How to start a company in Denmark

Company in Denmark - why is it worth it?

Denmark is a country of choice for foreign investors. This is influenced by many different factors. Above all, Denmark boasts one of the highest GDPs, not only in Europe but also in the world.

Its economy is stable, as well as open and flexible. Also very favorable is Danish inflation, which stands out among other European countries for its very low growth. Bureaucracy in Denmark is negligible and all political, legal or tax issues are very clear and transparent, also for foreigners. 

The fact that Denmark is also a member of organizations such as the EU, the Council of Europe, the WTO, EFTA, OSCE and the OECD also speaks in its favor. If you set up a business in Denmark, you can rest assured that you will be able to recruit highly-qualified specialists because, thanks to the country's top-quality education, the labor market is abundant with some of the most productive and best-educated workers in Europe.

The fact that English is very widely spoken in Denmark will also be a great advantage for foreign investors. English can be easily spoken not only in everyday life and when dealing with locals, but also when dealing with official matters. When filling out any documents related to the company, it is possible to choose any language you wish - it can be Dutch, but also English.

Denmark has many advantages also directly related to running a company. First of all, the process of setting up a company itself is one of the fastest, easiest and cheapest in the world. Foreign companies setting up in Denmark have exactly the same privileges as Danish companies. Denmark's policy actively focuses on supporting the development of entrepreneurs, including those running small and medium-sized businesses, so that they can take advantage of many grant, loan or credit opportunities.

When establishing a business in Denmark, one can choose from a number of legal forms, selecting the one that is most optimal for the type of business. Another encouraging factor is the very low, by European standards, income tax for companies, the rate of which is 28%, as well as low costs related to the payment of social and health insurance premiums by employers - a mere 1% of the wage bill. Thanks to the fact that Denmark has entered into agreements with numerous countries not only in Europe but also in America and Asia, double taxation will be avoided in most cases.

Sole proprietorship (Enkeltmandszirksmhed)

Sole proprietorship is a legal form that is very popular in Denmark. It is the simplest form of sole proprietorship available and requires only simple online registration with Erhvervsstyrelsen. The only formalities that a person wishing to run a sole proprietorship must complete are the submission of a business plan for the company to the relevant municipality and a certificate that proves that the person is qualified.

When establishing this type of legal form, you do not need to raise share capital, however, you should be prepared for the costs associated with registration. All state institutions and authorities operating in Denmark usually contact companies via digital post (Digital Postkasse), so once you have registered your company, you should set it up as soon as possible.

The naming of a sole proprietorship is quite arbitrary. The company may operate either under the name of the person who owns it or under an assumed name. The sole proprietorship has no legal personality, so all the liabilities and assets of the company belong to the owner and, in the event of any debts, the owner is obliged to pay them in full, being liable with all their assets. This legal form allows for the employment of employees and allows the owner to grant power of attorney to other persons who will be responsible for acting on behalf of the business. If the company's income does not exceed DKK 50,000 per year, it is not required to register for VAT.

Limited liability company (Anpartsselskab - ApS)

A limited liability company is the most common form of business in Denmark. It is the most suitable legal form for those entrepreneurs who wish to exercise strict control over the company's activities. To set up a Danish limited liability company, it is necessary to have at least one partner. You also need to raise a minimum of DKK 125,000 in start-up capital.

The process of registering a limited liability company itself is much cheaper and simpler than for other Danish companies. In order to be able to register a company, in addition to paying the initial capital, it is necessary to draw up the company's articles of association and memorandum of association and to register the company with the Agency for Enterprise and Trade no later than two months after signing the memorandum of association.

A Danish limited liability company has its own legal personality and is regulated under the Danish Private Limited Liability Company Act. This means that the company's capital is separate from that of the owners. This type of legal form requires the management of the company to be separate. It is also possible to appoint a supervisory board which consists of three members, however, this is not legally required. If the company decides to create one, this fact must be included in the articles of association. A limited liability company may only include one shareholder of the company.

