Danish holding company

Denmark Holding Company, or Danish holding company, is otherwise a limited liability company that takes the form of A/S or ApS (Danish limited liability company) and has shares in other companies. Such a company must be registered with the Trade and Companies Agency, and its name does not have to contain the word „holding”.

What should you know about a Danish holding company?
1. Anpartsselskab (ApS) is a private holding company.
2. Operating companies are companies owned by the holding company.
3. The holding company is generally not registered for VAT.
4. Only 1 shareholder is required for this company.
5. The holding company manages the ownership of subsidiaries.
6. The accounts of the holding company are audited every year and belong to public records.
7. If the holding company and the operating company are based in Denmark, and the operating company owns more than 50% of the shares, they are subject to joint taxation.
8. The holding company's income comes from both profits from the sale of shares in subsidiaries and dividends.
9. Dividends and profits of the company are not taxed.
10. The liability of the companies under joint taxation is shared, that is, part of the liability is borne by the holding company and part by the operating companies.
11. It is possible to use the same capital of DKK 20,000 used to establish a holding company by registering both companies at the same time ("rolling capital"). It is also possible to register the holding company after registering the operating company, but this is more complicated.
12. In the case of a Danish holding company, portfolio investors own shares worth less than 10% of the share capital and are required to pay capital gains taxes, subsidiary investors own shares worth between 10% and 50% of the share capital and are exempted from paying capital gains taxes, while affiliated investors own shares worth 50% of the share capital and are also exempted from paying capital gains taxes.
13. Shares of the company may come entirely from abroad.
14. Dividends are paid to shareholders every year at the general meeting.
15. The Danish holding company pays 22 percent corporate tax.
16. Operating companies should have the same fiscal year as the holding company.
17. Subsidiaries have no restrictions on their operations.

In the case of a Danish holding company, the value of the non-public shares it purchased can be reported in the annual report in two ways: as the actual purchase price (after dividends are received or the shares are sold, a profit will be reported) or as an intrinsic value (in order for the value of the shares to correspond to the value the operating company reported in its annual report, the value of the shares must be adjusted each year in the report; income will be reported in the annual report even if the value of the shares increases).