Company in Denmark
Company in Denmark - introduction Legal forms of doing business in Denmark How to set up a business in Denmark? Formalities and costs associated with a Danish company Rights and obligations of a Danish employer Danish tax system Summary FAQ
Company in Denmark - introductionDenmark is a European country situated in the Scandinavian region. In recent years, more and more foreign entrepreneurs have chosen Denmark as the location of their business, the main reason for this choice is probably that the country has a liberal economic policy towards all member states of the European Union and the European Economic Area, and consequently, people from abroad, including Poles, have the same privileges as Danish citizens. Polish entrepreneurs emigrating to Denmark are fully entitled to register their own business with Erhvervsstyrelsen (the Agency for Economic Activities and Enterprises - a branch of the Ministry of the Economy), however, before making such a decision, it is worthwhile to thoroughly familiarise ourselves with the requirements, deadlines and necessary documents regarding the various legal forms of Danish business activity, as well as to analyse all pros and cons, so that the decision is fully informed and in line with our expectations and possibilities.
What types of companies can an entrepreneur in Denmark choose from? What is the procedure for setting up a company in the Kingdom of Denmark? What is worth knowing about setting up and running a Danish business? What are the rights and obligations of a Danish entrepreneur? You will find the answers to these and other questions in the chapters below. Jump to content of the article to learn more!
Legal forms of doing business in DenmarkWhen deciding to set up your own business in Denmark, you can choose from a number of legal forms, of which the most popular and easiest to run is the sole proprietorship - Enkeltmandsvirksmhed. Other forms, also available to entrepreneurs from Poland, are Danish companies such as Anpartsselskab (ApS - limited liability company) Aktieselskab (A/S - joint stock company), Kommanditselskab (K/S - limited partnership), Interesselskab (I/S - general partnership); as well as Salgskontor (representative office of a foreign company), Andelsforening / Brugsforening (cooperative associations) and Filial af udenlandsk selskab (branch of a foreign company).
In addition to the above, there are also business types in Denmark such as Personligt ejet mindre virksomhed (PMV), Dania Private Limited Company (PLC) and Dania Holding Company.
It is worth knowing that Polish citizens who wish to set up and run their own business in the Kingdom of Denmark are required to apply to Statsforvaltningen (Regional Office, statsforvaltning.dk) for a special EU/EEA citizen's residence certificate.Important information about self-employment in Denmark:
In Denmark, the most popular and easiest legal form of business to run is the sole proprietorship - Enkeltmandsvirksmhed - which is ideal for young entrepreneurs taking their first steps in business who do not have a lot of financial resources and cannot estimate the future turnover of the company. In the case of self-employment, there is no separation between the company's assets and the business owner's personal assets, and therefore the owner is fully liable for any debts of his or her business. In addition, the self-employment tax is included in the annual tax return and thus the income of the Enkeltmandsvirksmhed is only taxed once during the year.
A Danish sole proprietorship must be registered with Erhvervsstyrelsen, preferably via the website erhvervsstyrelsen.dk, and the approximate cost of setting it up is DKK 10 000 (Danish kroner). When registering, the name of the company is given, usually the name of the owner, who will use a personal registration number - CPR. If the annual income of this legal form of Danish business exceeds DKK 50 000, it must also be registered with the RUT as a VAT payer. It is also worth knowing that the owner of this type of business has the right to hire employees, but is then obliged to pay employee contributions and provide a safe working environment for his or her employees.
Another option may be a small self-employed business - Personligt ejet mindre virksomhed (PMV), which does not need to be registered with the Danish Central Business Register (CVR). Once the company receives its unique registration number, you must pay a registration fee which is less than € 100, excluding legal fees. With this Danish form, no start-up capital is needed and the owner is liable for the company's obligations with his or her private assets, but you must change from a small own business to a self-employed form when the annual turnover exceeds DKK 50 000 or an employee is employed in the company.
Important information about Danish companies:
An entrepreneur in Denmark can choose from companies such as Interesselskab - I/S (general partnership), Aktieselskab - A/S (joint stock company), Iværksætterselskaber - IVS and Anpartsselskab - ApS (limited liability companies). For Danish companies, accounting is much more complicated and requires expertise, which is why owners of this type of Danish business often opt to use certified accountants. Danish companies are governed by tax law and the Companies Act (Selskabsloven) and require both a statute (vedtægter) and a memorandum of association (stiftelsesdokument) containing information such as the name, registered office address, personal details of the founders and management board, initial capital and the type and purpose of the company, in addition to being required to submit an annual report (årsrapport).