Limited partnership (Kommanditselskab - K/S)

It is possible to establish a limited partnership in Denmark provided that you have a minimum of two partners, of which at least one should be a general partner and at least one should be a limited partner. The general partner can be either an individual or a legal entity, such as a limited liability company. The general partner is fully liable for all debts of the partnership, while the limited partner's liability only covers the start-up capital he or she has contributed.

The second condition that enables the registration of the partnership is the drafting of a memorandum of incorporation, which specifies in detail how the partnership will conduct its business. The limited partnership must be registered with the Trade and Companies Agency. Please note that the deadline for the registration of a limited partnership is 8 weeks from the signing of the agreement. The name of the partnership should consist of at least one name of the entering general partners.

Public Limited Company (Aktieselskab - A/S)

The joint stock company is the most developed legal form available in Denmark. It is most suitable for medium and large companies that want to be listed on the Danish stock exchange and be able to sell their shares. It also involves a more complicated registration process, during which a number of conditions must be met.

The cost of registering a Danish limited company varies depending on several factors. Interestingly, if the company's name contains words such as 'under registration' or 'under stiftelse', the company can start business as soon as the articles of incorporation are signed. The registration of a joint-stock company in the Danish commercial register should take place within six months after the memorandum of incorporation is signed and the initial capital is deposited.  The average time to register a company after all required documents have been submitted is approximately 2-3 weeks. In the case of a Danish limited company, it is not possible to register the company on the basis of English-language documents - it is necessary to draw them up in Danish. After registering the company with the Danish Trade Register, it is also necessary to register it with the tax authority (Told-og Skatteregion).

A joint-stock company is required to have internal bodies such as an executive board, a directorate or a supervisory board. These are established at the general meeting. They should be composed of at least three persons - this is necessary due to the principle of majority voting when votes take place concerning the resolution of the company's affairs. Both co-owners and shareholders are not obliged to be responsible for any debts of the company with their private assets, however, an exception can be made if the bank requires giro in case of loans. 

Founders of a company are not obliged to hold shares in a particular company. If an individual shareholder decides to buy a minimum of 5% of the company's share capital, he or she must inform the company within 30 days. It is also possible to buy an existing joint stock company and adapt it for a specific business, but in most cases the process of converting it is much more time-consuming and costly than setting up a new company from scratch.

General partnership (Interesselskab - I/S)

A general partnership is a type of company that does not require share capital to be established. It also does not have legal personality, however, it is able to enter into various types of contracts and may also participate in legal proceedings. A general partnership must have at least two partners, who may be either individuals or legal entities. and legal persons. In order to register a company, it is necessary to draw up a memorandum of incorporation, which defines the relationship between the persons who set it up.

Once the memorandum of incorporation has been signed, it must be sent, together with the registration application, to the DBA within eight weeks. If all partners in the company have limited liability, it will also be necessary to register it with the DBA. The name of the general partnership must include the abbreviation I/S, which indicates the legal form of the company. The shares of a general partnership are generally equally divided among the shareholders, unless otherwise stipulated.

Representative office of a foreign company (Salgskontor)

A good option for companies that already have operations in another country and would like to expand them to Denmark is a representative office of a foreign company. This option is all the more encouraging as it does not require share capital or involve higher costs. Companies that are engaged in business activities with legal forms similar to those available in Denmark can apply to open a foreign company representative office. In addition, at least one person who manages the company must reside in one of the Member States of the European Union. The representative office of a foreign company should include in its name the name of the parent company, the country of its registered office and the word "filial", i.e. branch. The parent company is responsible for all obligations of the foreign company's representative office, as the representative office does not have a separate legal personality.

Foreign branch office (Filial af udenlandsk selskab)

Setting up a branch of a foreign company is a more time-consuming process than setting up a company. Establishing a Danish branch of a foreign company is possible for those companies whose legal forms are similar to those in Denmark, so it is an option available to foreign entrepreneurs. To set up a branch of a company in Denmark, it is necessary to submit an online registration form online.

