A Danish ApS is anAnpartsselskab is the Danish equivalent of the limited liability company. This type of structure is popular among investors who open small or medium businesses and also among foreign investors in Denmark. A mandatory requirement is to register it with the Danish Commerce and Companies Agency.
The fact that it is a flexible legal business structure that can be easily incorporated makes it one of the most commonly used business forms. It can be used to carry our almost any type of activity and can also be used as a holding company or as a special purpose vehicle. An example of a type of activity in which an ApS cannot be used includes the banking industry.
If you want to invest in Denmark
and need specialized aid in order to open a company here as a private limited company, you can reach out to our agents for complete assistance.
What are the company formation steps for the Aps?
The first step to accomplish for company formation in Denmark is to choose the type of company. As the Aps is already chosen, investors can proceed to the actual formation of the new legal entity. The steps presented below include a summary of the needed actions:
- draft the company documents: the Articles of Association and the Memorandum are drafted as the first step for opening a private limited company; they can also be drafted in English and there is no need to obtain a special certificate from the notary to attest the original signatures.
- open a bank account in Denmark
: the next step is to open a corporate bank account with a Danish bank and deposit the needed minimum share capital for this type of company (see the next question for more details).
- registration: once the two other steps are complete, the founders can register the new company with the Danish Business Authority; the ApS will the receive a unique company register number or CVR; a registration fee of approximately 100 euros applies and other legal fees may also be needed.
register for tax purposes: once the company is registered with the Business Authority, it can also be registered for VAT
and tax purposes with the Danish Tax Authority
; you can find the details regarding taxation further down in this article.
Once these steps are complete, the company can start its business activities and also handle the matter of hiring employees in Denmark (and making the necessary registrations for social security contributions).
The articles of association for the Aps include the following information:
the name of the company, it’s objective and its type;
the names of the shareholders;
details about the share capital, the number of shares, their value and other information about the limits for subscribing the shares; the types of shares, more specifically the rights that derive from owning shares in the company;
the chosen financial year;
details about the company’s governing bodies as well as information about the general meetings.
Our team can give you more details on how to draft the articles of association and the company’s memorandum and can assist you during this process when opening an ApS company in Denmark.
A characteristic of the limited liability company (both the private and the public one) is that the shareholders are not personally liable for the debts and obligations of the company. Their liability extends only to the value of the contributions they have brought to the company. They also have a right to a share of the company’s profits, in proportion to the interest they own (however, the company’s articles of association can provide otherwise or set certain conditions for this).
Investors who open a company in Copenhagen or another city will also find that they will need special permits and licenses if they wish to engage in selected business activities. These can include services related to street vending, opening cafes and restaurants, entertainment activities like filming and street performance or other types of activities like waste management and commercial driving.
One of our agents who specialize in company formation in Denmark can help you apply for these permits and licenses. In most cases, the application will be free, however, it is useful to talk to one of our agents to find out where you can obtain them and what specific type of permit you need, according to business activity.
What is the minimum share capital for an ApS in Denmark?
In order to set up a limited liability company in Denmark
or an ApS, it is necessary to provide at least 40,000 DKK. The share capital of the new legal entity is submitted in the local currency and investors need to pay it in full prior to company registration in Denmark
How many shareholders are necessary for a Danish ApS?
The condition for setting up an ApS in Denmark is to have at least one founder. There can also be more shareholders when a Danish ApS is established and they can be either individuals or legal entities. At least one founder must be a resident of Denmark or of any other European country, but some exceptions may apply if the Ministry of Business and Industry considers so. The company founders must have full legal capacity and cannot be under guardianship (when they are natural persons). Moreover, they cannot be subject to any ongoing or pending bankruptcy proceedings and they must not have an application for the suspension of payments filed against them.
In addition to the costs related to the minimum capital, investors in Denmark will also need to observe the registration fee as well as any additional fees. Some of these are the following:
670 DKK – the registration fee for the Aps, as well as for other business forms;
180 DKK – the tariff for changing the particulars of a registered ApS;
340 DKK – the fee for making changes related to reporting errors;
Other services, such as changing the company address or the financial year are not subject to any fees. Please keep in mind that these can be subject to change and it is always advisable to discuss any business incorporation related matters with one of our company formation agents in Denmark.
