How to establish a business in Denmark: A simple guide to registration

Part 1 of 3 in our series, "How to Establish a Business in Denmark."

Thinking about expanding into Denmark? Denmark is regularly named one of the simplest and most stable places in the world to do business – and starting off on the right foot makes everything that follows much easier.

This article is the first in a three-part series on how to establish a business in Denmark. Here, we give you an easy overview of business registration: what you need to think about, the main choices you will face, and the digital setup every company needs.

Why Denmark?

Denmark consistently ranks among the best countries in the world to start or grow a business. Foreign companies are drawn to a few key strengths:

• A stable, business-friendly environment with an efficient, low-corruption public sector.
• World-leading digital government, which keeps registration and reporting fast and simple.
• Competitive tax conditions and low business costs.
• A flexible labour market and a highly educated workforce — and most Danes speak excellent English.
• Great connections to the rest of Europe and the Nordic region.

In short, Denmark is set up to welcome foreign investment.

Does your business need to be registered?

Yes – and the first thing to work out is how. The right type of registration depends on what your company will actually do in Denmark and whether your activities create what's known as a permanent establishment (broadly, a fixed place of business such as an office or branch).

Getting this assessment right matters, because it affects your tax position and which registrations you'll need. It's the kind of question that's worth a closer look before you commit.

The main options for business registration

Depending on your plans, you might set up as a:

• Private or public limited company (an ApS or A/S)
• Branch of your existing foreign company
• Representation office, for temporary or preparatory work like market research
• Holding company, which Denmark is an attractive home for.

Each option comes with its own rules around capital, management and tax – so it pays to choose the structure that fits your goals. We can help you with this.

Tax registrations you may need

Once you have selected a structure, a few further registrations may apply. The most common is VAT – and foreign businesses should note there's no minimum threshold, so VAT registration often applies from your very first activity in Denmark.

Depending on what your business does, you may also need to register for things like payroll tax, excise duties, or report temporary activities to the authorities. Which ones apply – and how they're calculated – varies quite a bit by industry, so this is an area where a little guidance goes a long way.

Going digital: your business needs a digital profile

Denmark is one of the most digital societies in the world, and almost all contact with the authorities happens online. That means your company needs a digital profile from the start. Three essentials to be aware of:

• MitID Business: your company's secure digital ID for logging in, filing and banking.
• e-Boks: your official digital mailbox, which the authorities use to contact you (checking it is required by law).
• NemKonto: a special "easy account" the public sector uses for any payments to your company.

Setting these up early is important, because some of them start working the moment your company is registered – and much of the setup is in Danish.

Key things to remember

• Work out how your business should be registered before anything else.
• Choose the structure that fits your plans.
• Expect to handle VAT and possibly other tax registrations.
• Get your digital profile (MitID, e-Boks, NemKonto) sorted early.
• When in doubt, get local advice – it saves time and avoids costly mistakes.

Want the full picture? Download the free whitepaper

This article is just an overview. Our complete whitepaper, "How to Establish a Business in Denmark – Business Registration," goes deeper into every step – including the exact registration process, capital requirements, the different tax registrations and how they're calculated, and a full guide to your digital setup.

Download the free whitepaper here

Do you need help?

At Azets we can help you with setting up a business in Denmark – from business registration to outsourcing services and maintaining business critical functions for your company. We also offer advice and consultancy services about all business aspects. Please reach out, if you have any questions.