Denmark is a modern high-income Nordic country with one of the world’s most developed economies. Denmark has a modern high-income and highly developed mixed economy, dominated by the service sector with 80% of all jobs; about 11% of employees work in manufacturing and 2% in agriculture. The Danish economy is experiencing robust growth, with GDP expanding by 3% in 2024 and an expected growth rate of 2.9% in 2025, making it an attractive destination for international business expansion.
Unlock growth opportunities in Denmark with Cerity Global as your trusted partner. We offer end-to-end support for establishing your legal entity, navigating Denmark’s often complex regulatory landscape with clarity and efficiency.
From company registration to ongoing back-office support, including HR, payroll, benefits, accounting, tax and compliance, Cerity Global simplifies the process so you can focus on growing your business.
Need to hire quickly before your entity is set up? We offer interim EOR services in Denmark, enabling you to onboard talent fast. Once your entity is established, we ensure a smooth transition of your employees from the EOR Structure to your own legal entity, without disrupting payroll or compliance.
Our experts stay ahead of regulatory changes to keep your operations aligned with Denmark’s employment and tax laws, helping you scale confidently and compliantly.
Also known as private limited company, this legal entity setup is suitable for small and medium-sized enterprises, offering limited liability with a minimum share capital requirement. The ApS is the most common business structure for foreign investors in Denmark. 40.000 DKK (a change in legislation will increase the minimum share capital requirement) is required as minimum share capital. The liability of shareholders is limited to their capital contributions.
Also known as public limited company, this setup is Ideal for large corporations planning to raise capital through private or public investors. Suitable for larger operations with a minimum share capital requirement of DKK 500,000. A/S companies are required to have a two-tier management structure, whereas ApS companies are free to opt for the structure that fits them.
Branch office allows foreign companies to conduct business activities in Denmark under the parent company’s name. The branch office is not a separate legal entity but an extension of the foreign parent company. Requires registration with the Danish Business Authority.
A representative office has limited presence allowing foreign companies to conduct market research, liaison activities, and represent the parent company’s interests. Cannot engage in commercial activities or generate revenue in Denmark.
No requirement for resident directors. ApS companies can be managed by non-resident directors, though having a local director may facilitate banking and administrative processes.
Must have a board of directors with at least 3 members for most companies. The executive management can be non-resident, though local representation is often preferred for practical purposes.
Must appoint a branch manager who is responsible for the branch’s operations and compliance with Danish regulations. The manager does not need to be a Danish resident.
Must appoint a chief representative who is responsible for the office’s activities and compliance with Danish regulations.
Danish bank account setup requires specific documentation and follows standard EU compliance procedures:
Bank Account Setup in Denmark: Process and Requirements
Before Incorporation:
After Incorporation:
Note:
All banking activities must comply with Danish financial regulations and EU directives.
Required documents include the company registration certificate, articles of association, directors’ identification and authorization documents, proof of registered office address, and tax registration documents.
Cerity Global supports companies in their global expansion plans and helps in legal entity setup, registration and ongoing support services. With us, you can quickly set up a legal entity, operate compliantly, and expand globally. The process typically takes a few days to a week, depending on the bank.
Employment in Denmark is governed by the following primary legislation:
Employment contracts must be in written form for positions lasting more than one month.
Some of the standard details mentioned in the written contract include:
The different types of employment relationships are:
Permanent Employment Contract
The standard form of employment providing maximum job security with no predetermined end date. These contracts can be terminated by either party with proper notice periods.
Fixed-Term Employment Contract
Used for temporary positions, seasonal work, or specific projects. Limited to specific circumstances and subject to regulations regarding renewal and conversion to permanent employment.
Part-Time Employment
Contracts with reduced working hours compared to standard full-time employment, with proportional compensation and benefits.
In Denmark, a probationary period typically ranges from 3 to 6 months.
The regular working hours in Denmark are 37 hours a week and is regulated in a collective agreement.
