This is a guide for the person who intend to start a sole proprietorship in Denmark. We have written the guide to be practical and “hands-on”, so it can be of help to everyone starting a business for the first time in Denmark. Even if you have started a business before, the guide include many useful links and other relevant information. It is not that difficult to start a company in Denmark, even though you will meet some challenges on your way. To run a sole proprietorship in Denmark, you need to register the company at the danish authorities. After registration you will receive the company VAT registration code also called a CVR-number. The danish tax office does not handle the registration of your company, which is being done by “Erhvervsstyrelsen”. Get a NemID To register a new company, you need to have obtained a NemID (a digital signature stored on your computer or as a token card) for yourself. If you do not yet have a NemID, you can order one here: https://www.nemid.nu/dk-da/privat/bestil_nemid/ Be aware that you need to have a danish passport or a danish drivers license to order a NemID online. If you do not have this, you need to visit “Borgerservice” in your home town in Denmark. This is the public office that service citizens. Here you need to bring some ID from your own country – f.ex. a passport or if you are from a EU-country then a drivers license will do. Where to register your new sole proprietorship After having obtained the NemID, you will be able to log in to register the new company. Go to the page: https://indberet.virk.dk/ https://indberet.virk.dk/myndigheder/stat/ERST/Start_virksomhed?nm_extag=Link%3D%2Cforside%2Cmest-anvendte-start-virksomhed%2C And here you will see a link to “Start virksomhed”. It is not so difficult to perform the application, but we recommend getting help from an accountant or at least someone speaking and reading Danish, so you get the help needed. To carry on and fill out the registration form, there are a few things you need to agree on beforehand. Your company will need a name To avoid using a name that is already being used by other companies, then you should try searching the public database: http://datacvr.virk.dk/data/ If there already exists a company with the name you intend to use, then you are doing yourself a favor by choosing another name. It could otherwise easily start off really bad with having to communicate with a lawyer, about you violating someone elses brand. Another good idea is to check if the internet domain for your company name is availible for both the .dk (danish domain) and the .com version of it. We use UnoEuro as our domain provider (www.unoeuro.com), but there are many good suppliers out there. Here you can search and see if the domain is vacant. You also will need an address for the company Most new business owners start having their office at home, so unless you are renting an office or a shop from the beginning, odds are you will be working from home at first. Normally using the private address as a company address is not a problem when making the company registration. Just remember to put a label on your mailbox with the company name, otherwise mail could be returned by the mailman, not aware that a new business have emerged from your living room. In many situations you are allowed to deduct costs relating to having an office at home. We wrote more about this here: http://daniaregnskab.dk/418.asp You have to choose a starting date for your company Make sure to do a little thinking before choosing, in order to safe some money on the accounting. If you f.ex. start a company on the 29th of December 2014, then you will need to submit a tax declaration for the company and make a VAT report for the 4th quarter of 2014. Even though only having the company for a few days. It is smarter to choose 1st of January 2015 or sometime in the beginning of a quarter. If you do not care about the costs for your accountant, then of course you can choose any day that seems convinient. Branchekode Your new company will need to submit a code, that describes what type of business is being conducted. In Denmark this is called a “branchekode”. You can search for the code relating to your business here: https://indberet.virk.dk/myndigheder/stat/ERST/Branchekode Write it down since you need it for the registration process. Having decided on these data you are now ready to register the company https://indberet.virk.dk/ https://indberet.virk.dk/myndigheder/stat/ERST/Start_virksomhed?nm_extag=Link%3D%2Cforside%2Cmest-anvendte-start-virksomhed%2C When you register a new company, you normally need to be registered for VAT. In a few situations there a another type of duty being paid called “lønsumsafgift”. This article will not go into details on this type of duty, but as a general rule all companies need to be registered for VAT, unless they are in the authoring business as a writer, artists, psycologists or doctors. There are others also, but here we keep it simple. Try Googling “who is paying VAT in Denmark” (“hvem betaler moms”) if you are not sure about your business. Or ask us. Employer If you intend to hire employees, you will need to be registered for having employees also. When having employees you need to pay taxes for the employees (A-skat, AM-bidrag), pension (ATP) and holiday money (Feriepenge). You can register these duties when registering for VAT also. On the same form. Import/Export If you are importing goods from outside the EU, you need to register for this also. If you are an exporter of goods to outside the EU, you need a registration for this also. Just like in the above example, it can be a good idea, to be registered as an importer at the same time. How long time does it take to get the CVR-number? Normally it only takes a few days when you submit the form through virk.dk. Unless you owe some tax or VAT from former companies you had. Beside filing out the form for registering the new company, there are a few more things that you should check/do: Other duties (punktafgifter) Some companies importing goods from other EU countries, will need to pay a special form of duty called “punktafgifter”. These duties are put onto goods like beer, wine, liquor, packing items, bottles and more. Read more here: http://www.skat.dk/punktafgifter Bank You will need to get a business account in the bank: After you get the CVR-number, you can go to the bank and apply for a CVR-number. Prepare yourself for a challenge here. It has become significantly harder to obtain a business account in Denmark lately. And it does not relate to getting a credit. Just the simple process of opening an account is a challenge – foreigners and danish people alike. It can help naturally if you are well prepared. But it is still no guarantee it will be of any help. Normally the banks soften up after some months has passed, and you are able to provide them with some accounting reports. Banks often ask for: A business plan. You can download templates here: https://startvaekst.virk.dk/opstart/vaerktoejer-til-opstart/forretningsplan/forretningsplan-download And budgets; Cash budget Income statement budget Balance sheet budget Private expense budget You can download templates here: https://startvaekst.virk.dk/opstart/oekonomi/budgetter-ivaerksaetteren Almost all accountants and auditors can be of big help here. The cost for getting these things done are typically ranging from 1.000 – 5.000 DKK + 25% VAT, depending on the type of business you want to start. NemKonto To receive refunds from the government, you need a NemKonto: It is not always you that is paying money to the tax office, but sometimes, especially in the beginning, there can be situations were they are paying you. F.ex. if you are getting a VAT refund after having initial purchased exceeding sales. The tax office and other goverment institutions use your NemKonto, to transfer money to you. A NemKonto is actually the same account, as your business account. You just have to link your business account to NemKonto. This is easiest done by asking your bank yo do it. You can also log in here and change the NemKonto: NemKonto http://www.nemkonto.dk/da/Virksomhed/NemKonto-for-virksomheder e-Boks In order to receive mails from the goverment, you need an e-boks: The latest within communication with the government is a new inbox called e-boks. Basically you will get all emails sent to this inbox from the government. Then you need to remember to log in to check weekly or monthly. Therefore it is smart to make a notify messaging, when you get new mails here, otherwise it is easy to forget. Create your e-boks here, using your NemID for the company to log in: http://www.e-boks.dk/ Access for accountant and Auditor to the tax office website Give access for your accountant and auditor to Skat Borger and Skat Erhverv: It is also a good idea to give your accountant and auditor access to Skat Borger (the tax office website for private tax issues) and Skat Erhverv (the tax office website for business tax and vat issues). On these website we declare VAT, personal tax, company tax and more.