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 business 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 business 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 business’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, business 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 business 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. IIt is recommended to take professional advisory services that will help you choose the legal form that will most closely coincide with your abilities and capabilities, especially for young entrepreneurs.

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 company denmark is equally available to all domestic and foreign entities.

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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 business 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 business;
    • a business 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 business’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 business as a whole;
    • such a business cannot tax its income separately.

e 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 business’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 business 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 business, 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 business).

The shareholders and co-owners of the business 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 business in Denmark:

  • a joint-stock business is a legal form for medium and large businesses 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 business, 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 business,
    • the nature and purpose of the business,
    • the initial capital;
  • the status of the business must be drawn up;
  • share capital must be made;
  • shareholders must elect a supervisory board and a management board at the statutory meeting;
  • the business must have at least 1 shareholder;
  • according to the law, the founders of a business do not have to be the owners of its shares;
  • a business 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 business is subject to separate taxation rules;
  • all documents must be drawn up in Danish;
  • the cost of registering an A/S business 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 business name, the business has the right to commence operations from the date the memorandum of association is signed;
  • another solution is to buy shares in an existing business 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 our bank account, we have 6 months to register the business with the Danish Trade Register. The whole procedure for registering a business usually takes 2 to 3 weeks.

The registered business is given a CVR registration number (equivalent to the Polish REGON number). Once the business 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 business 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 business 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 business 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 business 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 business (the Polish equivalent of z o.o.). This business 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 business through a law firm.

When establishing a limited liability business in Denmark, it is necessary to prepare the following documents:
I. Articles of Association
II. Memorandum of Association

All documentation can be crafted in the English language, and there is no requirement for a notarial certificate for signatures.

Moreover, the initial share capital needs to be transferred to either the business’ bank account or our client’s attorney’s account.

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Anpartsselskab – ApS vs Aktieselskab – A/S

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

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

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 business and not to the owners.

5. The approximate cost of setting up an ApS business 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 business and an A/S company are required to submit annual reports (årsrapport), need statutes (vedtægter) and incorporation documents (stiftelsesdokument).

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

8. Both businesses must have at least one owner.

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

10. Both businesses are subject to tax law.

Limited partnership (Kommanditselskab – K/S)

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

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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 businesses, which are liable for the business’ obligations with the amounts set aside in the shares and 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 businesses.

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

Relevant information about the branch of a foreign business:

  1. The name of the business branch should include the word filial, or 'branch’, as well as the name of the business 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 to register a branch of a business, 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 business;
    • the business’ 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 business;
    • 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 business’ 12-month accounts must be sent annually to the Agency for Trade and Enterprise.
  11. The business’ 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 business 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 business established for the purpose of promoting services and products (such a representative office does not, however, have the right to sell them).

Denmark allows foreign business to conduct operations through a representative office, particularly if these operations are confined in scope. Such activities may include tasks like receiving orders (excluding invoicing), administrative duties, or specific business endeavors for a defined duration, such as engaging in a temporary construction contract. Notably, registration with the Danish Business Authority is not mandatory for a foreign representative office. Additionally, representative offices are typically exempt from Danish corporate taxation.

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.

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).

Businesses – if you set up and run a business 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 businesses 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 business 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 businesses 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 business when it is registered in Denmark as VAT payer (if not registered, it only provides the NIP).
  10. If the owner of a Danish business 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 business 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 businesses, 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 businesses that are not registered for VAT.

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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, business) and employees, through trade unions or employee associations.

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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.

Key components of employment contracts

An employment contract in Denmark should encompass the following crucial components:

1. Identification details: Names, addresses, and contact information of both the employer and the employee.
2. Job specifics: Clear job title, role description, and delineation of responsibilities.
3. Work schedule: Explicit outline of the employee’s work hours and days.
4. Compensation details: Comprehensive pay schedule, including salary or wage, along with any supplementary benefits.
5. Termination provisions: Defined notice periods for both parties in case of termination.
6. Confidentiality clauses: Inclusion of clauses to safeguard the employer’s proprietary information through confidentiality or non-disclosure agreements.
7. Review and understanding: Both parties should thoroughly review and comprehend the key terms of the contract before signing.

