Denmark is consistently ranked among the best countries in the world for doing business. With its transparent regulations, highly digitalized public administration, and strong infrastructure, Denmark attracts thousands of entrepreneurs and foreign investors every year. Whether you are a startup founder, a freelancer, or a company looking to expand, Denmark offers a stable and innovative environment to build and grow your business. In this article, we’ll explore what makes Denmark an attractive destination for business, how to get started, and what key aspects you should know as an entrepreneur in this Scandinavian country.
Why Choose Denmark for Your Business?
Denmark is known for its business-friendly policies, flexible labor market, and efficient bureaucracy. The country has one of the lowest corruption levels in the world, and registering a business is a streamlined process that can often be completed online in just a few hours.
Furthermore, Denmark offers a strategic location in Northern Europe with access to EU markets, a well-educated workforce, and a strong focus on innovation and green technology. Danish society also supports work-life balance and values sustainable development, which reflects in the way many businesses operate.
For foreign entrepreneurs, Denmark provides excellent support through agencies like Invest in Denmark and Startvækst, offering guidance, legal advice, and networking opportunities.
How to Register a Business in Denmark
To legally start a business in Denmark, you must first register it with the Danish Business Authority (Erhvervsstyrelsen). The Central Business Register (CVR) is the central system where all businesses are listed. You will receive a CVR number, which is the company’s identification number used for tax, VAT, and legal matters.
Types of business structures in Denmark include:
- Enkeltmandsvirksomhed (Sole proprietorship) – Easy to set up, with low startup costs, and ideal for freelancers and solo entrepreneurs.
- Anpartsselskab (ApS) – A private limited company that requires a minimum capital of DKK 40,000.
- Aktieselskab (A/S) – A public limited company often used for larger enterprises, requiring a minimum share capital of DKK 400,000.
Foreigners can register a business in Denmark, but if you are not a resident of the EU/EEA, you may need a work and residence permit.
The process is digital and accessible through the Virk.dk platform. You will also need a NemID or MitID (secure digital login system) for authentication.
Taxation and Accounting in Denmark
Denmark’s corporate tax rate is 22%, which is relatively low compared to other Western European countries. VAT (MOMS) in Denmark is set at 25%, and businesses with an annual revenue above DKK 50,000 must register for VAT.
All companies must comply with Danish bookkeeping and tax laws. This includes keeping detailed accounting records, submitting annual reports, and filing corporate income tax returns. Most small businesses use external accountants to handle these obligations, although digital accounting solutions are also widely available.
Employers are responsible for withholding taxes (A-skat) and social contributions for their employees. Denmark’s tax system is progressive, and while personal taxes are high, the benefits such as healthcare, education, and infrastructure are considered world-class.
Hiring Employees and the Danish Labor Market
The Danish labor market is characterized by “flexicurity” – a model that combines labor market flexibility with social security. This system makes it easier to hire and dismiss employees compared to many other EU countries, while still providing workers with social protection and training opportunities.
Most employees in Denmark are covered by collective agreements that set minimum wages, working conditions, and other employment terms. Although there is no statutory minimum wage, agreements often ensure fair compensation.
Employers must provide safe and healthy working conditions, and employees are entitled to paid holidays (5 weeks annually), maternity/paternity leave, and other benefits. Additionally, the working culture in Denmark is known for its flat hierarchies and informal communication.
Funding and Business Support in Denmark
Denmark offers a range of funding options for startups and growing businesses. Public grants, innovation funds, and soft loans are available through programs like:
- Innovationsfonden (Innovation Fund Denmark) – supports research and development projects.
- Vækstfonden (The Danish Growth Fund) – provides venture capital and loans.
- EU grants – accessible to Danish businesses through Horizon Europe and other EU initiatives.
Business incubators and accelerators like Founders House, Startupbootcamp, and Accelerace are available in major cities like Copenhagen and Aarhus, offering mentorship, office space, and networking opportunities.
Networking is essential in Denmark’s tight-knit business community. Platforms like LinkedIn, professional associations, and industry events can help build relationships that foster growth.
Challenges and Considerations for Foreign Entrepreneurs
Despite its many advantages, doing business in Denmark comes with challenges. The high cost of living and labor, as well as the complex Danish language, may be barriers for some. Additionally, adapting to Danish business culture—which values punctuality, consensus, and minimal hierarchy—can take time for those from more formal or hierarchical cultures.
However, English is widely spoken in the business environment, and Denmark is considered one of the easiest places for foreigners to integrate professionally. Government services are also highly digitized and available in English, making the administrative process smoother.
Denmark offers a dynamic and reliable business environment with vast opportunities for growth, innovation, and international expansion. From easy company registration to strong government support and a skilled workforce, Denmark continues to stand out as one of the most attractive destinations for entrepreneurs in Europe. While there are challenges to consider, particularly for non-EU nationals, the advantages far outweigh the drawbacks. With the right planning and local support, your business venture in Denmark can thrive.
