Denmark is one of the countries with the safest banking systems in the world and the banking fees have a tendency to be quite low. After opening a company in this country, an entrepreneur also has to open a bank account in Denmark.
Since the financial services are important to any organization, for a new company, choosing the right bank is an important issue.
When you open a Danish company, choosing the right bank is of outmost importance. Therefore, a certain knowledge of the banking environment in Denmark is crucial for doing business in this country.
Denmark has one of the safest banking systems in Europe and local banks apply some of the lowest costs associated to opening bank account, administration, withdrawal fees. These low fees are available for those opening personal or corporate bank accounts in Denmark. Since we mentioned these types of bank accounts, it should be noted that individuals can also open savings or deposit bank accounts, while Danish companies can set up merchant accounts in this country.
The merchant account is important to companies that offer e-commerce services because it allows them to accept credit and debit card payments. This is an account that can be arranged for later after the steps for company formation in Denmark have been handled and the share capital is deposited in the regular corporate bank account. The merchant account will be established with the help of a business partner who will facilitate the communications in the electronic payment transactions. Investors should keep in mind that additional fees will apply, however, the benefits of accepting electronic payments will outweigh the costs.
If you want to open a bank account in Denmark, our company formation agents are ready to provide you with ongoing assistance. In some cases, it is possible to open the company bank account through a company representative, an individual who is empowered through a power of attorney to handle this step. This can be useful when company funders cannot be present in Denmark during the entire incorporation process. If this is the case, one of our agents can provide the needed assistance.
Types of banks in Denmark
The banking sector in Denmark is heavily focused on only several major market players. The two largest banks in the country own a combined market share of approximately 70% or even more.
Foreign banks in Denmark target mainly larger corporations and multinationals, even though in the last years some of them have changed this strategy and now also offer personal loans. Our company registration executives in Denmark can offer more information on this subject and can help you open a bank account in Denmark.
According to the financial supervisory body in Denmark, which regulates the financial markets in this country, the banks in Denmark are categorized as follows:
• Group 1 banks: with a working capital of at least DKK 65 billion;
• Group 2 banks: with a working capital of minimum DKK 12 billion;
• Group 3 banks: with a working capital of at least DKK 500 million;
• Group 4 banks: with a working capital of maximum DKK 500 million. Our Danish company formation professionals can provide more information on this type of banks;
• Group 5 banks: branches of foreign banks in the country;
• Group 6: these are banks based on the Faroe Islands.
Documents needed to open a bank account in Denmark
Opening a bank account in Denmark is quite a straightforward procedure which generally involves no costs. First of all, one must obtain a residence permit and to create a NemID (a digital signature) which will allow the user to submit various documents online with the authorities. The NemID is useful when opening a company in Denmark, as well as a bank account.
For corporate bank accounts, the company representatives will be asked to provide relevant documents on the company, such as the Articles of Association as well as the identification documents of the company’s director or administrator. The minimum share capital is deposited after the account is formed, the same day. As per the rules set forth by the Ministry of Foreign Affairs, non-residents are entitled to the same rights to open a business and will need to observe the same costs. After a foreign investor has opened the bank account, the minimum share capital he will have to deposit for a private limited liability company will be of 40,000 DKK or approximately 5,363 EUR. One of our agents can provide you with more details about the capital if you wish to open a company in Denmark.
For individuals, the documents necessary to open a standard bank account in Denmark are the following:
• A photo ID, like a valid passport;
• A CPR (the ten digit unique number of identification which is issued for all Danish residents) number;
• Proof of address in the country;
• An employment contract, if the person in question is working in Denmark.
The health insurance card can also be requested by some banks, however, this is not mandatory in all cases (in most situations, the CPR number will suffice when the applicant has not received the health insurance card).
Cross-border employees who open a bank account with a Danish bank (for the purpose of receiving their salary from the Danish employer) can be asked to present proof of address irrespective if it is in the country or not. The requirements for documentation can also differ from one bank to another.
Having an employment contract is an important condition for many banks. This means that the steps related to banking can be secured once the individual has ensured a job position in the country or he/she receives income from a Dutch-source in another form. An alternative for those who do not have a job is to provide the acceptance letter from the university or educational institution (applicable to those who move to Denmark for study purposes).
Foreign employees in Denmark can also choose to have their salary transferred to a bank abroad. The details of this transaction are established upon opening the bank account and, in some cases, individuals may wish to choose to work with the same bank branch as the one in their country of residence (if applicable). Once the account is created, most transactions are handled online and this is an important advantage. In many cases, the account holder will sign an online banking agreement when he opens the account.
Most Danish banks will provide bank account information in English upon request. Foreign applicants need to remember to discuss this with their bank advisor once they start the process and assistance will be provided, otherwise the information is automatically offered in Danish. What’s more, not all banks offer online services in English, this is why it is important to discuss this aspect when choosing the bank. Having the option to change the language in the designated app or website page is an advantage for expats until they learn Dutch.