In addition to submitting the registration form, it is also necessary to contribute share capital, the minimum amount of which is DKK 80,000. The cost of setting up a Danish branch of a foreign company depends on various factors, such as the complexity of the process and the specific circumstances of the client. As with a representative office of a foreign company, the Danish branch should include the word 'filial' in its name, the name of the parent company and the country of origin. The director of the Danish company is responsible for the liabilities of the foreign company branch. It should also be borne in mind that the company branch is subject to Danish law. The foreign company branch is obliged to send copies of the monthly accounts of the entire year to the Trade and Companies Agency.

Co-operative association (Andelsforening/Brugsforening)

A cooperative association is a legal form quite rare in Denmark. It can be created on the basis of an association agreement drawn up by individuals. This agreement gives the possibility to enter into transactions for the purchase and sale of goods and also for the processing of products. The liability of the members of a cooperative association is limited. A cooperative association should include in its name the abbreviation A.m.b.a., which refers to the legal form of the company.

Other formalities related to registering a company in Denmark

The process of registering a company in Denmark largely depends on the chosen legal form, however some of its elements are invariable. Any European citizen may freely establish a company in Denmark. When you submit the necessary documents to the Trade and Companies Agency, all you need to do is attach an EU citizen’s residence certificate, which allows you to start a business in another member state, in this case Denmark.

Every company also needs its own bank account for various financial transactions. In Denmark, every bank account must be registered in the NemKonto system. It is possible to register both a Danish account and a foreign account that already exists. It is good practice to open a new Danish account for a company, which the bank immediately registers into the NemKonto system. The documents that are needed to open an account with a Danish bank are primarily the applicant's passport, residence permit, identification code, driver's license, Articles of Association, personal documents of the company's founders, documents proving ownership of Danish and foreign real estate, profit and loss account, statement of cooperation with other banks and possible licenses if required for the business in question.

Another useful thing is to make an electronic signature, or NemID/MitID. With NemID, we have easier access to Danish online banks as well as official government websites. To obtain your individual electronic signature, simply go to your nearest Citizens' Service Point (Borgerservice). You will need to provide proof of your identity when producing the signature, so it is advisable to bring your identity card or passport with you. It is also a good idea to bring an accompanying person with you to confirm that your identity is genuine.

For certain types of business, you may additionally be required to have the relevant licenses or approvals. This may slow down the whole process of registering a company somewhat. In order to obtain the licenses, you will need to apply to the relevant Danish authorities who are authorized to issue them.

Depending on what the company's activities concern, the authorities issuing the relevant licenses are, for example, the Police, the Food Base or the municipality. The most commonly required licenses and permits relate to the sale of alcohol, passenger and goods transport services, food market activities and medical or pharmaceutical activities.

If the registration passes, documents such as a certificate of incorporation, an extract from the DCCA register with the company's name, registered address, directors' requirements, the size of the authorized capital, the original certificate of participation, the company seal, the original articles of association under apostille and a power of attorney are issued.

Purchase of an existing company

An alternative option instead of starting a new company is to buy an existing one. Offers for the sale of ready-made companies can easily be found in Denmark and the whole process is very easy and fast. All paperwork can be completed remotely in most cases and it takes no longer than three weeks to take over a company. Companies for sale are usually registered for a few months and have a universal name, so that it fits for different types of business. They are created for resale to entrepreneurs who care about time and as little paperwork as possible. The option of buying a ready-made business also has other advantages - if the company has been registered for a long time, has no liabilities and has accounting experience, it is widely recognized by banking institutions, government agencies and also by business partners as reliable and stable. The only thing a person buying a ready-made company has to take care of is opening a bank account for the company.

Start-up Denmark

The Danish Ministry of Business and Growth, in cooperation with the Ministry of Immigration, Integration and Housing, offers the Start-up Denmark program for foreign investors. This program not only offers the opportunity to start a business in Denmark, but also includes obtaining a residence permit for up to two people for a period of two years. This initiative aims to encourage foreign entrepreneurs to develop their company in Denmark, so that the Danish economy could grow even further.

In order to participate in Start-up Denmark, certain criteria must be met. The entrepreneur must have a business idea that is innovative in its field and will bring added value to the Danish economy. Each proposal from foreign investors is reviewed by a group of Danish experts who decide whether to approve or reject the idea. Unfortunately, this program is not aimed at entrepreneurs who, for example, plan to open a restaurant or a grocery shop in Denmark. 

