Holding Company in Denmark

Updated on Wednesday 15th March 2017

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holding-company-in-denmark.jpgA holding company in Denmark is a common company that owns shares in another company – called a subsidiary – from this country or from abroad. 
 
This type of business entity is chosen by numerous entrepreneurs because it offers certain profitable tax rates and decisional rights in the actions of the subsidiary. Our company formation advisors in Denmark can offer assistance in opening this type of company in the country.
 

Tax exemptions for a holding company in Denmark

 
Together with the DTAs (double tax agreements) signed by Denmark and the Parent-Subsidiary ordinance which grant important deductions or even exemptions from the withholding tax on dividends in the country, as well as royalties and interests, Denmark has certain agreements on tax exchange information in place. 
 
These agreements enable the access of financial data connected to companies for the foreign tax authorities. These measures were put in place to prevent tax frauds.
 
For the same purpose, Denmark has adopted the controlled foreign corporation regime (CFC taxation). Accordingly, the profits from all subsidiaries are added to the parent company in Denmark.
 
However, only when the later controls in excess of 50% of the voting rights in subsidiary and in excess of 10% of the assets of it, as well as when 50% of the taxable income is made up of financial gains. Our Danish company formation experts can offer more details on these matters.
 

Withholding taxation on received dividends in Denmark

 
Denmark follows the Parent-Subsidiary directive of the European Union which ensures a withholding tax exemption for dividends sent by a subsidiary in the European Union to a holding company in Denmark.
 
Among the advantages of holding companies in Denmark, our Danish company formation professionals mention that, in order to qualify for this exemption, the company in Denmark has to control minimum 25% of the shares of a subsidiary in the European Union within a 12 month time frame.
 
In case a subsidiary does not fall under the above-mentioned directive, it could qualify for the deductions offered by more than 80 DTAs that Denmark has signed. The majority of these DTAs offer a withholding tax rate of only 5%.
 
If you wish to open a Danish holding company, we invite you to get in touch with our company registration representatives in Denmark.

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