The branch is a separate office of the company, based in a different jurisdiction where the foreign corporation expands its business activities. It can carry out any of the activities the foreign company is allowed to perform, however, it cannot expand beyond these. In essence, the Danish branch is an extension of the parent company that has a set of advantages and is a preferred means of business expansion, especially for banks and other financial institutions.
Opening a branch in Denmark is an easy process if a few requirements are met such as the legal form of the parent company (it has to be a limited company, a partnership or a form of business accepted by the Consolidated Act on Certain Commercial Undertakings) and the location of the foreign company (must be in the EU, EEA and if it’s a non member country, it has to bring evidence that Denmark’s companies are free to open branches there). At least one manager must be a resident in Denmark or in an EU or EEA country.
The name must clearly state the status of the branch and must contain the name of the foreign company’s country (not mandatory for the countries included in the Consolidated Act on Certain Commercial Undertakings)
Our company formation agents in Denmark invite you to watch the following video on the particularities of a branch:
Before starting any activities, the branch must open a bank account where the initial capital is submitted and register at the “Danish Commerce and Companies Agency”. The branch will have a name that will include its status (filial or branch office).
The following documents are needed in order to register the branch with the Danish Business Authority:
• Copies of the Articles of Association: the head office must provide copies of the parent company’s Articles of Association; this may not be needed when the foreign entity is located in EU/EEA;
• Confirmation from the local company register: a document confirming the fact that the foreign company is duly registered with the local company’s register is needed for incorporating a branch.
• Power of attorney: this document is required for the individual who will be appointed as the branch representative; it will state the identification information as well as the powers;
• Reciprocity statement: this is only required when the parent company is based in certain jurisdictions; it is a declaration from the foreign company stating that it may open branches.
All the above information must be in Danish or accompanied by a Danish translation and our team of agents who specialize in company formation in Denmark can help you with detailed information about the submission of these documents.
After receiving a unique registration number, the Danish branch must also register for social security purposes.
Even though is not considered a legal entity, a branch is advantageous especially because it doesn’t have to prepare audited financial statements. However, a certified copy of the audited financial statements of the parent company must be deposit at the Danish Commerce and Companies Agency. Also, the bookkeeping is necessary as the branch must pay VAT like any ordinary local company.
A special consideration for foreign companies that expand their business to Denmark using a branch office is the liability level: the parent company abroad is fully liable for the debts and obligations of its Danish branch.
Please feel free to contact our specialists in company formation for more details regarding Danish branches.