In Denmark, entrepreneurship and innovation are strongly encouraged: it is really easy to set up a small business in Denmark if one is an EU/EEA or a Nordic citizen because will not be required to be a Danish resident. Citizens outside the Nordic countries, EU/EEA and Switzerland can easily apply for a residence and work permit to be able to register their business in Denmark.
To start a small business in Denmark there are three simple steps:
Decide the type of business entity:
There are six types of legal entities in Denmark:
- Danish Private Limited company: is one of the most common business forms in Denmark and it requires at least one investor, regardless of his residency, to be founded. The minimum share capital for setting it is 80 000 DKK and the amount is divided into shares which are not negotiable nor transferable. The shareholders are liable only to the extent of their own contribution.
- Danish Public Limited company: it requires at least one founder and can be founded by providing a minimum share capital of 500000 DKK. Shareholders aren’t liable for the company’s obligations, and shares can be offered to the general public.
- Limited Partnership: it requires at least two members (individuals or legal entities) to agree upon setting up a partnership. At least one partner is a general one and at least one is limited, with limited liability to the extent of his own contribution. Registration with the Danish trade register is also compulsory.
- General Partnership: it requires at least two members (individuals or legal entities) to agree upon setting up a partnership, and both bear full liability for the company’s obligations. It is mandatory for a general partnership in Denmark to be registered with the Danish trade register.
- Sole trader: is an individual who wants to set up a company in Denmark on his own. The single member has full liability on the company’s obligations and has the obligation to register with the tax authorities if the activity performed deals with trading or if the proprietorship has employees.
- Branch and Representative office: two other options for a foreign corporation willing to enter the Danish market are the representative office (only suited for marketing and research, no commercial activities) and the branch office (essentially an extension of the parent company that performs the same business activities in Denmark).
Registration and CVR
Once the type of business is decided, EU/EEA and Nordic citizens can simply start their own business by registering their company with the Danish Commerce and Companies Agency: a NemID or a Digital signature is required: if in lack of both, a lawyer can set up the company for you. This must be done no later than eight days before starting any dutiable activities. The registration process can be easily done online. Once the business is registered, a Central Business Registration Number (CVR number) is issued. A CVR number, which costs 670 DKK, is a business’identification number used to communicate with Danish public authorities and private entities.
Declare VAT and TAX for your small business:
The Danish tax authorities known as SKAT will be informed right after the CVR is issued: thereafter is the business’duty to declare VAT and pay taxes. The process can be easily done online through the Danish Tax Agency’s online service called “TastSelvErhverv”.