Starting a company in Denmark - registration, taxes, accounting

Planning to start a company in Denmark? The rules are clear here - you just need to know them

Denmark is one of the most business-friendly countries in Europe - transparent laws, a highly skilled workforce, a stable economy and full access to the EU market. There are no restrictions for foreign investors here: 100% foreign ownership of a company is perfectly permissible, and registration procedures are largely digital and efficient.

That doesn't mean, however, that you just register your company and go about your business. The Danish tax and labor system is detailed, well-supervised and highly digital, and the tax authorities (Skattestyrelsen) operate efficiently and without leniency.

At Aider Polska, we provide accounting services for Polish companies entering the Danish market - from choosing a form of business and registering a company in Denmark, through VAT and payroll, to ongoing bookkeeping, reporting and tax services. We know these regulations inside out and are happy to share this knowledge.

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How to start a company in Denmark? Key information before you start

Before starting a business, it is a good idea to determine the operating model, the scale of the business and the level of responsibility you want to bear as an entrepreneur. In practice, choosing the right legal form affects taxation, administrative responsibilities and the level of business risk.

What legal form should you choose?

Foreign investors most often go for one of two forms:

Limited Liability Company. (Anpartsselskab, ApS) - by far the most popular choice for foreign companies entering the Danish market. It is a separate legal entity, protects the owner's assets and does not require Danish residency for owners or directors. The minimum share capital is DKK 20,000 (about EUR 2,700) - as of February 2025, this threshold has been lowered, making it easier to enter the market. Registration is done online through the Virk.dk portal , and the CVR (company registration number) can be obtained almost immediately after submitting complete documents.

Branch (Filial) - Danish extension of a foreign company, without separate legal personality. Quick to start up, does not require share capital, but does not limit liability - the parent company is fully liable for the branch's obligations. Each year, the Danish branch must submit the parent company's annual report to Erhvervsstyrelsen. It requires the appointment of a local branch manager.

Partnerships (Interessentskab, I/S) and limited partnerships (Kommanditselskab, K/S) are also available - less frequently chosen by foreign investors, although useful in certain joint venture structures.

Regardless of the form chosen - Aider Polska keeps the books for each type of business, from day one, ensuring compliance with Danish GAAP standards.

Registering a company in Denmark - step by step

Registration of a company in Denmark is carried out by Erhvervsstyrelsen (Danish Business Activity Authority) through the Virk.dk platform . Once registered, the company is assigned a CVR number - the Danish equivalent of a TIN, which is necessary for all dealings with authorities, entering into contracts and issuing invoices.

Communication with the Danish administration requires an electronic signature MitID Erhverv and an active Digital Post box - all official correspondence goes through it. No access to Digital Post means, in practice, no access to offices.

Important for companies posting workers: any foreign company providing services in Denmark must register in the RUT (Register of Foreign Service Providers) system - as of 2025, this obligation extends to all postings, regardless of their length, and must be completed before work begins. From 2026, it is also required to attach employment contracts, service contracts and relevant residence permits for non-EEA workers to the RUT registration.

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VAT and company taxation in Denmark

Danish VAT (Merværdiafgift, Moms) has one rate: 25%. Denmark, unlike most EU countries, does not apply reduced VAT rates - no 5%, 8% or 23%. Exemptions and the 0% rate apply only in strictly defined cases (e.g., exports outside the EU).

The VAT registration threshold for companies established in Denmark is DKK 50,000 annual turnover - an exceptionally low threshold by European standards. For foreign companies without a permanent place of business in Denmark - the obligation to register arises from the first taxable transaction, without any threshold.

VAT registration must take place at least 8 days before the start of taxable activities in Denmark.

Non-EU companies must appoint a fiscal VAT representative in Denmark, who is jointly and severally liable for the client's tax obligations. Polish companies, as EU entities, can register directly, although working with a local agent makes handling the paperwork much easier.

VAT returns are submitted electronically through the TastSelv Erhverv system: monthly (turnover over DKK 50 million), quarterly (DKK 5-50 million) or semi-annually (under DKK 5 million).

Corporate income tax

Denmark's CIT rate is 22% and is calculated as a flat tax on profits. Tax losses can be carried forward indefinitely, although their deduction in a given year is limited to 60% of income above DKK 9 million.

Denmark is a member of the EU and participates in the implementation of the OECD's global minimum tax (Pillar Two) - as of 2024, corporate groups with revenues above EUR 750 million are subject to an effective minimum rate of 15%.

Will your company be subject to tax in Denmark? It depends on whether a tax permanent establishmentis created . An establishment can be established when, among other things:

the company has a permanent place of business (office, construction site lasting more than a certain period of time),
the local agent has and regularly exercises the right to enter into contracts on behalf of the foreign company,
the construction or installation project exceeds the time threshold specified in the relevant double taxation treaty.