Another condition is to be a shareholder in the country of nationality of the investor and not to receive dividends. Last but not least, the entrepreneur must have sufficient savings to cover one person or the whole family for one whole calendar year. The minimum amount of savings is considered to be approximately EUR 18,000 if the investor plans to live alone in Denmark, EUR 36,000 if together with another person, while in the case of children, an additional amount of approximately EUR 6,000 per child is added.

An entrepreneur who has successfully completed the entire process envisaged by the program is granted access to privileges equal to those provided to Danish citizens doing business. He or she is able to benefit from state subsidies and support programs, can establish business contacts and has unlimited access to the European market. In addition, he or she is also offered free consultations at business development facilities. Both the foreign investor and his or her family also gain benefits such as social guarantees, including health care and education, among others.

Right of residence in Denmark

Residence without parking documents

Residence on Danish territory without a residence permit is possible for EU citizens if the stay in question does not last longer than 3 months. According to Danish law, residence is counted from the date of entry into the country. If the planned stay is prolonged and consequently lasts longer than 3 months, then it is necessary to apply for registration of the stay of the EU citizen, even before the period of 3 months has been exceeded. The EU citizen’s registration certificate is an official confirmation that the person is legally residing in Denmark. It is also possible to register the EU citizen’s residence immediately after entry into Denmark.

Each certificate of registration of residence of an EU citizen requires a specific reason why the person is staying in the country.

Depending on the circumstances, this reason may change, in which case it is necessary to apply for a new certificate.

Citizens of Scandinavian countries are an exception to this, as they are exempt from holding residence permits. Citizens of countries such as Switzerland, Norway, Iceland or Liechtenstein must follow the same rules as citizens of EU Member States.

Permanent residence

People who have resided legally in Denmark for a minimum of 5 years may apply for permanent residence. You must go with a current certificate of residence of an EU citizen to the citizens' service office (Borgerservice). This office is usually located in the municipality. After visiting the Borgerservice, you will receive a registration number (CPR), a health insurance card and address registration. The rules on residence of EU citizens in Denmark are regulated by the EU-opholdsbekendtgørelsen.

Business visa

People visiting Denmark for business purposes such as, for example, to conclude contracts or to attend seminars, conferences and meetings, may apply for a business visa. Obtaining a business visa is simple and the whole process is similar to applying for a Schengen visa. In order to obtain a business visa, it is necessary to have an invitation from a Danish company or business partner. The invitation must contain information such as the purpose of the visit, the date, confirmation of stay and also proof of financial security. The application for a visa should be submitted at the earliest three months and at the latest two weeks before the planned visit.

Application for a visa should be made at the Consular Section of the Danish Embassy or at the Visa Center. If you are applying for a visa for the first time, you must go there in person. You will be required to provide biometric data and a digital photo. Every time you apply for a visa within the next five years, it will be possible to use a travel agent to apply for the visa, as you will only need to be present in person the first time.

Once the application has been submitted, a decision must be awaited, which is usually taken within 10 days of the applicant providing the documents. If additional information needs to be provided, the waiting time may extend to one month. In special circumstances where the embassy decides to forward the documents and information to the immigration service for thorough verification, the wait for a decision may be as long as three months. There is a fee to obtain a business visa and it costs €27. However, it is also possible to opt for the fast-track procedure which takes three days, in which case the cost is €35.

In addition to the basic documents that are submitted in every business visa application process, additional documents may also be required. Documents such as an extract from the tax service or registration documents in the case of individual entrepreneurs, an extract from the commercial register, copies of a power of attorney, as well as information about the company or business partner who issued the invitation are most often requested. For stays longer than two weeks, it may also be necessary to provide a detailed itinerary. In the event that the inviting party does not bear the costs associated with the travel, documents that prove the applicant's financial capacity must also be provided.

It is also possible to extend the validity of the business visa for an additional 90 days.