According to our records, the Finance, Insurance, and Real Estate sector have the largest number of registered companies (totaling 205,499), followed by Services (204,134) and Retail Trade (30,476) in Denmark. The Standard Industrial Classification (SIC Code) is utilized to categorize companies into specific industries. The top three SIC Codes for Denmark are Holding company (21.39%), Membership organization (17.3%), and Real property lessor (7.99%). Novo Nordisk is Denmark's largest company. Briefly describing the business profile, it is a global healthcare company specializing in diabetes care and other chronic conditions. Renowned for its insulin innovations, the company has a strong emphasis on sustainability and community support. It continues to expand its focus beyond diabetes, investing in research and development for new therapies. Another example of a huge, successful Danish company are DSV PANALPINA A-S, NTG Nordic Transport Group A/S, FLSmidth & Co. A/S, ADI Global Distribution Denmark A/S and Danske Bank.
Largest danish companies excel in diverse sectors, spanning from transportation and logistics to healthcare and energy. These businesses underscore Denmark's international influence and dedication to innovation and sustainability. This is the list of companies influencing the Danish economy in 2023.
Rank of top 10 largest companies in Denmark (data retrieved in 2022):
- Novo Nordisk
- Vestas Wind Systems
- Danske Bank
- Aktieselskabet Schouw & Co.
If you want to find information about companies, such as their website / domain, headquarters, company description, revenue, founders, location and more, please use the Danish company search tool. Examine over 528,675 companies accessible in the online databases and see also the top industries and major players, including those with the highest sales and companies with the highest number of employees. You can also get a lot of valuable information from sites like Wikipedia. Danish companies are also regularly included in the famous Fortune global 500 list. What types of companies are distinguished in Denmark?
- Interesselskab - I/S (general partnership):
- a general partnership must be registered via erhvervsstyrelsen.dk at Erhvervsstyrelsen (Agency for Enterprise and Trade) up to 8 weeks after signing the company agreement in order to obtain a CVR number - (Central Company Register - www.cvr.dk),
- the name should include the abbreviation I/S,
- at least two natural or legal persons are required to form a general partnership,
- the partners are obliged to draw up and sign a memorandum of association specifying the terms and conditions of cooperation,
- share capital is not mandatory,
- the company must be registered with the DBA (Danish Business Authority) if each partner has limited liability,
- the company may enter into contracts, sue and be sued even though it has no legal personality,
- compared to a Danish limited liability company, the partners of a general partnership have more limited influence over its operation.
- Kommanditselskab - K/S (limited partnership):
- this company must be registered via erhvervsstyrelsen.dk at the Agency for Trade and Companies (in case all partners of the company are legal entities) within 8 weeks, starting from the day on which the memorandum of incorporation defining the company's activities was signed,
- the name of the company must include the abbreviation K/S,
- it requires at least one general partner, which may be a limited liability company, fully liable for all its obligations, as well as several limited partners who are liable for the company's obligations with the initial capital contributed,
- Partnerselskaber (P/S) is a slightly different type of limited partnership, i.e. a company with limited liability up to the amount of shares, whose partners, who are liable for its obligations with all or part of the initial capital, are public limited liability companies,
- The company must be registered with the DBA.
- Aktieselskab - A/S (joint stock company):
- start-up capital of DKK 500 000 (cash or other assets) must be deposited in a bank account before the company is registered,
- a memorandum of association is required containing information such as name, registered office address, initial capital, personal details of the board of directors and founders of the company, purpose and type of business,
- the company must then be registered within 6 months both with Erhvervsstyrelsen, preferably via the website erhvervsstyrelsen.dk, for a CVR registration number, and with the Tax and Customs Administration using the website skat.dk,
- the registration process takes approximately two to three weeks,
- the company's operations can be commenced on the day the articles of association are signed if the words 'under stiftelse' are added to the company name (during registration),
- the cost of registration is DKK 670, while the estimated cost of registration through a law firm is DKK 5 000,
- the company consists of both a board of directors and management and an elected board of directors at a general meeting, which should consist of at least 3 persons in order to maintain a voting majority when voting on important company matters,
- a legal form dedicated to both large and medium-sized companies,
- must have a statute,
- both co-owners and shareholders of the company are not liable for the company's debts with their private assets, however they may be obliged to live-in any bank loans,
- is conditioned by tax law,
- individual shareholders who have acquired at least 5 % of the share capital have 30 days to notify the company,
- share capital is required,
- in Denmark, only a joint stock company can be listed on the stock exchange,
- at least 1 owner and 1 shareholder is required,
- it is not required, according to the law, that the founders of the company are the owners of its shares,
- the company is subject to separate tax legislation and the taxation of the shareholders is based on the income earned,
- in Denmark, it is also possible to purchase shares in a "shelf company", i.e. a company that already exists but has not yet started operations (so-called "shelf company"), but this is more costly and time-consuming,
- start-up capital of no less than DKK 50 000 is required,
- the company's capital is not owned by the owner, but by the company,
- The Selskabsloven (Companies Act) regulates the law of this Danish legal form.
