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Starting a business in Denmark

Starting a Business in Denmark: Complete Company Registration Guide

Business Opportunities in Denmark

Denmark is a popular destination for entrepreneurs owing to its growing GDP and stable economy. The country takes pride in setting up a company in the least possible time. Besides, Denmark focuses on cleantech with its goal of reducing 70% of the nation’s carbon emissions by 2030.  

Denmark offers tremendous scope for beginning your life as an entrepreneur and innovator. The government in Denmark has formulated a few steps to start a business here with minimal cost. For better screening, authorization, and maintaining the company’s safety, the Danish Business Authority recently introduced the Investment Screening Act. 

Besides the simplicity of setting up a company in Denmark, the country’s demography, economics, competition, and education make it a perfect spot for entrepreneurs and startups. According to the ranking of the World Bank’s Ease of Doing Business Report 2020, Denmark ranks fourth in terms of starting a business.

Setting up a business in Denmark requires in-depth knowledge of the country’s business requirements, taxes, procedures, registration, etc. Although it is easy for Nordic people to proceed with company registration in Denmark, people residing outside Denmark need guidelines as provided here.

Benefits of Starting a Business in Denmark

The advantages of doing business in Denmark are as follows:

Powerful domestic economy

Denmark offers a sturdy economic structure and a large domestic market, making it an attractive foreign business location. The workforce of Denmark is highly focused, productive and motivated. As a result, Denmark has a flexible and cost-efficient labor force.

Strong service sector

The service sector in Denmark contributes to more than 80% of employment, making it a primary GDP contributor. This indicates a highly concentrated and developed finance and banking industries. Apart from this, Denmark also has a robust tourism sector and is a gateway to Europe. 

Language versatility

Denmark has several official languages, such as Danish, Greenlandic, Faroese, and German. Of all official languages, English is widely used for business and other formal purposes. Therefore, people from foreign countries can easily communicate with the Danish workforce.

A pool of professional talent

96% of the Danish population have completed their secondary education. Out of this, 47% have acquired their university degrees. Thus, Denmark is counted as a highly qualified, multilingual and educated country. Besides, the transparency and flexibility of the Danish market are worth noting. This indicates easy hiring of employees according to the market demand. 

Focused on reducing the carbon footprint

By the end of 2030, Denmark plans to reduce its carbon footprint by 70%. Using its cleantech program, the country and its organizations adapt sustainable operations to minimize the carbon footprint. Besides, the government also propagates strict policies on the same.

Strategic location

Copenhagen, the capital of Denmark, has a strategic location, especially in terms of logistics. Denmark can easily connect to Scandinavia, Europe, and the Baltic nations, bringing customers from different locations to one marketplace.

Low business cost

One of the many reasons why people consider establishing businesses in Denmark is the low cost of running a business. The employer cost in Denmark is comparatively low. In addition, its overhead costs are also comparatively much lower than in Europe. Above all, the company tax is only 22%.

Reliable social system

Denmark follows a high tax rate throughout the country. The country has an extensive social security system to aid residents at all times, starting from education to retirement. Due to extensive globalization, the country also offers adequate security to its employees against fraudulent activities. Although the country has higher tax rates, you need not worry about getting duped.  

Requirements for Starting a Business in Denmark

The requirements to do business in Denmark are highlighted below:

Visa and residence permit

  • First and foremost, a work permit is necessary for establishing a business in Denmark. However, the Nordic and Swiss people and the citizens of the EU and EEA are exempt from this rule. Instead of a work permit, they require an EU residence document from the State Administration. In the case of a foreigner, they have to apply at the Danish Agency for Labour Retention and International Recruitment to get work permits.
  • Besides, every startup organization should apply for the Denmark Startup Visa. Here, you must present the business plan and get it approved by the Danish Business Authority. The factors on which the Danish Business Authority check your business plan include innovativeness, business model, demand in the market, scalability, capability of the team, and suitability for the Startup Denmark program.

Company name

  • One of the mandatory Denmark company incorporation requirements is the company’s name. The company’s name must be unique and must not infringe on any existing Danish company. 
  • One of the crucial criteria while choosing a company name is to pay attention to its originality. The company name should be original. You must submit company registration documents for business name registration in Denmark.

Company address

  • The company should have its office address in Denmark. However, the company’s owner need not be a citizen of Denmark.


  • For Denmark’s new company incorporation, your business will be subjected to a corporate tax of 22%. This same tax rate applies to all company types. All foreign companies have to pay a limited tax liability.

Directors and company secretary

  • For company registration in Denmark, one shareholder is mandatory. However, there is no upper limit on the number of shareholders. The executive board should have one person. However, the board of directors and the supervisory board should have at least three members.

Types of Business Structures in Denmark

Before you get into company incorporation in Denmark, learn about the various types of business structures eligible in the country.

Private limited company

  • Commonly known as ApS, you can start a private limited company in Denmark with only one shareholder. 
  • A private limited company requires a minimum capital of DKK 40,000. 
  • In such a type of business, the shares are non-transferable and non-negotiable.

Public limited company

  • A public limited company has its shares equally distributed among the shareholders or listed on the stock exchange. 
  • Here, DKK 400,000 is the minimum capital required. Initially, one has to pay 25%, which includes cash and other assets. However, the shareholders are not held responsible for the company’s debt.

General partnership

  • In a general partnership business, you must include at least two partners who will be considered responsible for the company’s liabilities and debt. 
  • There is no minimum capital requirement to set up a general partnership in Denmark. 
  • In this case, the partnership and the company must be registered with the Danish Trade Register.

