Registering your company in Denmark: A how-to for employers

Denmark: The cornerstone of northern European growth

Renowned for its pro-business environment, Denmark offers a highly efficient framework for establishing operations. Its streamlined registration processes, competitive operational costs, and strong support for foreign investment make it an ideal destination for businesses aiming for sustainable growth. Denmark’s mix of accessibility, innovation, and economic resilience offers a strong foundation for scaling in one of Europe’s most dynamic markets. 

The business benefits of registering your company in Denmark 

With its innovation-focused economy and supportive regulations, Denmark is quickly becoming a top choice for business expansion. For HR leaders and business executives, operating in Denmark is both rewarding and accessible.

Expanding into Denmark opens the door to many strategic benefits:

1. Achieve long-term profitability with a skilled workforce and competitive operational efficiency.
2. Simplify your business setup with streamlined CVR registration through the Danish Business Authority.
3. Take advantage of government incentives that encourage foreign investments and foster innovation-driven industries.
4. Leverage Denmark’s advanced infrastructure and proximity to key European markets.
5. Access a robust consumer base in one of Europe’s most prosperous and stable economies.
6. Ensure compliance effortlessly with transparent and business-friendly regulations.

Next, we’ll delve into the available business pathways—standard company registration, business licensing, and Employer of Record (EOR)—to help you choose the approach that best aligns with your business strategy.

What are the options for setting up a business in Denmark

Businesses looking to establish operations in Denmark can choose between two primary options, each catering to different operational needs and strategic goals.

1. Standard company registration through the Danish Business Authority

This route involves registering a legal entity under Denmark’s Central Business Register (CVR) system. It provides businesses with complete operational and financial control but requires adherence to compliance, tax obligations, and governance standards.

2. Employer of Record (EOR)

An Employer of Record (EOR) allows companies to hire employees in Denmark without establishing a legal entity. The EOR manages compliance, employment contracts, and administrative responsibilities, offering a streamlined solution for businesses prioritizing workforce expansion.

Aspect	Standard Registration	Employer of Record (EOR)
Purpose	Establishes a formal legal entity, granting comprehensive control over all business operations.	Enables hiring talent in Denmark without creating a legal entity, with the EOR ensuring compliance.
Control	Provides full autonomy over decision-making, finances, and management.	Delegates administrative and legal tasks while retaining oversight of your team.
Compliance	Businesses must independently comply with Danish tax laws, labor regulations, and corporate governance standards.	The EOR assumes responsibility for compliance, reducing risk and ensuring adherence to local laws.
Setup Time	Requires a significant time investment due to procedural documentation and regulatory filings.	Offers a faster pathway to operational readiness, enabling immediate workforce deployment.
Cost	Involves upfront registration costs, ongoing operational expenses, and compliance fees.	Consolidates administrative costs into predictable service fees, often more economical for short-term needs.
Scalability	Best suited for companies with a long-term strategy and plans for significant operational investment.	Ideal for quickly testing the market or scaling teams without the commitment of a formal entity.

Standard company registration suits businesses that require complete operational autonomy. On the other hand, an EOR offers speed and simplicity, making it a smart choice for companies looking to quickly hire talent and establish a foothold without committing to the complexities of legal entity setup.

Next, we’ll examine how an EOR simplifies employee onboarding and compliance for businesses entering the Danish market.

How an EOR simplifies company registration in Denmark

Entering Denmark’s business environment is seamless and efficient with the expertise of an Employer of Record (EOR). An EOR kickstarts operations quickly—hiring local talent, managing payroll, ensuring compliance, and handling all administrative complexities with ease.