- Iværksætterselskaber - IVS (limited liability company):
- the company must be registered through the website erhvervsstyrelsen.dk at Erhvervsstyrelsen,
- the cost of registering a company is DKK 670, while the estimated cost of registration by a law firm is DKK 3 000-5 000,
- in Denmark, a private limited company can only be established from 1 January 2014,
- the required start-up capital is at least DKK 1 (or the equivalent of DKK 1 in euro),
- the company is governed by the Private Limited Liability Company Act,
- for this company, a minimum of 25% of the annual profit must be transferred to the reserve fund,
- the sum of the reserve funds and share capital must be DKK 50 000 for dividends to be paid.
- Anpartsselskab - ApS (limited liability company):
- the company must be registered through the website erhvervsstyrelsen.dk at Erhvervsstyrelsen,
- the cost of registering a company is DKK 670, while the estimated cost of registration by a law firm is DKK 3 000-5 000,
- the company is subject to both the Private Limited Liability Company Act and tax law,
- this company has legal personality and is the ideal form for a family business, as the owner can have absolute custody of the company,
- for this form, incorporation documents (stiftelsesdokument) are required,
- Articles of association (vedtægter) must be drawn up,
- minimum starting capital is DKK 50 000,
- the capital does not belong to the owner, but to the company,
- a minimum of 1 owner and management is required,
- governed by Selskabsloven, the Companies Act.
- Denmark Holding Company:
- A Danish holding company must be registered with the Trade and Companies Agency,
- registration takes 1 day,
- a private holding company is Anpartselskab (ApS),
- share capital is a minimum of DKK 125 000,
- has shares in other foreign subsidiaries,
- 1 shareholder is sufficient for this company,
- the holding company's accounts are audited each year and belong to the public registers,
- dividends and profits of the company are tax-free,
- according to the Danish Tax Reform Act of 2009, portfolio investors own shares with a value of less than 10% of the share capital and have to pay the capital gains company, subsidiary investors own shares with a value of between 10% and 50% of the share capital and are exempt from paying taxes on profits, while associated investors own shares with a value of 50% of the share capital and are also exempt from paying capital gains taxes,
- 100% of the company's shares may come from abroad,
- subsidiary companies are not restricted in their operations.
- Denmark Private Limited Company - PLC:
- A PLC is a limited liability company Anpartsselskab (ApS),
- A PLC cannot engage in only 7 business activities, which are: trust business, trust management, insurance, collective investment schemes, reinsurance, banking, fund management.
- the minimum share capital is DKK 50 000,
- the shareholders of such a company are liable only by the amount of their contribution for the company's liabilities,
- PLC has the possibility to expand into the market of countries belonging to the European Union,
- Denmark Private Limited Company requires at least 1 shareholder and a director from Denmark,
- the name of each company (even in English) should end with the Danish abbreviation ApS,
- in Denmark, this legal form must be registered with two government agencies (the Articles of Association and Memorandum must be registered with both the Danish Trade and Companies Agency and the Companies Register),
- ready-made templates for the Memorandum, containing information such as the costs of setting up the company, the allocation of shares, the personal details of the board of directors, the promoters and the auditor, can be found at the Danish Business Authority.
- Salgskontor (representative office of a foreign company):
- has no legal personality,
- in Denmark, the law does not stipulate a foreign company's representative office, so this form may only operate on behalf of the parent company, which is fully responsible for all the Salgskontor's obligations,
- this form was created to promote products and services, but cannot sell them.
