DOING BUSINESS IN DENMARK IN 2023
Since 2003, Healy Consultants Group PLC 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.
| Compare different Denmark entities | LLC | Public limited company | LLP | 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? | €13,920 | €11,655 | €11,655 | €11,665 | €12,915 |
| Average total engagement period? | 2 months | 2 months | 2 months | 2 months | 2 months |
| Accounting and tax considerations | LLC | Public limited company | LLP | 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 | Public limited company | LLP | 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 | Public limited company | LLP | 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 |
| Banking considerations | |
| 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 |
Denmark business setup summary
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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 2nd least corrupt country in the world, according to the 2017 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 productivity of 128 index points in the 1st quarter of 2018
- 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 3rd easiest country in the world for trading across borders, according to the Doing Business study by the World Bank. Denmark companies can 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 12th most competitive economy in the world, according to the 2017/18 World Competitiveness Yearbook.
- Denmark boasts several industries that provide 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 fiber 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.
- Denmark has competitive business costs because:
- The Danish social security rates and the employer costs are amongst the lowest in Europe and all the Scandinavian countries;
- Copenhagen’s salary levels, social security costs and office rent are around 15-20% less than that of Stockholm, Sweden
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:
- Annual audited financial statements must be submitted to the Denmark Inland Revenue Department including a complete tax return;
- The details of shareholders and directors of Denmark companies will be publicly available at the Danish Business Authority.
- 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;
- Denmark does not have a minimum wage at all since the nation is highly unionized. This implies that with the union’s collective bargaining, the price of labour might rise unexpectedly
- 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 most 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 a 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:
