Setting Up a Limited Liability Company (Aps) in Denmark

In Denmark, the limited liability company (ApS – Anpartsselskab) is the most favored business structure. Setting up this type of company is simpler compared to other legal entities. The minimum share capital required is 20 000 DKK. If you're looking to establish an ApS in Denmark but are uncertain about the process, we're here to help you.

What are the Characteristics of an ApS in Denmark?

A limited liability company (ApS) is recognized as a separate legal entity under Danish law governing private limited companies. The owners are not personally responsible for the company’s obligations, as their private assets remain distinct from the company’s capital. An ApS requires a clear management structure and can optionally include a Supervisory Board with three members.

Establishing an ApS in Denmark requires the following:

• A founding agreement and the company’s articles of association.
• An initial capital of at least 20,000 DKK.
• Registration with the Danish Business Authority within two months of signing the founding agreement.

In a Danish ApS, the minimum share capital is 20 000 DKK, which can be contributed either in cash or through assets. Cash contributions are the fastest and simplest method. Alternatively, non-cash contributions, such as goods, inventory, or equipment, are also accepted but require documentation to verify the value of the assets. This option involves higher costs and extends the setup timeline. Auditor fees for valuing non-cash contributions typically range between 5 000 and 15 000 DKK, excluding VAT.

Who Can Manage an ApS?

An ApS in Denmark can be managed by a single director or a team of individuals. Owners are also eligible to take on the role of directors. Neither directors nor owners are required to be tax residents of Denmark. Additionally, the company can have one or multiple owners.

How to Set Up an ApS in Denmark?

To set up an ApS in Denmark, registration with the Danish Business Authority (Erhvervsstyrelsen) is mandatory. The process is simple, and the financial requirements are more modest compared to other company types.

The following are necessary to register an ApS:

• Founding documents (stiftelsesdokument).
• Articles of association (vedtægter).
• Share capital.

The registration fee for an ApS is 670 DKK. However, if the registration is handled by a law firm, the cost typically ranges between 3 000 and 5 000 DKK.

A share capital of 50 000 DKK is required to meet the formalities. These funds can later be used for business expenses, dividends, or salaries. However, the capital cannot be transferred to the personal accounts of the owner or owners and must be deposited into the company’s bank account.

The ApS must also be registered with the Agency for Trade and Companies within 8 weeks of its establishment.

Why is it Beneficial to Operate an ApS in Denmark?

Starting a business in Denmark involves fewer formalities compared to many other countries. The company registration process is quick and comes with minimal administrative costs.

The key benefits of an ApS in Denmark include:

• Flexibility in carrying out business operations.
• Foreign companies enjoy the same rights and responsibilities as Danish businesses.
• Denmark's corporate income tax rate is relatively low at 28% compared to other European countries.
• Employer contributions to social and health insurance are only 1% of the payroll, one of the lowest rates among OECD nations.
• Company registration is fast and involves minimal administrative costs.