Are you considering starting a business in Denmark but are not quite sure where to begin? Do you feel that the process is overwhelming and that you have to face unknown obstacles? You are not alone. Many entrepreneurs like you, who arrive in a new country, have the same questions and fears. Denmark is undoubtedly a country that offers huge opportunities for businesses, but success does not come without careful preparation and a deep understanding of the local environment.
Let’s discover together what you need to consider when opening a business here.
1. The Tax System: An Essential First Step
Denmark has a well-structured but rigorous tax system. The VAT is 25%, one of the highest in Europe, and the corporate tax rate is 22%. If you imagine that you can easily get through these tax obligations without solid preparation, you might face unpleasant surprises. Even the smallest companies can encounter financial difficulties if they do not plan their budget for these taxes in advance.
For example, let’s say you want to open a retail store. In addition to VAT, you will also have specific taxes for certain products, such as alcohol or tobacco. This is where the importance of an Accountant who understands the specifics of Danish legislation comes in. A reliable partner can guide your business in tax matters, ensuring that you do not make mistakes that will cost you later.
2. Legal Formalities and Company Registration
Establishing a business in Denmark may seem simple at first glance, but choosing the right legal form is essential for the future of your business. The process can be done online, but choosing between different types of legal entities requires careful consideration. What will you choose? A Sole Proprietorship, an ApS, or perhaps a
branch of a foreign company? Each has its own advantages and disadvantages. For example, if you are opening a tech startup, an ApS (Anpartsselskab) could be the most suitable option, considering the minimum capital requirements and greater management flexibility. However, if you plan to collaborate with multiple investors, a K/S or P/S could be the ideal solution. Choosing the legal form is not just a formality; it is a decision that can influence your future.
3. Danish Business Culture: Openness and Honesty as the Basis for Success If you are used to a more hierarchical business culture, Denmark may surprise you. Here, equality and openness are the norm, and the managerial structure is much more relaxed. Employees are encouraged to express their opinions and actively contribute to decision-making, regardless of their position. For example, business meetings in Denmark are direct and focused on the subject. Don’t expect many formalities; punctuality and efficiency are essential. If you have a meeting at 9:00 AM, make sure you are there on time, as Danes do not appreciate delays.
4. Access to Funding and Operational Costs
Another aspect to consider is access to funding. While there are many venture capital funds available, especially for tech startups or businesses in the green energy sector, the competition is fierce. You will need a well-structured business plan and a solid team to attract investors.
Operational costs can also be high, especially in major cities like Copenhagen or
Aarhus. Salaries are among the highest in Europe, and the rent for office space in central Copenhagen can be considerably high/ pricey. However, you should keep in mind that these costs are offset by the high purchasing power of consumers.
Do You Recognize Yourself in This Situation?
If you are thinking about all these aspects and feel that things are becoming overwhelming, you are not alone. Many new entrepreneurs feel the same way. The process may seem complicated, and the pressure can be high, but with the right support, everything becomes much clearer. It is essential to have a partner by your side who understands the complexity of the Danish business environment and can provide you with tailored solutions, allowing you to focus on what truly matters: growing your business.
The Conclusion? Your Success in Denmark Begins with Proper Planning Opening a business in Denmark can be an extraordinary opportunity, but your success depends on how you prepare. From taxation and legal formalities to business culture and access to funding, every step requires detailed attention. With well-planned preparation and a partner to guide you at every stage, you can turn challenges into opportunities and successfully grow your business.
At Contab Group, we are here to help you simplify things and grow your business with confidence. Let’s discuss how we can support you every step of the way.
