Step-by-Step Guide to Opening a Business in Denmark Thank you for choosing Denmark Invest in Denmark provides a free and confidential one-stop-shop service to foreign companies looking to set up or expand in Denmark. The following is our guide to opening a business in Denmark, with links that are updated with the latest information. We are happy to walk you through it as well as introduce you to our Service Provider Network that can further assist you. Step 1 Step 2 For a more detailed Choose which type of legal entity fits Register your company your goals and activities in Denmark Every company in Denmark must be description of the There are several types of company registered with a CVR number (Central different types of legal structures in Denmark. We recommend Company Register Number) in the that foreign companies use an Danish Business Authority’s (DBA) online forms please refer to: “Anpartsselskab” (ApS – meaning a private registration system (indberet.virk.dk). The investindk.com/ limited liability company), which is akin CVR number is always used when establishingabusiness to a limited liability company in the communicating with public authorities. United States, as this provides you with It costs DKK 670 to register your the most protection. company online. Summer 2017 www.investindk.com STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK A company should be registered officially Ι áéëîÝêàñéÝêàÝîðåßèáïëâ with the DBA within 14 days after the association of the company memorandum of association has been Ι ìáßåâåßàáïßîåìðåëêëâðäáëóêáîïäåì signed. structure of the parent organization and copies of passports of all ultimate To register your company, the DBA personal owners with more than 25% requires you to have a “NemID”, an ownership individual’s digital signature to access public and private services on the internet Step 3 in Denmark (nemid.nu). In order to get a NemID, you must have a residence and Register with the Danish Tax Authorities work permit in Denmark. Upon registering, the Danish Business Authority (DBA) sends the relevant Therefore, we recommend that you work information to SKAT (the Danish Customs with a lawyer who can do this for you. We and Tax Administration), who is responsible have a vetted list of lawyers to introduce for the collection of taxes and VAT. you to when you are ready. SKAT also provides advice to companies on Here is an overview of all our service tax, duty and VAT issues providers: investindk.com/spn (please see link: skat.dk for more insight). It only takes a couple of hours to register Before you start you start operating, you your company online; however your lawyer must register your company separately for: will need the following from you before Ι βåâõëñïáèèãëëàïÝêàïáîòåßáåê starting: Denmark (only required if the company Ι îÝêïâáîëâïäÝîáßÝìåðÝèëâ has a revenue of more than DKK 50,000) 50,000 to your client account held by Ι ÝõîëèèðÝôβåâõëñïáèèβáôáéìð your Danish lawyer. This is not a fee but services rather an operating capital for your Danish company Ι ñðåáïβåâõëñéÝêñâÝßðñîáëîàáÝèåê wholesale goods subject to duties or Ι îëòåàáðäáêÝéáͭÝààîáïïÝêàßëìõëâ purchase these kinds of goods abroad passport of the member(s) of the executive board and the member(s) or Ι éìëîðÝêàΔëîáôìëîðβåâõëñàëÞñïåêáïï the board of directors if applicable. with countries outside the EU Please note that members(s) of both the Ι βðÝôϊðÝôàáàñßðáàâîëéåêßëéáÝð executive board and the board of source) - if you have employees directors of the company can reside outside of Denmark For more information on corporate taxation, please see link: investindk.com/taxation 2 STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK Once you have your company set up, you Step 4 can continue with the following steps Issue employment contracts simultaneously - assisted by your Danish Your lawyer can also assist you in service providers. preparing employment contracts or ‘Secondement’ addendums to the existing Step 6 contracts for employees who will transfer within the company that complies with Process for helping you transfer your Danish legislation. employees to Denmark Depending on the employee’s nationality All employers must take out a mandatory different rules may apply: industrial injury insurance. This insurance should be added to the salary as the Ι ëêβêÝðåëêÝèïéñïðÝíßñåîáÝ employer’s contribution along with the ATP residence and work permit prior to their contribution. These contributions are arrival in Denmark among the world’s lowest rates for Ι êÝðåëêÝèïéÝõáêðáîÝêàóëîçåê employer-paid social security (e.g. Sweden: Denmark without permits for up to three 31.42% of salary; Denmark: approx. DKK months. For longer stays, they need to 4,000-12,000 depending on the nature of request a registration certificate before the employment). the three months period has expired For a detailed description on hiring in the Ι åðåöáêïëâðäáëîàåßßëñêðîåáïéÝõ Danish labor market, including working enter and work in Denmark without any conditions please see permit investindk.com/labour Applications for residence and work permits (one application per person) can Step 5 be filed by the employer and the employee Set up corporate structure (optional) directly or via a Danish lawyer who, for an We would recommend setting up your additional fee, can assist you in filling out corporate structure so that you avoid double taxation and use Denmark as a profit center for your other international Useful address: branches or companies. The Citizen Centre at Danish Agency for International Denmark not only has a low corporate Recruitment and Integration taxation rate, it also incurs no fees on the Njalsgade 72C, 2300 Copenhagen S transfer of dividends outside of the country.