We invite you to watch a video on the main steps to open a bank account in Denmark:
The NemKonto account in Denmark
Having a designated bank account, the NemKonto, is also mandatory. This is also a regular bank account that is used for a specific purpose, that of receiving payments from the Danish public authorities, such as pensions or family allowances. Some companies will also need this account in order to receive an income or tax rebate.
When they open a bank account with a Danish bank, individuals simply have to inform the bank that the account they open will be assigned as the NemKonto. Individuals who, for some reasons, cannot open a bank account in Denmark may be able to assign a foreign account (in their country of origin) to be used as their NemKonto account.
Assigning a foreign bank account as the NemKonto is summarized below:
With NemID: this is the easiest way to assign the designated account and it can be accomplished by using the self-service available upon online login; we remind those interested that they do not need to be Danish citizens in order to obtain the NemID but they do need to have a CPR number and be able to properly identify themselves (valid identification documents are to be provided).
Without NemID: when the applicant has no access to the self-service or does not have a NemID, he can assign a foreign bank account by submitting a set of documents to the Danish authorities; these will include the NemKonto registration form for citizens which is to be notarized (by a notary) or signed by two witnesses; moreover, the applicant will provide copies of his/her identification papers; the documents are sent by post in Aalbord, to the NemKonto Support.
The process for assigning a foreign bank account for NemKonto purposes is different for companies in the sense that more documents are required. Applicants still need to submit the NemKonto form for companies (notarized or signed by two witnesses and the signees must have the right to act on behalf of the company). In addition to this document, the company’s articles of association are provided in a signed copy and official documents from the registration authority in the country where the company operates that proves the legal entity is formally registered (this document cannot be more than one month old). Copies of the signee’s identification papers are also provided. For companies, it is also possible to have a third party assigned for this NemKonto registration. Our team of agents who specialize in Danish company formation can provide this assistance upon request based on a mandatory power of attorney signed by the company officials. All documents are sent by post in Aalborg. When the process is complete, the applicant receives an activation letter after the NemKonto is assigned to the company. This is sent by post to the company’s registered address, as indicated. The activation cannot be sent in digitized form due to security concerns.
The Danish Agency for Digitization is in charge of NemKonto. Our agents can provide more information once the company registration in Denmark is complete.
Becoming the customer of a Danish bank is straightforward both for companies and for individuals, however, it is one step that needs to be taken into consideration by all those who wish to relocate to the country.
Choosing a Danish bank
There are many foreign bank branches in Denmark and foreign nationals who relocate here may choose to work with a bank with which they have had previous experience. Many banks, both domestic and international ones, offer a variety of services that also include comprehensive online services and mobile banking solutions.
Some of the criteria that one may take into consideration when opening a bank account in Denmark include the following:
Minimum deposit: some banks will ask their clients for a minimum deposit; it is worth checking if your chosen bank imposes such costs;
Fees: the overall bank fees can be important for customers; these can include those for ATM withdrawals, intra-bank transfers, etc.; other policies and fees such as for international money transfers, should also be considered;
General services: these can include the issuance of a credit or debit card, loans, internet and mobile banking; most banks offer many services, however, it is useful to check the ones you will need most before opening the bank account;
ATM: customers may also be interested in the range of ATMs a specific bank has in the country.
Below, our team of Danish company formation agents lists some of the most important banks in the country:
- Danske Bank: one of the largest banks where customers can open a variety of accounts and have access to other services such as mortgage or personal loans;
- Nykredit: its main activities are banking and mortgage lending, with 777 billion DKK assets under administration in March 2020;
- Jyske Bank: offering basic accounts as well as separate salary and budget accounts, savings solutions as well as a range of other services for individuals and companies;
- Sydbank: private banking and investor services, loans and pensions as well as other services.
Banks can establish their own policies for selecting their clients, therefore it is possible for some financial institutions to interview their potential customers and ask questions about income, foreign transactions and others. In some cases, foreign nationals who open a bank account can be charged extra.
Before you decide on a bank with which you will work with, you can request more information about specific services as well as schedule a meeting with an advisor. Not all banks have English versions of their websites, however, Danes are fluent English speakers and calling the bank for more information or scheduling a meeting can be helpful. Alternatively, foreign clients can reach out to our agents for detailed information as well as assistance.
If you need to know more about the banking system in Denmark, or require assistance to open a company in this country, we invite you to get in touch with our Danish company formation representatives. They will help you open a bank account in Denmark and will assist you in all aspects related to investing in Denmark. In case you would like to open a bank account in another country, for example in Panama, we can put you in contact with our partners.
Call us now at +45 2238 8800 to set up a meeting in Copenhagen. As a Bridgewest client, you will beneficiate from the joint expertise of local experts and international consultants for opening a company in Denmark.
- prompt response to your inquiry (maxim 24 hours);
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