Limited partnership

  • In a limited partnership business, you must have at least two business partners, where one has limited liability. 
  • At least one partner must take up the status of a general partner and at least one as a limited partner. 
  • There is no capital requirement for a general partner, whereas the capital requirement for limited partners is a minimum of DKK 1. 
  • Like a general partnership, here, too, you must get the business registered under the Danish Trade Register.

Sole proprietorship

  • A sole proprietorship consists of one person who holds absolute liability for the company. 
  • It must be registered under the Danish Trade Register, provided it conducts trading or has employees.

Branch office 

  • Takes responsibility for the foreign entity to conduct all business 
  • Has to be registered with the Danish Business Authority
  • A branch office does not require any capital investment. 
  • It has unlimited liability for a parent company that can be managed by at least one and more branch managers. 
  • According to the Danish Companies Act, a branch office is subject to a corporate tax of 22% levied on its income. 

Company Registration Process

The company registration process in Denmark is given in a stepwise format below:

  • Although there are several business structures, the suitable one for foreign companies is the private limited liability company. 
  • A private limited liability company imparts maximum protection in terms of legal affairs. 

Step 2: Registering company 

  • Every company in Denmark has to be registered online with a CVR number or Central Company Register Number under the Danish Business Authority. 
  • This online registration will cost DKK 670. It has to be done eight days before its business operations. 

Step 3: Register with Danish Tax Authority

  • After registration, the Danish Business Authority (DBA) conveys the necessary information to the SKAT (Danish Customs and Tax Administration). 
  • Every business must be enrolled separately for VAT, payroll tax, duties, import or export, and A-tax. 

Step 4: Submission of Articles of Association

  • Next, you have to provide the Articles of Association. This consists of the company’s name, the registered company’s location, objectives, and share capital. 
  • Along with these, the Danish Registrar also asks for the addresses and names of the managing members.

Step 5: Issuing employment contracts  

  • In compliance with Danish legislation and under the lawyer’s guidance, you must prepare employment contracts to hire and transfer employees within the company.
  • Employers need to get hold of mandatory industrial injury insurance. 

Step 6: Registering for permits 

  • Now, apply for the required permits and visas that you require to operate your business in Denmark. 

Step 7: Hiring and transferring employees to Denmark 

  • The transfer of employees to Denmark depends on their nationality. 
  • Before arriving in Denmark, non-Europeans need both a residence and a work permit. 
  • Europeans can stay and work in Denmark without any permit for only three months. 
  • People from Nordic countries do not need any permits to settle and do business in Denmark. 

How Much Does it Cost to Incorporate a Company in Denmark?

  • The cost of incorporating a company in Denmark varies depending on the company structure. For an unlimited company, no investment is required. On the contrary, a private and public limited company should have a minimum capital of DKK 400,000. 
  • Companies also have to pay a CVR registration fee of DKK 670. 

Are Foreigners in Denmark on Certain Passes Allowed to Start a Business in Denmark?

Yes, foreigners can start a business in Denmark, provided they have a valid work permit. They must apply at the Danish Agency for Labour Retention and International Recruitment to get this work permit. Besides, every startup business should apply for the Denmark Startup Visa and get approval from the Danish Business Authority.

Government Assistance for Foreign-owned Businesses

The government has implied the following policies and services to attract and support foreign-owned companies in Denmark. 

  1. The Ministry of Foreign Affairs in Denmark has established an ‘Invest in Denmark’ agency within the Trade Council. It is the country’s official investment promotion agency which provides a one-stop service to foreign companies who are setting up business in the country.  
  2. On 10th May 2021, the Danish Government introduced FDI authorization and screening. This Act is applicable to businesses that began on and after 1st September 2021. According to this Act, all foreign investors must apply to the Danish Business Authority for authorization before they complete an agreement with the Danish entity having a business in a sensitive sector. 

According to the Investment Screening Act, this FDI authorization and screening has three executive orders: 

  • Executive order on procedure 
  • Executive order on the scope of application 
  • Executive order on transferring confidential information 

This FDI screening aims to ensure national security and prevent a threat to foreign direct investments. To keep up with this, the FDI follows two screening mechanisms: 

  • Sensitive sectors have a mandatory authorization scheme 
  • Other sectors have a voluntary notification scheme 

Both these schemes can be applied to foreign investments that: 

  1. Have a permanent address in Denmark 
  2. Have a permanent address in Denmark with parent companies situated somewhere else 
  3. Have a permanent address in Denmark but controlled by a foreign influencer

How Multiplier Can Help

Companies must pay attention to compliance and administration requirements while setting up a company in Denmark. Indeed, establishing a business in a foreign land is a tedious process. However, companies can reach out to Multiplier to ease setting up a company in Denmark.

Multiplier takes pride in helping companies with seamless and transparent staffing internationally. To employ relevant talents all over the globe, Multiplier uses the best tools and strategies in connection to the market demand. When you partner with Multiplier, you need not worry about hiring the perfect talent.

Frequently Asked Questions

To set up a business in Denmark, employers and the employees must fill out the AR1 form. This form is required when applying for a Danish residence and a work permit for salaried workers in the country.

If you opt for an online registration process, it will take you only a few hours to set up a company in Denmark. However, setting up a company in Denmark will take you a day for an offline process. You may need to wait for at least two weeks for paper registration.

Yes, when you are determined to set up a business in Denmark, you must open a separate company bank account. It helps to maintain transaction records for the company. You must submit an application form, a company report, ownership papers, and a photocopy of the memorandum.

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