* Your lawyer can assist you here Tel: +45 72 14 20 01 for a separate fee. Web: https://www.nyidanmark.dk/en-us/frontpage.htm * If dividends are paid to a parent company (holding at least 10% of the shares) in another EU member state or a state with which Denmark has a double taxation treaty. 3 STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK the application form and filing the The application for a residence and work application on behalf of the company in permit under the Pay Limit Scheme must Denmark, potentially saving you some be completed by filling out the application time. Since you are establishing a new form “AR1”: https://www.nyidanmark.dk/ company, it may be advisable to use a xform/formularer/ar1.form.aspx lawyer for the first couple of applications The fee for each application under the which will enforce your reputation as a pay limit scheme is: DKK 3,440 legitimate business with the authorities, (2017-figures). however this is not necessary. The AR1 application form consists of two There are three steps that must be parts; one for the employer to be filled out completed when filing the application: and one for the employee to be filled out. i. Create case order ID (can be done online) ii. Pay the fee (unless the applicant is Ι åïðëâàëßñéáêðïîáíñåîáàâîëéðäá exempt) (can be done online) employer: i. AR1 part II must be filled out and iii.Submit the application (can be done signed by the employer online) ii. Documentation for salary and Foreign employees that have been offered employment conditions which are not a highly paid job have particularly easy stated in the employment contract access to the Danish labour market (for example, fringe benefits, paid housing, etc.) There are no specific requirements with iii. Because you will be a new Danish regards to education, profession, or the entity sponsoring the work permit, we specific nature of the job would advise that you develop a financial forecast for the company/ In order to obtain residence and work group that will be attached to any work permit according to the Pay Limit Scheme permit application as this may help the employees’ job must have a gross ease the application process, however annual pay of no less than DKK 408,000. this is not a requirement The employee must have a written job contract or job offer which specifies Ι åïðëâàëßñéáêðïîáíñåîáàâîëéõëñî salary and employment conditions. Salary employee: and employment conditions must i. AR1 part I must be completed by the correspond to Danish standards employee ii. Employment contract or job offer For more information on the Pay Limit which includes information on salary Scheme please see: terms, employment conditions, and https://www.nyidanmark.dk/en-us/coming_ job description (may not be more than to_dk/work/work.htm 30 days old). Salary and employment 4 STEP-BY-STEP GUIDE TO OPENING A BUSINESS IN DENMARK conditions must correspond to Danish Step 7 standards iii. Documentation of education relevant Set up payroll and bank account to the offered job (in English or Danish) Invest in Denmark generally recommends iv. Copy of passport (all pages with foreign companies who establishes a information, including front page) company in Denmark to engage a Danish accountant or auditor since the company Ι êßëêêáßðåëêóåðäïñÞéåððåêãÝê has to file tax returns locally, arrange application for a residence permit, the bookkeeping, VAT reporting, pay rolls, etc. employee’s biometric features (facial Ι ìáêÝÞÝêçÝßßëñêðͬ image and fingerprints) must be recorded In order to open a corporate bank and stored on a chip on a residence card. account a “request for opening a If the employee fails to have his/her corporate account” form is needed. It is biometric features recorded, the obtainable through any large Danish application will be rejected. This means bank. The form is to be returned to the that the application will not be processed Danish bank with a reference or Ι ëîéÝèèõͭõëñéñïðÝèîáÝàõäÝòáÞááê recommendation from your local bank in granted a residence permit before your home country. The completed entering Denmark request must be accompanied by the following documents: Ι êßáðäááéìèëõááÝîîåòáïåêáêéÝîçͭ Ι ëéìÝêõîáìëîðåêßèñàåêãìîëòåïåëêï they will be issued (from the city of regulating the power to bind the residence) a Tax ID card as well as a company who needs accounts (i.e.: Can Health Insurance card which allows them only individuals within the company free access to public health services.