Starting a Business in Denmark

UK entrepreneurs find Denmark appealing because it’s digital, predictable, and great for trade. This guide will help you start a business in Denmark. You can form a company, set up a branch, or take a lighter approach to test demand.

Denmark is one of Europe’s most digital economies. Most dealings with public authorities are online. With 98% broadband coverage, daily tasks are quick, from filings to updates.

Benchmarks show Denmark’s strengths. It scores well in the GEOS Global Subsidiary Index, GDP per capita, and political stability. The sovereign and political risks are both “AA” and “AAA” respectively.

When setting up a company in Denmark, you’ll need MitID and a Danish CVR number. MitID ensures secure digital access. The CVR number is your business ID for invoices, suppliers, and more.

We’ll guide you through the Danish Business Authority’s role. This way, you can go from idea to registration smoothly.

If you’re planning to move, Start-up Denmark might help. It’s for innovative founders. A Danish Business Authority expert panel assesses your application via SIRI.

For regulated sectors like Gaming Licences or FX & Crypto Licensing, we plan ahead. We ensure your company formation supports your growth in banking and onboarding.

Overview of Business Landscape in Denmark

UK founders often look at Denmark for its stable and quick business environment. Denmark’s political stability is shown in its high rankings globally. This makes planning more certain, not a risk.

It’s also a good place to start expanding to Europe without many hurdles.

Economic Climate

The Danish economy is strong and trustworthy for investors. It ranked 10th in the World Economic Forum’s 2019 Global Competitiveness Report. It also ranked 4th in the World Bank’s 2020 Doing Business ranking.

These rankings are important for budgeting, hiring, and investing.

Everyday, Denmark’s digital government makes things easier. Around 85% of citizens are online, and they quickly adopt new technology. This makes Denmark a great place to test new ideas.

The country also has good infrastructure. It has energy connections to Norway, Sweden, and Germany. Plus, it has steady electricity, clean water, and a solid financial system.

Key Industries

Denmark is strong in AI, cybersecurity, and robotics. It also has a big sustainability economy. Brands like Rockwool, Danfoss, and Grundfos show how green innovation can succeed globally.

This mix is good for both product and service businesses.

Denmark is also known for its food, with strong safety and hygiene standards. This can help when trying to get early customers, partners, and distributors.

Benefits of Starting a Business

Denmark is pro-business and has a strong social welfare system. This helps keep the workforce stable. The country also has high English proficiency, efficient transport, and reliable communications.

This makes it easy to work with teams across time zones. Copenhagen start-ups offer a great network for pilots and partnerships. The Aarhus tech ecosystem adds strong talent and research links.

• A smoother operating rhythm, helped by Danish digital government and clear processes.
• Credibility benefits from Denmark political stability and global competitiveness signals.
• A realistic route to expand to Europe from Denmark, supported by infrastructure and connected markets.

Legal Framework for Business Formation

Setting up in Denmark means choosing your legal structure. This affects your liability, taxes, and daily tasks. We help you pick the right option for your business goals, not just for show.

Types of Business Entities

You can choose from a sole proprietorship, limited company, or a Denmark branch office. Foreign firms might need to register for employer or VAT duties without starting a new company. Each choice impacts how clients see you and your risk level.

For limited companies, deciding between ApS and A/S depends on funding and size. An ApS has a DKK 20,000 minimum share capital and costs around DKK 2,000 to DKK 10,000 + VAT. Both residents and non-residents can be shareholders and directors in an ApS or A/S.

• Sole proprietorship: simple, but you carry the risk personally; it often requires residency, a CPR number, and MitID.
• ApS or A/S: limited liability and clearer governance; useful when investment or contract size increases.
• Branch: keeps the parent company in place while establishing a Denmark branch office for local trade.

Regulatory Requirements

Danish company compliance is detailed but structured. For a sole proprietorship, registration and closure are digital, with no fee online via VIRK. Limited companies have more corporate filings and record-keeping from the start.

On data handling, GDPR Denmark and the Danish Data Protection Act apply. Privacy must be integrated into your processes early. The Danish Bookkeeping Act requires digital bookkeeping, clear audit trails, and secure invoice storage.