- Andelsforening/Brugsforening (cooperative associations):
- when registering an association via erhvervsstyrelsen.dk, include the abbreviation A.m.b.a. in the name referring to its legal form - cooperative association with limited liability,
- the members of this legal form are only liable to a limited extent for its obligations,
- in Denmark, an association may be formed on the basis of an association agreement between natural persons, which allows both the processing and sale of products belonging to them, and the sale of goods or the purchase of goods by them.
- Filial af udenlandsk selskab (branch of a foreign company):
- registration of a branch can be done on the Danish website erhvervsstyrelsen.dk.
- The registration form should contain: personal data, the company's legal form, the sum of the share capital, data and addresses of the entities authorised to make decisions on behalf of the Danish branch, the financial statements for the last year, the name of the Polish company, the KRS number, the object of the company's activity, the name and address of the company's branch in Denmark, the object of the branch's activity,
- the name of the company branch must contain both the word "filial" ("branch") and the name of the company and the country of its registered office,
- the estimated cost of setting up a Danish branch by a law firm is DKK 8 000,
- the director of the Danish branch is fully responsible for all its obligations,
- does not require share capital, but takes longer to set up than a company. Polish entrepreneurs are entitled to a Danish branch of their company if the company registered in Poland has a similar legal form to the one in Denmark (e.g. limited liability company ApS or joint stock company A/S),
- requires share capital of min. DKK 80 000,
- the branch must also be registered with the Danish Customs and Tax Administration,
- this form is subject to Danish law,
- in Denmark, the branch is subject to both 25 per cent corporation tax and VAT,
- a copy of the annual accounts must be sent to the Trade and Companies Agency every year.
It is worth remembering that owners who have a registered legal form in Poland equivalent to Danish ApS or A/S have the right to set up a branch in Denmark and will be exempt from paying double tax, but the process of setting up this legal form is much more time-consuming and costly than setting up a new company. Specific categories of foreign companies are permitted to conduct business in Denmark through a branch office. A branch office does not constitute an independent legal entity but represents the foreign company within Denmark. Registration of a foreign branch must be completed with the Danish Business Authority and can be processed within a few weeks.
How to set up a business in Denmark?In Denmark, every entrepreneur, whether from home or abroad, has the right to have their own business registered, as the country is guided by liberal economic policies, free competition and free market principles. Despite the fact that the Danish tax system is quite complicated and the tax percentages are high, Poles are keen to set up their businesses in Denmark, as it is a pioneer among welfare states.
Before registering a business in Denmark, one must first choose the appropriate legal form and then fill in and send, preferably via the website erhvervsstyrelsen.dk, a registration form with the required attachments to Erhvervsstyrelsen (the Agency for Economic Activity and Enterprises), which will send the application further - to SKAT (the Customs and Tax Office) in order to assign a CPR (the equivalent of the Polish NIP), i.e. a special tax identification number. Each Danish company is given a registration number - CVR (virk.dk), which is the equivalent of the Polish REGON number. You can find additional information about VAT and taxes for new businesses and access general details about working in Denmark on SKAT's website.
What else is worth knowing about registering a company in Denmark?
- The cost of registering a company in Denmark is DKK 670 (DKK 3 000-5 000 if a law firm is used).
- Every company in Denmark must be registered both with the Tax Office (SKAT - Told-og Skatteregion) and with the Register of Foreign Service Providers (RUT); failure to register with the RUT or failure to update information may result in a fine of DKK 10 000 for the company owner (if the provisions are repeatedly violated, the fine may rise to DKK 20 000). or bring a prosecution.
- In addition, in Denmark, you must also register your business with the Labour Market and Supplementary Pensions Office (Arbejdsmarkedets Tillaegspension - ATP) and pay regular social security contributions.
- When registering a sole proprietorship in Denmark, you must provide a pre-selected company name including the name of the owner, while in the case of Danish companies, their names should include the relevant abbreviations for the different legal forms, such as I/S (Interesselskab), K/S (Kommanditselskab) or A.m.b.a. (cooperative association with limited liability). The address of the company, the personal details of the owners and shareholders, as well as the type, scope and date of commencement of the business must also be stated.
- In Denmark, NemID (EasyID) is an identifier that functions like a digital signature and all Danish companies receive it.
Before registering a company in Denmark, it is advisable to familiarise yourself in advance with at least some basic information about Danish business law, the laws governing your own business, deadlines, taxes, company documentation as well as accounting rules.