This option is available to visitors who need to stay in Denmark for legitimate reasons. To do so, it is necessary to submit an application to the Danish Immigration Service Centre or the nearest station. Persons conducting business in Denmark may also apply for a multiple-use visa.

Taxation in Denmark

Anyone who is self-employed or employed in Denmark is obliged to pay Danish taxes. Taxes in Denmark are progressive, which means that the amount is determined by a person's income. Danish taxpayers are entitled to deduct expenses such as transport to work, insurance premiums and pensions, food costs and child support, but this must be substantiated and documented. In case of any doubt, the Danish Tax Administration may carry out an audit. which may relate to the taxes paid over the past seven years.

Under the Danish system, you may be subject to full or limited tax liability. In order to determine which category a person is subject to, factors such as whether he/she is resident in Denmark, how long he/she has been resident in Denmark, the type and amount of salary received, the place of employment and the place of permanent establishment of the employer or business are taken into account. If you are fully taxable, you must pay tax on all of your income, including income from other countries. In the case of persons with limited tax liability, they are not required to pay tax on income earned in Denmark. When an individual leaves Denmark, the tax liability ceases.

When planning to start a company in Denmark, you should remember to register it with the Enterprise and Trade Agency no later than at least eight days before the actual start of operations. This can be done through the regional Customs and Taxation office. Many countries offer tax breaks or tax holidays for entrepreneurs, but Denmark is unfortunately not one of them.

Individuals 

According to Danish legislation, individuals are subject to taxes such as income tax and progressive tax. Income tax is a flat tax of 32%, while the progressive tax rate depends on the income received. For incomes of less than DKK 42 000 per year, the progressive tax rate is 5.64%, while for incomes above this limit it is 15%. When calculating progressive tax, both income received from work and capital income is taken into account. Income tax is paid to local authorities, while progressive tax is paid to the treasury.

Sole proprietorship

Income that is generated as a result of the operation of a sole proprietorship is officially recognized as income of the business owner. This results in the tax on the business and other income of the entrepreneur being settled on a single tax return. The tax return should be filed quarterly or semi-annually, depending on the company in question. The return can be submitted online via the Danish Tax Authority's website. Sole proprietors, like those employed in Denmark, are entitled to health and pension benefits. The due dates for advance payments of income tax are 20 March and 20 November. If the advance payment is made earlier, the tax can be refunded with interest, which will be higher than at the bank, while if the contribution is not made until November, the interest rate will be reduced by 0.4, so that the interest will also be lower.

Companies - CIT

Companies operating in Denmark are required to pay corporation tax, the rate of which is 28%. Company taxation is based on the principle of consolidation - this means that not only the parent Danish company is taken into account, but also its branches and any subsidiaries. In the case of partnerships, taxation applies only to the partners of the companies.

VAT

Any company with an annual turnover of more than DKK 50,000 is required to register and pay VAT. VAT is a value-added tax - this means that it is included in the price of the services or products offered. The VAT rate is 25 per cent and applies to companies whose activities are based on the sale of goods or the provision of services. Some activities are subject to a VAT rate of 0%, such as medical care, the sale or rental of real estate, education, cultural activities, banking and insurance transactions.

Thanks to Danish law, foreign companies selling goods or offering services to Danish entrepreneurs and companies can apply the reverse charge procedure. Under the reverse charge procedure, foreign companies are not required to pay Danish VAT. Tax does not have to be included when issuing invoices and the value of the goods or services should be net. When using the reverse charge formula, the purchaser becomes liable for the payment of VAT. This procedure can only be used for certain types of business, for example, construction work, sports events, cleaning, employee leasing, maintenance and repair work, cleaning, entertainment, exhibitions and conferences.

Excise duties

Excise duties are paid when the end purchaser buys the goods in question and only apply to certain categories of products.

Employment of employees

In Denmark, two categories of labor law can be distinguished, depending on the type of workers employed - these are the rules for manual workers and the rules for white-collar workers. However, regardless of the nature of the work performed, any employer who employs workers in a company operating in Denmark is obliged to provide employees with health and safety training, decent wages and insurance against occupational illnesses as well as accidents. In case of shortcomings, strikes, lockouts, labor conflicts or solidarity industrial action by trade unions can be expected.

