Step-by-Step Guide to Opening
a Business in Denmark
Thank you for choosing Denmark
Invest in Denmark provides a free and confidential one-stop-shop service to foreign
companies looking to set up or expand in Denmark.
The following is our guide to opening a business in Denmark, with links that are updated with
the latest information. We are happy to walk you through it as well as introduce you to our
Service Provider Network that can further assist you.
Step 1 Step 2
For a more detailed
Choose which type of legal entity fits Register your company
your goals and activities in Denmark Every company in Denmark must be description of the
There are several types of company registered with a CVR number (Central different types of legal
structures in Denmark. We recommend Company Register Number) in the
that foreign companies use an Danish Business Authority’s (DBA) online forms please refer to:
“Anpartsselskab” (ApS – meaning a private registration system ([Link]). The [Link]/
limited liability company), which is akin CVR number is always used when
establishingabusiness
to a limited liability company in the communicating with public authorities.
United States, as this provides you with It costs DKK 670 to register your
the most protection. company online.
Summer 2017 [Link]
STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK
A company should be registered officially Ι áéëîÝêàñéÝêàÝîðåßèáïëâ
with the DBA within 14 days after the association of the company
memorandum of association has been
Ι ìáßåâåßàáïßîåìðåëêëâðäáëóêáîïäåì
signed.
structure of the parent organization and
copies of passports of all ultimate
To register your company, the DBA
personal owners with more than 25%
requires you to have a “NemID”, an
ownership
individual’s digital signature to access
public and private services on the internet
in Denmark ([Link]). In order to get a Step 3
NemID, you must have a residence and Register with the Danish Tax Authorities
work permit in Denmark. Upon registering, the Danish Business
Authority (DBA) sends the relevant
Therefore, we recommend that you work information to SKAT (the Danish Customs
with a lawyer who can do this for you. We and Tax Administration), who is responsible
have a vetted list of lawyers to introduce for the collection of taxes and VAT.
you to when you are ready.
SKAT also provides advice to companies on
Here is an overview of all our service tax, duty and VAT issues
providers: [Link]/spn (please see link: [Link] for more insight).
It only takes a couple of hours to register Before you start you start operating, you
your company online; however your lawyer must register your company separately for:
will need the following from you before
Ι βåâõëñïáèèãëëàïÝêàïáîòåßáåê
starting:
Denmark (only required if the company
Ι îÝêïâáîëâïäÝîáßÝìåðÝèëâ has a revenue of more than DKK 50,000)
50,000 to your client account held by
Ι ÝõîëèèðÝôβåâõëñïáèèβáôáéìð
your Danish lawyer. This is not a fee but
services
rather an operating capital for your
Danish company Ι ñðåáïβåâõëñéÝêñâÝßðñîáëîàáÝèåê
wholesale goods subject to duties or
Ι îëòåàáðäáêÝéáͭÝààîáïïÝêàßëìõëâ
purchase these kinds of goods abroad
passport of the member(s) of the
executive board and the member(s) or Ι
éìëîðÝêàΔëîáôìëîðβåâõëñàëÞñïåêáïï
the board of directors if applicable. with countries outside the EU
Please note that members(s) of both the
Ι βðÝôϊðÝôàáàñßðáàâîëéåêßëéáÝð
executive board and the board of
source) - if you have employees
directors of the company can reside
outside of Denmark For more information on corporate taxation,
please see link: [Link]/taxation
2
STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK
Once you have your company set up, you
Step 4
can continue with the following steps
Issue employment contracts simultaneously - assisted by your Danish
Your lawyer can also assist you in service providers.
preparing employment contracts or
‘Secondement’ addendums to the existing
Step 6
contracts for employees who will transfer
within the company that complies with Process for helping you transfer your
Danish legislation. employees to Denmark
Depending on the employee’s nationality
All employers must take out a mandatory
different rules may apply:
industrial injury insurance. This insurance
should be added to the salary as the Ι ëêβêÝðåëêÝèïéñïðÝíßñåîáÝ
employer’s contribution along with the ATP residence and work permit prior to their
contribution. These contributions are arrival in Denmark
among the world’s lowest rates for
Ι êÝðåëêÝèïéÝõáêðáîÝêàóëîçåê
employer-paid social security (e.g. Sweden:
Denmark without permits for up to three
31.42% of salary; Denmark: approx. DKK
months. For longer stays, they need to
4,000-12,000 depending on the nature of
request a registration certificate before
the employment).
the three months period has expired
For a detailed description on hiring in the Ι åðåöáêïëâðäáëîàåßßëñêðîåáïéÝõ
Danish labor market, including working enter and work in Denmark without any
conditions please see permit
[Link]/labour
Applications for residence and work
permits (one application per person) can
Step 5
be filed by the employer and the employee
Set up corporate structure (optional) directly or via a Danish lawyer who, for an
We would recommend setting up your additional fee, can assist you in filling out
corporate structure so that you avoid
double taxation and use Denmark as a
profit center for your other international
Useful address:
branches or companies.
