Types of Company in Denmark: Brief Overview for Entrepreneurs

Introduction

Whether you are a global organisation, a developing startup, or a solitary entrepreneur, there are several company kinds available when starting a business in Denmark that are tailored to meet diverse demands. Structures such as partnerships, sole proprietorships, public limited companies, and private limited companies (ApS) are available in Denmark’s business-friendly environment; each has its own advantages and limitations. 

Knowing these possibilities enables you to select the one that best suits your development goals, liability requirements, and investment capability. Furthermore, establishing and managing a business can be made easier by Denmark’s clear legislative framework, particularly if you are aware of the company structure that best suits your objectives.

Overview of Business Entities in Denmark

Here’s an overview of the types of company in Denmark:

1. Private Limited Company (ApS): An ApS, which is common among small and medium-sized enterprises, restricts liability to shareholder contributions and necessitates a minimum capital of DKK 40,000.

2. Public Limited Company (A/S): Designed for larger companies, the A/S has a DKK 400,000 minimum capital requirement and permits public share trading.

3. Sole Proprietorship: A sole proprietorship is the best option for independent business owners. It has few registration requirements but does not restrict personal liability.

4. Partnerships (I/S, K/S): Two or more people share responsibility and ownership in a partnership. Options differ according to liability agreements.

5. Branch Office: To streamline operations, foreign businesses might open a branch in Denmark and operate under the parent company’s legal structure.

Setting Up a Private Limited Company (ApS) in Denmark

Here’s a quick guide to setting up a Private Limited Company (ApS) in Denmark, a popular choice among the types of company in Denmark:

• Minimum Capital Requirement: To get started, you’ll need at least DKK 40,000 in assets or cash.
• Limited Liability: Financial security is provided by the fact that shareholders’ liability is capped at their investment.
• Easy Registration Procedure: Setting up an ApS is simple. Begin by registering on the web page of the Danish Business Authority.
• Management and Shareholders: A minimum of one director and one shareholder are required, albeit they may be the same individual.
• Annual Reporting: In order to maintain transparency, an ApS is required to produce annual financial reports.

An ApS is perfect for startups and small enterprises wishing to set up shop in Denmark since it offers minimal liability and simplicity of formation.

Public Limited Companies (A/S) and Their Benefits

For larger businesses among the types of company in Denmark, a Public Limited Company (A/S) offers valuable benefits:

• Capital Requirements: An A/S is appropriate for companies aiming to expand or go public, and it requires a minimum share capital of DKK 400,000.
• Shareholder Liability: Individuals are protected financially since liability is capped at the contributions made by shareholders.
• Public Trading: A/S businesses can raise a significant amount of money from investors more easily since they are able to trade their shares openly on the stock exchange.
• Management Structure: To ensure open governance and expert supervision, an A/S needs a board of directors and management.
• Annual Reporting and Audits: Tight reporting guidelines and required audits boost investor confidence and credibility.

For businesses in Denmark with intentions for public fundraising and expansion, an A/S is a good option.

Foreign Subsidiaries and Branch Offices in Denmark

When considering types of company in Denmark, foreign businesses can choose between setting up a subsidiary or a branch office:

• Subsidiary: Functions as an independent Danish company, typically an ApS, with its own legal obligations and taxes in Denmark. provides flexibility and liability protection because the parent firm is not held directly accountable.
• Branch Office: A branch office shares the parent company’s legal status and operates as an extension of it. Although the branch makes tax reporting and filing easier, the parent company is still responsible for the branch’s debts.

Every choice has distinct advantages; subsidiaries are best for increased autonomy, while branches are best for simpler market access in Denmark.

Read More: Subsidiary vs Branch in Denmark

Tax and Compliance Requirements for Different Danish Companies

For different types of company in Denmark, tax and compliance requirements vary:

• Corporation Tax: The corporation tax rate for Danish businesses, such as ApS and A/S, is 22% of their profits.
• VAT: If a business makes more than DKK 50,000, it has to register for VAT. The VAT rate is 25% by default.
• Annual Financial Reporting: The Danish Business Authority requires annual financial statements from ApS and A/S firms, with audits being necessary for A/S companies.
• Payroll Tax: Employers are required to make social security and payroll tax contributions when they hire staff.

By fulfilling these conditions, compliance is guaranteed and a strong basis for conducting business in Denmark is established.

Conclusion

Your company’s objectives, size, and financial capabilities will all play a role in the sort of business you choose in Denmark. Denmark has a range of choices for small businesses, corporations, and solo entrepreneurs, including the Public Limited Company (A/S), which is best suited for public investment, and the Private Limited Company (ApS), which has limited liability.

Options like branch offices for easier market entry or subsidiaries for independence are also advantageous to foreign companies. Denmark makes it simple to build a strong company presence that is suited to both domestic and global goals thanks to its simple registration process and clear compliance standards.