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Registering a sole proprietorship in Denmark

An Enkeltmandsvirksomhed (sole proprietorship) is the most commonly chosen and simplest legal structure for running a business in Denmark. It is an excellent option for new entrepreneurs starting with a limited budget and uncertain future revenues. If you need assistance with registering such a business, we would be happy to help.


A sole proprietorship is a business structure where the owner is fully responsible for the company's liabilities. This includes both business debts and tax obligations. In the event of financial difficulties, the owner is required to settle these debts using their personal assets, such as property or vehicles.

Criteria for registering a sole proprietorship in Denmark

It is important to thoroughly familiarize yourself with the requirements, deadlines, and necessary documents for different types of business structures in Denmark. Additionally, it is crucial to analyze the pros and cons to make an informed decision that suits your expectations and capabilities. Entrepreneurs planning to move to Denmark can register their business with Erhvervsstyrelsen (the Danish Business Authority, which operates under the Danish Ministry of Economy).


In the case of a sole proprietorship, all decisions regarding the business operations are solely the responsibility of the owner. However, the owner can authorize others to act on behalf of the business. Running such a business is much easier as it does not require initial capital. Additionally, the Danish administration provides support to the self-employed in completing the necessary procedures for company registration.

How to set up a sole proprietorship in Denmark?

The first step in registering a sole proprietorship in Denmark is to register with Erhvervsstyrelsen. This registration can be completed through the website erhvervsstyrelsen.dk. When registering the business, the name of the company must be provided. This name typically corresponds to the first and last name of the owner, who will use their personal CPR number.


Registering a sole proprietorship in Denmark (Enkeltmandsvirksomhed) is a straightforward procedure. Here are the steps to take to complete the registration:


Prepare the required information - before starting the registration, make sure you have the following details ready:

  • Company name
  • Business address
  • NACE code (business activity code)
  • CPR number (personal identification number)

If having a physical office in Denmark is not necessary, for example, in the case of an online business, you can use a virtual office service to obtain a Danish address for your company.


Online Registration - registering a sole proprietorship is done online through the Virk.dk portal. This involves filling out a registration form, which, once approved, will be submitted to the relevant authorities.


Obtaining a CVR Number - after completing the registration form, you will receive a CVR number (Central Business Register), which serves as a unique identifier for your business. This number will be required for any business-related matters.


VAT Registration (if applicable) - VAT registration is required if you expect your business’s annual turnover to exceed 50 000 DKK. This can be done through the Virk.dk portal:

  • Log in to Virk.dk.
  • Find the VAT registration form.
  • Complete and submit the form.

It’s also worth considering the use of a VAT tax representative, who can assist not only with the registration process but also with VAT reporting and other related formalities.


Opening a Bank Account - setting up a separate bank account for your business will simplify the process of managing finances and handling tax filings.


Accounting Management - the company's accounting in Denmark must comply with Danish regulations. If you have the necessary knowledge and experience, you can manage it yourself or hire an accounting firm to handle it.


Tax Reporting - according to the Danish tax authority (SKAT), it is necessary to regularly report taxes and submit tax declarations. It is also advisable to consider purchasing appropriate insurance for your business and ensure that you have all the required licenses and permits to operate. To avoid future legal and administrative issues, it is important to strictly follow all required steps and deadlines.

Benefits of Running a Sole Proprietorship in Denmark

Starting a sole proprietorship in Denmark is an easy and straightforward process for any entrepreneur. Enkeltmandsvirksomhed is an attractive option for young entrepreneurs due to its low financial and administrative requirements. The main advantages of a sole proprietorship in Denmark include:

  • Ease of managing the business – a sole proprietorship is straightforward to run, which is a significant advantage, especially for young entrepreneurs with limited experience.
  • The business is not required to register for VAT if its annual income does not exceed 50 000 DKK.
  • No requirement to contribute share capital.
  • Low startup costs, amounting to just 10 000 DKK.
  • Business taxes are reported on a single tax return, meaning income is taxed only once.
  • The possibility of receiving assistance from the Danish administration in handling registration-related formalities.
  • The ability to authorize others to act on behalf of the company through power of attorney.
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