Company in Denmark

Denmark is one of the most popular and convenient destinations for people who plan to open and run their own business. The country has led the business rankings for many years and has attracted many foreign entrepreneurs. Before setting up a business in Denmark, it is important to familiarize yourself with Danish regulations, taxes, deadlines, fees and the documents you need to submit to avoid business pitfalls. On this page you will find everything you must know when running a business in Denmark.

What you need to know about setting up and running a company in Denmark

Denmark’s economy is guided by the principles of a free market, free competition and no restrictions on running your own business. The rules for setting up a company in Denmark are the same for all citizens of the European Union:

  • you should choose the type of business that suits you and be thoroughly familiar with all legal obligations such as permits, product labelling, patents, licences, etc;
  • you have to familiarize yourself with Danish law, the market, the competition;
  • you should set a start-up date and define your financial expectations;
  • have a financial plan prepared by an accountant, or be employed, or have a fund for the first year of operation, or have a rental agreement for the premises where the company will be established;
  • you must present the agreements with the Danish entrepreneurs with whom you plan to work;
  • you must have some start-up funds (between DKK 10,000 and DKK 25,000) to pay for such things as a translator, a license, a consulting agency or the purchase of equipment (it can be helpful to get a grant from EU funds, which you are eligible to apply for);
  • register your business (online) with the Danish Agency for Business and Enterprise – Erhvervsstyrelsen (at the latest 8 days before you start operating), which is a branch of the Ministry of Economic Affairs and which forwards your company’s documents to SKAT, the Danish Tax and Customs Administration, in order issue you with a CPR (Personal Taxpayer Identification Number), which you need for income tax settlement and VAT purposes; if your annual turnover is less than DKK 50,000, company registration is optional;
  • you must apply for an EU/EEA citizen’s residence certificate from the Danish regional office (statsforvaltning.dk), which you must obtain before starting your own business (this applies to all Polish citizens who wish to stay in Denmark for more than a quarter);
  • check with the Danish registrar that the company name will be unique.

Business forms in Denmark

Running your own business in Denmark has its advantages and disadvantages, so it is worth considering whether you are ready to take on the challenge and become self-employed. It is also advisable to choose the legal form that will most closely coincide with your abilities and capabilities.

Taking up and running a business in Denmark is defined by legislation such as The Carrying on Business for Profit Act of June 1996; The Public Limited Companies Act of June 1973 as amended in January 2002 and June 2003; The Private Companies Act of May 1996 as amended in April 2003; The Company Accounts Act of June 1996.

Each legal form of doing business is equally available to all domestic and foreign entities.

[INFOGRAPHIC:
The most common types of businesses:
Self-employment:
Sole proprietorship (Enkeltmandsvirksmhed),
Public limited company (Aktieselskab – A/S),
General partnership (Interesselskab – I/S),
Limited liability company (Anpartsselskab – ApS),
Limited partnership (kommanditselskab – K/S),
Branch of a foreign company (Filial af udenlandsk selskab),
Representative office of a foreign company (Salgskontor),
Cooperative association (Andelsforening/Brugsforening).].

Self-employment – sole proprietorship (Enkeltmandszirksmhed)

One of the most common forms of running a business in Denmark is self-employment, conducted by a person on his/her own account and under his/her own name or under a company name previously adopted by the owner. Such a business may also have employees.

A sole proprietorship is the simplest form of Danish business. It assumes that all assets and liabilities belong to the owner, who is liable for all debts.

In a sole proprietorship, no one but the founder has a say in the running of the business. Those who are self-employed use a personal CPR registration number. In the case of self-employment, registration is done at Erhvervsstyrelsen (www.eogs.dk).

The pros and cons of self-employment are outlined below:

  1. Pros:
    • this type of business is easy to run;
    • the company does not need to build up share capital;
    • the Danish administration helps with the necessary formalities for registering the business;
    • the minimum start-up costs are estimated at DKK 10,000, or PLN 5,000;
    • business tax is declared on a single tax return, which means that income is only taxed once;
    • a power of attorney may be granted to other persons to act on behalf of the company;
    • a company whose annual income does not exceed DKK 50,000 does not have to be registered for VAT.
  2. Disadvantages:
    • operating in this form involves unlimited liability with personal assets for the company’s obligations, as there is no separation between private and business assets;
    • in the event of the owner’s death, the company ceases to operate, but leaves behind fixed assets that are not separate from the business founder’s total assets, making it difficult to sell the company as a whole;
    • such a business cannot tax its income separately.

The owner must choose one of three options for taxing his/her business:

  • taxation according to the Share Capital Act (Kapitalafkastordning), which assumes that part of the company’s profit can be transferred to personal income and part to capital income;
  • taxation of the profit as personal income, i.e. the same as for employed persons;
  • taxation in accordance with the Companies Act (Virksomhedsordning), which assumes that costs from credit interest can be written off, but that company profit can also be retained in the form of bank savings, which will also be an advantage.

Public limited company (Aktieselskab – A/S)

Another option is to establish a public limited company, which consists of a board of directors, management or supervisory board elected at a general meeting and consisting of a minimum of three persons (the idea is to maintain the majority rule when voting on important decisions concerning the company).

