Denmark is located in northern Europe and belongs to the countries of the Scandinavian region. Despite the small size of the state, with population over 5 million, Denmark shows a high level of development, social protection, accommodation, and a business climate, which attracts international business and investors seeking ways to set up a company in Denmark. The country’s per capital income is considered one of the highest in Europe.
The state currency is the Danish Krone (DKK), which is not subject to the currency regulation of the European Union. The state is known for its responsible attitude to scientific and industrial developments related to the protection of the environment. The government considers such projects as the most important and systematically implements them. In particular, the country attracts foreign investors and entrepreneurs to start business in Denmark with low tax pressure on business, a low corruption component, a highly qualified workforce and flexible legislation.
Why set up offshore company in Denmark
The Danish government will do everything to let you concentrate on your business. High organization flexibility and a secure business environment are Danish business calling cards. The process of company registration in Denmark takes several hours and is affordable.
The main advantages of jurisdiction are:
- The stable political system and a highly developed economy. The country is a member of many international organizations.
- Denmark is a member of the European Union signed over 80 double tax treaties.
- The state currency Danish Krone is not regulated by the EU.
- Denmark does not carry out foreign exchange controls; the principle of freedom of capital applies.
- Modern infrastructure and highly skilled workforce.
The legal system of the Kingdom of Denmark is similar to that of most EU countries.
Ways to register company in Denmark
Starting business in Denmark it’s necessary to now that information on all Danish companies is in the Open Register, all companies submit annual reports and pay taxes. Danish companies may use nominee directors and shareholders, but a real shareholder and director must manage the company, since issuing power of attorney is unlikely. In addition, the Danish company is also an excellent tax planning tool. Starting from 2016, the corporate tax rate on income is 22%, while the company pays 25% VAT, such taxes are paid by resident companies. At the same time, income from real estate or any company enterprises located abroad is not subject to taxation. In order to minimize tax costs, the company may consider transferring production to another country.
The Danish IVS feature is that it can be established with a registered capital of even one Danish Krone (DKK).Atrium Business Solutions
Company types you can register
Opening a business in Denmark you can register the following types of companies:
- Anpartsselskab (ApS): Closed Joint-Stock Company or private limited company.
- AS: Open Joint Stock Company
- Kommanditselskab (K/S): Limited Partnership.
- IVS: Limited Liability Company.
IVS is a relatively new type of legal structure appeared in Denmark in 2014. This type of company is becoming even more popular than the already known Danish structure like ApS or A/S, also referred to as limited liability companies.
Danish Partnerships (K/S) are a great way for taxation optimizing. If the partners of the company are not Danish citizens, the company is not considered a tax resident of the country. If the partners of the company are residents of a country that has an agreement on the abolition of double taxation with Denmark, then only partners are taxed. Setting up business in Denmark an important parameter is the presence of a partner who is the resident of the country Denmark has an agreement on the abolition of double taxation with, and this partner should own at least 51% of the company.
Requirements for companies
The Danish IVS feature is that it can be established with a registered capital of even one Danish Krone (DKK). Thus, in the absence of seed capital, you can register an IVS company and freely start your business in Denmark. In this case, the liability of the company is set at 1 DKK. However, with the established minimum authorized capital of one krone, one must take into account the company’s costs for a lawyer, auditor and other services necessary for running a business. Therefore, for successful Denmark company registration, a minimum amount of capital must be declared that satisfies the above costs, for example, 10,000 DKK.
The main requirements for Danish companies:
- at least one director;
- legal office;
- audit required;
- an accountant is required to conduct current accounting;
- minimum authorized capital depends on company type.
The registered capital of AS is €65,000 with 25% paid when register a company in Denmark. The director or, if it is not alone, the majority should be EU residents.
To set up a company in Denmark it is necessary to provide (for beneficiaries, shareholders, and directors of companies):
- A notarized copy of the passport or other identification document, with the pages with the signature and photo.
- A notarized confirmation of the address of the place of residence (a copy of the utility bill or bank statement).
To open a limited liability company without capital requirements, you must come up with a name that ends with the abbreviation IVS or the full name of the type of Danish company (Iværksætterselskab). Since the name of the new company will be checked in the Register, in order to avoid not unique names it is desirable to have several synonymic names for replacement.
Benefits to open company in Denmark
In Denmark, you can register a company for any business activity not prohibited by law. Naturally, a license is needed to provide banking or insurance services. Key benefits of corporate tax rules for international business in Denmark:
- The corporate tax rate is 25%, which is less than the average rate in Europe (in such countries as Sweden, Norway, Finland, Great Britain, Spain, Germany, Belgium, and France the income tax rate is higher in comparison with Denmark).
- The actual absence of social insurance contributions for employers (unlike many other countries).
- There is no capital duty, share transfer duty, wealth tax.
- The dividends can be received and distributed without taxes.
- The compensation for losses from operating activities.
Shareholders of limited companies are not personally liable for all debts of companies, but only within the limits of their contributions to the authorized capital. They are entitled to distribute profits in proportion to their contribution unless otherwise provided by the Charter. A private limited company (ApS) cannot offer shares for sale, i.e. make a public offer.
Quick and easy offshore company formation in Denmark
The AS type of company is also called an Open Joint Stock Company, which can satisfy the needs of a company with large amounts of capital. Such a structure is best suited for international trade. Quick registration of a company allows you to start corporate activities in a short time. Denmark company register does not require special permits from the Danish government or notary confirmation. A company can be created by one or more founders, which can be both foreigners and Danish citizens. Shareholders can be not only individuals but also legal entities; knowledge of the Danish language is not required.