Formalities and costs associated with a Danish companyThere is a lot of paperwork and costs involved in running your own company in Denmark: from registering it, through the day-to-day matters of day-to-day accounting, invoicing and company documentation in general, to the timely submission of annual tax returns or company reports.
What formalities and costs are involved in setting up and running a company in Denmark?
- Once you have chosen the appropriate legal form for your Danish business, you will need to register it with Erhvervsstyrelsen via erhvervsstyrelsen.dk.
- For a sole proprietorship (Enkeltmandszirksmhed), the set-up cost is a minimum of DKK 10 000 (PLN 5 000), while the estimated cost of registering Danish companies through a law firm is between DKK 3 000 and 5 000.
- After registering your company at Erhvervsstyrelsen, you will need to send your registration application and all attachments to DCCA (Danish Commerce and Companies Agency) for a CVR number (www.cvr.dk), as well as registering your business with Skattestyrelsen (Customs and Tax Administration) and RUT (Register of Foreign Suppliers, virk.dk - concerning VAT payers).
- For Danish companies, you must have start-up capital of DKK 50 000 (ApS), or DKK 500 000 (A/S, with a minimum of DKK 125 000 in cash).
- Sole proprietorships in Denmark are required to choose one of the available forms of taxation:
- taxation of profit as personal income,
- taxation according to the Enterprise Act - Virksomhedsordning - the business owner has the right to retain the profit from the business in the form of bank savings or a tax deduction for credit interest expenses,
- taxation according to the Share Capital Act - Kapitalafkastordning - the business owner has the right to transfer part of the business profit to capital income and part to own income.
- Danish entrepreneurs are required to make contributions and pay company such as:
- income tax of 8% (income below DKK 50 217), 39.2% (income from DKK 50 217 to DKK 558 043), 56.5% (income above DKK 558 043); CIT - corporate income tax is 28%.
- Danish companies are taxed on a consolidated basis, which means that both the main company and its subsidiaries and all branches are taxed.
- VAT on goods and services of 25% paid by companies in Denmark with an annual turnover in excess of DKK 50 000. Polish companies that are not payers of Danish VAT are also entitled to a refund. A Danish business should register as a VAT payer even if it provides services to companies that are not registered as VAT payers.
- In Denmark, SKAT sends taxpayers a form, Årsopgørelse, on the basis of which it is necessary to correctly fill in the annual tax return, taking into account all tax allowances, e.g. for costs incurred during the tax year, and then submit it via skat.dk, logging in with code TASTSELV (the tax office has 7 years to verify the validity of the allowances taken into account, which is why it is necessary to keep all documents related to the deducted costs for this period).
- When deciding whether to set up and run your own business in Denmark, it is advisable to consult the following addresses:
- address of the registration authority: Erhvervs-og Selskabsstyrelsen, Kampmannsgade 1, DK-1780 Copenhagen V; Tel: +45 33 30 77 00; Fax: +45 33 30 77 99; E-mail: email@example.com.
- erhvervsstyrelsen.dk (Erhvervsstyrelsen - Enterprise and Trade Agency; Danish Commerce and Companies Agency - DCCA),
- virk.dk (RUT - Register of Foreign Suppliers),
- toldskat.dk, (Customs and Tax Office - SKAT),
- rkantor.com (online exchange office).
- In Denmark, a special organisation, Invest in Denmark, has been established to provide assistance and information to entrepreneurs on various topics related to, among other things, investment or business.
Rights and obligations of a Danish employerEmployee recruitment in Denmark is governed by strict anti-discrimination laws, promoting equal opportunities for all applicants. Danish entrepreneurs who wish to employ workers in their company should be aware of a number of additional obligations including drawing up and concluding contracts, paying contributions, paying taxes, as well as ensuring a safe working environment for employees. Before you get started hiring an employee, a Danish employer should be thoroughly familiar with both the health and safety regulations, as failure to comply with them may lead to a ban on the continuation of work or a financial penalty for the company, and the laws regulating the employment of persons within the Kingdom of Denmark. The website of the Danish Labour Inspection Authority (UIP) provides all relevant information on the labour laws applicable in Denmark.
What are the obligations of a Danish employer?
- An employer in Denmark should comply with the Employment Document Act - Ansættelsesbevis loven - regarding the need for the employer to draw up a contract that contains relevant information about the terms and conditions of an employee's employment with his or her company (applies to persons who have been employed by the company for a minimum of one month for more than eight hours per week).
- Providing its employees with both decent wages and insurance against occupational diseases and accidents at work.