The shareholders and co-owners of the company are not liable with their own assets for any debts of the company, but the bank may require them to finance the loans.

What else is worth knowing about setting up a public limited company in Denmark:

  • a joint-stock company is a legal form for medium and large companies and is the only one that can be listed on the Danish stock exchange;
  • an initial capital of DKK 500,000 in cash or other assets is required, which must be contributed before the company can be registered;
  • in order to establish a public limited company, the founders must draw up and sign a memorandum of incorporation. Such articles of incorporation should contain:
    • the personal details of the company’s founders and management,
    • the name and registered office of the company,
    • the nature and purpose of the business,
    • the initial capital;
  • the status of the company must be drawn up;
  • share capital must be made;
  • shareholders must elect a supervisory board and a management board at the statutory meeting;
  • the company must have at least 1 shareholder;
  • according to the law, the founders of a company do not have to be the owners of its shares;
  • a company can be established by at least 1 person;
  • individual shareholders are required to notify the company within 30 days that they have acquired a minimum of 5% of the share capital;
  • in the case of shareholders, taxation is derived from the income received, while the company is subject to separate taxation rules;
  • all documents must be drawn up in Danish;
  • the cost of registering an A/S company with a Danish law firm is between DKK 4,500 and DKK 1,000;
  • if the words 'under registration’ (under stiftelse) are added to the company name, the company has the right to commence operations from the date the memorandum of association is signed;
  • another solution is to buy shares in an existing company that has not yet commenced operations (so-called off the shelf company), but this requires more time and money.
Once the memorandum of incorporation has been signed and the start-up capital has been deposited in a bank account, we have 6 months to register the company with the Danish Trade Register. The whole procedure for registering a company usually takes 2 to 3 weeks.

The registered business is given a CVR registration number (equivalent to the Polish REGON number). Once the company is registered, the next step is to register with the tax authority (Told-og Skatteregion).

General partnership (Interesselskab – I/S)

Another option for doing business in Denmark is to set up a general partnership. Such a company must be formed by a minimum of two natural or legal persons who undertake joint obligations, the relationship between them being defined in the articles of association.

Key information regarding a general partnership:

  • a Danish general partnership does not have legal personality, but has the right to conclude contracts, can be sued and sue itself;
  • the assets of the company consist of the contribution made to it and property acquired by the company during its life;
  • it is important that the name of the Danish company contains the abbreviation I/S, which indicates its legal form;
  • a general partnership does not require share capital;
  • all documents together with the registration application must be sent to the Danish Commerce and Companies Agency – DCCA Erhvervsstyrelsen (eogs.dk) within eight weeks of signing the company agreement, so that the Central Company Register number – CVR is assigned;
  • if all partners of a general partnership have limited liability, the partnership must be registered with the DBA.

Limited liability company (Anpartsselskab – ApS)

One of the most popular Danish legal forms is the limited liability company (the Polish equivalent of z o.o.). This company is most often chosen by people who want to run a family business and have personal and total supervision over it.

The Danish company Anpartsselskab – ApS has legal personality and is regulated by the Danish Private Limited Liability Company Act. It costs between DKK 3,000 and DKK 5,000 to set up a company through a law firm.

[INFOGRAPHIC:
Types of limited liability companies in Denmark:
Private limited company – Anpartselskab – ApS.
Private limited company – Ivaerksaetterselskaber – IVS,
which can be incorporated in Denmark from 1 January 2014. This company, like Anpartsselskab – ApS, is governed by the provisions of the Danish Act on Private Limited Liability Companies. The starting capital of an Ivaerksaetterselskaber is a minimum of one Danish krone, or the equivalent amount in euros. At least 25 per cent of the company’s 12-month profit must be transferred to a reserve fund, which is necessary, and dividends are only paid when the sum of the start-up capital and reserve funds is equal to DKK 50,000.]

Anpartsselskab – ApS vs Aktieselskab – A/S

1. The Danish laws that govern the running of a limited liability company and a joint-stock company are similar.

2. The shareholders of a limited liability company have less freedom to decide on the affairs of the company compared to the shareholders of a limited liability company.

3. The starting capital of an ApS company is a minimum of DKK 50,000 and of an A/S company a minimum of DKK 500,000 (in various assets, but at least DKK 125,000 in cash).

4. In both companies, the capital belongs to the company and not to the owners.

5. The approximate cost of setting up an ApS company with help of a professional law firm is DKK 3,000 to 5,000, and an A/S company is DKK 4,500 to 6,000 approximately.

6. Both a limited liability company and an A/S company are required to submit annual reports (årsrapport), need statutes (vedtægter) and incorporation documents (stiftelsesdokument).

7. In a Danish limited company, management is needed, while in a Danish public limited company, management, and a board of directors (optional: supervisory board) are needed.

