Business in Denmark

What should you know about setting up and running a company in Denmark?
Forms of running a danish business
Self-employed – single proprietorship (Enkeltmandszirksmahed)
Public limited company (Aktieselskab – A/S)
General Partnership (Interesselskab – I/S)
Limited liability company (Anpartsselskab – ApS)
Anpartsselskab – ApS vs. Aktieselskab – A/S
Limited partnership (Kommanditselskab – K/S)
Foreign branch (Filial af udenlandsk selskab)
Representative office of the foreign company (Salgskontor)
Co-operative associations (Andelsforening/Brugsforening)
Important information about taxes in Denmark
Obligations of the employer relating to the employment of an employee in a company
Occupational health and safety in Denmark
What you should know about signing up your company with the RUT, the Registry of Foreign Service Providers
FAQ

The Kingdom of Denmark, although the smallest of the Nordic countries, has long been extremely attractive to many entrepreneurs. All thanks to the dynamically developing market, which, as enterprise rankings show, is doing very well in Denmark. Based on a survey conducted by the World Bank Group, Denmark holds the leading position in Europe regarding the simplicity of conducting business, securing the fourth rank globally as of 2020. Denmark also possesses a strong and competitive economy, securing the top spot on the IMD World Competitiveness Ranking for the year 2022.

Let’s do a quick overview of the most important industries in the Danish economy. Several industries that are particularly thriving in Denmark include renewable energy, life sciences and biotechnology, information technology, food and agriculture, as well as design and creative industries. Denmark is put in the forefront in the field of „cleantech” due to over 40 years of dedicated energy policies, with a target of achieving complete independence from fossil fuels by 2050. Denmark has made significant strides in the field of renewable energy, especially wind power, with a strong focus on sustainable practices. The country also has a robust ecosystem for life sciences and biotechnology, fostering innovation and research in these fields. In addition, Denmark is witnessing rapid growth in its IT sector, with a focus on digital innovation, modular automation, software development, and information technology services. Denmark stands out as a premier global destination for technological endeavors, offering a superb testing ground and access to world-class pools of software development talent. The Danish food and agriculture industry is known internationally for its high quality produce and a strong emphasis on sustainable and organic farming practices. Furthermore, Denmark is recognized for its vibrant design and creative industries, including architecture, fashion, and furniture design, which contribute significantly to its cultural and economic landscape. With its thriving sectors, Denmark is solidifying its position as one of the world’s leading hubs for innovation and sustainable development. Thanks to its well-developed infrastructure and strategic geographical position, Denmark facilitates efficient and expedient logistics and distribution activities, providing unparalleled access to Europe. Denmark offers a particularly favorable and flexible business conditions for companies in various industries to grow. The ease of doing business brings the world’s most prominent and ambitious professionals o Denmark.

Before you set up a business in Denmark, it’s worth doing some thorough research to avoid some pitfalls. That may facilitate this search, this website contains all the necessary guidance that will certainly be useful to those who wish to set up their own company in Denmark.

What should you know about setting up and running a company in Denmark?

Free competition, the development of a market economy and a simple trade policy are the hallmarks of progress. The Danes know this very well, and that is why they follow these principles in shaping the economic base of their country. In this way, both state structures and ordinary citizens, benefit. As Denmark is one of the Member States of the European Union, all its citizens can take advantage of this benefit. The only thing you need to know beforehand is the rules for business registration in Denmark, which are the same for all EU citizens. Non-EU individuals are required to obtain both a residence permit and a work permit prior to traveling to Denmark.