- Organising health and safety (H&S) training.
- Reporting the health and safety training carried out to the UIP.
- Organising a safe working environment for employees, instructing them on applicable safety rules and providing them with personal protective equipment.
- Treating all employees equally.
- Complying with the law (EU Directive 96/71 of 16 December 1996) conditioning the rules of the agreement on the posting of workers abroad. Companies from Poland may post workers to Denmark as part of the provision of services, but posted workers should have both the right of permanent residence in Poland and the right to work in Poland and be permanently employed by a Polish company. According to the Danish Aliens Act, a posted employee does not need to obtain a visa, but should be able, after completing work in Denmark, to return to a Polish company.
- LetLøn is a free system dedicated to maintaining payroll employee documentation in Denmark.
- Oplysingsseddel (the equivalent of a PIT) - is an earnings document needed for the annual tax return, which every Danish employer is obliged to provide to their employees after the end of the tax (or work) year.\
- The Danish Labour Inspection Authority (Arbejdstilsynet) can unannouncedly inspect any company for compliance with health and safety regulations and registration with the RUT. The Danish Labour Inspectorate cooperates with both SKAT and the police to monitor Danish companies primarily on whether the company employs persons with a work and residence permit in Denmark. No court order is necessary to inspect Danish companies, and the Labour Inspectorate has the right to carry out surveillance: retail, market and risk assessment surveillance, as well as to inspect offshore installations.
Employees in Denmark are also obliged to follow the rules of the Danish company, to comply with both the rules and regulations on health and safety at work and, therefore, to attend compulsory health and safety training, as well as to follow company instructions and to use the personal protective equipment provided by the employer. Employees in Denmark are usually protected by collective agreements, which are agreements between employees (employee associations or trade unions) and employers (companies, employer organisation) regarding Danish working conditions. A Danish collective agreement regulates, among other things, workplace safety, wages, pensions, working time, conditions and place of work, settlement of overtime, holidays, a set of additional rules (framework agreement between LO and DA), as well as problem solving and other rules that are regulated by Danish labour law.
Danish tax systemCompany is an indispensable part of any Danish business, but depending on the type of company, the detailed scope and tax rates vary. The tax system in Denmark is quite complex and the percentage rates of Danish taxes are high, but the prospect of a sizable income and the possibility to take advantage of tax reliefs makes many foreign entrepreneurs choose Denmark as the headquarters of their business.
An entrepreneur, when running his/her own business in Denmark, has to deal with taxes such as:
- Income tax, the percentage rates of which are:
- 8% for income below DKK 50 217,
- 39.2% for income between DKK 50 217 and DKK 558 043,
- 56.5% for income above DKK 558 043,
- 28% for legal entities.
- Voluntary church tax of 0.92%.
- Fixed VAT on goods and services of 25% paid by companies in Denmark with an annual turnover of more than DKK 50 000.
- Denmark's corporate tax rate stands at 22 %, which is lower than the OECD average.
In Denmark, the reverse charge procedure means that foreign companies that want to sell goods and services to Danish companies do not have to charge Danish VAT. In this case, the tax is not charged on the invoice, only the net value of the service or good must be entered, using a formula such as Reversed charge, which means that the recipient must charge and pay VAT. The customer's registration number (SE-number) or special Central Business Register number (CVR) must also be entered. Services that fall under this procedure are: employee leasing, entertainment, conferences, cleaning, construction, maintenance and repair work.A Polish company registered in Denmark as a VAT payer is required to provide the SE-number assigned by the Danish Tax Authority, while the TIN alone is sufficient if the company is not registered as a Danish VAT payer.
- In Denmark, the tax-free amount - Personfradrag - is DKK 46 700 for 2021. However, foreign employees employed in Denmark for a period of three months to three years whose earnings are not less than DKK 47 500 are required to pay a flat tax of 25% plus a Danish labour market contribution of 9%.
- Individuals in Denmark are required to pay both a linear municipality tax to the local authority, the average rate of which is 25%, and a progressive tax to the treasury, the percentage rate of which depends on the amount of income: for income above the tax-free amount plus income from capital it is 3,64%, while it is 15% for income above DKK 389 900 plus income from capital.
- In addition, a tax of 8% is levied on personal income for the employment fund and an 8% health insurance contribution. In Denmark, a progressive company taxes both capital and labour income, but for individuals the tax on income can be a maximum of 51.5%.