8. Both companies must have at least one owner.

9. The law of both companies is set out in the Danish Companies Act (Selskabsloven).

10. Both companies are subject to tax law.

Limited partnership (Kommanditselskab – K/S)

Another company that can be established in Denmark is a limited partnership. This company requires a minimum of one general partner (e.g. a limited liability company), who will be fully liable for the company’s obligations, and several limited partners liable for the company’s obligations only with the starting capital they have contributed to it.

[INFOGRAPHIC:
K/S company highlights:
The operation of a limited partnership is governed by a memorandum of incorporation, which is needed to register the company;
the Kommanditselskab company must be registered with the DBA;
a limited partnership must be registered if all its partners are legal persons;
the company should be registered by the partners up to eight weeks after signing the agreement at the Trade and Companies Agency (the registration form can be filled out via www.eogs.dk);
the name of the company should include the name of at least one general partner and the abbreviation S/K, which indicates its legal form.]

A slightly different type of K/S limited partnership is a limited liability partnership, Partnerselskaber – P/S. The partners in such a company are public limited liability companies, which are liable for the company’s obligations with the amounts set aside in the shares or with the entire share capital.

Foreign branch office (Filial af udenlandsk selskab)

Another possibility offered by the Danish labour market to Polish entrepreneurs is the establishment of a branch of a foreign company, which does not require share capital, but takes longer to set up than companies.

Polish entrepreneurs are entitled to a Danish branch of their company if the company registered in Poland has a similar legal form to the one in Denmark (e.g. limited liability company = ApS or joint stock company = A/S).

Relevant information about the branch of a foreign company:

  1. The name of the company branch should include the word filial, or 'branch’, as well as the name of the company and the country in which it is based.
  2. The registration of a branch can be done on the Danish website eogs.dk.
  3. In order that to register a branch of a company, you will need the necessary documents.
  4. Once the registration form is completed, it must be sent to the Trade and Enterprise Agency. It should include:
    • the name of the Polish company;
    • the company’s legal form;
    • the total share capital;
    • financial statements for the last year;
    • KRS number;
    • object of activity;
    • address and name of the Danish branch of the company;
    • the object of the branch;
    • personal data;
    • addresses of the entities authorized to make decisions on behalf of the Danish branch.
  5. The minimum amount of share capital should be DKK 80,000.
  6. The branch of the foreign company must be registered with SKAT(the Tax Office) for VAT purposes.
  7. The cost of setting up a branch in Denmark by a lawyer is approximately DKK 8,000.
  8. The branch is subject to Danish law.
  9. The director of the Danish branch is fully responsible for the branch’s obligations.
  10. A copy of the company’s 12-month accounts must be sent annually to the Agency for Trade and Enterprise.
  11. The company’s Danish branch is subject to 25 per cent Danish corporation tax.

Representative office of a foreign company (Salgskontor)

Another legal form that may be used by entrepreneurs wishing to operate on the Danish market is a representative office of a foreign company established for the purpose of promoting services and products (such a representative office does not, however, have the right to sell them).

Another legal form that may be used by entrepreneurs wishing to operate on the Danish market is a representative office of a foreign company established for the purpose, of promoting services and products (such a representative office does not, however, have the right to sell them).

Co-operative associations (Andelsforening/Brugsforening)

A cooperative association is a legal entity that is formed on the basis of an association agreement between individuals. This agreement allows for the sale and processing of products that belong to these individuals, or the purchase and sale of goods to these entities. The members of a cooperative association are responsible to a limited extent for the obligations of the Danish business. Associations must include in their name an abbreviation indicating their legal form – A.m.b.a. (cooperative association with limited liability).

Important information on taxation in Denmark

If you run a business or are employed in Denmark, you are subject to Danish taxation, which is progressive, i.e. the tax threshold depends on the amount of your income. In Denmark, you can deduct insurance premiums, child support, pension contributions, transport to work and food costs, but the Danish tax authorities have the right to check, within seven years, whether the above expenses are correct.

[INFOGRAPHIC:
Highlights of Danish taxation:
The income tax percentage rates for 2019 are:
8% for income less than DKK 50 217;
39.2% for income between DKK 50 217 and DKK 558 043;
56.5% for income higher than DKK 558 043.
Denmark also has a church tax, which is voluntary and amounts to 0.92%.
In Denmark, the municipality tax paid to regional governments is variable; in Denmark, the tax-free amount is set every year (in 2019, it was 10.10 per cent of gross salary; those whose income did not exceed DKK 37,200 were exempt from paying tax).
At the regional customs and tax office, you have to register through the Danish Commerce and Companies Agency.]

Self-employment – the Danish tax authority (SKAT; www.skat.dk) recognizes income from self-employment as income for the business owner, so business tax is declared on a single tax return and the business owner, who pays taxes and contributions, is entitled to pension and health benefits like those for employees in Denmark. Once a quarter or once every six months, a tax return (income tax and VAT) must be filed through the Danish Tax Administration’s website (SKAT, through the LetLøn system, through which employee payroll records can be kept). Advance payments for income tax are made on 20 March (by which date you can make a higher advance payment in order that to receive a tax refund with interest, which is higher than at the bank) and 20 November (by which date the interest rate is reducing by 0.4, i.e. the interest is lower than at the bank).

