Establishing Your Business in Denmark: A Comprehensive Guide for International Companies

Denmark offers a robust business environment with clear regulatory frameworks that make it an attractive destination for international expansion. Understanding the corporate registration process and legal requirements is essential for any company looking to establish a presence in this Scandinavian market.

Available Business Structures in Denmark

The Danish Business Authority recognizes several legal entities suitable for different business needs. Each structure carries distinct legal and tax implications that should align with your operational requirements.

Sole Proprietorship (Enkeltmandsvirksomhed)

Single ownership with complete decision-making authority
Unlimited personal liability for business obligations
No minimum capital requirements
Registration mandatory for VAT (turnover exceeding 50,000 DKK), payroll taxes (base over 80,000 DKK), or international trade activities

Capital Companies: ApS, A/S, and P/S

These entities operate under the Danish Companies Act and require formal establishment through signed documents and articles of association.

Multiple ownership options through shareholding structures
Limited liability protection for owners
Minimum capital requirements: 40,000 DKK for ApS, 400,000 DKK for A/S and P/S
Mandatory digital annual reporting and accounting compliance
Specific governance requirements including board composition

Limited Partnership (Kommanditselskab)

Combination of general partners (unlimited liability) and limited partners (liability restricted to capital contribution)
No minimum capital requirements
Reporting obligations determined by partner composition

Partnership (Interessentskab)

Minimum two partners with joint unlimited liability
No capital requirements
Annual reporting mandatory only if all partners are corporate entities

Company Registration Process: Step-by-Step

Business Registration: Complete registration through the Danish Business Authority's Virk platform, requiring Danish CPR number and MitID authentication
Fee Payment: Standard registration fee of 670 DKK, with additional charges for specific services
VAT Registration: Submit application at least 8 days before commencing business operations
Tax Compliance: Implement payroll tax deductions for employees working in Denmark
Social Security Compliance: Register for labor market contributions including ATP, AUB, and workers' compensation insurance

Entry Strategies for Foreign Companies

International businesses typically choose among three establishment models:

Subsidiary Formation

Creates a separate legal entity with independent tax obligations and management structure, while maintaining connection through board representation.

Branch Office Establishment

Operates as an extension of the parent company without separate legal status, requiring full registration while the parent retains ultimate liability.

Representative Office

Suitable for non-revenue activities like marketing or market research, with simplified registration requirements and no Danish tax obligations.

Navigating Danish Corporate Law

The Danish Companies Act and Business Enterprises Act provide comprehensive frameworks governing corporate establishment, operation, and compliance. Regular monitoring of regulatory updates ensures ongoing compliance and risk mitigation.

Alternative Employment Solutions

For companies seeking to test the Danish market without immediate entity establishment, SailGlobal offers compliant employment solutions that enable businesses to hire local talent while managing legal and administrative requirements.

Denmark Company Registration Guide: Business Setup for Foreign Companies