How to Setup an LLC in Denmark in 2024-25 | Complete Guide

Establishing a business in Denmark is a strategic decision for entrepreneurs seeking a stable economy, modern infrastructure, and a business-friendly environment. One of the most popular business structures in Denmark is the Limited Liability Company (LLC), or “Anpartsselskab” (ApS) in Danish. This article will guide you through the essentials of setting up an LLC in Denmark, including its benefits, requirements, and the step-by-step process to get started.

What is a Limited Liability Company (LLC)?

A Limited Liability Company (LLC) is a legal entity where the owners’ personal assets are protected from the company’s liabilities. This means that the shareholders are only liable for the amount they have invested in the company. It is a common business structure for small to medium-sized businesses because it offers the flexibility of a corporation while protecting the owners from personal risk.

In Denmark, an LLC (ApS) is a popular business structure due to its tax advantages, limited liability, and operational flexibility. The LLC must meet certain requirements to operate legally, but once established, it provides a secure platform for doing business.

How to Establish an LLC in Denmark

The following steps you need to follow to establish a limited liability company in Denmark includes:

1. Choose a Business Name: The name must be unique and distinguishable from other businesses. It should not infringe on existing trademarks or company names.
2. Appoint a Registered Office: You need a physical address in Denmark to serve as the company’s registered office.
3. Draft and Sign Articles of Association: This legal document outlines the company’s purpose, shareholders’ rights, and operational guidelines.
4. Deposit Initial Capital: The minimum capital required for an LLC in Denmark is DKK 40,000 (~€5,400). This amount must be deposited into a corporate bank account before the company is registered.
5. Register with the Danish Business Authority (Erhvervsstyrelsen): Submit all the required documents and information to the Danish Business Authority. This includes details of the owners, the company’s capital, and the articles of association.
6. Obtain a CVR Number: Upon successful registration, the company will be issued a Central Business Registration (CVR) number, which serves as its unique identifier.
7. Register for VAT: If your business is expected to have a turnover exceeding DKK 50,000 annually, you must register for VAT.
8. Comply with Employment Laws (if hiring): If you plan to hire employees, ensure compliance with Denmark’s labor laws, which include employee contracts and social security contributions.

Documents Required to Register an LLC in Denmark

The lists of documents required to register an LLC in Denmark includes:

• Articles of Association: A legal document outlining the company’s purpose and internal governance.
• Memorandum of Association: This includes the company name, registered office, share capital, and the names of the shareholders and directors.
• Proof of Initial Capital: A bank statement showing the deposit of the minimum required capital (DKK 40,000).
• Identification Documents: Copies of passports or national ID cards of the shareholders and directors.
• Proof of Registered Office: Documentation showing that the company has a physical address in Denmark.

Benefits of Setting up an LLC in Denmark

The advantages for setting up an LLC in Denmark are:

1. Limited Liability: Shareholders’ personal assets are protected from business liabilities, limiting their risk to their investment in the company.
2. Business-Friendly Environment: Denmark consistently ranks as one of the easiest countries to do business due to its transparent regulations and minimal bureaucracy.
3. Strong Economy and Access to the EU Market: Denmark is a stable, high-income economy and serves as a gateway to the broader European market.
4. Tax Incentives: Denmark offers competitive corporate tax rates (22%) and various tax reliefs, particularly for R&D and green energy companies.
5. High-Quality Infrastructure: Denmark’s modern infrastructure, including digital services and transport systems, supports efficient business operations.

Requirements for Incorporating an LLC in Denmark

To incorporate an LLC in Denmark, certain conditions must be met:

1. Minimum Share Capital: DKK 40,000 (~€5,400).
2. Company Directors: There is no residency requirement for directors. However, at least one director must be appointed, and they can be from any nationality.
3. Registered Office: The company must have a registered address in Denmark.
4. Unique Business Name: The business name must be unique and not violate any existing trademarks.
5. Articles of Association: You must prepare and submit these to outline how the company will be governed.
6. Statutory Reporting: Once established, companies must file annual reports and comply with Danish accounting standards.

Why Start an LLC in Denmark?

Denmark is an excellent choice for entrepreneurs for several reasons:

• Ease of Doing Business: Denmark is renowned for its efficient and transparent regulatory environment, making it easy to start and run a business.
• Access to Skilled Labor: The country has a highly educated workforce, particularly in areas such as technology, engineering, and design.
• Sustainability Leadership: Denmark is a global leader in green energy and sustainability, making it a hub for innovation in these sectors.
• Strategic Location: As a member of the EU, businesses established in Denmark enjoy free trade access to one of the world’s largest markets.

Conclusion

Setting up an LLC in Denmark can be a smart decision for entrepreneurs looking for a stable, transparent, and supportive business environment. With benefits like limited liability, access to the European market, and a strong economy, Denmark is a compelling destination for business incorporation.

Are you considering starting an LLC in Denmark? At OnDemand International, we specialize in assisting businesses with company formation, ensuring that all legal and regulatory requirements are met. Let us handle the paperwork so you can focus on what matters—growing your business. Contact us today for expert guidance on setting up your LLC in Denmark.

Frequently Asked Questions About LLC Setup in Denmark

What is the minimum capital requirement to set up an LLC in Denmark? 

The minimum required capital is DKK 40,000 (~€5,400), which must be deposited into a corporate bank account before registration.

Can foreigners establish an LLC in Denmark? 

Yes, there are no restrictions on foreign ownership of Danish LLCs, and directors do not need to reside in Denmark.

How long does it take to set up an LLC in Denmark? 

The process typically takes between 1 to 2 weeks, depending on how quickly the required documentation is prepared and submitted.

Do I need a Danish bank account for my LLC? 

Yes, you need to open a Danish corporate bank account to deposit the initial capital and facilitate business transactions.

Is it mandatory to hire a local accountant? 

While it’s not mandatory to hire a local accountant, it is highly recommended to ensure compliance with Danish tax laws and accounting standards.