Ensuring that these elements are included and understood is essential for a comprehensive and mutually beneficial employment agreement.

In the Danish labor market, employment contracts can be categorized into the following types:
I. Permanent employment contracts:
– These contracts are indefinite-term and remain effective until terminated by either party.
– Terms outlined should include rights and obligations of both parties, working hours, salary, benefits, notice period, and termination policies.
II. Fixed-term employment contracts:
– Effective for a specific duration, these contracts specify the start and end dates of employment.
– Terms should include employment conditions, rights, and obligations of both parties.
III. Temporary agency work contracts:
– Applicable to workers hired through temporary staffing agencies for temporary assignments at specific companies.
– Terms should delineate the relationship between the agency, the employee, and the client company, along with rights and responsibilities of each party.
IV. Project-based employment contracts:
– Used for hiring employees for specific projects, arrangements, or tasks.
– Terms should specify project details, start and end dates, scope of work, deliverables, payment terms, rights, obligations, and other relevant conditions.

Each type of contract serves distinct purposes and should be tailored to encompass the specific needs and requirements of the employment arrangement.

Salary regulations

In Denmark, employers are obligated to fulfill the agreed-upon salary or wages. There is no mandatory minimum wage in the country, with pay typically governed by collective agreements specific to various types of work.

The method of payment can vary depending on the nature of the work. For instance, some roles may be compensated on an hourly basis, while others may involve piece-work rates, performance-related pay, or similar arrangements. Certain collective agreements may also require additional individually negotiated supplements to the minimum rate.

In some cases, pay is determined through negotiations between the company and the employee. Total compensation often exceeds the hourly rate due to additional pay components.

Employers can ascertain the applicable pay rates for different roles by referring to the relevant collective agreement and any accompanying appendices.

For demands regarding a collective agreement from a foreign company, refer to the section on collective agreements.

The typical components of wages paid by a Danish employer for work conducted in Denmark include:
– minimum pay rate/minimum wage rate/normal wage rate,
– locally negotiated wages and personal supplements or wages (applicable to collective agreements with or without predefined pay rates),
– special wage schemes, such as piecework, bonuses, and payment based on results,
– fixed supplement for all employees (common in collective agreements with normal wage rates),
– payment for weekday public holidays,
– payment during supplementary days off for holiday purposes,
– payment during statutory holidays,
– contribution to optional pay account/free-choice account/special savings,
– contribution to workplace pension schemes,
– overtime pay,
– supplementary payment for unusual working hours,
– supplement for evening, night, and weekend work,
– shift work supplement,
– supplement for external work and work requiring travel, including subsistence payment not intended as reimbursement for expenses.

Furthermore, Danish employers also provide payment for:
1. The first day of a child’s illness.
2. Payment during parental leave as a supplement to the public parental leave benefit rate.
3. Payment during illness as a supplement to the public sickness benefit rate.

These additional payments serve to support employees during specific circumstances such as childcare needs, parental leave, and illness, ensuring their financial stability during these periods.

Working hours and overtime regulations

In Denmark, there are no statutory regulations concerning the standard number of working hours. Typically, working hours are determined by either a collective agreement (if applicable) or the terms outlined in the employment contract.

Across most sectors, the standard weekly working hours amount to 37 hours. Typically, working hours span from Monday to Friday, starting between 8 or 9 AM and concluding around 4 or 5 PM. Lunch breaks typically range from 30 minutes to 1 hour per day and are typically not included in the calculation of weekly working hours.

In Denmark, the average working week over a four-month period should not exceed 48 hours. However, it’s important to note that it is possible to opt-out of this maximum limit only if the collective agreement adheres to the regulations set forth in the Working Time Directive. This opt-out provision allows for flexibility in certain circumstances but must be in line with the guidelines outlined in the directive.