Companies – if you set up and run a company in Denmark, you are subject to corporation tax – CIT, which is 22%, but if the Danish company’s annual turnover exceeds DKK 20,000, it becomes subject to VAT, which is 25%.

Individuals – In Denmark, individuals pay a flat income tax, which is 32% and paid to the local authority, and a progressive tax, which is 5.64% (income less than DKK 42,000) or 15% (income greater than DKK 42,000) and is paid to the state treasury. Progressive taxation is applied to income from work and capital income. The burden on an individual’s income cannot exceed 59%.

What is worth knowing about VAT?

  1. All Danish companies with an annual turnover of more than DKK 50,000 are subject to VAT.
  2. The VAT rate is 25%.
  3. The tax rate for services such as the sale or rental of real estate (including energy, water and gas supply), medical care, education, banking, insurance transactions and cultural activities is 0%.
  4. Foreign employees who are employed in Denmark for a period of between three months and three years and whose minimum earnings amount to DKK 47,500 are subject to a 25% flat tax, which is increased by a 9% contribution to the Danish labour market.
  5. A fixed 25% VAT is paid by any company selling services or goods in Denmark. This is a value-added tax added to the price of services and goods that are sold by the company.
  6. The owner of a Danish business must register the business as a VAT payer before starting to provide services and goods; the employer has eight days to do so.
  7. The business can be registered as a VAT payer via the RUT, or Register of Foreign Suppliers (virk.dk) website.
  8. The reverse-charge procedure is that foreign companies that want to sell goods and services to Danish businesses do not have to charge Danish VAT. In such cases, no tax is charged on the invoice, only the net value of the goods or services is entered, and a ready-made formula it is used, e.g. “Reversed charge”, which means that the purchaser should charge and pay VAT on the service and enter the CVR or SE-nummer (the purchaser’s registration number). Such services include:
    • cleaning,
    • construction work,
    • maintenance work and any repairs,
    • entertainment,
    • sports events,
    • exhibitions,
    • employee leasing,
    • conferences.
  9. The SE number (assigned by SKAT) is provided by a Polish company when it is registered in Denmark as VAT payer (if not registered, it only provides the NIP).
  10. If the owner of a Danish company is also an employer, and therefore is hiring employees, they are required to register in Denmark as an employer.
  11. Foreign employees (both permanent and seasonal) that the owner of a Danish company wishes to employ are subject to various tax rules, which are related to their origin and how long they have lived in Denmark.
  12. Polish companies, even if they are not VAT payers in Denmark, are entitled to a VAT refund on taxable Danish costs.
  13. The recipient of services in Denmark is obliged to register as a VAT payer and pay this tax, even if it provides services to companies that are not registered for VAT.

[INFOGRAPHIC:
What you should know about CIT:
Corporate income tax is 28%.
Legal persons, i.e. limited liability companies or joint stock companies, are subject to CIT, and in the case of partnerships, only the partners of such companies are subject to tax.
In Denmark, companies are taxed on a consolidated basis, i.e. the parent Danish company, its branches and subsidiaries are taxed.]

Employer’s obligations in relation to the employment of an employee in a company

Danish business owners who decide to hire employees should carefully familiarize themselves in advance with Danish labour law and the laws that cover the relevant occupational groups. One such law is the Employment Document Act (Ansættelsesbevis loven), which states that people who have been employed for a minimum of one month for more than eight hours a week must be given a document containing information about the most important working conditions.

Danish employees are often protected by so-called collective agreements, i.e. an agreement on working conditions that is concluded between employers (employers’ organization, companies) and employees, through trade unions or employee associations.

[INFOGRAPHIC:
A collective agreement can regulate:
working conditions;
the time and place of work;
payouts;
the settlement of overtime;
holidays;
pensions;
problem-solving;
safety at work;
other rules governed by Danish labour law;
a framework agreement between DA and LO, i.e. a set of additional rules.]

All Danish employers are obliged to provide their employees with occupational illness and accident insurance and health and safety training and, above all, decent pay (they should not discriminate against anyone), if they fail to do so, the trade unions, on behalf of Danish employees, have the right to organize a strike, lockout, or solidarity industrial action to negotiate better pay. Trade unions in Denmark can organize labour conflicts in order that to conclude an agreement or conduct industrial disputes in order that to conclude a collective agreement.

Denmark has a law that sets out the rules for an agreement on secondment of workers to work abroad.

Occupational health and safety in Denmark

If you run your own business in Denmark or are employed by a Danish company, you must comply with Danish labour law and Danish health and safety regulations (on pain of a fine or stoppage of work performed), which can be found on the website of UIP, the Danish Labour Inspection Authority.

The most important obligations of a Danish employer are:

  • providing their employees with personal protective equipment;
  • instructing employees on safety rules;
  • arranging a safe working environment;
  • organizing a safe working environment;
  • preventing injuries at work;
  • taking care of hygiene at work;
  • providing employees with annual health and safety training, which must be documented and submitted to the UIP;
  • continuously liaising with Danish constant Health and Safety.