Here’s how an EOR supports businesses entering Denmark:

1. Bypass the time-consuming and complex legal entity registration process by having the EOR act as the official employer, enabling immediate operational readiness.
2. Delegate administrative tasks such as payroll management, tax filings, and employment documentation to the EOR, freeing your team to focus on strategic business growth.
3. Ensure compliance with Denmark’s labor laws and tax regulations as the EOR manages all legal obligations, reducing exposure to potential risks.
4. Avoid the upfront costs and ongoing expenses of setting up and maintaining a legal entity, allowing more resources to be allocated to core business initiatives.
5. Quickly scale your workforce to align with market demands without investing in long-term infrastructure or operational commitments.
6. Access Denmark’s skilled labor market without navigating the complexities of local hiring regulations or geographical limitations.
7. Provide competitive benefits packages aligned with Danish standards, with the EOR managing administration and compliance to enhance employee satisfaction.
8. Leverage the EOR’s expertise in navigating Denmark’s legal and regulatory environment, offering peace of mind and operational security.

By partnering with an Employer of Record (EOR), your business can enter the Danish market seamlessly. An EOR empowers you to focus entirely on growth and achieving your strategic objectives. Meanwhile, the complexities of legal compliance and operational management are expertly handled by those who understand Denmark’s regulatory landscape best.

Next, we’ll walk through the step-by-step process of registering a company in Denmark, ensuring you have the insights needed for a smooth setup.

A step-by-step guide to registering a company in Denmark

Denmark’s well-structured registration process ensures businesses can establish themselves effectively while maintaining compliance with local laws. Here’s a detailed guide:

Step 1: Decide on your business structure

Establishing a local entity in Denmark can be resource-intensive and complex. However, partnering with an Employer of Record (EOR) allows you to bypass these challenges and begin operations immediately.

An EOR serves as your legal employer, managing essential tasks such as onboarding, payroll processing, tax filings, and compliance with Denmark’s stringent labor laws. This enables you to concentrate on scaling your business while the EOR handles administrative and regulatory complexities.

For businesses opting to set up a local entity, selecting the appropriate business structure is crucial. Your choice impacts your legal responsibilities, tax obligations, and the operational flexibility of your company.

Common business structures in Denmark include:

• Private Limited Company (ApS): Suitable for small and medium-sized enterprises, offering limited liability with a minimum share capital requirement.
• Public Limited Company (A/S): Ideal for large corporations planning to raise capital through private or public investors.
• Branch Office: A practical option for foreign companies aiming to operate in Denmark without forming a separate legal entity.

Step 2: Reserve your company name

Choose a unique company name that complies with Danish Business Authority (Erhvervsstyrelsen) guidelines. Verify and reserve it online to meet legal requirements.

Step 3: Submit the necessary documents

After selecting your business structure and reserving a name, prepare and submit the required documents for registration.

Key documents include:

• Articles of Association and Memorandum of Association
• Identification and proof of address for directors and shareholders
• Proof of a registered office in Denmark
• Name reservation certificate from the Danish Business Authority

Submission options:

Online: Through the Danish Business Authority’s digital portal.

In-person: By submitting documents directly to the relevant authority.

Step 4: Open a business bank account

A corporate bank account is mandatory for conducting financial transactions, managing taxes, and fulfilling other operational needs.

Required documents for a business bank account include:

• Company registration certificate
• Articles of Association and Memorandum of Association
• Identification documents for directors and authorized signatories
• Proof of registered office address

Opening a bank account in Denmark is often complex, but an Employer of Record (EOR) eliminates this step entirely. With an EOR, payroll operations are handled seamlessly and without the usual headaches.

• Pay your team in Danish Krone (DKK) or other currencies effortlessly.
• Stay compliant with Denmark’s intricate tax laws and labor regulations.
• Simplify global payroll management and eliminate administrative burdens.

An EOR takes care of payroll and compliance, freeing up your time and resources to focus on what matters most—growing your business in Denmark. So you can let the experts handle the complexities while you drive your business forward.

Step 5: Register for taxes

Tax registration is a critical step to ensure compliance with Danish laws. All businesses operating in Denmark must register for applicable taxes.

Key registrations include:

• Corporate Tax: Mandatory for all companies.
• VAT Registration: Required for businesses that meet the taxable turnover threshold.
• Payroll Taxes: Necessary for companies with employees, covering income tax withholding and social contributions.