In Denmark, overtime pay is contingent upon collective bargaining agreements (CBA). In the absence of a CBA, no statutory regulations govern overtime pay. Generally, under CBA terms, overtime pay typically entails a 50% increase for the first 3 hours worked beyond regular hours and 100% for subsequent hours. Additionally, employees may have the option to choose between receiving payment for overtime or taking time off in lieu of payment. Furthermore, if an employee works on a public holiday, they are entitled to receive a pay bonus equivalent to 100% of their average salary.

Regulations regarding Sunday work in Denmark vary depending on the industry and the specific collective bargaining agreement in effect. Typically, employees receive compensation ranging from 50% to 100% of their daily pay for working on Sundays. However, in cases where employees are not covered by a collective bargaining agreement, there are no other legislative provisions governing Sunday work.

In Denmark, employees are entitled to certain rest periods as follows:
1. An uninterrupted rest period of at least 11 hours for every 24-hour period.
2. At least one day of rest per week.

Additionally, it is mandated that no more than six workdays are permitted between two rest days, ensuring employees have regular breaks from work to maintain their well-being and work-life balance.

In Denmark, regulations for night workers stipulate that they cannot work more than an average of 8 hours within a 24-hour period over the course of four months. This provision is in place to protect the health and safety of night workers by ensuring they do not exceed a reasonable limit of working hours during nighttime shifts.

Termination of employment

In Denmark, the termination process is fairly straightforward, though there are specific regulations for salaried workers. This process entails adhering to the notice period, providing a valid reason for termination (particularly for employees who have been with the company for over a year), and, when applicable, offering compensation. Employers are entitled to terminate an employment contract for various reasons, including financial constraints, organizational restructuring, and employee misconduct such as non-cooperation or poor performance. Dismissal due to dissatisfaction with an employee necessitates prior warning and an opportunity for improvement before termination. Additionally, termination may occur if an employee has been absent due to illness for more than 120 days within the past 12 months, provided this condition is stipulated in the employment agreement. Unjustified terminations by employers may result in compensation for the employee. Although a written notice is not mandatory, it is strongly recommended for documentation purposes. However, if requested by the employee, the employer must provide sufficient written reasoning for termination.

The length of the notice period depends on the duration of the employment:
– One month notice for employment up to five months.
– Three months notice for employment up to two years and nine months.
– Four months notice for employment up to five years and eight months.
– Five months notice for employment up to eight years and seven months.
– Six months notice for employment over nine years.

Employees are required to give one month’s notice when resigning. In cases of gross misconduct by either party, the employment contract can be terminated immediately without any notice.

There isn’t a universal statutory guideline for compensation upon the termination of employment. When compensation is required, it’s typically dictated by collective agreements, primarily favoring salaried employees. The standard regulations are as follows:

1. For non-salaried workers, the compensation must be stipulated in the employment contract or collective agreement.
2. For salaried (white-collar) employees, compensation usually amounts to half of the notice period, varying based on factors such as length of continuous employment, termination circumstances, and the employee’s age. Typically, this compensation ranges from 1 to 3 months.
3. For executive officers, compensation is only provided if outlined in the employment contract or service agreement.

Upon termination, the employer must settle any outstanding holiday leave by paying it into the employee’s holiday fund. Furthermore, salaried employees are entitled to severance pay equivalent to one month’s salary after 12-17 years of service. For those employed for over 17 years, the severance pay increases to three months of salary.

In Denmark, blue-collar employees lack general protection against unjustified termination, unless such protection is explicitly stated in the employment contract or covered by a collective bargaining agreement. Similarly, there are no standard regulations regarding the length of notice periods for blue-collar employees, unless specified in a collective bargaining agreement.

Before terminating an employee based on performance, misconduct, or cooperation issues, the employer must adhere to a specific procedure aimed at facilitating the employee’s improvement before cessation of employment. Failure to follow these guidelines may render the termination unjustified, potentially leading to compensation for the employee.

Initially, the employer must issue a written warning to the employee, including:
– A clear statement of the issue and explanation of areas needing improvement.
– Proposed objective and measurable changes.
– Suggestions for resolving the problem.
– Potential follow-up meetings (if necessary).
– A statement outlining the employment consequences of non-compliance.
– A specified timeframe for improvement (if applicable).