[INFOGRAPHIC:
The most important duties of Danish employees include:
compliance with the rules of Danish health and safety legislation;
use of the required personal protective equipment;
following the rules and instructions;
participating in annual training on health and safety at work.]

If a Danish company has a minimum of 10 employees, it is obliged to set up a health and safety organization and appoint inspectors responsible for implementing all safety rules. The same applies to companies that provide variable and temporary workstations where people work for more than two weeks.

What you should know about reporting your company to the RUT, the Register of Foreign Service Providers

If you decide to set up and run your own business in Denmark, you must, before starting work, report your company to the Register of Foreign Service Providers – RUT. Any changes to the company must also be reported, up to a maximum of the 1st working day on which they take effect.

What else you should know about the RUT:

  • If a Danish company is not reported to the Registry or the information reported is out of date, the Labour Inspector can prosecute or fine the Danish business owner (DKK 10,000 or even DKK 20,000 in the case of multiple violations).
  • The Labour Inspector also has the right to charge a financial penalty for each day of delay in reporting services to the Register.
  • The Register of Foreign Providers has a telephone number that Danish business owners can call to obtain all the most important information regarding registration with the RUT or Danish labour law.
  • A company can be registered with the RUT via the virk.dk website.
  • Every employer or employee who works in Denmark should register with the Register of Foreign Service Providers. After registration, they receive a personal RUT number, which is necessary when dealing with Danish authorities.
  • Each employee should provide his or her employer with a receipt with his or her RUT number (this applies especially to construction, gardening, agricultural, forestry or cleaning services).
  • What information must be provided when registering:
    • contact details,
    • location of the work,
    • type of service,
    • sectoral classification code of the company,
    • date of works,
    • name and address of company,
    • personal details of posted workers,
    • duration of delegation,
    • the CVR number and VAT registration number.

Any natural or legal entity for which services are performed in Denmark belongs to Danish service providers.

Denmark – general information

Denmark is a small country located in Northern Europe. It has an area of 42,951 square kilometers and a population of about 5.857 million (as of 2021). The capital of Denmark is Copenhagen. The state system is a constitutional monarchy and the official language is Danish – although in some parts of the country residents can also communicate in Faroese and German. Denmark borders Germany, Sweden as well as the Baltic Sea and the North Sea. GDP per capita is 67,758 per capita (2021 figures) and unemployment is estimated at around 2.2%. Denmark has a temperate climate. Winters are windy and mild while summers are quite cool. The largest ethnic groups living in Denmark include Scandinavian, Inuit, Faroese, German, Turkish, Iranian and Somali. The highest court of appeal in Denmark is the Supreme Court, whose seat is in Copenhagen. In addition, there are also two higher courts – the Higher Court for Western Denmark and the Higher Court for Eastern Denmark. Legislative power is exercised by the Danish monarch; however, it is exercised by the Folketinget. The head of government is the prime minister.

Denmark, year after year, always includes very high positions in all rankings regarding the most attractive countries in Europe for doing business. These verdicts are also confirmed by the number of foreign investors in Denmark, who eagerly decide to open a business here. According to the World Bank, Denmark is the bespoke leader among European countries when it comes to doing business. Denmark also stands out from countries around the world, being among the most competitive economies. Setting up a new business entity in Denmark is almost as simple as trivial. Of course, there are certain requirements, such as the need to pay a minimum share capital and provide the necessary documents to the authorities, but the formalities here are very limited. Foreign investors who already have businesses in other countries most often choose to open new companies rather than establish branches. This is due to the much shorter registration time for setting up a business entity. A very big incentive for non-European entrepreneurs is that Denmark also has access to the entire European market, allowing it to potentially reach as many as 100 million new consumers. Denmark appreciates any investment that is made by foreigners, so additional tax incentives are given. This country also boasts a highly developed infrastructure, which is not insignificant for many companies if they want to expand into Northern Europe. Denmark has a reputation for managing costs very efficiently, due to the lack of social contribution costs for employees. All these advantages contribute to the fact that Denmark is chosen every year by foreign investors to open or expand their business.

Permits and licenses in Denmark

Before actually starting a business, providing services and/or selling products, it’s a good idea to ascertain whether additional permits or licenses will need to be obtained in advance for a particular business. These are necessary in sectors such as law and accounting, transportation, trade, construction, insurance, education, energy, agriculture, gas, animal care, health care, food and beverage or fishing, among others. The relevant permits can be obtained from the corresponding state institutions. There are, for example, the Danish Agricultural Agency, the Danish Medicines Agency or the Danish Energy Agency. The specific documents that you will need for your chosen type of business may also include documents confirming the professional qualifications of the person wishing to conduct the business in question and proof of company registration in Denmark. Special attention must be paid to permits by companies that provide temporary or occasional services in Denmark. In their case, it will be necessary to renew obtained permits more frequently. Additional requirements may also be imposed on investors who come from outside the European Union. It is worth preparing for the fact that some state authorities issuing licenses may require payment of fees, however, this is not the case every time. Once the entrepreneur has submitted all the necessary documents, a response is issued almost immediately. The standard waiting period for such paperwork varies around four weeks, however, it is very often much shorter.

