Page 1. The Guide of Establishing Business in Denmark.
This guide is a general guide aimed at overseas companies, to highlight the legal issues involved when establishing business in Denmark. However, the guide will not provide comprehensive legal advice on applicable laws or other issues in connection with establishing and doing business in Denmark.
Prior to any steps towards establishing a business in Denmark, you should seek specific professional legal advice.
How this guide works
The guide considers the various business vehicles you may wish to set up in Denmark, and aims to address some of the main considerations that may be of relevance, such as hiring of staff, renting office premises and intellectual property rights. The guide also deals with the regulatory and business framework, how profits and tax are treated and also deals with insolvency and litigation matters. The web links in this guide provide further information in English regarding the various topics dealt with below.
DENMARK – A COUNTRY OF OPPORTUNITIES
Why invest in Denmark?
Denmark is in many ways a country with great opportunities, and you stand a good chance of investing successfully in Denmark. Some of the reasons are the facts that,
- Denmark is a country with political stability and a well-functioning public sector.
- Denmark is an internationally oriented society with a flexible labour market, e.g. short terms of notice and high education standards.
- Denmark has a high industrial productivity and profitability. Denmark has one of Europe’s most efficient distribution systems.
- You will find IT and telecom infrastructure, together with wireless communications and use of internet and new media in Denmark to be among the most competitive in the world.
- It has an ideal geographical location in relation to Scandinavia, Northern Europe and the Baltic Sea Region.
- The workforce is competitive, with good language skills, and there is sophisticated personal and industrial IT usage.
- The managerial skills are suited to a global high-tech economy.
- The Danish Government has created an excellent climate and motivation for innovative businesses and entrepreneurs
FRAMEWORK FOR BUSINESS
Commercial objectives, the extent of proposed activities, tax considerations and business structures would be key factors behind any decision to establish a business in Denmark.
Having decided to establish a business in Denmark, you would need to determine whether to:
- Establish a business in Denmark on your own.
- Acquire an existing business.
- Enter into business with others
Establishing business in Denmark on your own
Should you choose to set up a business on your own, you would have the option to establish a branch (“filial”) or to form a separate Danish subsidiary.
Branch or subsidiary?
The branch of a foreign company, although not a separate Danish legal person, must keep its own accounts and its profits would be taxed in Denmark.
Profits would also be taxable in the foreign company of which it is part, but in most OECD countries and many others, tax paid in Denmark is deductible.
The Danish tax authority may audit the branch and the foreign company in order to assess the branch’s taxable profit. If, however, you form a subsidiary, the tax authority would not be permitted to audit the parent company.
Establishing a Danish subsidiary
A Danish subsidiary would normally be set up as a company limited by shares (“limited liability company”) with one or more shareholders (who may be individuals or legal persons). The shareholders’ liability would be limited to the amount invested in the company.
A limited liability company may be public or private.
The shares of a public company may apply for its shares to be listed on the stock exchange or offered to the public at large to issue or acquire shares or other securities. The minimum issued share capital (to be paid in cash or contributed as assets) required for a private limited liability company (anpartsselskab, ApS) would be DKK 80,000 (EUR 10,753) and for a public limited liability company (aktieselskab, A/S) DKK 500,000 (EUR 67,204).
A limited liability company is a legal person, which means that it can own property, enter into agreements and employ staff.
Establishing a limited liability company, including registration with the Danish authorities can be done online and in a few days.
Name of the company
A limited liability company may be given any name that is not too similar to that of an already existing company or trademark, provided the name is not offensive. The name has to bear ApS or A/S in the name, depending on which type of limited liability company is chosen. If a branch office is chosen the name must include “filial” (branch office).
Page 1. “Establishing Business in Denmark”
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