Expand Business in Denmark

Global Upside helps businesses expand into Denmark by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Danish laws and regulations.

The hiring and incorporation processes in Denmark are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Denmark. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Copenhagen

Currency

Danish Krone (DKK)

Language

Danish

Government

Parliamentary Constitutional Monarchy

Country Overview

Denmark has a high standard of living as the per capita net national product is among the most noteworthy in the world—with well-developed social administrations. The economy depends principally on administration businesses, manufacturing, and trade. A relatively small percentage of the populace is occupied in farming and fishing. Small enterprises are dominant in Denmark. As per data:

  • Denmark ranks as the 39th largest economy in the world in terms of nominal GDP.
  • Denmark ranks as the 16th largest economy in Europe.
  • Denmark is the world’s biggest exporter of wind turbines.
  • Denmark ranks as the 7th best country in the world for business.

Legal Entity Setup

Options for setting up a legal entity in Denmark include:

Limited Company (Kapitalselskab)

Limited Company (Kapitalselskab) has four categories: private limited companies (Anpartsselskaber or ApS), public limited companies (Aktieselskaber or A/S), entrepreneur companies (Iværksætterselskaber or IVS), and limited partnership companies (Partnerselskaber or P/S). This kind of establishment requires at least 1 investor and they have no personal liabilities. The overall and key administration responsibility is held by the board of directors, whilst the daily administration responsibility of the company is of the executive board. Yearly financial reports must be recorded with the Danish Business Authority.

General Partnership (Interessentskab, I/S)

General partnership (Interessentskab, I/S) is a form of a legal entity set up that requires a minimum of two investors who can be individuals or companies. In case all the partners are legal entities, registration with the Danish Business Authority is compulsory. The partners are subject to the obligation of the overall association.

Limited Partnership (Kommanditselskab, K/S)

Limited Partnership (Kommanditselskab, K/S) is a form of a legal entity set up that requires a minimum of two investors who can be individuals or companies. One of the associates, here, is the general partner is known as Komplementar and the other is the limited partner called a Kommanditist. While the Komplementar has an unlimited personal obligation for the bonds and debt, the Kommanditist is liable for the contributed capital.

Branch office (Filial)

Branch office (Filial) is not a separate and individual entity but a part of the foreign-based business. To run the business in this kind of an establishment, it requires more than one branch manager.

It takes approximately two to three weeks to establish a legal entity set up in Denmark, depending on the kind of establishment required.

Human Resources

The Danish Salaried Employees Act (DSEA) governs the laws about the employment relationship concerning client clauses, sickness, parental leave, termination, etc. The DSEA is known as Funktionærloven in Danish.

  • Name and address of both the employer and employee
  • Job location
  • Job title and description
  • Date of commencement of the job and duration of the contract
  • Leaves and benefits
  • Termination
  • Salary and pension benefits
  • Working hours and overtime
  • Intimation of collective agreements or any other agreements

Payroll

The payroll cycle, in Denmark, is monthly and all wages are paid by the month-end. Employers must provide the employees with a payslip with the detailed salary structure.  All reports must be kept with the employers for a minimum of 5 years.

Accounting

The Danish Financial Statements Act (DFSA) 2002 administers the financial reports of all business corporations.

Tax & Compliance

Corporate Tax

The corporate tax rate in Denmark is 22%.

Value Added Tax (VAT)

The standard VAT rate here is 25%.

Data Privacy

The Danish Parliament executed the Danish Act on Data Protection, also known as the Danish Data Protection Act (DDPA), to enforce the GDPR. This act came into effect on May 25, 2018, consequently replacing the former Danish Act on Processing of Personal Data (Act no. 429 of 31/05/2000. Hence, as reinforced by the DDPA, data privacy and processing are governed by the GDPR.

The Danish Data Protection Act does not cover the Faroe Islands and Greenland.

Anti-Bribery & Anti-Corruption Law

Under the Danish Criminal Code, also known as Straffeloven in Danish, reinforced by Act no. 1156 of 20 September 2018, bribery is a criminal offense. The Danish Criminal Code criminalizes both active and passive bribery in the private and public sectors.
The guidelines on bribery of public officials are specified in Section 122 and Section 144 of the Danish Criminal Code.

1. Bribery for public/ private officials

For individuals:
i) Imprisonment for at least 6 years.
ii) A monetary fine.
iii) Confiscation of received benefits.

For legal entities:
i) A monetary fine of an unspecified amount.
ii) Exclusion from public procurement bonds as covered by the EU Public Procurement Directive.

Bribery in the private sector is prescribed in the Criminal Code under Section 299 (2).