Denmark

Main » Jurisdictions » Denmark

Denmark

General information about the jurisdiction

Denmark (official name is the Kingdom of Denmark) is a Scandinavian country that includes Faroe Islands, Greenland and Denmark as well.

The head of the state is the monarch, whose power is limited by the parliament.

Denmark is one of the most expensive countries for living in Europe, but, at the same time, it guarantees really high standards of living for its people. According to scientist searching, the inhabitants of the Scandinavian countries are some of the happiest in the world. It is achieved by stable economic and political situation as well as state security of the human rights like the highest value.

Denmark is a part of the EU, but not the Euro zone and has its own currency – the Danish crown.

The state has oil and gas reserves, which are exported to Europe, and uses renewable energy sources.

Moreover, through its legislation, Denmark may be used in tax planning and doing business.

1. Legislation

Company activity in Denmark is regulated by Danish Private Companies Act, Consolidated Act on Danish Companies and Holding Companies Act.

2. Company formation

2.1 Types of companies

The Danish law provides such corporate form as public and private joint stock companies, limited and unlimited partnerships.

 Foreigners prefer Private Limited Liability Company (ApS), Public Limited Liability Company (A/S) and Limited Partnership (K/S).

2.2. Private Limited Liability Company (ApS):

  • The minimum authorized capital – DKK 125 000 (approximately 17.000€), must be paid by the moment of incorporation. 
  • Shares – registered with par value. Bearer shares are not permitted.
  • Director - at least 1 individual, no residency required.
  • Members – at least 1, individual or legal person, no residency required. The whole nominee service may be used. 
  • Secretary – not required.
  • Publicly available information: information about directors and shareholders. The information about beneficial owner is kept by the agent and is not available for third parties. 
  • Company is obliged to keep and submit an annual financial report, to be audited.
  • Registered office in Denmark is required. 

          2.3. Public Limited Liability Company (A/S):

  • The minimum authorized capital – DKK 500 000 (approximately 67.000€), must be paid during the first year of work.
  • Shares – registered with par value. Bearer shares are allowed.
  • Director – the company is managed by the Board of Directors (at least 3 directors) and the Board (1-3 members). Members of the Board and half of the directors must be residents.
  • Members – at least 1, individual or legal person, at least 1 member must be Danish resident.
  • Secretary – not required.
  • Publicly available information: information about directors and shareholders. The information about beneficial owner may be hidden by using nominee service.
  • Company is obliged to keep and submit an annual financial report, to be audited.
  • Annual meetings of shareholders are required.
  • Registered office in Denmark is required.

2.4 Limited Partnership (K/S):

  • The minimum authorized capital – not established. Usually, authorized capital is   100€ (if it is declared, it must be paid by the moment of incorporation).
  • Members – at least 2 partners, individual or legal persons, no residency required. One of the partner must have unlimited liability (usually, it is a legal person with the liability within its assets), and another one – limited liability.
  • Director – at least 1, a partner may be a director. At least 1 director must be Danish resident. It is recommended to use nominee service.
  • Secretary – not required.
  • Publicly available information: information about partners.
  • Company is obliged to keep and submit an annual financial report, to be audited.
  • Registered office in Denmark is required.
  • K/S is not subject to corporate tax and partners pay income tax. Thus, the partners who are residents of low-tax jurisdictions may use this provision for the payment of taxes on distributed profits of partnership in the country of registration.

3. Taxes

Income tax - 25%

VAT - 25% (for some goods – 0%)

Tax on dividends - 28% (dividends, paid by a company that owns at least 15% of the authorized capital, do not include in the taxable amount).

Tax on interests and royalties - 30%.

There is no sale tax, tax on rent estate abroad.

4. Currency control

None

5. Agreements on avoidance of double taxation

Denmark concluded more than 85 agreements on avoidance of double taxation, including Ukraine.