DOING BUSINESS IN DENMARK
Since 2003, Healy Consultants has assisted our Clients to start a company in Denmark. The services we provide include i) Denmark business registration ii) company licensing iii) corporate bank account opening services iv) human resources strategies v) work permit applications and vi) office rental solutions.
|Summary||LLC||1 month||Limited liability partnership||Representative office||Branch office|
|Also known as||Anpartsselskab||Aktieselskab||Kommanditselskab||Repræsentationskontor||Filial|
|Best use of company?||All products and services||To secure public funding||Professional services||Marketing & research||Specific projects|
|How soon can you invoice Clients/sign sales contracts?||1 month||6 weeks||1 month||6 weeks||7 weeks|
|How soon can you hire staff?||1 month||6 weeks||1 month||6 weeks||7 weeks|
|How soon can you sign a lease agreement?||2 weeks||3 weeks||2 weeks||3 weeks||1 month|
|How long to supply corporate bank account numbers?||3 weeks||3 weeks||3 weeks||3 weeks||3 weeks|
|How long to supply company registration/tax numbers?||2 weeks||3 weeks||2 weeks||3 weeks||1 month|
|Corporate tax rate on annual net profits?||22%||22%||0%||0%||22%|
|Limited liability entity?||Yes||Yes||Yes||No||No|
|Minimum paid up share capital?||€6,700||€67,300||€2||None||None|
|Corporate bank account location?||Citibank||Spar Nord Bank||BNP Paribas||Citibank||Nordea Bank|
|VAT payable on sales to local customers?||25%||25%||25%||0%||25%|
|Average total business set up engagement costs?||€10,655||€10,655||€11,655||€10,655||€11,915|
|Average total engagement period?||2 months||2 months||2 months||2 months||2 months|
|Accounting and tax considerations||LLC||1 month||Limited liability partnership||Representative office||Branch office|
|Statutory corporate tax payable?||22%||22%||0%||0%||22%|
|Legally tax exempt if properly structured?||No||No||Yes||Yes||No|
|Must file an annual tax return?||Yes||Yes||Yes||No||Yes|
|Must file annual financial statements?||Yes||Yes||Yes||No||Yes|
|Must appoint an auditor?||Yes||Yes||Yes||No||Yes|
|Access to double taxation treaties?||Yes||Yes||No||No||Yes|
|Withholding tax on payments to foreign shareholders?||22%||22%||22%||None||None|
|Company Registration||LLC||1 month||Limited liability partnership||Representative office||Branch office|
|Resident director/partner/manager/legal representative required?||No||No||No||Yes||Yes|
|Minimum number of shareholders/partners?||1||1||2||Parent company||Parent company|
|Maximum shareholding for foreigners?||100%||100%||100%||100%||100%|
|Minimum statutory paid up share capital?||€6,700||€67,300||€2||None||None|
|Shelf companies available?||Yes||Yes||Yes||No||No|
|Time to incorporate a new entity?||4 weeks||5 weeks||5 weeks||6 weeks||7 weeks|
|Can easily convert to a PLC?||Yes||Yes||No||No||No|
|Public register of shareholders and directors?||Yes||Yes||Yes||Yes||Yes|
|Can have preference shareholders/owners?||Yes||Yes||Yes||No||No|
|Business Considerations||LLC||1 month||Limited liability partnership||Representative office||Branch office|
|Good entity for trademark registration?||Yes||Yes||Yes||No||Yes|
|Can bid for Government contracts?||Yes||Yes||Yes||No||Yes|
|Can secure an import and export license?||Yes||Yes||Yes||No||Yes|
|Sponsorship by a local citizen required?||No|
|Our Client needs to travel to Denmark for business set up?||No|
|Temporary physical office solutions available?||Yes|
|You need a local resident as bank signatory?||No|
|Can be wholly foreign owned?||Yes|
|The entity will likely be regulated by?||Danish Business Authority|
|Minimum number of directors/managers?||1|
|Monthly VAT reporting to the Government?||Yes|
|Must sign an office lease agreement during incorporation?||No|
|shareholders & directors documents to be attested\translated?||No|
|Each foreign director needs a personal income tax number?||No|
|Foreign non resident director needs a residence visa?||No|
|Maximum number of staff allowed?||No maximum number for any entity|
|Expatriate to local staff ratio?||None|
|Can secure residence visa for business owner?||Yes|
|Other useful information|
|What will be included in my customer sales invoice?||Click link|
|This country has signed free trade agreements?||Yes|
|This country is a member of WIPO/TRIPS?||Yes|
|This country is a member of the ICSID?||Yes|
|Average custom duties suffered?||1.60%|