Employees retain the right to have a union representative present at the meeting, and employers are obligated to inform the union representative of the warning within two days of the meeting.

If the employee’s conduct or performance fails to improve, employers may proceed with termination following the requisite notice periods.

All employees are safeguarded against unfair dismissal on various grounds including:
a. pregnancy, maternity, paternity, or parental leave,
b. filing a complaint against the employer,
c. engagement in temporary work,
d. discrimination based on race, color, sex, sexual orientation, religion, political opinion, social, ethnic, and national origin,
e. age,
f. membership or participation in trade union activities,
g. disability, except when the employer has fulfilled obligations to accommodate the employee’s disability.

Dismissal not deemed reasonably justified by the employee’s behavior or company circumstances may result in compensation for the employee. Salaried employees with less than 12 months of tenure are not shielded from unjustified termination and hence are not eligible for compensation, unless dismissal is warranted based on the aforementioned reasons. For employees with a minimum of 12 months of service, compensation is capped at half of their salary for the notice period. Depending on age and length of service, compensation may range from up to three months’ salary for those over 30 years old, four months’ salary for employees with at least ten years of service, or six months’ salary for employees with a minimum of 15 years of service.

Dismissal is categorized as collective when, within a span of 30 days, the company terminates:
I. 10 employees (applicable to companies with 21 to 99 workers),
II. 10% of the workforce for companies with 100 to 299 employees, or
III. 30 employees for companies with over 300 workers.

Prior to executing dismissals, the employer is obligated to consult with the trade union representative, explore alternatives to dismissal, and notify both the government and the union. However, there is no fixed statutory redundancy payment mandated for collective dismissals.

Employees with a tenure of 12 to 17 years are entitled to redundancy pay ranging from 1 to 3 months’ salary, commensurate with their years of service. Additionally, employees may be eligible for contractual redundancy pay as stipulated in their individual employment contracts or collective bargaining agreements.

Employees wishing to resign must submit a written notice and provide their employers with one month’s notice, working until the end of the month in which they are leaving. For example, if an employee resigns in March, they are expected to work until the end of April. During the probationary period, employees who resign are required to give one day’s notice. However, certain contracts may specify longer notice periods, such as 14 days, which must be adhered to.

Employers in Denmark are required to provide one month’s notice to employees who have been with the company for less than six months. For employees with more than six months of service, the notice period extends to three months. Upon completion of three years of employment, the notice period increases to four months, with an additional month added for every subsequent three-year period of service, up to a maximum of six months’ notice. Although permitted, paying in lieu of notice is not a prevalent practice in Denmark.

Occupational health and safety in Denmark

If you run your own business in Denmark or are employed by a Danish business, you must now 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.

Company in denmark - duties of employees.png

If a Danish business 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 businesses 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 business 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 business 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 business 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 business,
    • date of works,
    • name and address of business,
    • 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.

Closing procedures

When closing your business, it’s important to note that your business’s MitID will be canceled, resulting in the loss of access to your business’s digital mailbox. While your business may still receive information in its digital mailbox after closure, you should ensure to set up access to the mailbox using your CPR no. (civil registration number) and personal MitID before closing down your business. This ensures continued access to important communications even after business closure.

Before closing your business, it’s essential to access your business tax account via E-tax for businesses (TastSelv Erhverv). This tax account provides you with an overview of your business declarations, charges, and payments to and from the Danish Tax Agency. By reviewing your tax account, you can ensure that all necessary declarations have been made to avoid duties and prevent overpayment of VAT or A-tax, among other obligations. This step helps to ensure that all financial matters are settled appropriately before the closure of your business. If you have already closed your business, you’ll need to utilize your personal MitID to access E-tax for businesses. Upon logging in, choose 'Continue as a private individual’ instead of 'Continue as a business,’ as your business’s CVR number has been canceled. This ensures that you can still access necessary tax information and services related to your closed business using your personal credentials.

