Establishing Business in Denmark

Establishing Business in Denmark

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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

establishing business in denmarkWhy 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:

  1. Establish a business in Denmark on your own.
  2. Acquire an existing business.
  3. Enter into business with others

establishing business in denmark

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”

Read More. Go to:

  1. Establishing Business in Denmark
  2. Buying a Danish business
  3. Danish business with others
  4. Denmark Employment
  5. Property and Environment in Denmark
  6. Intellectual Property in Denmark
  7. Danish Business Environment
  8. Profit and tax in Denmark
  9. Denmark Company Liquidation
  10. Denmark company formation

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