By following these steps, your business can operate efficiently and legally in Denmark.

Next, let’s explore the costs involved in company registration to help you plan your budget effectively.

The real cost of registering a business in Denmark

For businesses planning to establish a company in Denmark, here’s a breakdown of typical costs to help you budget effectively:

1. Registration costs

• Danish Business Authority fees: Filing with the Danish Business Authority typically costs DKK 670 to DKK 1,000, depending on the type of business.
• Legal and documentation fees: Drafting foundational documents such as the Articles of Association can range from DKK 5,000 to DKK 10,000.
• Name reservation fee: Securing a unique company name through the Danish Business Authority costs approximately DKK 1,000.
• Notary and stamp duties: Fees for official documentation and notarization may range from DKK 2,000 to DKK 4,000.

2. Annual maintenance costs

• Accounting and auditing services: Fees start at DKK 10,000 annually, varying based on company size and complexity.
• Tax filings: Professional services for VAT and corporate tax submissions typically cost between DKK 5,000 and DKK 8,000 annually.
• Registered office renewal: Maintaining a registered address can cost approximately DKK 3,000 annually.

3. Additional considerations

• Banking services: Opening a corporate bank account may involve setup fees that vary by financial institution.
• Compliance costs: Staying up to date with Denmark’s tax and labor regulations often requires professional consultancy, adding to operational expenses.

With an EOR, you can eliminate many of the new business registration expenses, as it covers payroll, compliance, and administrative responsibilities under one predictable fee. An EOR simplifies operations and reduces overhead, allowing you to focus on business growth without the financial burden of setting up and maintaining a legal entity.

Next, we’ll explore how the costs of traditional entity registration compare to the streamlined, cost-efficient model offered by an EOR.

Cost comparison: standard registration vs. EOR in Denmark

Here’s a concise comparison of the financial and operational differences between establishing a legal entity through traditional registration and leveraging an Employer of Record (EOR) in Denmark:

Traditional registration involves upfront investments and ongoing administrative responsibilities, making it a better fit for long-term, large-scale operations. In contrast, an EOR offers a streamlined, cost-effective alternative. With predictable fees covering compliance, payroll, and other operational needs, an EOR is ideal for businesses looking for an efficient and scalable market entry solution in Denmark.

Let’s see how an EOR can accelerate your business growth while ensuring compliance with Denmark’s regulatory framework.

Simplify your expansion into Denmark with Multiplier

Entering the Danish market doesn’t need to be overwhelming. With Multiplier’s Employer of Record (EOR) solution, you can focus on growing your business while Multiplier manages  compliance, payroll, and administrative details.

Multiplier empowers you with:

• Effortless local hiring and global scaling

Tap into Denmark’s skilled and innovation-driven workforce without the complexities. Our HR experts manage compliant contracts and seamless onboarding, enabling confident expansion.

• Streamlined payroll management

Stay compliant with Denmark’s tax laws, pension contributions, and labor regulations. Multiplier helps deliver accurate payroll processing, tax filings, and real-time reporting, so you can avoid errors and focus on strategy.

• Integrated HR operations

Simplify onboarding, expense tracking, and leave management through our all-in-one platform. Gain real-time operational insights and maintain control of your team’s operations with ease.

• Comprehensive compliance support

Navigating Danish labor laws and tax requirements can be daunting. So, Multiplier handles all employment contracts, payroll taxes, and legal compliance to ensure you meet every local regulation.

• Customizable benefits that attract top talent

Offer competitive, locally aligned benefits packages while while administrative complexity is handled, ensuring a satisfied and engaged workforce.

• Dependable support and security

With 24/5 expert assistance, GDPR-aligned processes, and SOC 2-certified security measures, we ensure your business and employees are safeguarded at every step.

With Multiplier, entering Denmark becomes a streamlined, worry-free experience. From compliance management to onboarding and payroll, Multiplier delivers everything needed to succeed in the Danish market.

Book a Demo today to see how Multiplier’s EOR services can help you expand confidently and efficiently into Denmark.