To deregister or close your business on virk.dk, follow these steps:
1. Log in to E-tax for businesses.
2. Navigate to 'Profile’ located at the bottom of the left-hand menu.
3. Choose 'Registration certificate’ (’Registreringsbevis’).
4. Click on 'Download registration certificate/deregistration certificate’ (’Hent registreringsbevis/ophørsbevis’).

Once you have completed the deregistration process, you can obtain your deregistration certificate from E-tax for business. This certificate can serve as documentation for various purposes, such as informing your bank or unemployment fund. After deregistering your business, it’s important to note that you must retain your accounts and other relevant documents for a minimum of five years. This includes maintaining information such as accounts, bookkeeping records, and vouchers. Furthermore, if you have purchased property or renovated buildings used in connection with your business, you are required to keep accounting records for 10 years from the date of property purchase or building renovation.

If you’ve already closed your business, it’s crucial to ensure that all necessary declarations are completed for any applicable taxes or duties, such as A-tax, excise duties, or payroll tax. Even if the declaration amounts to zero Danish Kroner (DKK), it’s important to submit it for the relevant period.

Before proceeding to the next step, pay special attention to the following:
– File your last VAT return.
– Declare your final salary and tax obligations.
– Declare your last payroll tax obligations.
– Follow the process to deregister your business from excise duties.

Ensure that all necessary steps are taken to fulfill these obligations before moving forward with the closure process.

It’s important to correct your business profit in your preliminary income assessment to ensure that you’re paying the correct amount of tax throughout the year. Here’s how to do it:
1. Log in to E-tax for individuals.
2. Select 'Forskudsopgørelsen’ (Preliminary income assessment).
3. Correct your business profit in field 221 or 435.
4. Make sure to check off the field 'Virksomhedsophør’ (Close of business) under 'Andre felter’ (Other fields), 'Selvstændig erhvervsdrivende’ (Own business). This ensures that your preliminary income assessment for the next year does not include business profit.

By completing these steps, you’ll ensure that your tax payments are adjusted accordingly following the closure of your business.

After closing your business, you need to calculate your business profit and prepare your tax accounts from January 1st until the date of business closure. This involves determining gains or losses on items removed from the business or sold to others, such as computers, inventories, furniture, vehicles, and machinery, which must be included in your business profit.

It’s important to note that you must declare your business profit on your tax return in the year following the closure of your business. The tax return deadline is typically July 1st, although it was extended to September 1st in 2020 due to the coronavirus pandemic. Failure to meet the deadline may result in fines of DKK 200 per day, up to a maximum of DKK 5,000.

Here’s how to correct your tax assessment notice or tax return:
1. Log in to E-tax for individuals.
2. Select 'Ret årsopgørelsen/oplysningsskemaet’ (Correct your tax assessment notice/tax return).
3. Review preprinted amounts and correct any inaccuracies.
4. Check box 71 to indicate that your business is closed.
5. Enter your profits in box 111 or your losses in box 112. Complete any other relevant boxes as necessary.
6. Scroll to 'Regnskabsoplysninger’ (Accounting information) and click 'Oplys’ (Declare). Enter information in the relevant boxes.
7. Click 'Gem’ (Save). If you have nothing else to declare, click 'Tilbage’ (Back).
8. Review your declarations to ensure completeness.
9. Click 'Næste’ (Next) to view an overview.
10. Click 'Godkend’ (Accept). You can now view your tax assessment notice. If any information is incorrect, you’ll be prompted to complete missing details before a new tax assessment can be generated.

Your tax assessment notice will indicate whether you’ve overpaid taxes and are due a refund or if you owe additional taxes.

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 businesses 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 businesses 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 our business registration in Denmark. Special attention must be paid to permits by businesses 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.

