Denmark is one of the most highly developed European countries. Therefore, it is attractive to foreign capital owners in terms of profitable investment opportunities. Although Denmark is not an offshore zone in the sense that we are used to, this jurisdiction offers foreign firms some privileges in terms of paying taxes.
Organizational and legal forms
Registration of an enterprise in Denmark is permitted in several of the following forms:
- open joint stock company, which must contain 3+ founders;
- a closed society, the participants of which have limited liability. At least 1 founder is required;
- partnership, the CEO of which is endowed with unlimited liability, and one of the partners is limited in liability;
- branches of a foreign enterprise;
- LTD.
The most common company options in Denmark are VET (K/S) and ZAO (ApS).
ApS tax liability and opening procedure
How this type of company compares favorably with others is the flexibility of the articles of association. The legislation does not specify disclosure requirements regarding the purpose for which a company is registered. Along with this, the composition of the firm’s members is included in the memorandum of association. Each year, 2 reports must be sent to the representative offices of the authorized bodies, namely, the Annual Return and the Financial Statement. As for the authorized capital, it must be paid in full in the amount of 128 thousand Danish crowns.
Profits earned by the company are taxed at a rate of 25%. If the company operates in Denmark as a holding company, it will be granted the following tax privileges:
- 0% for dividends received from foreign subsidiaries if the Danish company owns 15% of the shares during the last 12-month period;
- 0% for the income of legal entities, which were received from a subsidiary company owned by the holding within the last 36 months.
The standard rate for VAT is 25%, royalties are also taxed at 25%, and the rate for the source of dividends is 28%. The zero rate is quite realistic, however, only on the condition that we are talking about royalties in which copyright is used, and the recipient is one of the residents of a state with which the Danish jurisdiction has an agreement regarding the exclusion of double taxation.
The following documents are required:
- Operating Agreement – Firm Status
- Page with Apostille – Apostille sheet
- Certificate of Formation – a document confirming that the organization has completed the registration procedure
- Statement of Organizer – a statement from the founder
If an entrepreneur intends to resort to nominee services, he will need to prepare additional official papers.
K/S opening in Denmark
The partnership must consist of at least 2 founders and 1 director. Moreover, it is necessary that a Danish resident be appointed as one of the directors. The capital is equal to 1 thousand euros. This amount is paid before the end of the financial period.
Every year, partnerships are required to submit reports to the institutions of authorized structures, since Denmark is not a classic offshore zone. An audit is needed if the total amount of assets in material equivalent is more than 500 thousand, or the company’s assets-turnover exceeds 100 800. VAT is 25%.
Documents:
- Registration certificate
- Statute or agreement of the founders (this document and the above must be translated into English without fail)
- Meeting minutes
- Main power of attorney and indication of a specific person
- Nominee Services Agreement
- Enterprise stamp
Pros of Danish jurisdiction
Several good reasons make Denmark so attractive to foreign entrepreneurs:
- the prestige and respectability of the state;
- a high level of development of the investment field and the economic environment in general;
- government support for foreigners and the integrity of the Danish legislative field;
- tax field privileges;
- full confidentiality.
If you need to register a company in Denmark, our specialists will help you register a company quickly and efficiently. Also, you can buy a ready-made company in Denmark. Write to us in the CRM form and we will help you register a company.
Eternity Law International specialists will provide you with qualified advice on the acquisition of an offshore company, opening a bank account in any jurisdiction, as well as further support of your company’s activities at any stage.
We offer ready-made European and offshore companies. It takes 2 days to reissue documents for new owners.
If you have any questions or need advice on registering or buying a company, call us at the phone numbers listed on the website, or write to us in the CRM form located at the bottom of the page. Our specialists will answer you online.