ApS company registration process in Denmark

A Danish private limited company (ApS) is a popular choice, offering favorable terms and a simplified registration procedure. It is worth learning the key information about this form of business to maximize its potential.In case you need help with ApS company registration in Denmark, we offer our support.

Key information about ApS company in Denmark

In Denmark, the most common form of business is a limited liability company (ApS - Anpartsselskab). Compared to other legal forms, registering an ApS company is much easier. To establish this company, the minimum share capital is DKK 40,000.

In order to establish a LLC in Denmark, several requirements must be met. First of all, the company must be registered with the Agency for Enterprise and Trade within two months of signing the incorporation agreement. Initial capital is also required, which must be at least DKK 40,000. In addition, a memorandum of incorporation and articles of association are necessary.

To establish an ApS company, it is necessary to have a registered office address in Denmark. If you are unable to rent a permanent office, consider obtaining a Danish address by using a virtual office service. More and more foreign entrepreneurs are opting for this solution when they start operations in Denmark.

Private addresses are sometimes used by some clients as business addresses, but this solution only applies to those living in Denmark. Although the Danish business authority usually accepts this practice, it is not formally recognized.

Anpartsselskab's board of directors may consist of one director or several. There is no obstacle to the owners acting as directors in the company. Directors may or may not be tax residents of Denmark. Owners also may be one or more.

For an ApS company, the appointment of management is required, and it is also possible to have a Supervisory Board of three members. It has legal personality and is regulated by the Danish Private Limited Liability Company Act. The owners' liability for the company's obligations is limited to the company's capital, which means that they do not bear the financial risk with their personal assets. The company's capital is therefore separate from that of its owners.

In a Danish limited liability company, the minimum share capital should be at least DKK 40,000. Contributions can be made in the form of cash or non-cash, by contributing assets to the company. The easiest and fastest way to make a contribution is in cash form.

With a non-cash deposit, various assets can be deposited, such as a car, goods or inventory. Providing appropriate documents confirming the value of the deposited assets is necessary, which entails higher costs and prolongs the process of buying the company. The cost of the auditor's services oscillates between DKK 5,000 and 15,000, to which VAT must be added.

The applicable threshold for VAT registration in Denmark is DKK 50,000. Companies with an annual turnover of more than DKK 50 million must file VAT returns and make payments monthly. In contrast, companies with a turnover between DKK 5 million and DKK 50 million are required to submit VAT returns and payments quarterly.

When turnover is less than DKK 5 million, payments and VAT returns are required twice a year. For EU companies under the DKK 50,000 threshold, having a VAT representative office in Denmark is not mandatory, but it is worth considering. The use of such a service can greatly simplify the management of all VAT formalities.

Why is it advisable to operate a company in Denmark?

The formalities involved in setting up a business in Denmark are among the least burdensome in the world. The process of registering a company is fast and does not generate high administrative costs.

ApS in Denmark offers a number of significant advantages, including:

• Simple paperwork: The company registration process is quick and involves minimal administrative costs.
• Low income tax: The corporate income tax rate is 28%, which is relatively low compared to other European countries.
• Equal rights for foreign companies: Foreign companies have the same obligations and rights as Danish companies.
• Low social burden: Employers pay only 1% of the wage fund for social and health insurance, one of the lowest rates in OECD countries.
• Free market and free competition: There are no restrictions on doing business.
  
  

The process of registering an ApS company in Denmark

Registration of Anpartsselskab takes place at the Danish Enterprise Authority - Erhvervsstyrelsen. The process is simple and less costly compared to other legal forms.

In order to fulfill the formalities, it is necessary to have an initial capital of DKK 40,000. These funds can later be used to cover business expenses, salaries and dividends. However, it is worth remembering that this capital cannot be transferred to the owners' private account; it must be placed in a company bank account.

During registration, incorporation documents (stiftelsesdokument), Articles of Incorporation (vedtægter) and share capital are required. The registration fee is DKK 670, while the expected cost of outsourcing the registration to a law firm fluctuates between DKK 3,000 and 5,000.

Registration of an ApS company with the Agency for Trade and Enterprise must be done within 8 weeks of its establishment.