Costs of setting up a company in Denmark

Those who are considering opening a business in Denmark must take into account the fact that quite a lot of initial costs will have to be incurred even before the business is launched. Pre-launch costs include, among other things, the cost of such activities as market research and analysis or the preparation of a business plan. If the entrepreneur decides to carry out promotion and invest in marketing of the company before it starts actual operations, these activities can also be included in the pre-startup costs. Of course, it will also be necessary to pay the initial capital, the amount of which depends on the chosen form of business. In addition, we can expect such costs as:
– Fee for registering a business entity with the Danish Business Authority (DBA). This will allow you to pay taxes for your business in Denmark. To register, there is no need to visit the office, just do it online at the office’s website
– The fee for obtaining a Danish NemID signature. This type of signature is very often used when doing business in Denmark, as it makes it possible to use a company’s online banking services, sign official documents or forms online, and contact public authorities over the Internet. The cost of obtaining a single NemID signature is DKK 80. Each company can apply for up to 3 NemID signatures, and they can be used not only by the company owner and management, but also by employees.
– Fee at a Danish bank for opening an account for a running business. A business bank account is essential when opening a business in Denmark, as this is the only way to deposit share capital.
– Fees associated with registering employees for workers’ insurance. Any business that employs workers in Denmark is required to provide them with insurance against accidents at work and occupational diseases.

Access to the Danish company register

In Denmark, there is an organization called the Company Register, which holds all information on companies that do business in the country. This institution is legally obliged to make it possible to obtain this type of information and facilitate public access to it. The Central Business Register is responsible for providing answers to interested persons about companies registered in Denmark, their owners, their partners, the share capital contributed or the registered office. This type of information can be provided to anyone who wishes to know details about the operation of a particular company. For this purpose, one can go in person to the offices of the Danish Trade and Companies Agency or ask questions online via their website. In addition to this, there are branches and centers throughout Denmark that are under the authority of the Trade Registry, which are designed to assist in matters related to the operation of this body. The board of directors of the Trade Registry is mainly responsible for managing the Danish Trade and Companies Agency. Among the main sectors of the institution are the customer contact center, the coordination and marketing center, the business center and the department for better business regulation. Some of the projects run by the Danish Trade Registry are run by the Projects Forum, which has comparable financial resources to the Trade Registry.

Breakdown of existing companies in Denmark

Industry breakdown
The total number of companies that are currently registered and actively operating in Denmark is 45,738,856. The largest number of Danish companies operate in the services industry – there are a total of 227,504 of them and they account for 43.5% of the Danish market. Finance, insurance and real estate are also very developed industries in Denmark, with a large representation of 174,540 companies accounting for 33.4% of the Danish market. Retail trade is also a popular industry, with 30,399 operating companies. Slightly fewer companies are in industries such as construction (25,509), wholesale trade (20,173), manufacturing (16,707), transportation, communications, electrical, gas and sanitary services (16,095), agriculture, forestry and fishing (10,553), public sector (555) and mining (378). The remaining 309 companies operate in the unknown industry category.

Breakdown of companies by SIC code
Denmark has a code called SIC, or Standard Industrial Classification. It allows registered companies in Denmark to be divided according to which industries they operate in. According to the breakdown by SIC code, it can be seen that the most frequently used codes in Denmark are Holding (20.64%), Member Organization (17.47%), and Real Estate Lessor (7.98%). Other SIC codes also frequently used are Business services (5.61%), Management consulting services (2.26%), Finance, insurance and real estate – Subdivider/developer (1.9%), Closed-end investment office (1.52%), Computer related services (1.51%), Individual/family services (1.5%), Custom computer programming (1.01%).

Denmark’s most significant companies
The largest companies that are currently registered and operating in Denmark, based on the turnover they generate, are (as of April 2022):

  1. E-boks A/S – 231.04 mld DKK
  2. Glunz & Jensen Holding A/S – 195.63 mld DKK
  3. Centrica Energy Trading A/S – 77.83 mld DKK
  4. Vestas Manufacturing A/S – 48.19 mld DKK
  5. Energi Denmark A/S – 44.54 – mld DKK
  6. Lego A/S – 38.54 – mld DKK
  7. Coop Danmark A/S – 35.34 – mld DKK
  8. Ørsted Salg & Service A/S – 33.08 – mld DKK
  9. Siemens Gamesa Renewable Energy A/S – 30.46 – mld DKK
  10. Lego System A/S – 28.11 – mld DKK

All Danish companies registered in the country generate a total of €1,891,047,924,361 in sales. AP Møller – Mærsk A/S boasts the highest sales with sales of €56.30 billion. The second highest company in terms of total sales is AP Møller Holding A/S with €54.86 billion, followed by Maersk A/S with €39.60 billion in sales. One can also distinguish companies such as Ocean Network Express Europe Ltd. Denmark Filial (€30.01 billion), Dsv A/S (€24.51 billion), Tata Consultancy Services Limited, Filial af Tata Consultancy Services Ltd., India (€24.21 billion), Novo Nordisk Fonden (€21.93 billion), Centrica Energy Trading A/S (€21.40 billion), Danske Bank A/S (€20.21 billion), Novo Nordisk A/S (€18.93 billion).

