Doing business in Denmark can offer numerous advantages to entrepreneurs and companies. Denmark is a highly developed, wealthy country with a well–educated population, low levels of corruption, and a business–friendly environment. Furthermore, Denmark has a strong economy and a highly competitive labor market, allowing businesses to access world–class talent.
This means that doing in business has many advantages and few disadvantages.
In this article, we look into some advantages and disadvantages of doing business in Denmark and how you can get through some pitfalls when getting started. Furthermore I will be guiding you on how to start a business in Denmark and how Startup Consulting can help you.
Advantages and disadvantages of doing Business in Denmark
There are many advantages and few disadvantages of doing business in Denmark. This creates an attractive market for those who live in Denmark and even for those who do not live in the country.
In this article we will have a little more focus on those who do not live in Denmark.
There are a high number of advantages of doing business in Denmark and we can only go through a few of them. So here are a few.
One of the main advantages of doing business in Denmark is its favorable tax climate. The corporate tax rate is only 22 percent which is among the lowest in Europe. Additionally, Denmark has a variety of tax incentives and deductions for businesses, making it an attractive option for entrepreneurs.
Another advantage of doing business in Denmark is its excellent infrastructure. Denmark has an extensive network of roads, railways, and ports, making it easy to transport goods and services across the country.
Supportive business culture
The Danish government also provides support for entrepreneurs who want to set up businesses in Denmark, such as offering free business advice and helping to find investors.
Highly educated inhabitants
Denmark has the 3rd best education Higher Education System in the World, a study shows. This has created a population of highly educated individuals with a wide range of special abilities. This is widely viewed as one of the main reasons why a such a small country could have such a high impact on worldwide business.
The high education leven en Denmark creates an attractive economy with high-spending citizens.
Before taxes the average Dane earns roughly 550,000 DKK yearly (about 73,000 Euro or 78,000 USD). This places the Danes as one of the highest earning workers in the world. This further creates a high-spending community.
The Danish consumer spending for 2021 was $181.62 billion or 170.53 Euro.
The disadvantages are few but can be hard to overcome at times.
The bank industry situation
Dealing with Danish banks is not easy. In fact the Danish banks are some of the banks that are most difficult to deal with in the World.
Getting a Danish bank to open a business bank accountant for your business is not an easy job. It might even be nearly impossible, since the Danish banks do not like to open a business bank account for foreign residents living outside of Denmark.
This makes it hard to do business in Denmark since the businesses in Denmark mostly are only allowed to make domestic transfers. This means that you have to get Danish bank account numbers and not just a business bank account with IBAN numbers, which the Danish banks do not like to make transfers to.
Of course, the low corporate tax was one of the advantages. But doing taxes anywhere is not an easy task. This is also the case here in Denmark where we also have something called moms, which is a Value Added Tax to almost every sales item we have in Denmark.
And you have to deal with ‘moms’ within your bookkeeping and is separate from your normal corporate taxes. Dealing with it is no easy task and you will be needing help with this.
The business culture
The Danes love to be prepared for anything. This can mean that you need to agree and schedule a meeting in weeks in advance with potential suppliers and business partners.
The Danes are also very sceptical about people and businesses they do not know. It can be difficult to even get them to agree to make an appointment for a meeting. But they do love their own networks and are most comfortable to work withing their own individual business networks and rarely go outside it to make new business relations. Unless they are introduced to someone new from someone from their own network.
How to start your business in Denmark
If you are going to be able to be doing business in Denmark, it not completely necessary to open a Danish company. You can of course use your own from your own country. For instance if you only want to sell your products in the Danish market by exporting them to Denmark.
However, it is advisable that you do it anyways especially because of the bank situation in Denmark as mentioned under disadvantages and if you want to sell to the Danish market from inside the Danish boarders.
And yes, you can open your own company even if you do not live in Denmark and even without being a Danish citizen. Doing business in Denmark is easier with your own Danish registered company.
1. Register your company
As someone who lives abroad, do not have a Danish social security number (CPR no.) and want to be doing business in Denmark, you have the opportunity to open either a Limited Liability Company (called ApS short for anpartsselskab in Denmark) or a Limited Company (called A/S which is short for aktieselskab in Denmark).
Without a CPR no. you cannot open a sole proprietorship in Denmark.
The Danish company that you are registering will have to have a Danish address, but it is not a requirement that you should have a Danish address personally.
When registering the company, you will have to send a picture of your passport, prove your personal address and inform the system of your national social security number.
You can register your company at virk.dk.
2. Apply for a business license or permit
Some industries require that you have specific licenses or permit to able to operate. This can slow down your doing business in Denmark a little bit in some cases.
Some licenses or permit can be:
- License to sell alcohol
- Permit for street vendors
- Café and restaurant license for outdoor seating
- Waste management license
- Specialty licenses for
- Advertising agencies
3. Send business bank account applications
As mentioned under Disadvantages, it can be difficult, if not impossible, to get a Danish bank to open a business bank account for your company since you live abroad.
But to be able to receive payments from the Danish market and hence to be able to be doing business in Denmark, you will need Danish business bank account numbers.
Doing business in Denmark is very hard without the Danish business bank account numbers. So it is of vital importance that you should acquire those.
You have two general options: You can either apply at Danish banks or you can get a non-Danish business bank account that has Danish bank account numbers.
You can get help with the latter at Startup Consulting. More about that later in the article.
4. Business partner and suppliers
You can get started with some parts of this step even before you get your business bank account.
When doing business in Denmark you need to have business partners and eventually suppliers. It is important that you have those in place early in the process of doing business in Denmark, otherwise it can be difficult to get started.
Here are some thing you may need to acquire before really getting started doing business in Denmark:
- Insurance: There are some legally required insurances that you need to acquire before you are even able to be doing business in Denmark. And some optional ones, too.
- Payment terminals and/or payment gateways and eventually other payment systems like MobilePay which is extremely popular in Denmark
- Suppliers: You may need one or several suppliers depending on your activities in Denmark
- Business partners: You may need different business partner when doing business in Denmark
Make doing business in Denmark easier with our help
There are a number of services we can provide you to make your first steps in Denmark easier for you. Doing business in Denmark is very attractive and can certainly be filled with some startup challenges. With our help, you can and will make it much easier for your self.
Here is how we can and want to help you with:
Registering your company
We know exactly what the Danish Business Authority wants from you and how to create the needed documents.
This means for you an easier process with the Authority.
Business bank account
When doing business in Denmark, you will be needing a business bank account.
We can help you with your applications to Danish banks. This is a lengthy process which can take months, including writing a business plan, creating a budget, collecting documents, etc.
But we can also help you with a foreign bank account with Danish bank account numbers. This means that you will be able to receive traditional Danish bank wires from other Danish banks. This is a much easier and much faster process than applications to Danish banks. And most important of all: You are guaranteed to get the business bank account.
Administration and networking
We can help you find the right businesses and persons that can help your business get started doing business in Denmark.
We can help you acquiring insurance, find a trustworthy accountant, a lawyer, suppliers and anything else that you need to start your business.
Finding your first clients
Do not know where to find your first clients? We can help you with that if you need it.
Using our vast network which we got from working with several hundred Danish companies, we can help you find your first clients that can kick start your Danish company.
Contact us now
Get started with your process now by contacting us.