Expenses associated with establishing a business in Denmark

People who are planning to start a business in Denmark should take note that there will be a significant amount of expenses to be covered even before the business officially launches. These upfront costs may include expenses related to market research, analysis, and the creation of a business plan. If the entrepreneur decides to engage in advertising or marketing activities prior to the start of operations, these costs may also be considered as pre-launch expenses. Additionally, the entrepreneur will need to allocate funds for the initial capital, which will vary depending on the type of business chosen. Other expenses that should be anticipated may include:

  • The cost of obtaining a Danish NemID signature, which is commonly used for conducting business in Denmark, is DKK 80 per signature. NemID signatures allow businesses to use online banking services, sign official documents or forms online, and communicate with public authorities via the internet. Companies can apply for up to three NemID signatures for use by the business owner, management, and employees.
  • A fee is charged by Danish banks for opening a business bank account, which is necessary to deposit share capital when starting a business in Denmark.
  • A fee is required to register a business entity with the Danish Business Authority (DBA) to enable the payment of taxes for the business in Denmark. Registration can be completed online via the DBA website.
  • Businesses in Denmark are required to provide insurance coverage for their employees against workplace accidents and occupational diseases. Fees are associated with registering employees for this type of insurance.

Ability to view the Danish company register

In Denmark, there is a regulatory body known as the Company Register that maintains information on all businesses operating in the country. The organization is legally obligated to provide public access to this information, which includes details such as business ownership, partners, share capital, and registered office. Interested parties can obtain this information by visiting the offices in the Danish Trade and Companies Agency or through their website. There are also branches and centers throughout Denmark that fall under the jurisdiction of the Trade Registry and can assist with inquiries related to this information. The board of directors of the Trade Registry oversees the management of the Danish Trade and Companies Agency and its various departments, such as the customer contact center, coordination and marketing center, business center, and department for better business regulation. The Projects Forum, which has comparable financial resources to the Trade Registry, manages some of the agency’s projects.

Breakdown of existing companies in Denmark

Industry breakdown
The total number of businesses that are currently registered and actively operating in Denmark is 528,753. Among the companies based in Denmark, they account for a share of 2.39% of the total revenue generated by EU-based enterprises, simultaneously employing 0.97% of all EU workers. The predominant number of registered businesses belong to the finance, insurance, and real estate sector (a total of 205,419 companies), followed by services (204,036) and retail trade (30,552). Slightly fewer companies are in industries such as construction (25,802), wholesale trade (19,907 ), transportation, communications, electrical, gas and sanitary services (17,177), manufacturing (14,336), agriculture, forestry and fishing (10,515), public sector (548) and mining (251). The remaining 210 businesses operate in the unknown industry category.

Breakdown of companies by SIC code
Businesses are categorized into specific industries through the utilization of the Standard Industrial Classification (SIC Code). It allows registered businesses in Denmark to be divided according to which industries they operate in. Denmark’s leading SIC Codes include holding business (constituting 21.36%), membership organization (17.27%), and real property lessor (7.98%). Other SIC codes also frequently used are misc business credit institutions (4.58%), management consulting services (2.28%), subdivider/developer (1.89%), closed-end investment office (1.53%), computer related services (1.51%), eating place (1.48%), individual family services (1.45%) and carpentry contractor (1.28%).

Denmark’s most significant businesses
The largest businesses that are currently registered and operating in Denmark, based on the highest sales, are (as of October 2023):