Poland and Denmark have a double taxation treaty, but each situation should be evaluated individually. As part of accounting outsourcing, Aider Polska analyzes the tax structure of your business, calculates liabilities and ensures that all returns are filed on time.

If you conduct related party transactions - remember that Skattestyrelsen actively verifies transfer pricing. Documentation must confirm that intra-group transactions are conducted at arm's length.

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Hiring and payroll in Denmark

The Danish labor market operates under a flexicuritymodel , combining a high degree of employer flexibility in hiring and firing employees with a broad social safety net. This is unique in Europe.

Denmark has no statutory minimum wage - wages are regulated by collective bargaining agreements (overenskomster), which cover most industries. Estimated minimum wages in sectors covered by the agreements are typically DKK 110-125 per hour. Failure to comply with rates under collective agreements risks labor inspection and retroactive adjustments.

As an employer in Denmark, you are obligated to:

deduct and advance employee income tax (A-skat) on the basis of an individual tax card (skattekort) issued by Skattestyrelsen,
to deduct labor market contribution (AM-bidrag) of 8% of gross salary - this is an employee contribution deducted before tax is calculated,
paying contributions to the ATPpension system (employee and employer - a total of about DKK 3,510 per year for a full-time employee, two-thirds is paid by the employer),
paying accident insurance and contributions to the vacation (Feriekonto, 12.5% of salary), maternity (Barselsfonden) and training (AUB) funds,
monthly reporting of wages and deductions through the eIndkomst system .

Note that Denmark - unlike Sweden or Poland - does not apply a percentage employer contribution to social security. Instead, the flat-rate or percentage contributions to specific funds described above apply. This is an important difference to consider when planning employment costs.

EU/EEA employees can work in Denmark without a visa. Non-EEA employees need a work permit - a Pay Limit scheme, Positive List and EU Blue Card, among others, are available.

Payroll calculation according to Danish law - including the correct employee tax card, ATP contributions and eIndkomst reports - is an area that requires precision. Aider Polska assumes full responsibility for payroll, reports to Skattestyrelsen or contribution settlements- minimizing the risk of errors.

Accounting in Denmark - obligations of the entrepreneur

Every company operating in Denmark keeps its books in accordance with Danish GAAP (or IFRS for larger entities). Annual financial statements are filed with Erhvervsstyrelsen - the deadline is five months after the end of the fiscal year. Failure to meet the deadline results in an automatic penalty, and delays of more than a few months can trigger proceedings for compulsory liquidation of the company.

The Danish ApSaudit obligation arises when a company exceeds at least two of three thresholds for two consecutive years: DKK 4 million in total assets, DKK 8 million in net income or 12 employees. A voluntary audit exemption is also possible if the company does not exceed these thresholds.

Outsourcing your accounting to Aider Polska means that we take care of it all for you: we keep the books for any type of business, settle taxes, prepare annual reports and keep an eye on deadlines. We serve ApS companies, branches and other structures - regardless of industry.

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Consequences of failure to comply

The Danish system is highly automated and highly efficient. Skattestyrelsen integrates data from the eIndkomst system, company registers and VAT returns in real time. Any inconsistency is quickly caught.

Penalties for non-compliance increase quickly. Failure to register an RUT before the start of work, late VAT return (penalty starting at DKK 800 per period, increased to DKK 1,400 from 2025), failure to file an annual report - all these generate automatic penalties and interest. In the case of intentional tax evasion, criminal liability is possible.

That's why companies that opt for Aider Polska's accounting services from the start - instead of learning Danish regulations by trial and error - operate more safely and predictably.

Aider Poland - your partner for doing business in Sweden

Denmark is a market with clear rules and real potential for Polish companies.

Aider Polska knows these rules. We help Polish companies enter the Danish market efficiently and safely: from choosing a legal form and registering with Erhvervsstyrelsen, through payroll and ongoing accounting outsourcing, to tax settlements, annual reports and audit services. Our accounting services cover any type of business - regardless of the industry or legal structure chosen.

Planning to set up a company in Denmark? Contact us - tell us about your plans and we will guide you through the process step by step.

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FAQ - Establishing a company in Denmark

- To set up a company in Denmark, you need to choose a form of business (usually ApS or Filial branch), register the entity through the Virk.dk platform, obtain a CVR number and, depending on the type of business, VAT registration and employer obligations.
- The cost depends on the form of business chosen. For an ApS company, the minimum share capital is DKK 20,000. In addition, accounting and tax handling costs must be taken into account.
- The most common solutions are the ApS limited liability company (Anpartsselskab) and the Filial foreign branch.
- CIT in Denmark is 22%, while the standard VAT rate (Moms) is 25%. Foreign companies performing taxable activities in Denmark must usually register for VAT before starting operations.
- Yes. Any company doing business in Denmark is required to keep its accounts in accordance with local regulations and to file its returns and financial statements on time.