Companies that are registered in Denmark employ a total of 3,823,049 workers. Region Hovedstaden has the largest number of employees, with a staff of 53,286. Københavns Kommune, with 49,065 employees, and Salling Group A/S, with 49,065 employees, boast a slightly smaller staff. Other companies that employ a very large staff are Midtjylland Region (37,869), Syddanmark Region (33,918), Aarhus Kommune (32,429), Forsvaret og Forsvarsministeriets Styrelser (28,817), Aalborg Municipality (21,391), Sjælland Region (21,356) and Novo Nordisk A/S (20,002).

Danish companies were also included in the Forbes Global 2000 list compiled in 2019. This compilation includes the 2,000 most successful companies from around the world. Businesses in this list are compared to each other based on categories such as revenue, profit, assets and market value. These factors are assigned individual weighted ranks, chosen on the basis of which factors are most important in creating this type of list. Danish companies that made the Forbes 2019 list are Maersk Group (262nd place in the ranking), Danski Bank (339th place), Novo Nordisk (376th place), Ørsted (486th place), Carlsberg Group (794th place), Vestas Wind Systems (847th place), DSV (1012th place), Koloplast (1316th place), Bank Jyske (1520th place), Nowozymy (1668th place), Lundbeck (1889th place), ISS A/S (1973th place) and Maersk Drilling (1977th place).

FAQ

  1. What is a Danish Holding Company?
    It is a Danish holding company that must be registered with the Trade and Companies Agency. Below you will find the most important information about Denmark Holding Company:

    • the private Danish holding company is Anpartselskab (ApS);
    • the Danish holding company has shares in other subsidiary foreign companies;
    • may have 100% foreign participation;
    • the profits of such a company are tax-free;
    • minimum share capital (DKK 125,000);
    • does not have to have more than one shareholder;
    • no restrictions on the activities of subsidiaries;
    • can be registered in 1 day;
    • the company’s accounts belong to the public registers and are audited annually;
    • these companies only have foreign shares;
    • dividends are not taxed;
    • The Danish Tax Reform Act 2009 distinguishes: connected investors – who are exempt from paying capital gains taxes and hold shares of 50% of the share capital; portfolio investors – who have to pay capital gains taxes and hold shares of less than 10% of the share capital; subsidiary investors – who do not have to pay profit taxes and hold shares between 10% and 50% of the share capital.
  2. What is a Denmark Private Limited Company – PLC?
    A Denmark Private Limited Company is a Danish limited liability company, Anpartsselskab – ApS. The shareholders of such a company are only liable by the amount of their contribution for the company’s obligations. Denmark is a member of the European Union, therefore such a company has greater possibilities to expand into the market of EU member states. The share capital of a PLC must not be less than DKK 50,000 and the name of any company (even an English one) should end with the Danish abbreviation ApS. A Danish Private Limited Company should be registered with 2 government agencies: We register the Articles of Association and Memorandum with the Companies Registry and the Danish Trade and Companies Agency. At the Danish Business Authority, you will find specimens of the Articles of Association, the Memorandum, which describes the provisions that have to do with, among other things, the personal data of the promoters, the allocation of shares, the costs of setting up the company’s, the personal data of the auditor of Danish business and the persons who are on the board. The PLC must have at least one Danish director and a minimum of one shareholder.

    However, the law prohibits PLCs from engaging in seven business activities, which include:

    • banking;
    • fiduciary activities;
    • fund management;
    • trust management;
    • insurance;
    • collective investment schemes;
    • reinsurance.
  3. Through which Danish website can I register my own business?
    eogs.dk
  4. What is a PMV?
    PMV (Personligt ejet mindre virksomhed) is a small self-employed business, the owner of which is not obliged to register with the Danish Central Business Register and Information (CVR). The owner of such a business is liable for its obligations with his, or her, own assets. A PMV does not require start-up capital, but once an employee is employed or the annual turnover exceeds DKK 50,000, the business owner is obliged to change the form of the business to his or her, own business.
  5. What is NemID (EasyID)?
    In Denmark, a NemID is an identifier that functions like a digital signature, and all Danish companies receive one.
  6. How is Danish business supervised by the Labour Inspectorate?
    The Danish Labour Inspectorate cares very much about the safety of employees, and therefore regularly checks all companies for a safe working environment and occupational health. Arbejdstilsynet, the Danish Labour Inspectorate, supervises all companies that operate in Denmark, including those foreign companies offering temporary services, and checks that the companies have registered with the RUT, the Danish Register of Foreign Service Providers. These checks are unannounced and apply to all companies, throughout Denmark. The Labour Inspectorate also cooperates with the Danish police, which checks that foreigners are legally in Denmark and have permission to work in Danish companies, as well as with the Danish Tax Administration, which checks that Danish companies are not money owing with contributions and taxes, i.e. VAT. The Danish Labour Inspectorate does not have to have a court order to inspect companies and can also inspect offshore installations and, in addition to health and safety, carry out risk-based surveillance, retail surveillance and market surveillance.
  7. What is a Danish RUT?

