Denmark is a reputable European jurisdiction that has created favourable conditions for running a business and strongly encourages foreign investments. This country may appear as a suitable option for entering major European markets as well as operating worldwide. The jurisdiction has certain standards of compliance that are not too bureaucratized. This is one of the most significant arguments for establishing a business presence in Denmark.
Major Forms of Legal and Business Presence in Denmark
If you intend to establish your business and legal presence in Denmark, you may do this in the following major forms:
- Private Limited Liability Company – a commercial vehicle where the liability of founders (shareholders) is limited to the amounts of their contributions only. The shares of this entity cannot be freely transferred and founders should form a statutory capital in the amount of DKK 40,000 at least.
- Public Limited Liability Company – a corporate entity where the liability of shareholders is limited to the amounts of shares they own provided that such shares can be freely offered to the public. The statutory capital for this entity should be at least DKK 400,000.
- General Partnership – businessmen who choose this vehicle are liable for the results of its operation, including with their personal assets.
- Limited Partnership – entrepreneurs may form this partnership in the status of (i) general partner who is entirely responsible for the business management and its results, and (ii) silent partner who bears the liability that is restricted to the amount of their contribution to the capital of partnership only.
- Branch – this type of business presence is suitable for foreign companies that intend to conduct the same type of business activities in Denmark. The registration procedure is required in this case.
- Representative Office – a type of business presence that is designated for investigating local business opportunities and promoting a foreign company only.
Registration Requirements and Steps
If you intend to create a company in Denmark, you may accomplish this by passing these steps:
- Determining your business objectives and reflecting such in your business plan.
- Choosing and verifying a business name for your future business vehicle.
- Arranging a future registered office for this corporate entity.
- Collecting information about the company’s founders, beneficiary owners, and management.
- Opening a bank account for depositing the amount of share capital.
- Drafting and formalizing Memorandum and Articles of Association for a future entity.
- Forming and lodging the package of registration documents to the Danish Business Authority. In the outcome, a company obtains a Central Company Register Number.
- Registration for tax and social security purposes.
- Getting specific permits and licenses for certain activities.
Legal and Regulatory Framework
The Danish legal framework may be considered very favourable. The local government has simplified the company registration procedure to make it maximally easy, including for foreign citizens. The company should comply during its operation with all European standards of doing business. The Danish Companies Act is a major legal act regulating the incorporation procedure.
The entire data about all legal entities in Denmark is contained in the Central Business Register. The Danish Business Authority, the Danish Customs and Tax Administration are the principal bodies responsible for the state registration and regulation of business activities.
Advantages of the Jurisdiction
Company formation in Denmark may be promising taking into account these potential benefits you may enjoy:
- Reputable European jurisdiction with the stable and well-developed economy
- Skilled and experienced workforce
- Developed trade, construction and logistics sectors
- Emphasis on modern technologies
- Number of incentives for doing business and making investments
Tax System of Denmark
Before setting up a company in Denmark, you may need to know about the following tax highlights relevant to this jurisdiction:
- Corporate income tax rate (CIT) – 22 %
- Personal income tax (PIT) rate (headline) – up to 56%
- Value-added tax rate – 25 %
- Withholding tax rates (for non-residents) – (i) dividends – 27% (ii) interests – 22 % (iii) royalties – 22 %
- Capital gains tax rates – (i) corporate – equals to the standard CIT (ii) individual - equals to the standard PIT
How Aotopay Specialists May Assist You
If you want to open a company in Denmark, Aotopay specialists may consult you more precisely about the major legal requirements you should address, make all necessary arrangements, prepare documents, and actually conduct this registration. Reach out to us shortly for more precise discussions and suggestions.