Setting up and running a business in Denmark as a foreigner can seem complex. However, Denmark is widely recognized for its business-friendly environment, digital infrastructure, and efficient public administration. In this article, we guide you through the essential steps and key considerations involved in setting up and eventually operating a business on the Danish market.
Preparations before starting your business in Denmark
Before you can launch your operations, a number of preparatory steps need to be completed.
Choosing the right business structure
One of the first decisions you’ll need to make is selecting the appropriate legal structure for your business. In Denmark, the most common types are:
- Limited liability company (Anpartsselskab, ApS) – This structure is suitable for those seeking limited liability. It requires a minimum capital of DKK 20,000 and is commonly chosen for scalable businesses or when multiple stakeholders are involved. An ApS must have at least one director, but a full board is not required unless specified in the Articles of Association or by law.
- Branch (Filial af udenlandsk virksomhed): A Danish extension of a foreign company. No share capital is needed, but registration with the Danish Business Authority (Erhvervsstyrelsen) is mandatory.
- Limited partnership (Kommanditselskab, K/S): Used when combining active and passive investors. General partners hold full liability, while limited partners’ risk is restricted to their contribution.
Registering a business name
When registering a name for your business in Denmark, you must follow the guidelines set by the Danish Business Authority (Erhvervsstyrelsen). The name must:
- Be clearly distinguishable from existing registered businesses
- Indicate the legal business structure
- Avoid misleading, offensive, or overly generic terms
- Comply with Danish spelling rules and character usage
You can check company name availability on the Danish Business Authority’s online portal.
Setting up your company in Denmark
Once your preliminary preparations are in place, you can move on to registering your company and eventually getting it up and running.
Company registration
The company registration process generally includes the following steps, which are submitted to the Danish Business Authority (Erhvervsstyrelsen):
- Providing essential business information, such as company name, legal form, address, and ownership structure
- Preparing and submitting foundational documents, including the Articles of Association
- Appointing directors and defining the company’s management structure
- Paying the applicable registration fee
Once registration is complete, your business will be assigned a CVR number, which serves as its official company ID in the Danish Central Business Register.
Note that in Denmark, registration applications can only be submitted digitally which in turn requires help from somebody with a MitID identification. In Denmark, local help is absolutely required to register and efficiently manage any legal entity.
Opening a corporate bank account
To operate a Danish company, you’ll need a corporate bank account. This usually does not require a physical meeting but requires submission of:
- Proof of registration
- Identification of owners and directors
- Articles of Association
- Information about the business and its operations
- Business plan
For limited companies, the share capital must typically be deposited into the bank account before registration is finalized.
Tax registration with SKAT
After receiving your CVR number, you must register your company for tax purposes with the Danish Tax Agency (SKAT). This may include:
- VAT registration – Required if your expected annual revenue exceeds DKK 50,000.
- Employer registration – If hiring staff, you must register as an employer to manage taxes, pensions, and social contributions.
- Corporate tax – All Danish companies are subject to corporate income tax and must file annual returns.
Protecting your brand
If you plan to build a recognizable brand or launch a unique product or service, it’s advisable to register your trademark. This can be done through the Danish Patent and Trademark Office (Patent- og Varemærkestyrelsen) or, for broader protection, via the EU Intellectual Property Office (EUIPO). Trademark registration helps secure exclusive rights and strengthens your market position in Denmark and beyond.
Running your business in Denmark
Once your company is operational, you’ll need to meet several ongoing obligations to remain compliant and ensure business continuity. These include:
- Bookkeeping and accounting – Accurate financial records must be kept in line with the Danish Bookkeeping Act. Depending on your company type and size, audited financial statements may be required.
- Annual reporting – Private and public limited companies must file annual financial reports with the Danish Business Authority.
- VAT and tax filings – Periodic VAT returns and corporate tax declarations must be submitted to SKAT within specified deadlines.
- Payroll and employment compliance – If you employ staff, you are responsible for reporting salaries, withholding income tax, paying social contributions, and adhering to Danish labor laws.
- Updating company information – Any changes to company details (e.g., address, directors, ownership) must be reported promptly through the appropriate authorities.
A reliable partner on your business journey
As your partner in Denmark, Nordic GEM offers the local insight and experience to help you establish and run your business with confidence. From first steps to long-term growth, we’re here to support you along the way. Contact us to learn how we can support your business in Denmark.