It is not mandatory to have a supervisory board in a limited liability company or an ApS in Denmark. The supervisory board or the executive board is optional and no special requirements are available for its members. A mandatory requirement is to have a registered or a state-authorized accountant. He will submit the annual financial statements regarding the company and will deal with the appropriate bookkeeping of the documents for a Danish ApS.
How is an Aps taxed?
The private limited liability company is subject to the standard cooperate income tax rate of 22%. Companies operating in selected business fields, those in the gas and oil industry, are subject to a slightly higher tax rate at 25%.
Other taxes for companies include stamp duty, social security for the employer (approximately 12,000 DKK – 15,000 DKK per year per employee in most cases), and withholding taxes on dividends, although in some cases, exemptions may apply and companies can reclaim part of the total withholding tax. We recommend reaching out to our Danish company formation agents for complete details on the taxation on dividends. We can also provide information on the double tax treaties signed by Denmark.
The value-added tax has a standard rate of 25% in Denmark. Private limited liability companies that offer education, insurance business, financial services and services for the transport of individuals are exempt from this tax. A registration threshold of 50,000 DKK applies for VAT purposes. The VAT return and the VAT payment is made once a month when the annual turnover of the company exceeds 50 million DKK; when it is between 5 and 50 million DKK the payment and return are due on a quarterly basis and when the turnover is below 5 million DKK, it is required twice a year.
What are the accounting and reporting requirements for an Aps?
The ApS is required to submit the annual financial statements and auditing in Denmark is only required for these companies if a certain financial threshold is exceeded.
The annual tax return is filed electronically in the six months following the end of the fiscal year (which, in general, is the same as the calendar year although taxpayers may opt for different dates). Advance payments are generally made in March and November and voluntary payments are also possible from November to February the following tax year. Taxpayers who fail to make the necessary payments on time or make incomplete payments and late filing are subject to penalties.
Are there other requirements for an ApS in Denmark?
As far as the name of the company is concerned, it is mandatory to contain the word anpartsselskab or the abbreviation ApS for a limited liability company in Denmark
. No trademarks
, names of real property or surnames are allowed as the name of the Danish ApS
and it is not permitted to have a similar name with another company.
An ApS company in Denmark is required to observe the requirements for social security contributions (as listed above) as well as workers compensation and observing the various workplace safety requirements. Some of the main conditions include the following:
when the company has to pay social security contributions, it will also pay labor market additional pension for employees who work at least 9 hours a week (and are also subject to other conditions concerning their age);
in addition to the pension, the company will also pay a financial support scheme for trainees, a contribution to maternity benefits and one to the labor market fund for occupational diseases the company will also pay sickness benefits related to the illness of the employees, as applicable.
Companies register as employers in Denmark in order to be able to make the mandatory social security and workers compensation contributions. They need to do so within 8 days after the first time they pay wages.
Invest in Denmark
Denmark is an ideal location to base the headquarters for a company that will offer services on the Nordic market but also in the rest of Europe. The country has good infrastructure and great connectivity and, in addition to this, is has a supportive business environment.
Some of the main business areas of interest include the following:
tech and cleantech;
food manufacturing and sustainable food technologies;
the maritime industry as well as transport and logistics services;
research and development – a business field that can receive support for innovation.
Investors who wish to open a company in any of these industries can choose to incorporate an ApS company because of the easy set up procedure and the fact that they will be separate from their business in terms of liability.
Start-ups in Denmark
As a country that promotes investments and innovation, Denmark also offers a special programme designed for start-ups, supported by the Danish government. It is designed for new businesses, those in the early stages, which are founded by no more than two individuals. Foreign nationals who are accepted for the programme will receive a permanent residence and work permit in order to be able to manage their business for 2 years, with an additional extension for 3 years. Some of the main conditions that apply concern the business’s potential for growth. Innovative, scalable solutions are prioritized, meaning that investors who wish to open restaurants or retail shops, along with other types of businesses, will not be eligible for this programme.
The start-up scheme is available to non-EU and non-EEA countries, however, EU and EEA nationals can also find attractive ways to join the business environment in the country. If you are a foreign national and wish to benefit from the applicable schemes, our team can give you more details on how these can apply if you have decided to open an ApS company in the country.
For more details on the characteristics and registration procedures for all types of businesses in Denmark, our company formation agents remain at your disposal. Please contact us for personalized consultancy.