Establishing Business in Denmark

Establishing Business in Denmark: Price, Procedure, and Registration for Non-Residents

Denmark, known for its strong economy, skilled workforce, and business-friendly environment, is an attractive location for entrepreneurs and companies looking to expand their operations. Establishing business in Denmark can be a rewarding venture, but understanding the costs, procedures, and specific requirements for non-residents is crucial for a smooth and successful launch.

This guide provides a comprehensive overview of the key aspects involved in setting up a business in Denmark, focusing on the financial implications, the registration process, and the specific considerations for non-residents.

Price of Establishing Business in Denmark:

The cost of establishing business in Denmark varies depending on the chosen business structure and the complexity of the setup. Here’s a breakdown of potential expenses:

• Registration Fees: The registration fee for a private limited company (ApS) is currently DKK 670. For a public limited company (A/S), the fee is DKK 2,150.
• Share Capital: A private limited company (ApS) requires a minimum share capital of DKK 40,000. A public limited company (A/S) requires a minimum share capital of DKK 400,000. This capital needs to be deposited into a Danish bank account.
• Legal and Accounting Fees: Engaging legal and accounting professionals is highly recommended, especially for non-residents. These fees can range from DKK 5,000 to DKK 20,000 or more, depending on the complexity of the services required.
• Office Space and Utilities: If you require physical office space, rental costs will vary depending on location and size. Factor in utility costs such as electricity, internet, and heating.
• Permits and Licenses: Depending on the nature of your business, you may need specific permits and licenses, which can incur additional costs.
• Translation Services: If your documents are not in Danish, you will need to factor in translation costs.

Procedure for Establishing Business in Denmark:

The process of establishing business in Denmark generally involves the following steps:

1. Choose a Business Structure: The most common business structures are:

• Private Limited Company (ApS): Suitable for smaller businesses with limited liability.
• Public Limited Company (A/S): Suitable for larger businesses with more complex operations.
• Branch of a Foreign Company: Allows a foreign company to operate in Denmark without establishing a separate legal entity.
• Sole Proprietorship (Enkeltmandsvirksomhed): Suitable for individual entrepreneurs, but with unlimited liability.

2. Register with the Danish Business Authority (Erhvervsstyrelsen): This is done through the online portal Virk.dk. You will need to provide information about your company, including its name, address, business activities, and ownership structure.
3. Obtain a CVR Number: The CVR number is the Danish business registration number, similar to a tax identification number.
4. Open a Danish Bank Account: You will need a Danish bank account to deposit the share capital and manage your business finances.
5. Register for VAT (if applicable): If your business is expected to exceed the VAT threshold (currently DKK 50,000 per year), you must register for VAT.
6. Register as an Employer (if applicable): If you plan to hire employees, you must register as an employer with the Danish Tax Agency (Skat).
7. Obtain Necessary Permits and Licenses: Depending on your industry, you may need specific permits and licenses to operate legally.

Registration for Non-Residents:

Establishing business in Denmark as a non-resident requires careful attention to specific regulations. Here’s what you need to know:

• Representative in Denmark: Non-residents are generally required to appoint a resident representative in Denmark. This representative will act as a point of contact for the Danish authorities and can assist with various administrative tasks. This representative must have a Danish CPR number (personal identification number).
• Tax Implications: Non-residents are subject to Danish tax laws. It’s crucial to understand the tax implications of your business structure and operations. Consulting with a tax advisor is highly recommended to ensure compliance.
• Residence Permit (if applicable): If you plan to reside in Denmark to manage your business, you may need to obtain a residence permit. The requirements for obtaining a residence permit vary depending on your nationality and the nature of your business. The Danish Agency for International Recruitment and Integration (SIRI) handles applications for residence and work permits.
• Documentation: Prepare all necessary documentation in advance, including articles of association, shareholder agreements, and proof of identity. Ensure that all documents are translated into Danish by a certified translator if they are not originally in Danish.
• Digital Signature: A digital signature (NemID/MitID) is required for online registration through Virk.dk. Non-residents can apply for a NemID/MitID, but the process may require physical presence in Denmark or specific documentation.

Tips for a Successful Launch:

• Conduct Thorough Market Research: Before establishing business in Denmark, conduct thorough market research to understand the demand for your products or services and identify your target audience.
• Develop a Solid Business Plan: A well-structured business plan is essential for securing funding and guiding your business operations.
• Network and Build Relationships: Networking with local businesses and industry professionals can provide valuable insights and opportunities.
• Seek Professional Advice: Engaging legal, accounting, and business advisors can help you navigate the complexities of establishing business in Denmark and ensure compliance with all relevant regulations.
• Learn the Language and Culture: While English is widely spoken in Denmark, learning some basic Danish phrases and understanding Danish business culture can significantly improve your interactions with customers, partners, and employees.
• Utilize Government Support Programs: The Danish government offers various support programs for entrepreneurs and businesses, including grants, loans, and advisory services. Research these programs to see if your business qualifies.

Establishing business in Denmark offers significant opportunities for entrepreneurs and companies seeking to expand into a thriving European market. While the process involves specific procedures and requirements, particularly for non-residents, careful planning, thorough preparation, and professional guidance can pave the way for a successful and rewarding venture. By understanding the costs, procedures, and regulations outlined in this guide, you can confidently navigate the process of establishing business in Denmark and position your company for long-term growth and success. Remember to consult with relevant authorities and professionals to ensure compliance and maximize your chances of success in the Danish market.