BUSINESS IN DENMARK
Scandinavian countries are extremely popular with immigrants from different parts of the world. Not the least place in this list is occupied by the Kingdom of Denmark. This small state with a population of about 5.8 million people, by the way, very qualified, Danish universities offer quality and prestigious education, is considered one of the most favorable places for business immigration.
There are plenty of reasons for this. Let us highlight the main ones.
Firstly, there is practically no corruption in Denmark. At least, this is confirmed by numerous international studies.
Secondly, transparent tax, legal and judicial system, as well as a minimum of bureaucracy, allow you to open and do business in Denmark as efficiently as possible.
Thirdly, the ideal infrastructure, the level of development of high technologies and, in general, the quality of life in Denmark is one of the best in the world.
Own business in Denmark for foreigners is a good opportunity to move to an economically and socially developed European country forever and eventually get a Danish passport, and not only the entrepreneur, but also close relatives.
The comfortable geographical location of Denmark allows not to be limited to the local market or the Nordic countries, but opens the way to all countries of the European Union, in particular, the closest is Germany.
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How to start a business in Denmark
Citizens of the EU, Switzerland and Scandinavian states have the right to do business in Denmark without any special restrictions. Businessmen from third countries (from outside the EU) must fulfill a number of conditions, the main of which is the registration of a residence permit in Denmark. Local laws provide a whole list of programs for employment in Denmark, one of which (Start-up Denmark) is directly related to running a business.
The Start-up Denmark program allows foreigners to obtain a residence permit and register their own company in Denmark. However, there are other ways for entrepreneurs to move to this Scandinavian country. For example, marriage to a Danish citizen, training and other reasons through which you can get a residence permit. In order to choose the most suitable option, it is worth contacting the relevant business immigration specialists, who will provide advice depending on the specific circumstances.
Requirements for foreigners to obtain a residence permit and run a business in Denmark under the Start-up Denmark program
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An innovative business idea of interest to the Danish economy and approved by local experts.
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Financial security to cover living expenses in Denmark for the first year. The amount is DKK 143.3 thousand. When immigrating with family members for the spouse the amount should be equivalent, that is a total of 286.7 thousand, and with children increases to 333.8.
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Active participation in the activities of the company. Just being a shareholder and receiving dividends from a distance will not work.
Initially, the residence permit is issued for 2 years with the right to extend it for another 3 years. It should be noted that the new business should really meet the needs of the Danish market, for example, a store or a cafe local officials will definitely not be interested. The term of consideration of applications is 1-2 months.
Procedure and cost of company registration in Denmark
According to the Doing Business agency, out of 190 countries in the world in terms of accessibility of opening a business, Denmark ranks third and first among European countries. Another advantage of Denmark is the high popularity of the English language, and it means not only communication with locals, but also the possibility of filling out official documentation in English, in particular, when registering a company.
Main stages of company registration in Denmark
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Registration of digital signature (NemID). The procedure is carried out in less than one day online through a special website – www.nemid.nu. It is possible to request up to 3 signatures for employees of the company for free, each subsequent one will cost 10.5 euros.
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Opening an account in a commercial bank in Denmark and depositing the minimum amount of authorized capital, usually not less than 50 thousand Danish kroner (about 6.7 thousand euros). It is done within a day and free of charge.
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Registration of the company in the Danish Business Authority (DBA) system. There is a special online service for this – virk.dk. VAT payer registration is also done here. After the procedure is completed, the company receives an identification code (CVR), which indicates the completion of business registration. The process takes less than a day and costs 90 euros.
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Registration of employees with a private insurance company, usually against accidents and occupational diseases.
The business registration procedure must be carried out at least 8 days before the planned date of commencement of business operations. Many activities in Denmark are subject to licensing or require a special permit, read more here.
Forms of ownership for business in Denmark
Depending on the scale of the planned business, the amount of investment, the prospects of tax optimization and the type of activity, it is very important to choose the most appropriate form of ownership for a company in Denmark. Let's consider the most popular ones.
Private Limited Liability Company (ApS). It is registered for one or more owners. Liability for the company's obligations is limited to contributions to the share capital. Management is carried out by a director. The minimum requirements for the authorized capital are 125 thousand Danish kroner (16.8 thousand euros), with 50 thousand being contributed upon registration. There are more than 75 thousand such companies in Denmark.
Public limited company (A/S). Requires a minimum capital of 500 thousand Danish kroner (67 thousand euros). Provides for a board of directors consisting of at least three persons. The company's accounts are publicly available. In total, there are more than 35 thousand firms of this type in the country.
Individual entrepreneur (Enkeltmandsvirksomhed). Today in Denmark there are up to 300 thousand registered entrepreneurs and this is the most common form of doing business in the country. The owner independently carries out economic activities and is fully responsible for the company's obligations with its own property.
Taxes in Denmark
Denmark has a rather favorable tax climate, in particular, the corporate tax rate of 22% is one of the most acceptable in Europe. Social contributions are minimal and some foreign employees pay less income tax for the first 5 years. Denmark has signed double tax treaties with most countries of the world. Nevertheless, it cannot be said that the country has low tax rates, it is not true.
Danish tax rates in 2024
Corporate income tax – 22%
VAT – 25% and 0% preferential rate (newspapers, magazines)
Dividends – 25% for companies, and 27% for individuals if the amount does not exceed DKK 58.9 thousand and 42% in case of excess.
Income tax – progressive rate reaches 52.07%
Popular business destinations in Denmark
As already mentioned, Denmark is considered one of the most comfortable countries for business immigration. Spheres where high technologies, innovations and scientific developments are applied are especially popular with investors. Denmark is an ideal place for the implementation of all kinds of startup projects, and the modern and advanced population will quickly test and evaluate the new product.
The priority sectors in the Danish economy are IT, renewable energy, biotechnology, maritime transportation, food and design. If a foreigner has a good idea and a business plan in one of these industries, he or she can count on the support of the local authorities and successful immigration to Denmark for business purposes.
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