|Government foreign investment approval required?||No|
|Average monthly office rental? (US$ per sq m)||€22|
|Minimum statutory hourly wage?||€15|
|Average monthly Euro salary for local skilled employees?||€5,217|
|Denmark deposit interest rate? (1 year average)||3.02%|
|Overseas remittance currency controls?||None|
|Multi-currency bank accounts available?||Yes|
|Corporate visa debit cards available?||Yes|
|Quality of e-banking platform?||Excellent|
|Crowd funding available in this country?||Yes|
|Government grants available?||Yes|
|Government approval required for foreign owners?||No|
|Resident director/partner/manager/ legal representative required?||No|
|Can secure trade finance?||Yes|
|Security deposit to be kept with Government?||No|
|Group HQ tax incentives?||No|
Press the link headings below to read detailed, relevant, up to date information.
Advantages and disadvantages
Advantages of Denmark company registration
- Registering a company in Denmark is easy, because:
- A limited liability company can be established in Denmark within one week, with a minimum of one shareholder and one director of any nationality. Our Clients do not need to travel to complete the engagement;
- The minimum capital is €1,600 (DNK50,000), of which 25% must be paid up upon incorporation;
- Denmark offers a world-class business environment, with benefits including:
- Denmark is ranked the least corrupt country in the world, according to the 2014 Corruptions Perception Index released by Transparency International;
- Denmark’s strategic location makes it an ideal business gateway to Europe, providing easy access to the lucrative European Union market. Germany and the UK are its two largest trade partners;
- Employers in Denmark benefit from the 12th most flexible labor market in the world, offering high flexibility in hiring and firing practices. The Danish workforce is also amongst the most productive in Europe, with an average output of €53 per hour worked;
- Denmark boasts an exceptional transport infrastructure. Copenhagen Airport serves 132 destinations and boasts the shortest goods transport time of all European airports. Denmark is also home to more than 100 ports, making Denmark a nodal point for transport in Europe, perfectly suited for import and export;
- Denmark is ranked as the 1st easiest country in the world for trading across borders, according to the Doing Business study by the World Bank. Denmark companies are able to import and export goods in an average of 5 days, compared to the OECD average of almost 10 days;
- For all the reasons listed above, Denmark is ranked as having the 13th most competitive economy in the world, according to the 2014/15 World Competitiveness Yearbook.
- Denmark boasts several industries which are excellent opportunities for investment including:
- Denmark is the world leader in clean-tech energy, with the industry comprising 3.1% of the economy. Danish companies control one third of the wind power market and Denmark is the first country to allow the commercial usage of 2nd generation biofuels;
- Denmark has a rapidly growing IT industry, boosted by the world’s most technology-ready population. Denmark boasts world-class IT infrastructure, with high-speed fibre optic internet connections and 4G cellular coverage widely available;
- Denmark has the best test market in Europe, with the fastest population in the world for adopting new products.
Disadvantages of Denmark company registration
- Denmark is an expensive location for a company, because:
- Companies registered in Denmark are subject to a corporate tax rate of 22%, though this is below the EU average;
- Additionally VAT is levied on most goods at a rate of 25% on products sold in the country or exported to other EU States;
- For persons employed in Denmark, personal income tax is levied at high rates of up to 59%, with minimal deductions available to reduce the individual’s tax burden.
- A Denmark company may not offer an entrepreneur’s desired level of privacy because:
- Opening a Denmark corporate bank account can be difficult, as Denmark banks are selective when accepting a new customer;
- It is difficult to obtain an entrepreneur visa for a person to live in Denmark after registering a Danish business. The business incorporated must meet Danish regulations and the entrepreneur must provide evidence to prove the necessity of hiring a foreigner for the company’s operations.
