Company Formation Denmark
Updated on Wednesday 10th July 2019
Rate this article based on 2 reviews
Denmark is one of the best locations in the world for opening a company, being ranked among the easiest countries in Europe for doing business. Our team of specialists can provide full legal representation for the registration of a business in this country. Bridgewest can help you with:
- drawing up the articles of association that can be signed through a power of attorney (Denmark laws require powers of attorney for any public notary proceedings);
- drawing up documents for company incorporation in Denmark: specimen signatures, identification papers copies, application form required by the company registration office;
- since most of the requirements related to the registration of a business must be done with the assistance of a public notary, our specialists can arrange the proceedings necessary in this case;
- our specialists can help in obtaining a registered office in Denmark (a legal requirement when starting a business here);
- opening a bank account for the company in Denmark (BridgeWest will help with opening the bank account where the share capital will be deposited, as well as a current corporate bank account, a required procedure during the incorporation of the company);
- we can also put you in contact with an accountant in Denmark, who can provide professional accounting services for local businesses.
Company incorporation in Denmark
The registration of a Danish company is fast and it is comprised of simple steps. The first step, when deciding to open a company in Denmark, is choosing three names for the future company and submit them to the Trade Register in Denmark. Once the company’s name is approved by the local institutions, the registration of the business can follow the next procedures.
The next step for incorporating the company is to obtain a digital signature called NEM ID and to present identification documents, such as passport copies, identification cards or driver license of both shareholders and directors and a recent utility bill or a bank statement as a proof of residential address and a bank letter as a certification of the client’s solvency.
In order to open a bank account, the above-mentioned documents are required together with the application forms from the bank where the share capital will be deposited. The minimum share capital depends based on the selected legal entity; in the case of a private limited company in Denmark, the minimum share capital is DKK 50,000, while a Danish joint stock company needs a capital of DKK 500,000.
The start-up capital must be deposited in a bank account, but it can be used after the registration of the company. In Denmark, the documents of incorporation must be notarized by a Danish public notary. The last step to complete the registration process of a Danish company is to register with the Danish Commerce Companies Agency and receive a CVR number that will be the company’s identification number.
The most employed types of companies in Denmark
The private limited company (anpartsselskab - ApS) is employed by small businesses and requires a minimum share capital of DKK 50,000. The shareholder will be accountable for the company’s debts and obligations to the extent of his/her contribution. The legislation in Denmark does not stipulate any requirements regarding the nationality of the company’s representatives.
Thus, the directors and the shareholders of a private limited company in Denmark are not required to have the Danish nationality, nor the Danish residency. In the case of this business form, which is founded based on the shares owned by the shareholders, the members do not have the right of transferring the company’s shares; it is also necessary to establish an accounting system for this type of company.
The public limited company in Denmark (also known as a stock corporation) is a type of company that is especially addressed to large corporations. Its founders can be legal entities or natural persons, who are Danish nationals or foreigners.
Unlike the private limited company, the shareholders can trade their shares on the stock market. This business form needs to be registered with the Commerce and Companies Agency. Besides these business forms, foreign companies can expand their business operations in Denmark through subsidiaries or branch offices, which are extensions of the parent companies abroad.
Why register a private limited company in Denmark?
As we mentioned above, the procedure for setting up a company requires the selection of one of the business forms that are available in the given jurisdiction. In the case of Denmark, most of the businesses are registered as private or public limited companies. The private limited company is the most common way to start a business here as it can be selected for a wide range of business purposes. This type of company is also one of the most common ways to start the procedure of offshore company set up in numerous offshore jurisdictions.
An advantage of this structure is that its management system does not need a two-tier system and it can be set up only through management board, which can be formed of a single person. Furthermore, the members of the board of a private limited company in Denmark do not have to be Danish nationals. Our team of company formation experts can provide more details regarding the incorporation requirements necessary for this business form.
What are the main foreign investors in Denmark?
Foreign businessmen can choose to start a business in Denmark in one of its top economic sectors, which are represented by industries such as the maritime industry, technology, life sciences, design or the food industry. With a highly developed economy, Denmark has a wide range of foreign investors, the most important being from other European countries. The top investors in Denmark are from Sweden, the Netherlands, France, Luxembourg and the United Kingdom. Foreign investments in Denmark are represented by the following:
- Sweden is the top investor, accounting for 16.6% of all foreign investments (at the level of 2017);
- the following top investors are: the Netherlands (14.6%), France (11.6%), Luxembourg (10.1%);
- the other top investors in Denmark are: the United Kingdom (8.8%), Norway (8.1%) and the United States of America (4.8%);
- the main field of activity preferred by foreign investors is the financial sector, which represents 55.7% of all investments;
- other important economic fields for investments are: wholesale and retail (8.5%), manufacturing (7.9%) and the information and communication sector (3.9%).
What should an investor know on the Danish company set up?
When investing in a foreign country, foreign investors will usually be interested in the duration of the registration procedure, this being an important aspect for offshore company formation as well. In Denmark, the registration of a business lasts approximately one week, but this period can increase depending on the selected legal entity and the types of documents investors must provide.
In one week, investors can register a limited liability company, but when registering other types of entities, such as the branch office, the registration proceedings can increase up to two weeks. Any corporate structure will need a corporate bank account, and the formalities can be completed in a period of three weeks; our offshore company formation experts can provide information on how to register an offshore bank account in a preferred business destination.
When opening a company in Denmark, foreign investors are not legally required to be present during the registration procedure; they may provide the power of attorney to our representatives, who can complete the necessary formalities with the local authorities.
Taxation in Denmark
One of the main reasons for which investors choose to start the a company in a foreign country refers to the level of taxation, amongst other types of benefits. As the purpose of starting a business in a foreign country is to conduct the company’s business activities at lower costs than in the home country, the tax system available in a jurisdiction is a crucial factor.
The standard VAT rate in Denmark is 25% and it applies to most of the goods and services traded on the local market; the country provides an exemption on the payment of the VAT for products and services such as newspapers or international transportation. The corporate tax in Denmark is set at 22% (in 2015, the tax was imposed at a rate of 23.5% and the lower value became applicable starting with 2016).
The current dividend tax in Denmark is applicable at a rate of 27% for a taxable income of DKK 54,000; however, if the income is above this value, the dividend tax rate will increase at 42%. Still, there is an exemption on the payment of the dividend tax and this is available in the case of holding companies owning more than 10% of the shares of another company. BridgeWest is also able to offer ready-made Danish companies and VAT registration. Please contact us for more information and prices implied by opening a company in Denmark.
The standard VAT rate in Denmark is 25% and it applies to most of the goods and services traded on the local market; the country provides an exemption on the payment of the VAT for products and services such as newspapers or international transportation. The corporate tax in Denmark is set at 22% (in 2015, the tax was imposed at a rate of 23.5% and the lower value became applicable starting with 2016).
The current dividend tax in Denmark is applicable at a rate of 27% for a taxable income of DKK 54,000; however, if the income is above this value, the dividend tax rate will increase at 42%. Still, there is an exemption on the payment of the dividend tax and this is available in the case of holding companies owning more than 10% of the shares of another company. BridgeWest is also able to offer ready-made Danish companies and VAT registration. Please contact us for more information and prices implied by opening a company in Denmark.