The Citizen Centre at Danish Agency for International
Denmark not only has a low corporate Recruitment and Integration
taxation rate, it also incurs no fees on the
Njalsgade 72C, 2300 Copenhagen S
transfer of dividends outside of the
country.* Your lawyer can assist you here Tel: +45 72 14 20 01
for a separate fee. Web: [Link]
* If dividends are paid to a parent company (holding at least 10% of the shares) in another
EU member state or a state with which Denmark has a double taxation treaty. 3
STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK
the application form and filing the The application for a residence and work
application on behalf of the company in permit under the Pay Limit Scheme must
Denmark, potentially saving you some be completed by filling out the application
time. Since you are establishing a new form “AR1”: [Link]
company, it may be advisable to use a xform/formularer/[Link]
lawyer for the first couple of applications
The fee for each application under the
which will enforce your reputation as a
pay limit scheme is: DKK 3,440
legitimate business with the authorities,
(2017-figures).
however this is not necessary.
The AR1 application form consists of two
There are three steps that must be
parts; one for the employer to be filled out
completed when filing the application:
and one for the employee to be filled out.
i. Create case order ID (can be done online)
ii. Pay the fee (unless the applicant is Ι
åïðëâàëßñéáêðïîáíñåîáàâîëéðäá
exempt) (can be done online) employer:
i. AR1 part II must be filled out and
[Link] the application (can be done signed by the employer
online) ii. Documentation for salary and
Foreign employees that have been offered employment conditions which are not
a highly paid job have particularly easy stated in the employment contract
access to the Danish labour market (for example, fringe benefits, paid
housing, etc.)
There are no specific requirements with iii. Because you will be a new Danish
regards to education, profession, or the entity sponsoring the work permit, we
specific nature of the job would advise that you develop a
financial forecast for the company/
In order to obtain residence and work group that will be attached to any work
permit according to the Pay Limit Scheme permit application as this may help
the employees’ job must have a gross ease the application process, however
annual pay of no less than DKK 408,000. this is not a requirement
The employee must have a written job
contract or job offer which specifies Ι
åïðëâàëßñéáêðïîáíñåîáàâîëéõëñî
salary and employment conditions. Salary employee:
and employment conditions must i. AR1 part I must be completed by the
correspond to Danish standards employee
ii. Employment contract or job offer
For more information on the Pay Limit which includes information on salary
Scheme please see: terms, employment conditions, and
[Link] job description (may not be more than
to_dk/work/[Link] 30 days old). Salary and employment
4
STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK
conditions must correspond to Danish
Step 7
standards
iii. Documentation of education relevant Set up payroll and bank account
to the offered job (in English or Danish) Invest in Denmark generally recommends
iv. Copy of passport (all pages with foreign companies who establishes a
information, including front page) company in Denmark to engage a Danish
accountant or auditor since the company
Ι
êßëêêáßðåëêóåðäïñÞéåððåêãÝê has to file tax returns locally, arrange
application for a residence permit, the bookkeeping, VAT reporting, pay rolls, etc.
employee’s biometric features (facial
Ι ìáêÝÞÝêçÝßßëñêðͬ
image and fingerprints) must be recorded
In order to open a corporate bank
and stored on a chip on a residence card.
account a “request for opening a
If the employee fails to have his/her
corporate account” form is needed. It is
biometric features recorded, the
obtainable through any large Danish
application will be rejected. This means
bank. The form is to be returned to the
that the application will not be processed
Danish bank with a reference or
Ι ëîéÝèèõͭõëñéñïðÝèîáÝàõäÝòáÞááê recommendation from your local bank in
granted a residence permit before your home country. The completed
entering Denmark request must be accompanied by the
following documents:
Ι êßáðäááéìèëõááÝîîåòáïåêáêéÝîçͭ
Ι ëéìÝêõîáìëîðåêßèñàåêãìîëòåïåëêï
they will be issued (from the city of
regulating the power to bind the
residence) a Tax ID card as well as a
company who needs accounts (i.e.: Can
Health Insurance card which allows them
only individuals within the company
free access to public health services. The
headquarters sign? Or will you give
employee will also be invited by their
others permission?)
