Company Incorporation In Denmark- Documents, Process, Fees

Updated on July 06, 2024 06:09:02 PM

For business owners wishing to launch their ventures, Denmark, known for its robust economy, educated workforce, and welcoming environment, is a desirable location. Denmark's well-defined and simple incorporation procedure has many benefits for both domestic and international investors. This article will provide you a thorough overview of how to incorporate a business in Denmark, including the procedures, prerequisites, and advantages. For more details regarding company Incorporation in Denmark, you can connect with Professional Utilities.

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Why Incorporate a Company In Denmark?

Incorporation in Denmark serves you with few benefits. Some factors which makes Denmark favorite destination in the world for business owners are as follow:

  • Strong Domestic Economy: Denmark is a popular option for foreign enterprises and entrepreneurs because, despite having a population of just under 6 million, it has one of the most robust economies in the world and a big domestic market. Denmark has an extremely low bureaucracy rate in the commercial sector.
  • Conducting Business is Simple: One of the aspects that makes Denmark business friendly is the low cost of doing business there. Denmark has the lowest social security contributions and employer costs in Europe. Its overhead costs, like office rent, are likewise far lower than those of other trade nations in Europe. Additionally, with a current corporate tax rate of 22%, it now has one of the lowest rates of any European city.
  • Effective Service Sector: In Denmark, the services industry accounts for the majority of GDP and employs about 80% of the workforce. A highly developed and specialized banking and financial sector is included here.
  • High Academic Level: Denmark consistently generates highly educated young graduates. These fresh graduates are devoted to their work and well skilled in their fields. Businesses advance thanks to the dedication, enthusiasm, and skills of young people.
  • Exceptional Innovation & Technology: Denmark has some of the best contemporary infrastructures in the world. Its infrastructure, business facilities, and transportation network are highly developed and have a steady supply of water and energy. Denmark also boasts more than 40 enticing initiatives to assist the "cleantech" program due to the country's abundance of renewable energy.
  • Language: Although Denmark has many official languages, English is the language of business. In Denmark, four out of five people can communicate in English, making it easier for foreigners working there to transact business.
  • 100% Foreign Ownership: Denmark is one of the very few countries that allows foreign businessmen to fully own a Danish Holding Company. Additionally, it is not necessary for CEOs or members of the board of directors to be Danes.
  • Taxation Policy: Businesses in Denmark benefit from advantageous tax laws. The country has a low corporation tax rate and a low value-added tax rate in contrast to other countries. International business owners benefit from the country's 100% incorporation approval of foreign offshore enterprises. The profit tax is also based on the total turnover of the business.
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Type Of Companies Incorporated In Denmark

There are numerous business entities that can be incorporated in Denmark, each with their own needs and legal framework. The following are the most typical business entities that can be incorporated in Denmark:

Minimum foreign company corporation
  • Private Limited Company (ApS): Private Limited Company is suitable for small to medium-sized businesses. It requires a minimum share capital, but there is no fixed minimum. Limited Liability for shareholders is required. It can be established by one or more individuals or legal entities. It is common for startups and small businesses.
  • Public Limited Company (A/S): Public Limited Company Suitable for larger businesses seeking to raise capital from the public. It requires a minimum share capital (typically higher for an ApS). Limited Liability for shareholders is required. It requires at least one director and one auditor. It is often chosen by well-established companies.
  • Partnership (I/S, K/S): I/S (Interessentskab) & K/S (Kommanditselskab) are different types of partnerships. I/S is a general partnership where partners share both profits and liabilities equally. K/S is a limited Partnership where there are both general and limited partners. Limited partners have limited Liability.
  • Sole Proprietorship: In Denmark, registering a sole proprietorship has no initial charges and is legally dependent on the owner's personal assets. In contrast to limited liability companies, a sole proprietorship business does not protect the owner's private property against demands made by creditors.
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Documents Required For Incorporation In Denmark

The list of documents required for Company Incorporation in Denmark are:

Type Of Company Documents Required
Public Limited Company (A/S)
  • Articles of Association
  • Minutes of the founding general meeting
  • Documentation of the appointment of the company's directors and board members
  • Proof of share capital payment
  • Identification documents of shareholders, directors, and board members
  • Declaration of the registered office address
  • Notarized signature specimen of directors and board members
Private Limited Company (ApS)
  • Articles of Association
  • Minutes of the founding general meeting
  • Documentation of the appointment of the company's directors
  • Proof of share capital payment
  • Identification documents of shareholders and directors
  • Declaration of the registered office address
  • Notarized signature specimen of directors
Partnership (I/S)
  • Partnership agreement
  • Identification documents of partners
  • Declaration of the registered office address
Sole Proprietorship (Enkeltmandsvirksomhed)
  • Identification documents of the owner
  • Declaration of the business name and registered office address
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Eligibility Criteria for Company Incorporation in Denmark

For Incorporation a Company in Denmark, few things should be kept in mind. They are as follow:

