Procedure for establishing an ApS company in Denmark

The ApS (Anpartsselskab) is the most common type of business structure in Denmark. It is easier to register than other legal entities, and the minimum required share capital is 20 000 DKK. If you need help setting up an ApS in Denmark, we are here to assist you.

Essential Details About an ApS Company in Denmark

An ApS company in Denmark is a legal entity governed by Danish laws regulating private limited liability companies. The owners are not personally responsible for the company's debts, and the company's capital is separate from the personal assets of the owners. The company must have a management board, and optionally, a Supervisory Board made up of three members may be established.

To set up a Danish limited liability company, the following steps are necessary:

• Articles of incorporation,
• Company bylaws,
• A minimum share capital of 20 000 DKK,
• Registration with the Business and Companies Agency must be done within two months of signing the articles of incorporation.

The minimum share capital required for a Danish limited liability company is 20 000 DKK. Contributions can be made in cash or in kind, by transferring assets to the company. The easiest and fastest option is a cash contribution. For non-cash contributions, assets like goods, inventory, or a vehicle can be provided, but documentation confirming their value will be necessary. This option tends to increase costs and extend the registration process. Auditor service fees typically range from 5 000 to 15 000 DKK, plus VAT.

A registered company address in Denmark is mandatory to establish an ApS. While some clients opt to use their personal address, this is only permitted for individuals living in Denmark. Although the Danish Business Authority often accepts this approach, it does not strictly adhere to formal regulations.

It is necessary to provide an address where the company will conduct its operations and receive correspondence. For those not planning to maintain a permanent office, a Danish address can be obtained through a virtual office service. This option is gaining popularity among foreign entrepreneurs launching businesses in Denmark.

In Denmark, the VAT registration threshold is 50 000 DKK. Businesses with an annual turnover exceeding 50 million DKK must file VAT returns and make payments monthly. Companies with a turnover between 5 and 50 million DKK are required to do so quarterly, while those with a turnover below 5 million DKK need to submit returns and payments only twice a year. EU companies that do not surpass the 50 000 DKK threshold are not obligated to appoint a VAT representative in Denmark, although it may be a beneficial option, as such a service can greatly simplify VAT-related processes.

The Board of Directors in an ApS Company

An Anpartsselskab's board can be made up of one or more directors, and the company's owners are eligible to serve as directors. Neither directors nor owners are required to be tax residents of Denmark, and there can be one or multiple individuals in these roles.

How to Register an ApS Company in Denmark?

An Anpartsselskab must be officially registered with Erhvervsstyrelsen, the Danish Business Authority. The registration process is straightforward and more affordable compared to other legal entities. Required documents include the articles of incorporation (stiftelsesdokument), company bylaws (vedtægter), and proof of share capital payment. The registration fee is 670 DKK, while legal service fees typically range between 3 000 and 5 000 DKK.

To finalize the setup, a share capital of 20 000 DKK is required. This amount can later be utilized for the company's operational expenses, salaries, and dividends. However, it is crucial that these funds remain in the company’s bank account and are not transferred to the owners' personal accounts.

A Danish ApS company must be registered with the Business and Companies Agency within 8 weeks of its establishment.

Advantages of Operating a Business in Denmark

Denmark offers one of the simplest processes for starting a business globally. Registering a company is quick and involves minimal administrative expenses. Key advantages of establishing an ApS company in Denmark include:

• Streamlined procedures: The registration process is fast and incurs low administrative costs.
• Equal treatment for foreign companies: Foreign businesses enjoy the same rights and responsibilities as Danish companies.
• Competitive corporate tax rate: The corporate income tax is set at 28%, which is relatively low compared to other European nations.
• Minimal social security contributions: Employers pay only 1% of the payroll for social and health insurance, among the lowest rates in OECD countries.
• Open markets and free competition: There are no restrictions on business operations.