At the very beginning of your planning, you will need to consider which specific area you are interested in, in order to, determine what legal obligations you will have to fulfil as an entrepreneur, as well as which permits, product labels, patent, licences, and the like, you will have to get obtain. The next item on the list is to familiarize yourself with the basic things when planning to open a new company, such as Danish tax law, the market, and competition. Then you can move on to planning your start-up date and consider your financial expectations. Meetings with your accountant should result in a financial plan. You may also have start-up capital, which you can assume usually takes about a year. Renting premises that will become the company’s headquarters will also be an invaluable aid. Then comes the time to prepare contracts with the denmark’s entrepreneurs with whom we intend to cooperate. In addition, the basic budget should include an amount of DKK 10,000-25,000, which will allows you to pay for expenses such as translator, licence, consultancy office, purchase of equipment. If the initial funds are insufficient, it is possible to obtain a grant from the European Union. Once you have completed the basic plan, you will need to go through the formalities at the Danish Agency for Business and Enterprise – Erhvervsstyrelsen – which is a branch of the Ministry of Economic Affairs. You must register a business no later than eight days before you start operating. Your application will be forwarded to SKAT, the Tax and Customs Administration, where you will receive a CPR identification number (the equivalent of the Polish NIP). This number is necessary for settlement of income and VAT settlements. However, if your annual turnover does not exceed DKK 50,000, recording is not mandatory. If you plan to stay in Denmark for a longer period of time, you will need to apply for an EU/EEA residence certificate from the Danish regional office (statsforvaltning.dk). Discovering the optimal alignment between company structure, business requirements, and applicable taxation will establish the most solid groundwork for initiating your business operations in Denmark. Besides, remember to check with the Danish registrar that the company name you want to open is unique.

Forms of running a danish business

Starting any form of company should be well thought out. If you make an offhand decision, you could get yourself into trouble, even in the form of debt. It is a good idea to find out which legal forms of running a company are most suitable for your company when starting a new business in Denmark.

The establishment of a company in Denmark is regulated by the following acts:

The Carrying on Business for Profit Act of June 1996;
The Public Limited Companies Act of June 1973, as amended in January 2002 and June 2003;
Private Companies Act May 1996, as amended April 2003;
The Company Accounts Act, June 1996.

The most common forms of company in Denmark are:

ENKELTMANDSVIRKSMHED – sole proprietorship (self-employment);
AKTIESELSKAB – A/S – public limited company;
INTERESSELSKAB – I/S – general partnership;
ANPARTSSELSKAB – ApS – a limited liability company;
KOMMANDITSELSKAB – K/S – Limited partnership;
FILIAL AF UDENLANDSK SELSKAB – foreign company branch;
SALGSKONTOR – representative office of a foreign company;
ANDELSFORENING / BRUGSFORENING – cooperative associations.

All the forms of enterprises presented are equally accessible to the public, both domestic and foreign entities. For information about Denmark’s special program for start-ups, Start-up Denmark has some great resources.

Self-employed – single proprietorship (Enkeltmandszirksmahed)

A sole proprietorship is a fairly common form of running a company in Denmark also very often chosen by Polish entrepreneurs. This is because self-employed people are entitled to a number of deductions, filing a income statement is not as complicated as in other cases and all assets of the company are considered to be the property of the company owner. Of course, everything has its pros and cons. Here they are.

In the case of a sole proprietorship, decisions regarding the running of the company are made solely by the founder. However, he or she, has the right to authorize other people to act on behalf of the company. Running a company is much simpler as there is no need to build up share capital in advance. In addition, the Danish administration assists the self-employed in completing the formalities for business incorporation. In addition, the start-up budget is usually around DKK 10,000 or PLN 5,000. The tax declaration, on the other hand, is limited to one tax form. In practice, this means that income is taxed only once. However, if the company’s annual income does not exceed DKK 50,000, the company does not have to be entered in the VAT record.

However, the other side of the coin also has its drawbacks. A sole proprietorship is connected with high legal liability, as the owner is liable for the company’s obligations with his/her, own property. All because in Denmark there is no separation between private and company property of self-employed persons. In addition, such a company cannot tax its income separately. The biggest problem arises when the owner dies, for the reason that the company then ceases to exist. However, the fixed assets left behind are not separated from the total assets of the company founder.