  • Annual Report: The annual report for both a limited liability company and a limited company must be completed and authorized by the executive committee no later than five months after the end of the fiscal year.
  • Directors & Shareholders: You may need at least one shareholder and one director, although they can both be the same person, depending on the sort of company.
  • Number Of Members: There is no need for so many people to form an ApS, a single member can create an ApS.
  • Required Capital:
    • A limited liability corporation must be founded in Denmark with a minimum investment of 40,000 DKK.
    • To establish a limited corporation, 400,000 DKK in share capital is needed.
    • To register a sole proprietorship business in Denmark, no capital is needed.
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Process Of Company Incorporation In Denmark

The detailed stepwise process of company Incorporation in Denmark is as follows:

Step 1: Choose a Business Structure

Choosing the company's organizational structure is the first stage in registering a corporation. An entrepreneur can use a variety of business structures, such as a private or public limited corporation.

Step 2: Choose a Business Name

After deciding on the firm's organizational structure, it's crucial to choose a name for the company. The chosen business name must be brand-new and unique, and it cannot be the same as the name of an existing company.

Step 3: Establish a Business Bank Account

Open a business bank account and deposit the capital required for Danish company registration.

Step 4: Prepare the AOA

Prepare the Articles of Association of the firm that would contain the necessary details of the firm.

Step 5: Register with the Danish Business Authority

The responsible authority/governing body for company incorporation in Denmark is the Danish Business Authority (Erhvervsstyrelsen). The Danish Business Authority is the government agency responsible for various aspects of business registration, regulation, and supervision in Denmark.

The Danish Business Authorities must be contacted in order to register a company in Denmark. An application must be submitted to the Danish Business Authorities together with the required paperwork in order to register a company in Denmark.

Step 6: Register For VAT

Once a company has been registered in Denmark, it is crucial to register it with the Danish Tax Authorities for a variety of tax-related reasons. Denmark requires VAT registration before you may start doing business there. A Danish corporation is subject to Danish tax rules, and the amount of tax that must be paid depends on the company's organizational form.

Step 7: Acquire Business License

The company must get a number of business licenses and Permits in order to undertake commercial operations in Denmark. The Business License is mandatory to run any business or company in Denmark.

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Fee Structure For Incorporation In Denmark

The required fee for company incorporation in Denmark is as follows:

Type of Company Registration Fee Capital Duty Fee Central Business Registration Fee
Public Limited Company (A/S) Approximately DKK 6,670 1% of the share capital DKK 670
Private Limited Company (ApS) Approximately DKK 6,670 None DKK 670
Partnership (I/S) Approximately DKK 1,670 None DKK 670
Sole Proprietorship (Enkeltmandsvirksomhed) Approximately DKK 670 None DKK 670

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Laws Regarding Incorporation In Denmark

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The Danish Companies Act (Selskabsloven) governs the incorporation of companies in Denmark. The legal basis for founding and running various sorts of corporations in Denmark is provided by the Danish corporations Act. The following are some significant parts and legislation pertaining to Danish company incorporation:

  • Danish Companies Act: The main law that controls the formation, operation, and dissolution of corporations in Denmark is this one. It covers a range of business structures, including partnerships, sole proprietorships, public limited corporations (A/S), and private limited companies (ApS).
  • Act on Certain Business Entities: This law regulates particular business entities, such as limited partnerships (kommanditselskab), general partnerships (interessentskab), and sole proprietorships (enkeltpersonvirksomhed).
  • Act on Public Limited Companies: This legislation has regulations pertaining to share capital, shareholder rights, corporate governance, and financial reporting and only applies to public limited companies (A/S).
  • Act on Private Limited Companies: Similar to the legislation on Public Limited Companies, but with some differences, this legislation regulates private limited companies (ApS).
  • Act on Partnerships: This law governs all types of partnerships in Denmark, including limited and general partnerships.
  • Act on Registration of Business Enterprises: The rules and processes for registering business enterprises in Denmark are outlined in this act, together with specifics on how to register company information, update company information, and handle other associated issues.
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Conclusion

A firm can benefit much from company incorporation in Denmark, among other things. The country is a great alternative for worldwide expansion due to its strong economy, stable political environment, and advantageous location within Europe. Furthermore, Denmark's business-friendly laws and tax breaks foster innovation and growth.

The simplicity of conducting business in Denmark and its competent workforce make it a top choice for incorporation, offering a door to success in the European market whether you're a start-up or an established firm. For Incorporate your company in Denmark consult with Professional Utilities.

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Frequently Asked Questions

What is the Fee for Incorporation in Denmark?

The Fee of Incorporation in Denmark ranges between DKK 1340 to DKK 7340.

How long does it take to incorporate a business in Denmark?

Typically, it takes around 1-2 weeks to complete the incorporation process in Denmark.

What is the minimum capital requirement for incorporating a company in Denmark?

There is no minimum capital requirement for most types of companies in Denmark.

Do I need a Physical Office in Denmark to incorporate a Company?

No, it’s not mandatory to have a physical office in Denmark to incorporate a company, a registered address is sufficient.

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