Denmark | Company registration

Companies Act (Selskabsloven) — Danish Companies Act

Public limited company A/S

Limited liability company ApS

Most types of activities involving the sale of goods and services.

Activities involving the provision of banking, insurance and licensed services are prohibited.

14 working days from the date all required documents are provided.

The law does not prohibit purchase of already registered companies.

It must not be identical or similar to an already registered name. The name must end with “ApS” or “A/S”, depending on the legal form of the company. The words “Chamber of Commerce”, “Cooperative”, “Credit Union”, “Group”, “Royal”, “Imperial”, “National”, “State” may not be used.

Memorandum of incorporation, articles and memorandum of association of the company (Memorandum & Articles), minutes of the first shareholders’ meeting

Provided by the registered agent and must be located within the administrative territory of the jurisdiction. Used only to receive postal correspondence from government authorities.

The company’s share capital must be formed and 100% of its value must be paid before company registration.

A/S USD - 150,000 Danish kroner (approximately 70,000 US dollars)

ApS - 125,000 Danish kroner (approximately 18,000 US dollars)

The issue of registered ordinary and preference shares with a par value stated in any currency is permitted. Bearer shares are permitted only for public companies.

The shareholders of the company may be either legal entities or individuals who are residents of any country in the world. The minimum number of shareholders is one for a private company and at least two for a public company.

The directors of the company may be either legal entities or individuals who are residents of any country in the world. The minimum number is one for an ApS and at least three for an A/S, two of whom must be residents of Denmark, and at least one of the two residents must have all the rights of a subject of the Kingdom of Denmark.

Each company is required to keep current accounting records capable of showing all transactions carried out by the company during one calendar year. Reports are filed no later than 31 March in the year following the reporting year.

Companies must submit their financial statements, as well as a list of directors and auditors, to the financial statements department of the Commercial Court; the financial statements must strictly comply with the approved form.

An auditor’s report is required only for companies in which the number of full-time employees is at least 15; turnover for the financial year is at least EUR 3,625,000; the total balance sheet is at least EUR 18,715,000.

Names and addresses of directors and shareholders, registered address, amount of share capital.

Since the source of income of a holding company is dividends from managing shares in other companies and entities, the main criterion for assessing the tax system is the conditions excluding the collection of withholding tax on dividends.

As an EU member, Denmark regulates its tax legislation in accordance with the provisions of the “EU’s Parent-Subsidiary directive”, which provides that, provided a Danish holding company controls at least 25% of the shares in a subsidiary located in the EU for a minimum period of 12 months, any dividends transferred by the EU subsidiary to the Danish holding company are exempt from taxation.

In cases where this provision cannot be applied, it is possible to use double taxation agreements signed by Denmark with 78 countries. Most jurisdictions do not levy tax on dividends or income arising outside the jurisdiction, which means that income received by a Danish holding company may be exempt from taxation.

The corporate income tax rate in Denmark = 32%; however, dividends received by a Danish holding company from its foreign subsidiary are exempt from corporate income tax in Denmark if such company meets the following criteria:

25% shareholding: the Danish holding company must hold at least 25% of the shares in the foreign subsidiary

12-month period: the 25% shareholding must be held by the holding company continuously for 12 months; subsidiary status: the foreign subsidiary must not be a “financial company”. There are two criteria for determining financial company status:

   1. 33.3% or more of its assets are “financial assets”, or if at least 33.3% of these assets consist of income from “financial activities”. Financial assets include bank interest, dividends, licence payments and royalties, real estate income, premiums or payments under a lease agreement and any profit from the sale of financial assets that generate these types of income. An insurance company or a bank is always a financial company.

   2. low level of taxation: lower in relation to the level of taxation in Denmark. This means an overall rate level of less than 25%.

Among European jurisdictions “favourable to holdings”, Denmark stands out for the most favourable regime in relation to most offshore jurisdictions. Dividends received by a Danish holding company from an offshore subsidiary are not subject to income tax regardless of whether tax was actually paid in the subsidiary’s jurisdiction (until 1999, whether the subsidiary belonged to a classic offshore jurisdiction was relevant when determining the income tax rate).

Capital gains tax resulting from the sale of a subsidiary shareholding (Capital Gains Tax) - the capital gains tax rate in Denmark ranges from 39% to 59%. In cases where the Danish holding company is exempt from this tax, the subsidiary or dependent enterprise whose shares were sold must meet the following criteria:

25% shareholding: the Danish holding company must hold at least 25% of the shares in the foreign subsidiary

3-year period: the sold shareholding must have been owned by the holding company for at least three years from the date of acquisition

subsidiary status: the foreign subsidiary must not be a “financial company”.

Withholding taxes on outgoing dividends - the standard tax rate on transferred dividends in Denmark is 25%. This rate may be reduced to zero where double taxation agreements or the “EU’s Parent-Subsidiary directive” apply. Where dividends are transferred to a Danish holding company as an intermediary in a transaction from the managing company to the subsidiary, the tax is also not levied if the managing company is a non-resident of Denmark and has held at least 25% of the shares during the last 12 months.

The law does not restrict the company in its choice of banks and the countries where they are located, or the total number of accounts required for its own commercial needs. The law provides confidentiality of information about the company’s banking transactions.

Australia, Austria, Argentina, Bangladesh, Belgium, Brazil, Bulgaria, United Kingdom, Hungary, Vietnam, Germany, Egypt, Greece, Greenland, Netherlands, Israel, India, Indonesia, Iran, Ireland, Iceland, Spain, Italy, Jordan, Zambia, Kenya, China, Korea, Canada, Cyprus, Kuwait, Lithuania, Latvia, Lebanon, Luxembourg, Macedonia, Malaysia, Malta, Morocco, Mexico, New Zealand, Norway, Pakistan, Poland, Europe, Serbia / Montenegro, Singapore, Slovakia, Slovenia, USA, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, Philippines, Finland, France, Faroe Islands, Croatia, Czech Republic, Switzerland, Sri Lanka, Sweden, Estonia, South Africa, Jamaica, Japan