Setting up a business in Denmark
20 October 2009by Ina Dimireva -- last modified 23 October 2009
The formation of companies in Denmark is governed by a number of laws, including the Companies Act, the Private Companies Act, the Act on Certain Commercial Undertakings, the Act on Commercial Foundations and the Act on Commercial Foundations. This is an overview of the process of starting a new business in Denmark.
Legal requirements
Legal basis
Most of the legislation is governed by EU directives, and the regulations on the introduction of economic interest groups, the European limited liability co-operative and the European company are implemented into Danish law through:
- Act on the administration of the EEC's regulations on the introduction of European economic interest groups
- Act on the European Cooperative Society (the Danish SCE Act)
- The Act on the European Company (the SE Act)
Legal forms of business organisation
A wide variety of different companies can be established in Denmark. Generally there is contractual freedom in Denmark in relation to the selection of company forms, but there are a number of company types that can or will be used. Hence the first thing a new entrepreneur must decide is which legal form his or her business should adopt.
A business can be established as one of the following: Personally owned individual enterprise (sole trader), Partnership with personal liability of partners (I/S), Limited partnership (K/S) or companies with limited liability: Private company (ApS), Public company (A/S), Limited liability cooperative (A.M.B.A.), Company with limited liability (S.M.B.A.), Association with limited liability (F.M.B.A.) or a limited partnership (P/S). A company can also be established as a corporate fund.
I/S's and K/S's must be registered in the same way as other companies with limited liability, if all the stakeholders or general partners are public companies, private companies, limited partnership companies or companies with a similar legal form.
- Individual enterprise
- Partnership with personal liability of partners I/S and limited partnership K/S
- Private company ApS, Public company A/S, Limited liability cooperative, Limited partnership and endowment
Details of the individual forms of company
Information on all registered companies, businesses, endowments etc. can be found in the Central Business Register (CVR-register)
The Danish Commerce and Companies Agency's vision is to be a partner with the business community. The agency's goal is therefore to ensure transparency with regard to companies while at the same time making it as easy as possible administratively to set up and operate a company in Denmark.
A committee was appointed in 2006 to modernise company law. Their work will lead to a completely new company law.
Modernisation of company law (DA)
Just as there is a need for simple start-up procedures, every successful new company needs a sound commercial strategy and financing.
Administrative procedures
All Danish companies with commercial operations must register with the Danish Commerce and Companies Agency. In order to register a company or business, a number of documents must be completed and information must be supplied to the Danish Commerce and Companies Agency.
Note that since 1 May 2008, it is mandatory for all foreign businesses that wish to supply goods or services in Denmark to register with the Danish Commerce and Companies Agency, regardless of their expected turnover.
Individual enterprise (sole trader): It is very easy to start an individual enterprise in Denmark.
You can register directly via the internet on WebReg.dk, or you can call the Danish Commerce and Companies, +45 7220 0032, and they will send you a registration form.
You will be sent a special registration form where you must enter all of the necessary personal information, the operating mode and the sector in which the company will operate. There is no charge for starting an individual enterprise.
WebReg.dk (DA) Online government service
Partnership with personal liability of partners I/S: It is recommended that you draw up a partnership contract when establishing a partnership with personal liability of partners.
A partnership with personal liability of partners can be registered directly via the internet on WebReg.dk, or you can call the Danish Commerce and Companies, +45 7220 0032, and they will send you a registration form.
Certain partnerships with personal liability of partners and limited partnerships must be registered with the Danish Commerce and Companies Agency. This applies if all of the stakeholders in a partnership with personal liability of partners or all of the general partners are companies with share capital, e.g. limited companies or private companies.
You will be sent a special registration form where you must enter all of the necessary personal information about the owners of the partnership, the operating mode and the sector in which the company will operate.
WebReg.dk (DA) Online government service
For companies with limited liability, the formation of a company must first be registered with the Danish Commerce and Companies Agency via WebReg.dk or by calling +45 7220 0032.
You will need to complete a form stating the company's ownership form, capital situation and the necessary personal information about the individuals associated with the company in question.
Appendices must be attached to the form showing the necessary agreements, statutes and minutes of the founding meetings.
The company will be awarded a CVR number on this basis.
This number can be used to register the actual start-up of the company. You can do this via WebReg.dk or by contacting the Danish Commerce and Companies Agency.
WebReg.dk (DA) Online government service
Further information can also be obtained from the Danish Commerce and Companies Agency's many different guides that can be found in the section Key Documents.
Notification requirements
As a rule notifications must be submitted in Danish. If the notification is produced in another language, an authorised translation must also be attached.
This requirement can be waived in special cases concerning notification relating to branches of foreign companies.
The full requirements for notification can be found in the agency's statutory order on notifications.
The agency's statutory order on notifications (DA)
Commercial funds
A fund is either commercial or non-commercial. In general, a fund is commercial if it produces goods, provides services, sells or leases fixed property or if it owns or has a controlling interest in a commercial company.
All commercial funds must be registered with the Danish Commerce and Companies Agency. The initial capital must amount to at least DKK 300,000. For the majority of the commercial funds, the board acts as the fund authority. Other funds have the Danish Civil Affairs Agency as their fund authority.
Example of statute for a new commercial fund (DA)
Resources
Although Denmark will not establish a quick-desk for entrepreneurs as described in European legislation until January 2010, it does have a single point of access for the business community. The website Virk.dk is operated by the Center for Virk.dk, which is located in the Danish Commerce and Companies Agency. It is an inter-agency portal that has been developed in cooperation with the business-related public authorities. Virk.dk is therefore the business community's digital access to the public sector. The portal provides access to 1,300 reports and to searches of business-related information from the public authorities.
VIRK.dK (DA)
Startvaekst is a portal for entrepreneurs and companies. It contains comprehensive information about start-up, operation and growth.
Use the form if you wish to start as a sole trader, a partnership with personal liability of partners I/S, a limited partnership K/S or if you want to register a limited company or private limited company etc. for VAT. You can also register payroll tax, import, export or employees.
Start form (VAT registration etc.) (DA)
This notification form should be used to set up a company or by a foreign company to set up a branch in Denmark.
Virk.dk - Company form (Creation and changes) (DA)
Danish Commerce and Companies Agency
SKAT (DA)
Personalised help and advice
Enterprise Europe Network
The Enterprise Europe Network provides businesses with information and advice through its local partners.
Enterprise Europe Network – contact points – Denmark
SOLVIT helps businesses deal with problems that arise when national authorities wrongly apply EU market rules.
SOLVIT – contact points – Denmark
Source: European Commission
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