The rollout of new rules is key for planning. ERP systems have been approved since July 2024. Non-approved systems face stricter rules from January 2025, and all must comply by January 2026. Many finance teams also prepare for SAF-T Denmark, with full reporting expected by 2028.

Licences and Permits

Some activities need extra permissions, and timing is crucial. For founders moving to Denmark, we align company planning with Start-up Denmark eligibility. We work with Immigration advisers to discuss your case. For regulated sectors, we support licensing routes where the stakes are high, including Gaming Licences and FX & Crypto Licensing Companies.

Registering Your Business in Denmark

Setting up a business in Denmark is straightforward. Most founders do it online, making the process easy to follow. Once approved, your business gets a unique CVR number.

The CVR number is like a public ID for your business. It’s used for daily activities with customers, suppliers, and banks. It also shows who owns and runs the business, its legal status, and important documents.

Steps to Register

First, we focus on registering your business online. This can take one to two months, but it can be faster if everything is ready. You don’t need a notary, and you can decide on the business structure early.

1. Get your company details, ownership, and share capital ready.
2. Register on virk.dk and submit your application.
3. Get your CVR number and check the public register for accuracy.
4. Keep your record up to date, including any changes.

Required Documentation

Digital identity is crucial. Many use MitID, while others might need eIDAS Denmark. Sometimes, a CPR number is needed for full access and management.

• Company documents and governance details.
• Proof of share capital and bank records.
• Identity for online filing, like MitID or eIDAS Denmark.

Danish Business Authority

The Danish Business Authority manages the Central Business Register. It also helps with immigration, like Start-up Denmark. Here, business ideas are reviewed by experts.

After approval, follow the SIRI steps. This includes creating a case order ID, paying fees, submitting documents, and recording biometrics. Planning these steps with CVR registration helps your business start smoothly in Denmark.

Taxation in Denmark

Tax rules affect your pricing, cash flow, and how you pay yourself. When UK founders consider a Danish setup, we focus on the numbers you can plan around. We also guide you through the practical steps to keep filings on track.

Corporate Tax Rates

For many businesses, Denmark’s corporate tax of 22% is key to planning. This rate is seen as competitive and clear, with a Corporate Tax Rate Score of 6/10 for planning confidence.

The territorial tax system in Denmark is straightforward. Danish companies are taxed on income earned in Denmark. Non-resident companies are taxed only on local profits. Certain activities, like oil and gas, have special regimes, so we check these facts early.

Choosing an entity affects losses and timing. In a sole proprietorship, losses can offset other personal income. This can ease pressure in the first year. For example, a DKK 100,000 deficit could reduce taxable salary income from DKK 200,000 to DKK 100,000, cutting tax from DKK 80,000 to DKK 40,000.

Value Added Tax (VAT)

VAT planning is crucial. VAT registration in Denmark must be submitted at least 8 days before starting business activities. Many founders track this as the VAT deadline 8 days in their launch checklist.

Some entry routes, like foreign-company registrations, can take 2–4 weeks. Yet, the rule remains: registration must be completed at least 8 days before activity begins. So, timelines need to allow for review and follow-up.

We also consider payroll impact. If you take a salary from a company, it must register as an employer. This includes issuing payslips and withholding personal income tax, which can tighten cash flow during the first months.

Tax Incentives for Start-ups

Good start-up tax planning in Denmark focuses on growth. We look at what drives taxable profit and how expenses are documented. We also consider how cross-border work is booked under Denmark’s territorial tax system.

For day-to-day compliance, the Danish Tax Agency SKAT is key. Keeping their guidance close helps you stay consistent as turnover grows. This is important for VAT cycles and the Danish corporate income tax position.

• Model corporation tax, VAT, and payroll together before you set prices.
• Align VAT registration Denmark with your first invoice date and delivery start.
• Choose an entity with a clear plan for losses, salary, and reinvestment.

Financial Considerations

Money flow is key for a new business. We plan it early to manage bank checks, payment rails, and funding. Knowing some steps still need in-person action is important.

