The Danish Public Companies Act contains rules on founding a public company, as well as its share capital, management bodies, general meetings, auditing, management responsibilities, branches, cessation of trading, etc.
The Private Companies Act contains rules on founding a private company, as well as its share capital, management bodies, general meetings, auditing, management responsibilities, branches, cessation of trading, etc.
The Act on the Central Business Register (CVR) contains rules on the registration number that companies have if they are registered in Denmark.
Types of secondary establishment
You can choose to run a business in Denmark either by establishing a subsidiary or trading directly through a branch.
With no legal personality
Rules relating to branches of foreign companies can be found in the Public Limited Companies Act and the Private Limited Companies Act. A branch is not generally required to have equity or private capital as it is an integrated part of the foreign parent company.
You are liable as the foreign parent company for any obligations the branch manager enters into.
Only businesses from countries where Danish companies have the same opportunity to trade through a branch may open a branch in Denmark (i.e. EU or EEA countries, USA, Australia). Businesses domiciled in other countries must submit a reciprocity statement.
Subsidiaries are founded under the same conditions and rules as normal public or private companies.
Many of the requirements and procedures for opening a secondary establishment are the same as for starting up a business.
You must notify the Danish Business Authority of details of your proposed branch, if you wish to trade directly in Denmark.
A branch is founded by notifying the Danish Business Authority of this branch. Together with the notification form, you must also submit:
- official proof that the company exists legally in your home country;
- documentation showing who has authority of signature in the parent company;
- the parent company's memorandum of association;
- the parent company's statutes;
- and unlimited power of attorney for the branch manager.
The power of attorney must be signed by the persons with authority of signature at the foreign parent company.
You are required, on an on-going basis, to inform the Danish Business Authority, if you:
- Submit the parent company's annual report or exemption statement.
- Report any changes to circumstances previously notified, including changes to the statutes of the parent company. (The notification must include documentation as per the original notification).
- Notify the Danish Commerce and Companies Agency within 2 weeks if the foreign parent company becomes bankrupt or initiates composition proceedings, etc.
You can find information on the requirements for notification and the necessary documentation in the Danish Commerce and Companies Agency's guide to setting up foreign branches:
Virk.dk provides comprehensive information related to business from the public authorities.
The Services Directive: One-stop shops
The Services Directive is a European act that will make life easier for companies which offer services within the EU - in their home country or abroad. The directive established the rules that apply for entrepreneurs who want to found a company or who want to provide a temporary service within the EU/EEA (the 27 member states plus Iceland, Lichtenstein, and Norway). It requires the member states to remove all unnecessary bureaucracy, simplify formalities for companies and make public administration more effective.
So as to implement the directive, each Member State must establish «One-stop Shops», which are e-government portals that can assist companies to complete their administrative procedures online. The one-stop shops provide comprehensive information on all administrative requirements in relation to founding or expanding a service business in a specific country. For example, this includes:
- Which licences, certificates or other permits should I obtain so as to start a new business (at home or abroad)?
- What should I do when I want to offer my services abroad temporarily?
- What should I do to apply for a licence? Which is the responsible authority?
- Do I need to pay fees for the licences? What deadlines are in effect?
- Which laws and regulations exist for my sector?
- For example, what must I do to establish a restaurant or a shop? Or to work as a travel agent in another country without starting a company?
- Where can I go for personal advice and further information?
With the one-stop shops, you no longer need to go to different authorities one by one!! The one-stop shop provides you with the opportunity to find all relevant information and to send your online application to the responsible authority through a single contact point, the one-stop shop. You can carry out your administrative formalities electronically through the one-stop shop in the country that you want to do business in.
All one-stop shops are a part of the European EUGO-network. You can easily access all one-stop shops in Europe through a centralised website. The one-stop shop service is, of course, just one option. You can always approach the relevant authorities directly.