When setting up a sole proprietorship, the owner is assigned a personal enrollment number CPR. Application can be done at Erhvervsstyrelsen or at erhvervsstyrelsen.dk.

Public limited company (Aktieselskab – A/S)

Another form of running a company in Denmark is a public limited company. This activity is intended for medium-sized and large companies. The initial capital, which must be contributed before the company is set up and kept on a bank account, cannot be less than DKK 500,000 in cash or other assets. Only public limited companies may be listed on the Danish Stock Exchange. The good news for shareholders and owners of public limited companies is that they do not have to be liable for any debts incurred by the company with their, own assets, but the bank may require them to guarantee loans.

After signing a founding deed and depositing the initial capital, you have 6 months to make sure your company is registered with the Danish Trade Register. The entire incorporation procedure usually takes two to three weeks. As a result, when you have registered your business, the company receives a CVR number (Business Registration Number, equivalent to a REGON number). The cost of signing up through a Danish law firm starts at DKK 4,500 upwards. The next step is to record at the tax office – Told-og Skatteregion. The next important document is the company’s status. Later, at the statutory meeting, the shareholders will elect a director or supervisory board and a management board. The supervisory board must consist of at least three persons so that the majority rule is respected when voting on main company decisions. All documents must be written in Danish.

A company may be established by one person. The founders do not have to own shares in the company being represented, but at the same time the company must have at least one shareholder. In addition, individual shareholders, if they acquire a minimum of 5% of the share capital, are obliged to notify about this fact, the company within a maximum of 30 days. Shareholders pay tax on their income, while the company itself is subject to separate tax rules. A company such as a public limited company consists of a board of directors and a management or supervisory board that is elected at a general meeting. If the following formula is added to the name of the company: under stiftelse – during incorporation; the company is entitled to start company from the date of signing the memorandum of association. It is also possible to buy shares in an existing company that has not yet commenced operations – a so-called off the shelf company – but this requires much more time and funds.

General Partnership (Interesselskab – I/S)

Another form of company that can be run independently in Denmark is the general partnership. In order, to set up a general partnership at least two persons (natural or legal) are needed, who will be dependent on each other according to the rules, which will be specified in the contract of incorporation between them. Importantly, the company itself does not have legal personality. However, it can be sued and herself sue.

An entity in the form of a general partnership does not require share capital. The company must be registered within eight weeks of signing the articles of association with the Danish Commerce and Companies Agency, or DCCA Erhvervsstyrelsen (erhvervsstyrelsen.dk) for short. In situations where all partners in a company have limited tax liability, the company should be declared through the DBA. The name should include the abbreviation I/S as this determines the legal form of the company. The company’s budget consists of the founders’ contribution and the income generated by the company.

Limited liability company (Anpartsselskab – ApS)

In Denmark, the limited liability company (similar to the Polish z o.o.) is a popular type of running a company. It is favored by individuals who seek full control and oversight of their family company.

Denmark has two variations of limited liability companies:

1. The rules for running an Iværksætterselskab or IVS are derived from the same legal source as ApS companies, which is the Act on Private Limited Liability Companies. This form of limited liability company has been in operation in Denmark since 1 January 2014. The minimum initial capital required for an IVS is DKK 1 or EUR 1, and the company must establish a reserve fund, to which at least 25% of the 12-month income must be transferred. Dividends can only be paid out once the total of share capital and reserve funds reaches DKK 50,000.
2. The Annpartsselskab – ApS – possesses legal entity status and is regulated by the Danish Private Limited Liability Company Act. The filling fee charged by law firms for this process ranges from DKK 3,000 to DKK 5,000.

