Why Set Up a Joint Stock Company in Denmark


Denmark is a Nordic and Scandinavian country located in Europe bordered by Germany, Norway, and Sweden. It is officially called the Kingdom of Denmark. Its capital is Copenhagen and the official language is Danish, however German and English are spoken by many of its citizens.

Denmark’s strategic location makes it a perfect gateway to Europe while providing easy access to the EU market. Uk and Germany are Denmark’s largest trade partners. In addition, Denmark is the 3rd in the world when it comes to trading across borders.

Denmark is ‘one of the most progressive economies in the EU, and is very welcoming to foreign direct investment. According to the 2017 Corruptions Perception Index released by Transparency International, Denmark has ranked the 2nd least corrupted countries in the world.

You will find IT and telecom infrastructure, together with wireless communications and use of internet and new media in Denmark to be among the most competitive in the world.

Opening a company in Denmark is straightforward; mainly due to the streamlined regulatory regime. Currently, there are more than 2,500 foreign companies that already operate in the capital, Copenhagen. Denmark has double-taxation treaties with more than 80 countries.

Danish company law provides a wide range of legal entities which can do business in Denmark, however, public and private limited companies are the most commonly selected corporate forms

Public Limited Company (A/S shorten for Aktieselskab)

A Denmark Private Limited Company (PLC) has several benefits including:

• Limited Liability: Shareholders are not personally liable for the obligations of the company, but are liable only to the extent of their contributions.

• Few Restricted Business Activities: There are only seven types of business activities which a PLC cannot engage in.

• One Shareholder: A minimum of one shareholder residing in any country is required

• EU Membership: Denmark is a member of the European Union (EU) opening a wider market for a PLC to do business.

This type of company also provides shares for its members, but they can be offered to the general public as opposed to the private limited company in Denmark.

In a limited liability company, the tax is paid by the company. The tax is calculated according to the
corporate tax rules. If you receive a paid salary from the company, you must pay personal income
tax well as AM-contribution in the same way as other employees, and if you receive dividends from
your ownership, you will pay dividend tax.

The company must be registered at the Danish Business Authority and there must be a minimum share capital of 500,000 DKK (app. EUR 67,250) in cash or assets to make the registration. Before registration, you must have developed a foundation document as well as a set of statutes.

As you can see, The Danish Government has created an excellent climate and motivation for innovative businesses and entrepreneurs.