Denmark APS - Company Formation

Despite the fact that Denmark is not specified as the offshore zone, foreign enterprises that register in the country will be granted a variety of advantages and opportunities.

Procedure of Anpartsselskab Company Incorporation in Denmark

Despite the fact that Denmark is not specified as the offshore zone, foreign enterprises that register in the country will be granted a variety of advantages and opportunities.

Main benefits of commercial activity registration in the territory of Denmark are the following:

  • The policy of the state has good will, the country is not a “tax haven”, it is not on the list of regions not recommended to collaborate.
  • Warranty of complete confidentiality and anonymity of personal data of founders and owners.
  • Complete package of documents to be ready for just one business day.
  • Possibility of document delivery to any country of the world.
  • Simplified and encouraging tax policy of the government.

Companies that register in Denmark will not be exempt from the tax burden since the country is not a typical offshore. According to the applicable legislation the tax should be paid in total for the profit received in all countries of the world. However, preferential rates introduced, the possibility of tax rate reduction and the loyal system of deduction make Denmark as an attractive place for foreign businessmen to settle.

Flexible Legislation of the Country

The legal business form Anpartsselskab – Closed-type Joint-Stock Company (ApS) that is suitable for small business and middle-level companies.
In its structure, this type of business is identical to German Gesellschaft mit beschränkter Haftung, the Limited liability Company and the Dutch Besloten Vennootschap met beperkte aansprakelijkheid — Privаte Limited Company (BV − LLC).

The management of the company is carried out by Board of Directors, at the request of founders a Supervisory Board may be elected that will consist of three persons. All natural persons involved in the company’s management should be listed in the company’s constituent documents.

Thanks to the loyal policy and flexible legislation of the country, there is no requirement to specify the purpose of activity of the commercial firm in the Memorandum of Association. This is binding in countries with tougher requirements (for example, in Britain).
Denmark has signed double taxation agreements with most countries, including Russia. The Closed-Type Joint-Stock Company (ApS) promotes business-class attraction from Russia and many other countries.

Due to significant advantages, ApS is considered to be one of the best legal forms of business within the Scandinavian Region. The created environment allows successful functioning and holding development.

Each year, the company should form and submit two forms of strict reporting to relevant authorities: Financial statement and Annual Return. The periodicity of documents submission is once every twelve months.

In order to avoid double taxation and for the purpose of convenient management of the holding company, one is recommended to choose a resident of the European Union (including Denmark) as a shareholder (main or sole) with whom the relevant agreement is signed.

  • OJSC (Open-Type Joint Stock Companies). To execute the procedure of registration, the authorized stock capital should be created in the amount of Sixty Thousand Euro. The said amount should be paid by owners not later than one month since the date of company incorporation. There is a restriction of the number of registered owners of shares, at least two shareholders take part in registration of the company. The management of the company should be held by the Board of Directors (the required number of participants is at least three members, of which the prevailing majority is residents of the European Union).
  • Closed Limited Liability companies – LLC. The amount of the authorized stock capital is Eighteen Thousand Euro. Fifty percent of the said amount is paid by founders immediately at registration. The specified provisions apply only if a company is incorporated with the minimum number of founders − two shareholders. If it is formed with participation of one founder, the name will be amended to be “One person limited liability company”. The amount of the authorized stock capital will be Four and a Half Thousand Euro. The resident of the European Union should be elected the director of the company. A non-resident may manage the company under the power of attorney certified in line with the current legislation.
  • The legal form of business activity – Partnerships (limited and unlimited liability partnerships).
  • The form of business created on the basis of capital contribution by foreign and domestic business partners. All participants have obligations binding to be fulfilled.
  • Individual entrepreneurs who are solely engaged in activities are responsible for all obligations of their business.
  • Shipping companies.
  • Divisions of foreign companies, for registration of which the formal permit is required from the prefect of territorial unit where the business opening is planned.
  • Offshore companies and corporations.

Legal Business Form of Anpartsselskab 

The corporate income tax rate is twenty-five percent. If the company receives the status of holding, it will be granted a variety of benefits. The amount of tax on dividends from the foreign subsidiary company is equal to zero. The basic requirement is that the company of Denmark is obliged to own a package of shares (at least fifteen percent) for a period of twelve months or longer. Besdies, a subsidiary should not be classified as a “low-tax” company.

Under other conditions, CIT (corporate income tax derived from the subsidiary) is equal to zero if the holding owns a subsidiary for three years long. In such a case, a subsidiary should not belong to a company with the low tax burden.
For companies there is a limitation in terms of debt capitalization. The company’s total loans should not exceed its capital four-fold.
If the total share of loans exceeds the size of the capital five times or more, the decision is made on the impractical payment of interest, which in turn does not contribute to reducing the tax burden.

If the main purpose of company is to get benefits to avoid double taxation (by signing the international agreement) and this will be proved adequately − the holding shall be deprived of benefits based on corporate laws.

The fixed value-added tax rate is twenty-five percent. The rate on periodic form of license fee payment (royalties) is twenty five percent. Profit as dividends is levied at the source of payment at twenty eight percent. Zero royalty rate can be obtained by the enterprise in case if the company holds transactions related to fees (payment for the use of copyright). The beneficiary of the cash compensation shall be a resident of the European Union or another state (with which the double taxation agreement is signed). One tenth of all shares of the firm for a period of not less than twelve consecutive months must belong to the legal entity (beneficiary of remuneration).

Main Benefits of Company Registration in the Territory of Denmark

The main advantages of Denmark for foreign companies are as follow:

  • The country is not on black lists. Status of prestigious and stable jurisdiction.
  • Seventy countries of the world signed the double taxation agreement with Denmark (including Russia and Ukraine).
  • Absolute anonymity and protection of personal data. Our company is willing to support business processes optimization and absolute confidentiality of all participants. Personal information will only be known to the registration agent who signs the non-disclosure agreement.
  • No hard currency regulation.

Procedure of Company Registration

To register a company, the following is necessary:

  1. To register a new company or to choose one running company from the offered list.
  2. To submit complete personal information about the owner of the company for registration
  3. To make a prepayment for registration. Important! Using services of our company, you can pay the advance payment at the rate of thirty percent. Only as you receive and check the validity of the package of documents, the client pays the rest (seventy percent). Documents will be communicated as scanned copies, including the certificate of registration.
    • Direct procedure of registration of the company.
    • Original documents can be obtained from our office or through DHL Express delivery service.

Full package of documents. The registered company will receive the following package of documents:

— certificate of formation;
— operating agreement;
— statement of organizer;
— page with apostille.

List of documents for the service of “nominee director or shareholder”

If the company owner uses the nominal service, he will be provided with the following package of documents:

  1. Resolution on registration of power of attorney.
  2. Power of attorney with Apostille.
  3. Resolution on the director replacement with open date.
  4. Letter of acceptance to act as the Nominee Director.
  5. Refusal to act as the Nominee director with open date.
  6. Nominee Director’s declaration on the provision of nominee services.
  7. The trust tax return from the nominee shareholder.
  8. Transfer documents for shares, open date.

Jurisdiction of Denmark. General information. Registered companies should comply with the following main conditions:

— authorized capital in the amount of One Hundred Twenty Eight Thousand Danish kroons (amount is paid in full);
— the company consists of shareholders (both legal entities and natural persons) – including those that have one person in the staff with the director to be solely a natural person (from one person);
— the company will be assigned the legal form as anpartsselskab;
—abbreviated name – ApS will be used with words Trust/bank/insurance to get the necessary license;
— tax rates for holding operations – from zero percent.

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