  1. A.P. Møller – Mærsk A/S (€ 74.62B) – Maersk Group, operating in 130 countries, stands out as a diverse conglomerate. Hailing from Denmark, it holds the distinction of being the largest business in the country and one of the foremost shipping corporations worldwide. Apart from its dominant presence in the shipping sector, the group also actively engages in the energy domain, logistics, retail, and manufacturing industries.
  2. Maersk A/S (€ 57.97B) – a part of the Maersk Group.
  3. Andel A.M.B.A. (€ 49.61B) – Formerly recognized as SEAS-NVE until August 2020, functions as a consumer-owned energy corporation with its headquarters situated in Svinninge, Holbæk Municipality, Denmark. Its operational span covers the southern and western regions of Zealand as well as Lolland-Falster. The business’ establishment dates back to 2005 when it resulted from the merger between SEAS and NVE.
  4. Energi Danmark A/S (€ 46.31B) – A prominent participant in the energy trading sector within Northern Europe, conducts a wide array of activities. Its operations encompass physical and financial energy trading, carbon and gas trading, portfolio management, and the associated trading of derivative financial instruments.
  5. Dsv A/S (€ 31.67B) – Emerges as a global provider of transport and logistics solutions. Offering an extensive range of services including road transport, air transport, sea transport, and specialized transport services, DSV maintains a presence across 60 countries, facilitating transportation to and from 150 countries worldwide. Notably, DSV holds the position of being the largest road transport provider in Denmark.
  6. Ocean Network Express Europe Ltd. Denmark Filial (€ 30.00B) – Operating under the name (ONE), this modern Japanese container transportation and shipping business represents a joint collaboration among the Japanese shipping Lines Nippon Yusen Kaisha, Mitsui O.S.K. Lines, and K Line.
  7. Nitor Energy A/S (€ 26.51B) – Established in 2017, functions as an energy trading enterprise, with a primary focus on 24/7/365 physical natural gas and power trading across various European markets.
  8. Tata Consultancy Services Limited, Filial af Tata Consultancy Services Ltd.,Indien (€ 24.20B) – TCS, a globally recognized leader in IT services, consulting, and business solutions, effectively harnesses technology to instigate business transformation and drive change.
  9. Novo Nordisk A/S (€ 23.78B) – Specializes in the domain of diabetes care. Its core product line revolves around insulin and insulin-related products. Functioning as a global healthcare entity, Novo Nordisk also extends its involvement to areas such as hemophilia care, hormone replacement therapy, and growth hormone therapy.
  10. A/S United Shipping & Trading Company (€ 15.93B) – Manages a shipping and management enterprise that caters to diverse logistical needs. The business efficiently mitigates risks for its clientele through the procurement, sale, and shipment of products to customers, in addition to providing logistical and IT solutions.

Largest businesses in Denmark as of October 2023, ranked by net profit, are Takeda Pharma A/S (84,741 million DKK), Weibel Scientific A/S (52,245 million DKK), e-Boks Nordic A/S (50,652 million DKK), Novo Nordisk A/S (48,553 million DKK), Lego A/S (10,752 million DKK), Kirkbi Invest A/S (9,805 million DKK), Lego System A/S (8,426 million DKK), Ørsted Wind Power A/S (6,252 million DKK), Siemens Gamesa Renewable Energy A/S (5,562 million DKK) and A.P. Møller og Hustru Chastine Mc – Kinney Møllers Fond Til Almene Formaal (5,375 million DKK).

Businesses that are registered in Denmark employ a total of 3,788,814 workers. Region Hovedstaden has the largest number of employees, with a staff of 50,321. Københavns Kommune, with 48,730 employees, and Salling Group A/S, with 41,088 employees, boast a slightly smaller staff. Other businesses that employ a very large staff are Forsvaret og Forsvarsministeriets Styrelser (31,171), Novo Nordisk A/S (23,872), Aalborg Kommune (20,566), Region Sjælland (20,403), Rigspolitiet (18,303), Odense Kommune (17,489) and Region Nordjylland (16,410).

Danish businesses were also included in the Forbes Global 2000 list compiled in 2019. This compilation includes the 2,000 most successful businesses 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 businesses 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 business 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 business is Anpartselskab (ApS);
    • the Danish holding business has shares in other subsidiary foreign companies;
    • may have 100% foreign participation;
    • the profits of such a business 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 business’ 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 business, Anpartsselskab – ApS. The shareholders of such a business are only liable by the amount of their contribution for the business’ obligations. Denmark is a member of the European Union, therefore such a business 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 business (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 business’, 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 businesses 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 businesses that operate in Denmark, including those foreign businesses 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 businesses, 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 businesses, 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 businesses 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 business to the Register of Foreign Service Providers – RUT. Any changes to the business 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 business 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 business 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 business,
      • 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 business in Denmark?

    Setting up a Danish branch of a foreign business is a very good option for Polish businesses, but a Polish entrepreneur can only set up a branch of his business 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 business.

  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 business 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 business 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 business 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 business 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.
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