Anpartsselskab – ApS vs. Aktieselskab – A/S

A public limited company and a private limited company are distinct legal entities, but they have similarities. They are subject to taxation and their regulations are outlined in the Danish Companies Act – Selskabsloven. Both types of companies require at least one proprietor to be responsible for the operation and the assets of the company belong to the company itself. These two forms of companies share the following requirements:

1. Founding documents (stiftelsesdokument);
2. Articles of association (vedtægter);
3. annual accounts (årsrapport).

However, there are distinctions between the two types of companies regarding the initial capital requirement. For a limited liability company (ApS), the minimum required capital is DKK 50,000. In contrast, for a public limited company (A/S), the stake, which can be in the form of various assets, is elevated to DKK 500,000, and for cash, it is DKK 125,000. Additionally, if established by a professional law firm, the costs for setting up an ApS range from DKK 3,000 to DKK 5,000, while for an A/S, it ranges from DKK 4.5 to 6,000. Moreover, partners in a public limited company have less control over the company’s affairs than those in a private limited company. Also, an ApS only requires a management board, whereas an A/S needs both management and a board of directors or supervisory board.

Limited partnership (Kommanditselskab – K/S)

Another type of partnership is a limited partnership that requires at least one general partner (e.g. a limited liability company). The general partner is to be fully responsible for the financial obligations of the company. The other partners are liable for the company’s obligations only with the initial capital they have contributed.

The functioning of the partnership is conditioned by the founding agreement, which must be signed at the very beginning, before any other legal steps regarding the legalization of the company. A limited partnership must be recorded if all its partners are legal persons. The company then has eight weeks from the signing of the contract at the Trade and Companies Agency to do this. It is possible to complete the application of your business online at erhvervsstyrelsen.dk. The name of the company should include the name of one of the general partners and the Danish abbreviation for limited partnership, S/K. In addition, this type of activity must also be recorded with the DBS.

It is worth noting that another type of limited partnership is a limited liability company up to the quota of shares – Partnerselskaber (P/S). In this structure, the partners become limited liability companies, which are liable for the company’s obligations with the amounts set aside in the shares or with the entire share capital.

Foreign branch (Filial af udenlandsk selskab)

A branch of a foreign company gives Polish entrepreneurs the opportunity to enter the Danish market without having to establish a new company. It is an accessible form of running a company in Denmark, as it does not require share capital. The difference is that setting up a branch may require more time than setting up a company.

Setting up a branch in Denmark is easy for Polish entreprenurs, especially if the company set up in the home country has a similar legal form to that in Denmark (e.g. limited liability company → ApS; joint stock company → A/S).

Since a branch is governed by Danish law, the company must be set up in order to be legal in Denmark. Its name should include filial, i.e. „branch”, and the name of the company and the country in which it has its head office. Then you need to collect necessary documents and fill in a enrollment form, which contains the following information:

• the name of the Polish company;
• legal form of the company
• amount of the share capital;
• financial statement from the last year;
• KRS number;
• Business purpose;
• address and name of the Danish branch of the company;
• the purpose of the branch;
• personnel data;
• Addresses of persons authorized to make decisions on behalf of the Danish branch.

Once completed, it is sufficient to send the document to the Trade and Companies Agency, which can be done via erhvervsstyrelsen.dk. The minimum amount of share capital is DKK 80,000. The cost of setting up a branch in Denmark through a lawyer is approximately DKK 8 thousand. The established branch is subject to VAT, which in Denmark is 25%. Settlement takes place through the Danish tax office – SKAT. The person fully responsible for the company’s obligations is the branch manager. In the case of branches of foreign companies, there is an obligation to send each year to the Trade and Companies Agency a copy of the 12-month financial report on activities.

Representative office of the foreign company (Salgskontor)

This type of running a company is aimed at foreign companies that wish to promote their services and products in Denmark. It is important to note that Salgskontor does not include sales. It is interesting to note that Danish law does not regulate the regulations concerning the representative office of a foreign company, which legally does not have legal personality, but only acts on behalf of the parent company. The parent company bears all consequences related to the activities of the representative office of the foreign company in Denmark.