    Those who decide to set up and operate their own business in Denmark are required, before starting work, to report the company to the Register of Foreign Service Providers – RUT. Any changes to the company must also be notified, up to a maximum of 1 working day on which they take effect. What else you should know about the RUT:

    • If a Danish company is not reported to the Register or the information reported is out of date, the Labour Inspector can prosecute or fine the Danish business owner (DKK 10,000 or even DKK 20,000 in the case of multiple violations).
    • The Labour Inspector also has the right, to charge a financial penalty for each day of delay in reporting services to the Register.
    • The Register of Foreign Providers has a telephone number that Danish business owners can call to obtain all the most important information regarding registration with the RUT or Danish labour law.
    • A company can be registered with the RUT via the websitevirk.dk.
    • Any employer or employee working in Denmark should register with the Register of Foreign Service Providers. After registration, they will receive a personal RUT number, which is necessary when dealing with Danish authorities.
    • Each employee should provide his or her employer with a receipt with his or her RUT number (this applies especially to construction, gardening, agricultural, forestry or cleaning services).
    • What information must be provided when registering:
      • contact details,
      • location of the work,
      • type of service,
      • the sectoral classification code of the company,
      • date of work,
      • company name and address,
      • personal data of the posted workers,
      • the duration of the delegation,
      • CVR number and VAT registration number.

    Any natural or legal entity for which services are performed in Denmark belongs to Danish service providers.

  8. What can Danish businesses be fined for?

    Danish businesses can be supervised by the police, the Tax Authority and the Labour Inspectorate. These authorities check whether Danish businesses have registered with the RUT, whether they pay their taxes, comply with health and safety rules and whether employees have permission to work in Denmark. If Danish employers do not comply with these rules, they can expect warnings, financial penalties and even prosecution.

  9. Setting up a Danish branch vs a new company in Denmark?

    Setting up a Danish branch of a foreign company is a very good option for Polish companies, but a Polish entrepreneur can only set up a branch of his company if the business registered in Poland has a legal form similar to the Danish one, i.e. A/S or ApS. In order to set up a Danish branch, no start-up capital is necessary as in the case of setting up a new company.

  10. Where can I buy Danish kroner at a favourable exchange rate?
    Online exchange offices have lower margins than stationary exchange offices and entrepreneurs can also negotiate the exchange rate. www.rkantor.com.
  11. What Danish telephone numbers and website addresses should I be aware of?
    • eogs.dk,
    • skat.dk,
    • virk.dk,
    • statsforvaltning.dk,
    • toldskat.dk,
    • Registration body data: Erhvervs-og Selskabsstyrelsen, Kampmannsgade 1, DK-1780 Copenhagen V; Tel: +45 33 30 77 00; Fax: +45 33 30 77 99; E-mail: ckk@eogs.dk.
  12. How do I set up a company in Denmark?
    Denmark is characterized by the absence of restrictions on setting up and running one’s own business, a free market, free competition, relatively low, income tax (28%) and the lowest burden of health and social insurance for employers in the OECD countries (1% from the wage fund). On top of this, the registration of a new company and all the formalities involved are affordable for foreign entrepreneurs who want to become self-employed in Scandinavia, and entrepreneurs can also count on the assistance of Danish officials. You can set up your own business via the website of the Danish Commerce and Companies Agency (DCCA): www.eogs.dk, where you will find a registration form and through which Danish companies are assigned a special Central Company Register number – CVR: www.cvr.dk. A newly established company is also, required to register with the Danish Customs and Tax Administration and can do so via www.toldskat.dk.
  13. What is a residence certificate, and who should apply for one?
    Every Polish citizen who plans to stay in Denmark for more than 3 months and entrepreneurs who want to set up their own business in Denmark must apply for an EU/EEA residence certificate (www.statsforvaltning.dk) from the Danish Regional Authority before registering their business.
  14. What is Invest in Denmark?
    Invest in Denmark is a Danish organization that has been established to answer any questions entrepreneurs may have concerning, among other things, new Danish investments.
  15. What is the LetLøn system?
    LetLøn is a special, free, system found on the website of the Danish Customs and Tax Administration (SKAT) through which you can keep payroll records of employees of a small Danish business. All the employer has to do is enter the hourly rate of the person working for the company, and the system automatically calculates all taxes and costs needed for the annual settlement.
  16. What is Afstaelse?
    Afstaelse is the rent or deposit for renting premises for a business (i.e. a shop) that the current tenant must pay to the previous tenant.
  17. Who is liable for VAT in Denmark?
    Any entrepreneur who sets up a company in Denmark must pay corporation tax – CIT, which is 22%, and becomes a 25% VAT payer when the annual turnover of his/her company exceeds DKK 20,000.
  18. How much does it cost to have documents translated from Danish by a sworn translator?
    Approximately DKK 400 per page of document.