Business entities in Denmark
Healy Consultants will assist our Client engineer the optimum Denmark corporate structure. There are several ways of doing business in Denmark, the most common being the setup of a limited liability company (also known in some countries as a private limited company).
The Denmark limited liability company (Anpartsselskab)
- A Denmark limited liability company (LLC) is the most common entity used to conduct business within Denmark and is allowed to engage in any commercial or industrial activity, except financial and banking services. A Denmark resident secretary is not required;
- A limited liability company can be incorporated within one week, with a minimum of one shareholder and one director of any nationality. The minimum paid up share capital is DNK12,500 (approximately €400) and our Client does not need to travel to complete Danish business setup procedures with the Danish Business Authority.
The Denmark stock corporation (Aktieselskab)
The Denmark stock corporation is very similar to a limited liability company and can be registered with one shareholder and one director. The minimum amount of capital to setup such Denmark business entity is however higher: DKK800,000 (approximately €110,000). The company must also submit audited financial statements to the Denmark Inland Revenue Department.
The Danish Act on Certain Commercial Undertakings regulates foreign company branches in Denmark and stipulates that they may be 100% foreign owned. A branch office in Denmark can conduct trade within the scope set by the parent company. A Denmark branch office is allowed to invoice Denmark customers, sign local sales contracts and receive income from customers. A Denmark branch company is also required to obtain the necessary licensing for its industry of business.
Where a foreign company does not intend to carry on commercial business in Denmark, it may seek to establish a representative office. While a Denmark representative office is 100% foreign-owned and controlled, it is not permitted to make direct sales within Denmark. Such an office must will only engage in activities such as i) promoting the business of the parent company and ii) market research. A local Denmark agent or distributor must be appointed to sell goods and provide services to local companies.
Table of comparison between different Denmark entities
|Summary at a glance||LLC||Branch||Rep office|
|How long to set the company up?||1 week||2 weeks||2 weeks|
|How long to set the corporate bank account?||3 weeks||3 weeks||3 weeks|
|Bank signatory must travel||Yes||Yes||Yes|
|Issued share capital required||€400||0||0|
|Is doing business in Denmark permitted?||Yes||Yes||No|
|Allowed to sign sales contracts with Denmark Clients||Yes||Yes||No|
|Allowed to invoice Denmark Clients||Yes||Yes||No|
|Corporate tax payable in Denmark||22%||22%||0%|
|Corporate bank account||Citibank||Citibank||Citibank|
|Can rent office in Denmark||Yes||Yes||Yes|
|Tenancy agreement required before incorporation?||No||No||Yes|
|Allowed to import raw materials?||Yes||Yes||No|
|Allowed to export goods?||Yes||Yes||No|
|Allowed to export goods?||Yes||Yes||Yes|
|Do you visit Denmark for company incorporation?||No||No||No|
|Resident director required?||No||No||No|
|Resident shareholder required?||No||No||No|
|Minimum number of directors||1||0||0|
|Minimum number of shareholders||1||0||0|
|Denmark resident company secretary||No||No||Yes|
|Individual shareholders allowed||Yes||No||No|
|Corporate shareholders allowed||Yes||Yes||Yes|
|Corporate director(s) allowed||No||No||No|
|Public register of shareholders and directors||Yes||Yes||Yes|
|Denmark employment visa fees||€3,950||€3,950||€3,950|
|How long to get work permit approved||3 months||3 months||3 months|
|Statutory audit required||Yes||Yes||No|
|Annual tax return to be submitted||Yes||Yes||Yes|
|Access to Denmark double tax treaties||Yes||Yes||Yes|
|Estimate of engagement costs||€12,655||€12,915||€11,665|