The procedure for setting up an ApS company in Denmark
The limited liability company (ApS - Anpartsselskab) is the most common business structure in Denmark. It is easier to register compared to other legal entities, and the minimum required share capital is 20 000 DKK. If you need help with establishing an ApS company in Denmark, we are available to assist you.
Essential details about the ApS company in Denmark
An ApS company is a separate legal entity governed by the Danish Private Limited Liability Companies Act. The owners are not personally responsible for the company's debts, and the company’s capital is distinct from the owners' personal assets. The company must have an established management structure and may also have a supervisory board with three members.
To set up an ApS company, the following are necessary:
- Articles of association
- Company bylaws
- A minimum share capital of 20 000 DKK
- Registration with the Agency for Business and Trade within two months of signing the articles of association.
The minimum share capital required for a Danish limited liability company (ApS) is 20 000 DKK. Contributions can be made in cash or non-cash form by depositing assets into the company. The simplest and quickest option is a cash deposit. For non-cash deposits, assets like vehicles, goods, or inventory can be contributed. However, this requires providing relevant documentation to verify the value of the assets, which increases costs and lengthens the company formation process. Auditor fees for this service typically range from
5 000 to 15 000 DKK, plus VAT.
To set up an ApS company, a business address in Denmark is necessary. It's important to remember that only residents of Denmark are permitted to use their personal address as the company's address. While the Danish Business Authority usually accepts this practice, it is not officially permitted.
The address where the company will conduct its operations and receive mail must be specified. If a physical office is not feasible, a virtual office service can be utilized to acquire a Danish address. This option is growing in popularity among international entrepreneurs launching businesses in Denmark.
In Denmark, the VAT registration threshold is 50 000 DKK. Companies with an annual turnover exceeding 50 million DKK are required to submit VAT returns and make payments on a monthly basis. For businesses with a turnover between 5 and 50 million DKK, VAT returns and payments must be filed quarterly. If the turnover is below 5 million DKK, returns and payments are needed twice a year. EU-based companies that do not exceed the 50 000 DKK threshold are not required to have a VAT representative in Denmark, but it is a worthwhile option. Using such a service can greatly simplify handling VAT-related tasks.
How to establish an ApS company in Denmark?
An Anpartsselskab must be registered with Erhvervsstyrelsen, the Danish Business Authority. The registration process for this type of company is less complex and more affordable than for other legal structures. During registration, you will need to provide the foundational documents (stiftelsesdokument), the company's articles of association (vedtægter), and the share capital. The registration fee is 670 DKK, and if you use a law firm for assistance, the estimated cost ranges from 3 000 to 5 000 DKK.
To finalize the formalities, a minimum share capital of 20 000 DKK is required. These funds can later be used for the company’s operating expenses, dividends, or salaries. However, it's important to note that the capital must be deposited into the company’s business bank account and cannot be transferred to the private account of the owner(s).
The ApS company must be registered with the Danish Agency for Business and Trade within 8 weeks of its formation.
Who can be the managing director of an ApS company?
The management of an Anpartsselskab (ApS) can include one or more directors. The owners have the option to act as directors of the company if they choose. Directors do not need to be tax residents of Denmark. An Anpartsselskab can have either a single owner or multiple owners.
Advantages of operating an ApS company in Denmark
The process of establishing a business in Denmark is among the simplest globally. Company registration is fast and incurs low administrative costs. Key advantages of owning an ApS company in Denmark include:
- Equal rights for foreign businesses – foreign companies have the same rights and responsibilities as Danish companies.
- Streamlined procedures – the registration process is efficient and comes with minimal administrative expenses.
- Low corporate income tax rate – the tax rate for corporate income is 28%, which is competitive compared to other European nations.
- Low social security contributions – employer contributions to social and health insurance amount to only 1% of the payroll, one of the lowest rates within OECD countries.
- Open market and competition – there are no restrictions on business operations.