Co-operative associations (Andelsforening/Brugsforening)

Cooperative associations are recognized as a legal entity under Danish legislation. This activity is based on the conclusion of an association agreement between natural persons. The activities here include the sale and processing of products belonging to the founders or the purchase and sale of goods to these entities. In this form of activity, the liability of the members of the cooperative association is limited, so it is assumed that the legal form of such activity is determined by adding the abbreviation A.m.b.a. in its name. – cooperative association with limited liability.

Important information about taxes in Denmark

Every employee of a Danish company and every company set up in Denmark is liable to tax. According to the Danish tax system, taxation is progressive. In practice, this means that the tax threshold depends on the amount of income. The higher the income, the higher the tax. A good side of the Danish tax system are tax allowances, which allow deducting costs related to, among others: child maintenance, pension and insurance contributions, transport to work or meals.

The income tax percentage rates for 2019 were respectively:
8% for incomes below DKK 50,217;
39.2% for incomes between DKK 50 217 and 558 043;
56.5% for income higher than DKK 558 043.

These rates relate to the tax paid to the state. Meanwhile, the municipal tax paid to regional governments is movable, as the tax-free amount is set in Denmark each year. In 2019, it was 10.1 per cent of gross salary. Everyone whose income did not exceed the threshold of DKK 37,200 was exempt from the fiscal obligation. In addition, there is also a church tax, which amounts to 0.92% and is voluntary.

In the case of sole traders, whose income is equated by state structures with the company’s income, in consequence the business tax is declared on one tax return. The owner who pays taxes and contributions is entitled to pension and health benefits. The tax return, which accounts for income tax and VAT, must be submitted to the tax office either quarterly or semi-annually. This can be done through SKAT’s official website, via the LetLøn system. This system is a very useful tool as it allows you to keep payroll records of your employees at the same time. Advance income tax is paid on 20 March and 20 November. An important aspect of both of these dates is the interest rate, which is higher on 20 March than in a bank, and lower on 20 November. Translated into practice, this means that the first date guarantees the accrual of interest on the advance payment, so that the tax refund will be higher.

Depending on the amount of income received in a given tax year, companies pay either CIT or VAT. If the company’s revenue is less than DKK 20,000, it is subject to CIT at the rate of 22%. On the other hand, if their annual income exceeds DKK 20,000, they pay VAT at the rate of 25%.

On the other hand, natural persons in Denmark are obliged to pay flat tax on income. The rate in this case is 32%. The tax goes to the local danish business authority budget. The second tax is a progressive tax, which amounts to 5.84% on income below DKK 42,000 and 15% on income above DKK 42,000. Under Danish law, progressive tax is payable on income from work and capital gains. The total tax burden cannot exceed 59% of annual income.

More attention should be paid to VAT, which all companies whose annual income is equal to or greater than DKK 50,000 are obliged to pay as added value to services and goods. The rate reaches a threshold of 25 percent. Individuals who have worked in Denmark for between 3 months and 3 years and have a total income of DKK 47,500 are also subject to this obligation (the tax is increased by 9% in favour of the labour market). Danish entrepreneurs are required to dentify themselves as VAT taxpayers at least 8 days before starting to provide services or distribute goods. This can be done through the website of the Danish Register of Foreign Suppliers – RUT – at virk.dk.

Virk serves as the online gateway for Danish businesses to access the public sector. In addition, entrepreneurs have the possibility to apply a reverse-charge procedure, whereby a foreign company that wants to supply goods and/or services on the Danish market can pass on the obligation to pay VAT to the purchaser. The invoice you issue will show the net value of the product or service, and you will be asked to add a ready-made formula such as Reserved charge and the CVR or SE-number (the buyer’s identification number).

If the owner of a Danish company has employees, he/she is obliged to set up as an employer in Denmark. The SE-nummer is the purchaser’s identification number and is issued by SKAT at the time of enrollment. A Polish company incorporated as a VAT payer in Denmark is also required to provide this number. If it is not incorporated, it will provide the NIP. Both in the context of seasonal and permanent work in Denmark, it is worth remembering that different tax rules also apply, depending on the origin of the employee and the time of his/her stay in the country. The recipient of services in Denmark is obliged to identify itself as a VAT payer and pay VAT, even if they provide services to companies that are not incorporated as VAT taxpayers.