- Registering a company in Denmark is easy, because:
Best uses for a Denmark company
- Denmark is an excellent location for a business headquarters because:
- Copenhagen is the world’s most livable city, comprising a cosmopolitan population living and working in Denmark, a developed infrastructure for tourism, banking, entertainment, business, high quality office and residential accommodation, reliable power and utilities, first class hotels, hospitals, schools and shops;
- High quality labor is easy to find in Denmark, with 97% of the country having a high school diploma and 47% of the country having a college degree. Thus, entrepreneurs will be able to spend less time and money on job searches;
- Employers in Denmark have no social contribution requirements to pay for employees. Denmark’s world leading pension scheme is funded through public means with no necessary contributions from the employer;
- English is spoken by 80% of the Danish population and Denmark is ranked 2nd in the English Proficiency Index by Education First. Business documents do not need to be translated into Danish and the majority of important government websites are available in English;
- Denmark is a paradise for high net worth entrepreneurs. With a strategic location for wealthy entrepreneurs, the country is synonymous with luxury and is home to some of the biggest brands in the world.
- A Denmark holding company is an good way to book profits sourced from EU countries because:
- Registering a Denmark company portrays a positive image and provides an excellent corporate vehicle to promote your business to global customers, suppliers, investors, venture capitalists, governments and banks;
- Capital gains and dividend received from both local and foreign subsidiaries are usually exempt from corporate tax, provided i) the company receiving dividends holds more than 10% of the capital of the subsidiary and ii) the subsidiary is based in the European Union or in a country which has signed a double taxation avoidance DTA with Denmark;
- Denmark boasts 76 DTAs, minimizing global withholding tax.
- Denmark is an excellent location for a business headquarters because:
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- Time to incorporate: One weeks
- Cost to set up: €10,655
- Minimum capital: €400
- Physical office required: No
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: No
- Corporate tax rate: 22%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: APS
Frequently asked questions
Will details of my Denmark business formation be available for public viewing?Yes. Individuals who start a Denmark company will be required to enter their business details in the public register.
Will I be required to travel for business formation in Denmark?No. Our Clients will not be required to travel in order to form a company in Denmark.
I am looking for professional Denmark registration services. Can your firm help me?Yes. Over a decade, Healy Consultants has been assisting our Clients with business registration services in Denmark.
How to open a company in Denmark?For business establishment in Denmark, Healy Consultants will prepare the appropriate documentation on behalf of our Clients and notarize them. We will also submit the required application to relevant Government departments and assist ours Client with opening a corporate bank. To understand the complete process of company incorporation, please refer to this Denmark incorporation steps webpage.
What are the pre-requisites for opening a company in Denmark?In order to form a Denmark company, our Client will need to i) reserve the company name ii) supply the Denmark office lease agreement iii) sign the business registration forms iv) register for tax and social security and v) obtain a business license.
Will there be restrictions in ownership if foreigners setup a Denmark company?No. 100% foreign ownership is allowed if you wish to setup your business in Denmark.
Will I be required to travel for business formation in Denmark?Yes. Audited financial statements need to be submitted to the Government if you setup a business in Denmark.
What are the tax implications for a business setup in Denmark?Starting a business in Denmark requires entrepreneurs to pay corporate tax at 22%.
Why setup a company in Denmark?Denmark offers several incentives for opening new businesses such as grants, loans and tax rebates.
How can foreigners setup a company in Denmark?Denmark business requirements include i) reservation of business name ii) preparation of incorporation documents iii) notarization of the documents and iv) tax and business license registration. to understand the complete process of Denmark business registration, refer to incorporation steps page.
Useful links for Denmark
Government and public authority websites:
- Denmark Tax Authority
- NASDAQ OMX Stock Exchange
- Investment Authority
- Chamber of Commerce
- Denmark airports
- Visiting Denmark
- Danish Companies Act
- Terms and Conditions for transfers to and from Denmark – Danske Bank
- Taxation and Investment in Denmark 2013 – Deloitte
- Tax News – KPMG
- Doing Business in Denmark – World Bank
- UHY – Buisness in Denmark
- Baker Tilly – Doing Business Denmark