Remember that when doing business in Denmark, you are required to register with the Register of Foreign Service Providers - RUT, preferably through the virk.dk website, providing information such as address and company name, CVR number, type of service, contact details, VAT registration number, date of work, duration of posting, details of employees who are posted, sector classification code of the company, duration of the respective posting. For services such as horticulture, construction, cleaning and forestry, the Danish employee must present the RUT number to his or her employer.
SummaryDenmark is a country that welcomes business and promotes a free market and fair competition. They treat both local and foreign entrepreneurs equally. If Poles decide to start and manage their own business in Denmark, they can select from a variety of legal business forms and are eligible for benefits and incentives offered to EU and EEA members by the Danish government. Moreover, managing a business in Denmark is made much more convenient since all the necessary formalities can be handled online through official Danish websites.
Moreover, Denmark boasts the lowest social and health insurance burden of only 1% for Danish employers among the member states of the Organisation for Economic Co-operation and Development, along with a relatively low 28% income tax. Starting your own business in Denmark is also unrestricted. To register a new company, a form can be completed on the website of the Agency for Enterprise and Trade - erhvervsstyrelsen.dk. After this, the newly established company should apply through toldskat.dk to the Customs and Tax Administration. Once completed, the entrepreneur is entitled to fully operate their business in Denmark.
- What do I need to do to register my own business in Denmark?
Before registering your business in Denmark, you need to choose the appropriate legal form and then complete and send, preferably via erhvervsstyrelsen.dk , a registration form with the required attachments to Erhvervsstyrelsen (Agency for Business and Enterprise), which will send the application on to SKAT (Customs and Tax Administration) for assignment of the CPR, or special tax identification number. Every Danish company is given a registration number - CVR (virk.dk).
- When I run a company in Denmark, am I obliged to report it to the Register of Foreign Service Providers?
If you decide to set up and run your own business in Denmark, you are required, before you start work, to report your company to the Register of Foreign Service Providers - RUT. Any changes to the company must also be notified, up to a maximum of 1 working day on which they take effect. Any entity, whether natural or legal, for which any services are performed in Denmark, belongs to the Danish service providers.
- What company do I have to pay when running my own business in Denmark?
If you are self-employed, you have to pay companies such as:
When you run your own business, you have to pay such company as:
- income tax, the percentage rates of which are: 8% for income below DKK 50 217, 39.2% for income from DKK 50,217 to DKK 558 043, 56.5% for income above DKK 558 043,
- CIT - 28% on legal entities,
- voluntary church tax of 0.92%,
- fixed VAT on goods and services of 25% paid by companies in Denmark with an annual turnover of more than DKK 50 000.
- When must a company be registered for VAT in Denmark?
In Denmark, a company must be registered for VAT if its annual income exceeds DKK 50,000.
- When running a company in Denmark, do I have to report annually?
Yes, if you run a company in Denmark, you must prepare an annual report (årsrapport) on the company's activities and send a copy to the Trade and Companies Agency.
- Who should apply for an EU/EEA residence certificate in Denmark?
In Denmark, all Polish citizens who wish to set up and run their own business in the Kingdom of Denmark are required to apply for a special EU/EEA residence certificate from Statsforvaltningen (Regional Office, statsforvaltning.dk).
- What is the reverse charge procedure in Denmark?
In Denmark, the reverse charge procedure means that foreign companies that want to sell goods and services to Danish companies do not have to charge Danish VAT.
- What is the easiest way to set up a business in Denmark?
In Denmark, the easiest way to set up your own business is through the dedicated website of the Danish Business and Enterprise Agency (Erhvervsstyrelsen) - erhvervsstyrelsen.dk.
- What legal forms of business can I choose from when wanting to register a company in Denmark?
When wishing to register a company in Denmark, you can choose from such legal forms of Danish business as:
- Enkeltmandsvirksmhed (sole proprietorship),
- Anpartsselskab (ApS - limited liability company),
- Aktieselskab (A/S - joint stock company),
- Kommanditselskab (K/S - limited partnership),
- Interesselskab (I/S - general partnership); as well as
- Salgskontor (representative office of a foreign company),
- Andelsforening / Brugsforening (cooperative associations),
- Filial af udenlandsk selskab (branch office of a foreign company).
- What is Årsopgørelse?
Årsopgørelse is a document sent by SKAT to Danish taxpayers, on the basis of which the annual tax return must be correctly completed and submitted in due time via skat.dk.