Opening a Business Bank Account

To open a business bank account in Denmark, plan extra time. Overseas founders face detailed checks on ownership and funds. A meeting is needed before full access.

Denmark’s payment system is strong for secure transfers. TARGET DKK handles high-value settlements, while TIPS Denmark is for instant payments. Batch Clearing Denmark manages same-day or overnight retail flows. Banks process DKK 732 billion daily, so reliability is not a problem. Timing and paperwork are the main challenges.

Financing Options and Grants

Funding choices depend on your legal form and risk level. An ApS needs DKK 20,000 share capital. A branch has no capital but can have different liability and tax effects.

• Innovation Fund Denmark supports research-led products and partnerships.
• The Danish Growth Fund offers scale-up capital and guarantees.
• Copenhagen and Aarhus have accelerators and incubators for sharpening your proposition.

Business Insurance Requirements

Insurance in Denmark is for managing daily risks, not just ticking boxes. We match cover to your business, where you operate, and potential risks.

Liability is crucial. Sole proprietors face unlimited personal liability, while limited companies cap risk. If you hire staff or operate in regulated areas, insurance terms get stricter. Plan your cover with licensing and payroll decisions.

Choosing a Business Location

The location of your Danish operation can greatly affect hiring, sales, and daily operations. We guide UK founders in choosing a location that matches their customer base, talent needs, and the Danish business infrastructure. This infrastructure ensures teams stay connected and productive.

Major Cities for Start-ups

Copenhagen is a top choice for start-ups due to its access to accelerators, incubators, and funding networks. It’s ideal for companies needing to connect with big buyers, advisers, and international markets.

Aarhus is great for start-ups in a university city with a practical mindset. Both cities support a fast test market approach. This allows for quick digital feedback and feature validation.

Office Space and Rentals

Denmark offers flexible office space, perfect for hybrid teams and growing businesses. We consider lease terms, service charges, and readiness for fit-out. We also ensure you meet all compliance requirements from the start.

Getting a registered address is easy and crucial for setup and ongoing admin. With many tasks done online, a smaller space can work well with good planning.

Factors Affecting Location Choice

Good transport and communications in Denmark can cut travel times and keep clients near. We also look at utilities, resilience, and energy security. This includes connections to Norway, Sweden, and Germany.

Denmark’s focus on sustainability can benefit companies selling green products. For cleantech, green building, and efficiency tools, partnerships with Rockwool, Danfoss, and Grundfos are valuable. They support pilots, procurement, and scaling up.

Finding a Suitable Business Name

Your business name is more than just a label. It shows what your company stands for, its quality, and how long it will last. For UK founders looking to expand in Denmark, a clear, consistent, and verifiable name is key.

Denmark values openness. Partners and banks can easily check your company details online. So, make sure your name matches the legal records from the start.

Importance of Branding

We see a name as a way to build trust, not just a creative choice. In Denmark, where checking up on companies is common, a strong brand can make you seem established from the start.

Having a consistent name helps avoid questions and makes it easier to work with others. It also helps with hiring, getting suppliers, and talking to investors.

Guidelines for Name Selection

Danish rules for company names focus on being clear and not confusing. Choose a name that is easy to say, find, and still works if you grow. It should also match your business structure.

• Match the name to your structure, such as ApS, A/S, a branch, or other foreign set-ups
• Keep spelling steady across brand assets, legal documents, and customer communications
• Check early for similar names to avoid rework when timelines are tight
• Avoid terms that could mislead about regulated activities, qualifications, or public status

Registering Your Business Name

To register your business name in Denmark, use the national digital system. The Danish Business Authority can register you quickly once you have your documents and share capital ready.

Plan who will submit and sign the paperwork. Access might need MitID or an approved eID under eIDAS. This can affect how fast you can update, change ownership, or make later changes linked to your company details.

Employing Staff in Denmark

Employing staff in Denmark might seem easy at first. But, the real benefits come from planning ahead. Denmark’s talent pool is skilled and ready for change, helping teams grow fast. The flexicurity model supports quick hiring and easy exits, with strong social security.

It’s wise to keep expectations realistic. Employment rules are complex, but hiring is efficient. Salary benchmarking is tough, so pay, pensions, and total reward need careful planning. Clear job scopes and solid HR routines save time later.