Overtime
Overtime cannot average more than 48 hours over a 4-month period.
The notice period in Denmark typically ranged from one to six months.
Denmark does not mandate severance pay unless specified by contract or CBA. However, it ranges from usually one to two months’ average monthly earnings (non-statutory).
Foreign nationals from outside the EU/EEA require appropriate work authorization to work in Denmark. EU/EEA citizens can work freely in Denmark.
Work Visa & Permit Options in Denmark
1. Pay Limit Scheme
For skilled professionals with a job offer above the salary threshold.
2. Positive List Scheme
For professionals in occupations experiencing shortage in Denmark.
3. Fast-track Scheme
For skilled professionals with job offers from certified companies.
4. Startup Denmark
For entrepreneurs and innovative business founders.
Key Requirements:
Employees in Denmark are entitled to 5 weeks (25 working days) of paid annual leave per year, as mandated by the Danish Holiday Act.
Female employees are entitled to 18 weeks of maternity leave:
Male employees are entitled to 2 weeks of paternity leave following the birth of a child.
Parents can share additional parental leave of 32 weeks, which can be taken by either parent or shared between them.
Sick leave: The labor laws of Denmark require you to cover employees’ full salary during the first 30 days of sick leave. To get these paid benefits, employees must have been employed for at least eight weeks and worked for at least 74 hours before the sick leave starts.
The following statutory national holidays are observed in Denmark:
Payroll frequency in Denmark is typically monthly.
There is no legal requirement for a 13th month salary or mandatory bonus, though some employers provide additional compensation as part of their benefits package.
Employees in Denmark and their employers contribute to the Danish social security system, which provides coverage for healthcare, unemployment benefits, and pensions.
The mandatory and statutory benefits in Denmark are:
Danish accounting follows Danish Financial Statements Act (Årsregnskabsloven) and International Financial Reporting Standards (IFRS) for listed companies and larger entities.
All Danish companies must file annual financial statements with the Danish Business Authority.
Mandatory audit is required for companies exceeding certain thresholds:
Audits must be performed by certified public accountants and submitted with annual reports.
The standard corporate tax rate is 22%.
The VAT rate in Denmark is 25%.
The filing deadline for corporate tax returns is typically 6 months after the end of the tax year (usually June 30 for companies with a calendar year).
Penalties include late filing fees and interest on unpaid taxes. The Danish Tax Agency (Skattestyrelsen) imposes penalties ranging from DKK 200 to significant percentages of unpaid tax.
Denmark has comprehensive transfer pricing rules based on OECD guidelines:
Denmark implements CbC reporting requirements:
Transfer pricing documentation is mandatory for Danish companies involved in controlled transactions exceeding specified thresholds.
Master File
Local File
Deadline: Transfer pricing documentation must be prepared by the corporate income tax return deadline and submitted within 60 days upon request by the Danish Tax Agency.
Denmark implements the EU General Data Protection Regulation (GDPR) along with the Danish Data Protection Act.
Denmark’s AML framework is governed by the Danish Anti-Money Laundering Act, implementing EU directives.
Key requirements:
Obligated entities: Banks, insurance companies, securities firms, money transfer operators, lawyers, accountants, and other designated professions.
Penalties: Administrative fines up to DKK 8 million or 10% of annual turnover, and potential criminal liability for violations.
Reasons you should setup legal entity in Denmark:
Cerity Global ensures your business expansion in Denmark is fast, compliant, and future-ready, so you can focus on growth while we manage the back-office tasks.
Economic figures are subject to change based on quarterly reports and market conditions.
Cerity Global combines deep local knowledge with proven expertise to make your Denmark business establishment effortless and compliant. Whether you’re looking for legal entity setup and registration or ongoing support, we’re your trusted partner for sustainable global expansion in Denmark.
Disclaimer – The information provided is for informational purposes only and does not constitute legal, business, or tax advice. Entity setup requirements, tax rates, and economic data are subject to change and may vary by location.
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