Denmark

SETTING UP IN BUSINESS

Introduction

Denmark’s liberal approach to life in general is mirrored in its attitude to companies coming in from abroad. The business climate is benign, notwithstanding high labor costs. Opening a company in Denmark is straightforward; thanks to a streamlined regulatory regime and more than 2,500 foreign companies already operate in the capital, Copenhagen. Denmark has double-taxation treaties with more than 80 countries.

What is the most common type of company in Denmark?

There are two main kinds of business entity in Denmark:

• public limited company - Aktieselskab (A/S)
• private limited company – Anpartsselskab (ApS)

How much share capital is required to establish an A/S?

The minimum share capital for an A/S is €67,000.

What other requirements are there for an A/S?

• three directors required who must be citizens in the EU
• company must also employ at least one manager who must be an EU citizen
• audited annual accounts required
• a local serviced office is advisable, click here for details

How much share capital is required to establish an ApS?

The minimum share capital for an ApS is €17,000.

What other requirements are there for an A/S?

• audited annual accounts required, using a registered auditor
• neither directors nor managers need be domiciled in Denmark
• a local serviced office is advisable.

What other types of company are there?

• European public limited company (SE) – minimum share capital €120,000 – subject to national company law but possible to change the nationality of the company without liquidation and re-formation
• European Economic Interest Grouping (EEIG) – a cross-border partnership comprising partners from European countries – no capital required, no requirements for separate financial accounts, partners taxed individually
• Joint venture, often established in the corporate form of an A/S or ApS
• Sole trader, no capital requirements - must submit financial reports to the tax authorities – these reports need not be audited

How easy is it to recruit staff?

The Danish labor force is highly skilled and well educated. Unemployment is currently running at around 6%. Salary levels are high by EU standards but are in line with those elsewhere in the Nordic region. Recruitment can be achieved in consultation with the government employment offices or through the services of the various commercial employment agencies that exist. We can help you with recruitment.

What is the regulatory environment like?

Denmark has a liberal business climate and this is reflected in the regulatory environment. In general there are no restrictions on investments and capital and earnings can be freely repatriated. Price and exchange controls concern inter company charges and affairs in the transfer-pricing system. The corporate rate of tax is 28%, much lower than personal taxation – although expatriates may qualify for a much-reduced personal tax rate of 25%. For more information about tax planning, please get in touch.

Are there financial incentives available – and what about banking facilities?

Full banking services are available which offer a complete range of commercial banking facilities, including those related to acquisitions and the raising of capital. Foreign investors are treated on an equal footing with domestic investors as far as financing is concerned. Read more about how we can help you to open a bank account in Denmark.

There are limited financial incentives for businesses setting up in regions of Denmark that are designated by the EU as special development zones. In certain circumstances, incentives are also available to small and medium sized enterprises for research and development, export and skills development and clean environmental technology.