Important information for employees and entrepreneurs is that some services in Denmark are completely exempt from VAT, which in this case is 0%. These services include:
sale or rental of real estate (with supply of energy, water and gas);

• medical care;
• education;
• banking;
• insurance transactions;
• cultural activities.

Legal entities that are not subject to VAT pay 28% CIT. These include companies whose annual income does not exceed DKK 50,000. It is worth remembering that in partnerships, only the partners of such companies are subject to taxation. In general, companies in Denmark are taxed on a consolidated basis. In practice, this means that the parent Danish company and its subsidiaries and branches are taxed.

Obligations of the employer relating to the employment of an employee in a company

Danish entrepreneurs who employ workers are obliged to comply with Danish labour law and the laws that cover particular occupational groups. Among the employer’s basic obligations to the employee is the provision of occupational illness and accident insurance, occupational health and safety training and ensuring a decent wage. In addition to legislation, trade unions are the guardians of this order.

One of the laws that protects workers’ rights is the Employment Document Act – Ansættelsesbevis loven. This document states that people who have been employed for a minimum of one month for more than eight hours a week must be given a document containing general information about the most important working conditions. Another type of safety barrier is collective agreements. Collective agreements are agreements between employers, employer organizations or companies and employees. The parties negotiating the terms for the employees are usually trade unions or employee associations. The regulations contained in these documents may relate to:

• working conditions;
• working time and place;
• pay;
• Overtime settlement;
• holidays;
• problem-solving;
• safety at work;
• other rules under Danish employment law;
• the framework agreement between DA and LO, which is a set of additional rules.

If an employer does not comply with the standards that apply to him and the rules agreed upon, the trade unions have the right to organize a strike, a blockade, or solidarity action on behalf of Danish employees in order, to negotiate better pay. In addition, this group has the ability, to arrange labour conflicts and industrial disputes. Consequently, these actions are intended to lead to an agreement.

It is also worth mentioning that a separate document regulates the rules of the agreement on the secondment of workers to work abroad.

Occupational health and safety in Denmark

In Denmark, you may be fined or have your work stopped if you do not comply with occupational health and safety legislation. Both employees and entrepreneurs must comply with the rules. If a company has ten or more employees, the employer must set up a health and safety organisation and appoint inspectors who are responsible for implementing the safety rules. The same applies to companies that provide variable or temporary workplaces where people work for more than two weeks.

A Danish employer’s most important obligations include:
provide their employees with personal protective equipment;
instructing employees in safety rules;
ensuring that employees carry out their work in accordance with these rules;
arranging a safe working environment;
preventing injuries at work;
ensuring good occupational hygiene;
providing annual occupational health and safety training to employees, which must be documented and submitted to the Working Environment Authority;
ongoing cooperation with Danish Occupational Health and Safety.

A full list of Danish occupational health and safety regulations can be found on the official website of UIP, the Danish Working Environment Authority.

What you should know about signing up your company with the RUT, the Registry of Foreign Service Providers

Every natural or legal person that performs services in Denmark is a Danish service provider. Therefore, anyone who decides to operate in Denmark is required, even before commencing services, to notify the company in the Register of Foreign Service Providers – RUT – because for every day of delay, the Labour Inspectorate is entitled to impose a financial penalty. At the same time, the owner is obliged to inform about changes in the company up to the first working day when the changes are to take effect. The penalty for failure to notify or update company information may amount to DKK 10,000, or DKK 20,000 if the practice is repeated.

Registration with the Register of Foreign Service Providers can be done online at virk.dk. The information required from the applicant for enrollment is as follows:

• contact details;
• the location of the works;
• type of service;
• the sectoral classification code of the company;
• date of works;
• company name and address;
• personal details of the posted workers;
• duration of the mission;
• CVR number and VAT identification number.