Labour Laws and Regulations

Danish labour laws are shaped by practice, contracts, and norms. Collective agreements influence pay and benefits in many sectors. We help you choose if joining an employer organisation fits your strategy. Union membership is high, with unions playing a big role in standards.

Recent updates in employment laws are important. Employment terms must be clear and timely. There are limits on side jobs and strong whistleblower protections. Employers must track working hours and prevent sexual harassment.

Payroll Management

Payroll is more than admin; it affects cash flow. If you pay yourself a salary, your company must register as an employer. We help you plan for payroll, pensions, and benefits to avoid last-minute changes.

• Set a pay calendar that matches contract terms and reporting cycles
• Budget for pensions and standard benefits alongside base salary
• Keep records aligned with time tracking and leave policies

Hiring Foreign Workers

When hiring foreign workers, permission is tied to specific work activities. SIRI work permits cover several routes, including the Fast-track Scheme. These permits do not allow extra jobs or work in other countries.

We work with Immigration advisers to check if a role fits the permit. This makes your hiring plan predictable, even with tight deadlines.

Business Networking in Denmark

For UK founders, networking in Denmark is key to learning how deals are made. The Danish start-up scene values openness and quick meetings. It’s common to share ideas early and ask questions directly.

Importance of Networking

Networking helps with market research before you grow. You can test prices, improve your offer, and find local rivals through real talks. It’s also a good way to find partners and employees, as trust grows quickly in person.

To blend in, be ready, listen well, and explain your value clearly. The Danish start-up world likes teams that work well together and keep their promises.

Key Networking Events

Copenhagen’s pitch events are great for getting honest feedback and making connections fast. Aarhus incubators offer valuable leads, mentorship, and early customer access. Funding opportunities like Innovation Fund Denmark and The Danish Growth Fund can influence who you meet and what they’re looking for.

• Founder meet-ups that focus on problem-solving, not sales talk
• Pitch nights where you can validate demand in one room
• Incubator sessions that connect you with peers, advisers, and talent

Online Networking Platforms

Denmark is very digital, so networking continues online after initial meetings. Digital platforms help you stay on top of admin while building relationships. They make sure you have the right information at hand.

For daily tasks, virk.dk resources guide you through filings and important actions. Danish Business Authority tools offer official advice and data. Used correctly, these tools make communication with local partners smoother.

Marketing Your Business

When we help UK founders market in Denmark, we aim for speed and clarity. Denmark is seen as a test market, with high digital use and quick feedback. Around 85% of people are online, and broadband is almost universal, so data comes in fast.

We mix measurement, trust, and relevance in our marketing. We keep messages clear, claims verifiable, and next steps simple.

Overview of Digital Marketing

Digital marketing in Denmark thrives on speed. We test, learn, refine, and repeat. Danish online shoppers compare fast, so we focus on channels where intent is clear and results are measurable.

• Search and landing pages that answer real questions, with clear pricing and proof points.
• Paid media and retargeting that stays respectful, with strict frequency control.
• Email and CRM flows that support short buying cycles and tidy follow-up.
• Analytics that ties spend to leads, meetings, and pipeline quality.

Traditional Advertising Methods

Even in a digital world, traditional methods can build trust quickly. For Denmark, we mix digital with partnerships, events, and local presence. This works well in food, hospitality, professional services, and sustainability.

Sustainability branding in Denmark is strongest with specific claims. We promote clear language, documented sources, and transparent reports over vague green promises.

Local Market Strategies

Entering the Danish market is smoother with messages that respect local values. Trust, transparency, and practical benefits are key. High English skills help, but local signals are crucial too.

For B2B sales in Denmark, we focus on consultative selling and building relationships. Account-based targeting, tailored proposals, and steady follow-up work better than loud campaigns. This approach is especially effective for Nordic growth from Denmark.

Navigating Cultural Differences

Expanding into Denmark means understanding the legal steps, but culture plays a big role. We help founders feel confident in Denmark, avoiding misunderstandings in hiring, sales, and partnerships.