Working conditions

The relations that take place between employees and employers for the different occupational groups do not have a corresponding piece of legislation in Denmark that regulates them uniformly. The main document to which reference can be made is the agreement between the Danish Federation of Trade Unions and the Danish Confederation of Employers - this is where issues such as working hours, notice periods, minimum holiday entitlement and maximum retirement age are addressed.

All agreements between employer and employee must be in writing; verbal agreements are not recognised. Danish law does not regulate for what length of time a contract must be concluded, so there is a certain amount of discretion and these issues must be decided individually. However, it is accepted that a salary increase can be negotiated every two years or so, while an employment contract can be negotiated on average once every four years.

Social insurance

The Danish social security system covers all persons who take up employment in Denmark. In practice, this means that when employing an employee, the employer is obliged to deduct social security contributions from the employee's salary. The amount of these contributions per year is approximately DKK 1,080. It is estimated that a Danish employer pays an average of DKK 10,000 to 12,000 per year in social security contributions in connection with the employment of employees.

Remuneration

There are no minimum wage regulations in Danish law. All conditions regarding both work and pay are set by specific collective agreements. It is true that there is no minimum wage for the labor market in general, but collective agreements regulate this gap by setting minimum wages for specific industries and professions. Depending on the nature of the work, wages can be set as an hourly, daily or monthly rate. The situation is similar with the payment of wages, which can take place once or twice a month. Wages for specific industries are set anew every year.

Working time

Employees working for a Danish company work a standard 37 hours per week. Overtime is considered to be the first 3 overtime hours or the first 3 hours of work at a time when the employee normally has time off. It is agreed that the overtime bonus is 50%. If the number of overtime hours worked in a given day is higher than 3 or the employee works on Sundays or holidays, then it increases to 100%. The employee can also decide whether he or she prefers additional time off instead of a bonus. Those who work part-time have the same privileges as those who work full-time.

Holidays

Leave issues for employees are regulated by the relevant laws. Each employee may take a total of five weeks' holiday - 30 days to be exact, however, including Saturdays. In the case of second and third shift employees, an additional two hours of holiday are added for each week worked. At least 18 continuous days of holiday must be taken by the employee between 1 May and 30 September. It may also be the case that an employee does not manage to work the entire previous calendar year - in such a situation, the holiday entitlement is calculated on the basis of the months that have been worked in full, calculating 2.08 days of holiday for each month accordingly.

Collective agreements

Collective agreements are agreements that protect employees in Danish companies in matters related to working conditions. Collective agreements focus on the regulation of issues such as, among others, working conditions, pay, safety at work, time and place of work, holidays, settlement of overtime, pensions and others. Collective agreements include both employees and employers. An employer can become a member of a collective agreement if it wishes to do so and especially if it already belongs to an employers' union. It is worth remembering that the presence of employees in a particular trade union does not mean that the company will adhere to the collective agreements established by the association.

Termination of an employee's contract

The length of the notice period is not the same for each case and is determined by the length of employment. The notice period can also be negotiated by both the employee and the employer. The rules on dismissal of employees are regulated by collective agreements and vary according to the sector and the position taken by the employee. According to one widely accepted rule, dismissal of an employee who has worked for the company for at least nine full months and is at least 18 years old can only take place upon presentation of specific reasons justifying the dismissal. If the employee feels that the dismissal was unjustified, he or she can take the situation to court or to an appeals tribunal. If fault is proven on the part of the employer, the employer must pay the employee due compensation. There is also an exception where the employer may dismiss the employee immediately, without notice. The employer is entitled to take such action if the employee demonstrates grossly wrongful conduct.

Health and safety at work

An entrepreneur with a business in Denmark is obliged to comply with Danish health and safety regulations. These regulations can be found on the official website of the Danish Working Environment Authority. In addition, if a company has at least 10 employees, it is also necessary to set up a health and safety organization headed by designated inspectors. The main duties of the health and safety organization's inspectors are to implement the company's existing safety rules. This also applies to companies with temporary or fluctuating workplaces. Failure to comply with health and safety regulations may result in fines and the suspension of work.

