Global Expansion Resources | Denmark
Denmark Entity Set up
Helping your business expand into Denmark with specialist PEO services
Weigh up the pros and cons of a Danish entity set up versus using a global PEO partner when expanding your business internationally.
Thanks to its stable economy and attractive quality of living, it’s unsurprising that many business owners will be considering growing their company into Denmark. Operating your business compliantly in Denmark and establishing your long-term business interests there, means that you will often need to set up a legal entity. In spite of this, it is neither a quick or simple process.
The journey of setting up a legal entity can be full of obstacles which necessitate both time, money and resource to overcome. As a result, businesses looking to expand internationally commonly look to an EOR company when considering growing into new markets.
Here, we take a look at who needs to set up an entity, how to compliantly set up a legal subsidiary and how a PEO can assist you with your Danish expansion, without the need for a legal entity.
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Denmark Expansion Advice
Who needs to set up a Danish entity?
Foreign businesses looking to set up a legal entity in Denmark will likely fall into one of the following categories: Private Limited Company (Anpartsselskab or ApS), Public Limited Company (Aktieselskab or A/S) or Branch Office (Filial).
No matter whether your business is foreign, or native to Denmark, all companies come under the Danish Companies Act and therefore must register with the relevant authorities and regulatory bodies, including: the Danish Business Authority, the Danish Commercial and Companies Agency, as well as being enrolled in the Commercial Registry.
How do I set up a subsidiary in Denmark?
The process of setting up a legal entity will differ from each business, depending on what type of subsidiary is required for their expansion into Denmark, as well as other important determining factors. A more generalised overview of the requirements are as follows:
- Memorandum of association
- Articles of association including: company name, registered office, business purpose, members and directorship
- Danish bank account with the sufficient capital requirements in Danish Kroner (at least DKK 40,000)
- Registration with the Danish Business Register to acquire a CVR (Central Business Register) number
- VAT registration (Danish Customs and Tax Administration is also referred to as SKAT)
- Registration as an employer
Though not an exhaustive list of requirements when establishing a subsidiary in Denmark, it can be a complex, not to mention time-consuming process which begins before you even touch base in the Nordic region.
By partnering with a PEO provider, you can spend more of your valuable time growing different areas of your business, rather than going through the lengthy process of setting up a legal entity single-handedly.
Danish entity laws
The governing laws applicable to Danish entities cover a broad range of frameworks which have been designed to regulate companies, organisations and institutions within the Denmark region. There are a number of important regulations which must be followed by any business setting up in Denmark, including: company formation and registration, corporate governance, including disclosing financial statements in accordance with the Danish Financial Statements Act – Årsregnskabsloven, taxation, employment laws, environmental regulations, intellectual property rights and many more.
To compliantly venture into the Danish market and set up your legal entity there, in-depth knowledge of the laws and regulations is absolutely essential to the smooth company expansion. Failure to comply could have a substantial impact on the speed, efficiency and ease of your business growth – not to mention fines and legal consequences should it be handled non-compliantly.
The benefits of setting up a legal entity in Denmark
One of the most sought-after locations for business because of its stable economy and beneficial working environment for employees, Denmark has long-been a popular destination for businesses looking to expand internationally.
By setting up an entity in Denmark, your company solidifies its long-term growth intentions within the Nordic country, ensuring that your business is reliable to both clients, consumers and employees alike.
Why use a PEO partner instead of setting up a legal entity in Denmark?
While the benefits to setting up a subsidiary in Denmark are evident, you may wonder how using a PEO partner is similarly beneficial.
In spite of its advantages, establishing a legal entity in any country is a process laden with risk, which needs sufficient funds to run smoothly. From the initial registration, to ongoing compliance with their target company, businesses need to have the repeated resource, money and time required to set up a legal entity. This is in addition to other important aspects of business expansion, which demand a significant amount of attention also.
By outsourcing your business expansion to a PEO or EOR, you can begin operating in Denmark’s strong economy quickly, without the long process of setting up a legal entity. In doing so, you’ll have the freedom to allow your business greater flexibility within its operations and set up. Similarly, opting for a PEO ensures you can focus on those important aspects of business growth, knowing that the legalities of tax, national insurance, onboarding employees, visas & work permits, and employment contracts are handled compliantly.
You can rely upon Leap29’s expert PEO services to support your expansion into Denmark, thanks to our years of experience. Get in touch with our specialist team today on +44 (0) 20 8129 6860 or email [email protected] to see how we can help your business grow and thrive in Denmark.
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Denmark
Expansion Resources
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