In the event of any problems, the RUT has a helpline to assist those wishing to sign up or want to find information on labour law. Once you have gone through the process, you will receive a personal RUT number, which you will need to report to the Danish authorities. Each employee who is enrolled in the Register of Foreign Service Providers must provide his/her employer with a receipt showing his/her RUT number – this applies in particular to construction, gardening, agricultural and cleaning services.

FAQ

1. What is a Danish Holding Company?

   It is a type of Danish holding company that should be incorporated at the Agency for Trade and Companies, which can be done in one day. Its shareholding may be entirely foreign. The smallest amount of share capital is DKK 125 thousand, but the company’s profits are tax-free. The accounts of such a company belong to the public records and are audited annually. The shares held by the company are exclusively foreign. It is sufficient that there is at least one shareholder in the company structure. A private Danish holding company – Anpartselskab (ApS) – has shares in other, subsidiary, foreign companies. According to the Tax Reform Act 2009, a distinction can be made between:

   • affiliated investors – they are exempt from capital gains tax and hold shares amounting to 50% of the share capital;
   • portfolio investors – they do not pay capital gains tax and their shares are less than 10% of the share capital
   • subsidiary investors – do not have to pay any tax on profits, and their shares are between 10 and 50% of the share capital.
2. What is PLC?

   PLC is a Danish limited liability company – Anpartsselskab – ApS. The company is required to have at least one Danish director and at least one shareholder who is liable for the company’s obligations with their contribution. The share capital should be at least DKK 50,000. The Articles of Association and founding agreement must be recorded with two government agencies: The Companies Register and the Danish Trade and Companies Agency. The company name must end with the Danish abbreviation ApS. The company is an ideal tool for developing influence in the market of other EU member states.

   Danish legislation prohibits PLS from operating in the following sectors: banking, trust and fiduciary activities, fund and trust management, insurance, collective investment schemes and reinsurance.

3. Through which website can I set up my company?

   You can register your company through the website erhvervsstyrelsen.dk.

4. What is PMV?

   PMV – Personligt ejet mindre virksomhed; a small, self-employed company.

   The owner is liable for the obligations of the company with his/her own assets. No start-up capital is required to start a company. There is no obligation to sign up with the Central Business Register.

   However, the owner is obliged to change the form of running the company into his own business in two cases:

   • when he becomes an employer;
   • when the annual income exceeds DKK 50,000.
5. What is the Labour Inspectorate’s supervision of Danish companies?

   The Danish Labour Inspectorate has the right to carry out unannounced inspections, for which it does not require a court order. The supervision also includes cooperation with the police and the Tax and Customs Administration. In this way, it receives information about the legality of the employment of foreign workers and whether the company is meeting its tax and contribution obligations within the specified deadlines. At the same time, Arbejdstilsynet, the Danish Labour Inspection Authority, has the right to check whether companies are recorded in the Register of Foreign Service Providers (RUT). In addition, the Danish Labour Inspection Authority is also able to inspect offshore installations and, in addition to health and safety, carry out risk-based, retail and market surveillance.

6. What is the RUT?
   RUT – the Register of Foreign Service Providers; anyone who decides to operate in Denmark is required, even before commencing services, to record their companies with the Register of Foreign Service Providers, as the Labour Inspectorate is entitled to impose a financial penalty for every day of delay. The owner is also obliged to notify changes to the company by the first working day at the latest when the changes are to take effect.

   The Labour Inspector is entitled to impose a fine for failure to report activities or changes in the company:

   • DKK 10 thousand;
   • DKK 20,000 if the violation is repeated.

   To sign up, you will need: contact details, the location of the work, the type of service, the company’s sectoral classification code, the date of the work, the company’s name and address, the personal details of the posted workers, the duration of the posting, the CVR number and VAT registration number. The form can be completed on the RUT website – virk.dk. In addition, the office offers telephone support for enrollment and advice on Danish labour law. Every employee who is enrolled in the RUT must provide the employer with a receipt together with the RUT number. This number is required when contacting the public authorities there.

