Denmark is a very progressive economy in the EU, welcoming to foreign direct investment also being self-sufficient in energy – oil production, natural gas, wind and bio-energy. Opening a company in Denmark is straightforward; thanks to a streamlined regulatory regime and more than 2,500 foreign companies already operate in the capital, Copenhagen. Denmark has double-taxation treaties with more than 80 countries.
What is the most common type of company in Denmark?
There are two main kinds of business entity in Denmark:
- public limited company - Aktieselskab (A/S)
- private limited company – Anpartsselskab (ApS)
ApS Share capital requirement
The minimum share capital for an ApS is DKK 80,000 (approx €10,700).
The Danish labour force is highly skilled and well educated, although more than a quarter are in the public sector. Unemployment is approximately 4%.Salary levels are high by EU standards but are in line with those elsewhere in the Nordic region. Recruitment can be achieved in consultation with the government employment offices or through the services of the various commercial employment agencies that exist.
What is the regulatory environment like?
Denmark has a liberal business climate and this is reflected in the regulatory environment. In general, there are no restrictions on investments and capital and earnings can be freely repatriated. Price and exchange controls concern intercompany charges and affairs in the transfer-pricing system. The corporate rate of tax is 22%.
Companies are required to file annual financial statements within five months following the end of the fiscal year. Companies are divided into categories depending on size and if considered ‘Small’, certain aspects of the financial statement may be omitted. Annual returns must be filed by all companies
Full banking services are available which offer a complete range of commercial banking facilities, including those related to acquisitions and the raising of capital. Foreign investors are treated on an equal footing with domestic investors as far as financing is concerned.
There are limited financial incentives for businesses setting up in regions of Denmark that are designated by the EU as special development zones. In certain circumstances, incentives are also available to small and medium sized enterprises for research and development, export and skills development and clean environmental technology.
Please contact us and we will be pleased to discuss matters in greater detail.