Denmark is one of the nations in Europe that allows a simple company formation process, with advanced infrastructure and a business environment that encourages research and development and creative business ideas.
Denmark‘s stability of legislation on the establishment of new non-resident businesses, and a reputable taxation policy are the cause of the increasing popularity of registering companies in the country.
Steps to register your company in Denmark
Below, we present a guide that highlights the main steps needed to open a company in Denmark.
Choose a legal structure for your Danish company
According to the Danish Act on Private and Public Limited Companies, there are 3 types of limited companies (Kapitalselskab), public limited companies, private limited companies (Anpartsselskab or ApS), and limited partnership companies. They are all unconnected and distinct legal entities.
A limited liability company is owned by the shareholders, and the shareholders’ meeting is the definitive power of the company. However, the shareholders primarily control the company by authorizing and supervising the board of directors and the general manager.
In general, only the company is liable to creditors for corporate debts, and once the share contribution has been paid, the shareholders have no commitment to contribute further to the capital of the company.
Register the Danish company
This is important and it is performed with the Danish Business Authority, the process is an easy one and once it is complete, the company receives a central company register number used in all communications with the public authorities.
To register a company in Denmark, the key documents are the memorandum of association and the articles of association which include important details such as company name, registered office, business purpose, and members and directorship. Generally, a legal official is a person who drafts the documents of the company.
After drafting the documents, the next step is to set up a Danish bank account. This is the most important step as there is a minimum capital requirement of 40,000 Danish Kroner that needs to be invested, for all types of entities, before a company can be formed. Furthermore, Once the documents have been drafted by the legal official and the capital is in the bank account, the next step is registration with the Danish Business Register.
It generally takes a week for the company to be formed once the registration is submitted, and as soon as the company is formed, the ApS will receive a CVR (Central Business Register) number, which is a registration number that all companies in Denmark must have in order to be identified.
Register with the tax authorities Once the new company is registered with the business authority, it additionally needs to be registered with the Danish tax authorities, the Customs and Tax Administration, SKAT, to declare its income.
For many investors who start a business, the local taxation rules and the regulations for reporting are significant when choosing to establish their company in Denmark. Denmark has a corporate income tax rate of 22% and the reason for taxation is the residence of that company. Investors should note that companies activating in the oil and gas sector are liable to a higher corporate income tax rate of up to 25%.
Entrepreneurs who open a company in Denmark need to comply with the regulations for tax filings and submission which include filing the tax return electronically within six months of the end of the fiscal year and making the advance tax payments as needed.
Obtain permits and license
Generally, there are no licenses needed to conduct business in Denmark. However, some professions and activities require that you apply for a permit and license, in order to obtain admission or authorization.
If you wish to hire local employees, you will need to register as an employer which involves payment of social security workers, compensation, and so on, for the recently hired staff members. This can take about fourteen days to accomplish, so to avoid delays when it comes to hiring and paying employees, it is recommended to register as an employer immediately after the company is formed. Denmark also enables business owners to easily hire foreign employees or transfer the existing employees to the country in case of a company relocation.
Opening a branch in Denmark
Opening a company branch in Denmark is an easy process if a few requirements are met, such as the legal form of the parent company and the location of the foreign company which must be in the EU, EEA and if it’s a nonmember country, it has to bring evidence that the companies are free to open branches there. At least one manager must be a resident of Denmark or an EU or EEA country.
Investors looking to register a company in Denmark will also benefit from the fact that the country is ranked among the top countries in Europe for ease and simplicity of doing business.
The well-trained workforce and the outstanding quality of life in Denmark are a few more reasons for company formation in Denmark.
If you want to setup your Danish company, please feel free to contact your Damalion expert now.