7. What can Danish companies be fined for?

   The authorities that control the companies and their employees are:

   • Police;
   • SKAT – the tax office;
   • Arbejdstilsynet – Labour Inspectorate.

   These authorities have the right to ex officio prosecute any irregularities in the following areas: tax, health and safety at work, legality of employment (e.g. whether the employees have permission to work in Denmark; whether the company is incorporated in the RUT). Consequences of any irregularities in the aforementioned areas can be: warnings by the tax authorities, fines, prosecution.

8. Setting up a Danish branch vs a new company in Denmark?

   Foreign entrepreneurs wishing to enter the Danish market may set up a Danish branch of a foreign company. For Polish investors, this solution is recommended especially if the parent company has a similar legal form to the Danish one, e.g. A/S – joint stock company or ApS – limited liability company. This is because in order to establish a Danish branch it is not necessary to have start-up capital as in the case of establishing a new company. This makes the option even more attractive, especially for small and medium-sized companies.

9. Where can I buy Danish kroner (DKK) at a favourable exchange rate?

   Online exchange offices have lower margins than stationary ones and entrepreneurs can also negotiate the exchange rate → rkoantor.com.

10. What Danish phone numbers and website addresses should I know about?
    • erhvervsstyrelsen.dk;
    • skat.dk;
    • virk.dk;
    • statsforvaltning.dk;
    • toldskat.dk;
    • Registration authority data: Erhvervs-og Selskabsstyrelsen, Kampmannsgade 1, DK-1780 Copenhagen V; Tel: +45 33 30 77 00; Fax: +45 33 30 77 99; E-mail: ckk@erhvervsstyrelsen.dk
11. How do I set up a company in Denmark?

    If you want to set up a company in Denmark, you must apply through the website of the Danish Commerce and Companies Agency (DCCA): erhvervsstyrelsen.dk. This will give you, as a company owner, a special Central Company Register number – CVR: cvr.dk. Then proceed to sign up with the Danish Customs and Tax Administration: toldskat.dk.

    If you have any questions or doubts about registration and other formalities, Danish officials will be happy to help. The entire system is being simplified in such a way that it is clear and transparent for foreign entrepreneurs. The Danish market is, above all, free of restrictions on setting up and running your own company, free market, competitiveness, relatively low income tax rates and the lowest in the OECD countries (1% of the salary fund) burdening employers with health and social insurance. If you have any doubts, make sure to reach out to a professional advisor.

12. What is a residence certificate and who should apply for it?

    Every Polish citizen planning to stay in the Kingdom of Denmark for 3 months or longer must apply to the Danish Regional Authority for a residence certificate for EU/EEA citizens – statsforbaltning.dk. This also applies to entrepreneurs who want to open a company. You must apply for the residence permit before you set up your company.

13. What is the Invest in Denmark organisation?

    It is a Danish organisation which was established to answer all questions regarding new Danish investments.

14. Who is a VAT payer in Denmark?

    Every entrepreneur conducting a company in Denmark is subject to corporate income tax, which is 22% – CIT. On the other hand, 25% VAT is payable by business owners whose annual income exceeds DKK 20,000.

15. How much does it cost to have documents translated from Danish by a sworn translator?

    The cost is approximately DKK 400 per page.

16. What is NemID (EasyID), LetLøn and Afstaelse?

    NemID is an identifier that acts as a digital signature. All Danish companies receive one.

    LetLøn – a free system specially prepared by the Danish Customs and Tax Administration for, among other things, keeping payroll records for employees in small Danish companies. The employer enters the rate per hour of work of a person employed in the company, and the system automatically calculates due tax and costs necessary for annual tax settlement.

    Afstaelse – a rent or deposit for renting premises for a company, which has to be paid by the current tenant to the previous one.