local municipality to attend free Danish
language courses. In Copenhagen there Ι
êâëîéÝðåëêÝÞëñðëóêáîïäåìïðîñßðñîá
is an International Citizen Service, which (if any of the owners own more than
is a “one-stop-shop” for expats to help 25% of the shares in the company the
and answer questions regarding the bank will need to have copy of passports
Danish system, e.g. tax papers, social of the owner and information about
security number, integration issues, private address)
For more information
making friends, etc. on the International
Ι ëìõëâéáéëîÝêàñéÝêàÝîðåßèáïëâ
For more information on the International association of the company Citizen Service
Citizen Service please see link: [Link] If you would like to have internet banking, please refer to:
We will of course assist you in the process. you will also need following information: [Link]
Ι äåßäñïáîïéñïðÞáßîáÝðáàåêåêðáîêáð
banking?
5
STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK
Ι ëóóåèèñïáîïÞáÝÞèáðëïåãêåêðë
Step 9
internet banking? Alone? Two together/
in association? Ongoing business in Denmark – Taxation
& filing requirements
Ι ÝéáïÝêàìîåòÝðáÝààîáïïáïëâñïáîï
An accounting company can file your
of online banking
annual financial statement. An audit will
Once the bank has these documents and not be required as long as the company in
the information requested about internet two successive financial years does not
banking, they can make the documents exceed 2 out of these 3 limits:
and an unauthorized translation and send
them to you. 1. Balance sheet amount less than
DKK 4 m
You can fax the documents back to the
bank and you can snail mail them. When 2. Net turnover less than DKK 8 m
the bank has these documents in signed 3. Average full-time employees less than
condition, then the accounts will be 12 persons during the financial year
activated, and they will send passwords to
users in internet banking. A financial year can in principle start on
any given date, however the most practical
is to follow the financial year of the parent
Step 8 organization – and the most common start
dates are 1 January or 1 July.
Find an office location
If you are looking to lease a location Invest
Your accountant must file your VAT with
in Denmark can provide you with a list of
the tax authorities on a monthly, quarterly
options that help meet your criteria as well
or semi-annual basis depending on the
as introduce you to the necessary service
company size and wishes.
providers. Denmark has many flexible
office locations that can be month-to-
The Danish company is a separate legal
month leases and offer additional
entity, which is subject to corporate
business-in-a-box solutions as you grow
taxation in Denmark. The corporate tax
your business, such as a science park.
rate has been lowered to 22%.
In the interim period most law firms offer
Personal income tax is a combination of
that the lawyer’s address can be your
national tax, city tax and optional church
Danish address.
tax. It is a progressive system. The lowest
tax rate is approx. 36% up to marginal
income tax rate of 51.95%, exclusive of
church tax and labour market contribution.
Certain allowances and deductions are
allowed.
6
STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK
Ι ôìÝðÝôñèáͮäáîáåïðäáìëïïåÞåèåðõ Closing or scaling down the company
of benefiting from a lower tax rate, if Downscaling of operations is a valid
certain conditions are met. Special tax excuse to let go of workers, but different
scheme for foreign researchers and rules apply to blue collar (union rules
highly-paid employees (annual salary at apply) and white collar (in contract)
least DKK 764,400 in 2017): Flat tax workers. Unions however, tend to be
rate of 31.92% (8% base + 26% of cooperative in Denmark.
rest) over a period of up to 5 years
Closing down a Danish company requires
Ι ÝêåïäðÝôÝñðäëîåðåáïóåèèåïïñáÝê a liquidation process or – if there are no
annual summary of taxes paid (similar to liabilities – through a termination
a W-2) for all your employees based in statement. Both processes require help
Denmark or having worked in Denmark from a lawyer.
the last year
7
STEP-BY-STEP GUIDE
Start with Denmark
Invest in Denmark provides your company with a tailor-made solution for
locating your business in Denmark. We measure our success by how well we
contribute to yours. So, if you are considering setting up business or expanding
your activities in Denmark, make us your first stop.
Our specialized staff across the globe has the corporate background, industry
insight and well-connected networks to advise you on every aspect of locating
in Denmark. Not only when you set up, but also as your business grows.
Our tailor-made solutions include connecting companies with key local contacts,
arranging fact-finding tours and providing comprehensive benchmark analyses.
We make sense of local legislation and advantages of locating in Denmark
– all free of charge and in guaranteed full confidentiality.
We Look Forward to Hearing from You
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Created in collaboration with Brinkmann Kronborg Henriksen law firm indk@[Link] [Link]