Understanding Danish Business Culture

Danish business is practical and simple. Titles are not as important, and being prepared, on time, and honest is key.

Teamwork is valued in Danish workplaces. A good work-life balance is respected, so avoid late calls and weekend work unless urgent.

Decision-making in Denmark often involves consensus. This might seem slow, but it ensures everyone agrees, leading to smoother delivery.

Communication Etiquette

Direct and clear communication is preferred, with English widely used. We suggest keeping messages straightforward, especially about changes in timelines, pricing, or scope.

Trust and transparency are crucial in Denmark. Avoid vague promises, and if there’s a risk, discuss it early with a plan to manage it.

When talking about employment, be careful. Union membership and collective agreements are common. We advise following consistent and compliant processes from the start.

Building Relationships

Denmark’s digital setup makes admin easy, but relationships are key. Strong local connections help with customer proof, supplier terms, and referrals.

• Show consistency: deliver what you said, when you said.
• Bring data to discussions, not sales pressure.
• Allow time for stakeholder input and internal alignment.

For banking and onboarding, detailed documents are standard, and some steps may need in-person meetings. We help clients understand these expectations, fitting Danish culture while keeping the pace for UK companies.

Challenges of Starting a Business

Many UK founders like Denmark’s stable market and digital public services. Yet, the early set-up can feel strict. The challenges are often about timing, documents, and process. We help you avoid losing weeks when you should be trading.

Common Start-up Challenges

One big issue is Denmark bank account delays, especially for non-residents or complex groups. Banks may ask for detailed proof of funds and contracts before opening an account.

Another challenge is Danish compliance from day one. You need clear audit trails and secure digital storage for invoices. Formats like OIOUBL or Peppol are used where needed.

Tax timing can also be tricky. You must register for VAT at least 8 days before starting taxable activity. This can affect your first invoice and cash flow plan.

If you need to immigrate, the admin is strict. SIRI application biometrics must be completed quickly. Start-up Denmark cases depend on business idea approval before moving forward.

Strategies to Overcome Obstacles

We start admin early to avoid delays. This is crucial for avoiding bank account delays that can block payments or VAT settlement.

• Prepare banking packs with ownership charts, UBO details, budgets, and signed client or supplier evidence.
• Set up compliant systems early for smooth digital accounting under the Danish Bookkeeping Act.
• Create a simple launch timeline around VAT registration and contract start dates.
• Map regulated activities before trading to avoid surprises with Danish compliance requirements.
• If relocating, schedule SIRI application biometrics as soon as the appointment window opens.

Business Support Resources

Denmark’s self-service portals are strong, making many tasks doable online. We use the Danish Business Authority for company registration, CVR updates, and governance guidance.

For tax, VAT, and duties, SKAT sets the rules. This helps align invoices and records. For daily needs like MitID, CPR, and learning Danish, lifeindenmark.dk is a useful resource.

Benefits of Professional Support

Expanding into Denmark can be tricky for UK founders. Small errors can slow things down a lot. Start Company Formations helps avoid these issues, ensuring you’re ready to trade quickly.

We keep your Denmark company formation plan on track. Our knowledge of Danish digital systems helps you navigate smoothly.

Denmark values correct filings and clean data. Our ApS incorporation support and CVR registration help ensure this from the start. We guide you through choosing the right entity and explain the rules and costs involved.

Services Offered by Start Company Formations

Our Danish compliance support helps avoid common delays. We assist with banking, document matching, and keeping CVR records up to date. This prevents penalties.

We also guide you on digital bookkeeping, ensuring records are secure and backed up weekly. For e-invoicing, we help you meet OIOUBL/Peppol standards while keeping GDPR in mind.

Importance of Legal and Financial Guidance

Denmark is clear about its rules, but timing is crucial. VAT and employment duties need attention well before starting. We work with immigration advisers to ensure a smooth move.

For regulated areas, we help with Gaming Licences and FX & Crypto Licensing. This reduces surprises later on.

How to Get in Touch

Want to check your Denmark setup plan? Call Start Company Formations on 0204 504 1544. We’ll review your plan, highlight potential issues, and guide you forward.