Tax identification number and tax card

People who earn small amounts of money in Denmark are exempt from paying taxes and receive a so-called frikort. This privilege does not apply to entrepreneurs and foreign investors, who are required to have a tax identification number and a tax card. The tax card is issued electronically and can be accessed via TastSelv. To obtain a tax identification number and tax card, an application must be submitted. This can be done in two ways - electronically or traditionally by submitting a completed form 04.063.

You can apply for a tax identification number and tax card no earlier than 60 days before your first planned day of work in Denmark. In order for the application to be complete, it must be accompanied by copies of documents such as proof of identity (identity card or passport), a residence permit in Denmark, a signed employment contract if applicable and, in the case of married persons, also a marriage certificate.

Register of Foreign Service Providers

When planning to establish a company in Denmark, it is necessary to register it in the Register of Foreign Service Providers (RUT). This register gives Danish institutions access to the most important information about companies operating in the Danish market. Registration with the Register of Foreign Service Providers should take place even before the company starts operating in Denmark. The same applies if any changes occur in the operation of the company – the changes should be notified at least one working day before they are actually implemented. Registration with the RUT is a very quick process, as applications are submitted digitally, via the virk.dk website. The registration process is made much easier for foreign investors as there is no need to submit the application in Danish – English and German can also be selected. There is also no obligation to use a digital signature and ID. When registering, information such as the name and address of the company, the type of services, the location, the date of the activity, the CVR number, the VAT registration number, the sector classification code, the contact details of the registrant and, in the case of delegations, the duration of the delegation and the details of the delegated persons must be provided.

Upon completion of the registration, a receipt is received with your personal RUT number. The RUT number is necessary when contacting any Danish authorities. Employees who have their RUT number and are employed by a Danish company, especially in gardening, cleaning, construction, agricultural and forestry services, should hand in their receipt to their employer.

If you fail to register your company in the Register of Foreign Service Providers or to notify changes that have occurred in your company, you can expect a fine or prosecution by the Labor Inspector. The standard fine for this type of offense is DKK 10,000 to 20,000, but is sometimes also calculated on the basis of each day of delay.

Termination of activity in Denmark

The decision to terminate a company in Denmark involves certain formalities, one of which is the amendment of the tax return. You have to go to the Tax Office and provide information on the basis of which the tax liability to be paid will be calculated. The country in which you will have to pay tax depends mainly on factors such as where you live and the type of work you do. The type of form that needs to be completed before termination depends on the tax capacity of the person concerned. There are two types of tax capacity.

Of course, a person's living situation may differ from both the requirements for limited tax capacity and full tax capacity. If a person resides in both Denmark and the home country and also works or runs a business in Denmark, then the center of vital interests and the residence of the partner or spouse are the determining factors. If the home country is the center of interest and the partner resides there, the home country is regarded as the permanent residence. The situation is analogous if Denmark is the center of life interests and the partner resides in Denmark. In addition to changing your tax return, you must also inform the tax office of your new address and deregister from the Danish national register, which you can do at your local resident service point.

Danish economy

Denmark is a friendly country for foreign investors, especially when it comes to innovative and original start-up projects. Before starting a business in Denmark, it is a good idea to get an idea of the economy there. The Danish economy has several major sectors - food, renewable energy, information technology, maritime transport and biotechnology. Companies in these sectors can enjoy the largest amounts when it comes to various types of state funding.

Many foreign investors choose to open a restaurant or café in Denmark. This is a safe investment that does not involve high costs and, in the vast majority of cases, proves to be very fruitful - Danes love to spend their free time with their loved ones over good food, and are more likely than most people in other European countries to choose to forgo home-cooked food in favor of restaurants. Other popular choices are also hair salons, travel services, hotels as well as banking, insurance or transport.

Jewelry stores are also increasingly in demand - the reason being that Danes are more inclined than ever to look for investments. This is due to the negative interest rates in Denmark, which means that Danes have an unusually large amount of cash that most would like to invest in a safe way. Precious stones and metals are a good option.