Factors affecting business startup ease and difficulty in Denmark

Starting a Business in Denmark:

Denmark is usually selected as a company's centre for European activities including Nordic through establishing a Danish firm that can then develop a branch in other Nordic or regional nations. The established Danish company can also act as Nordic headquarter or holding firm for other activities in Europe. For private limited companies, the startup capital is usually an amount that is equivalent to 25% of the share capital but not less than DKK 80,000, which must be paid fully. Starting a business in this country also requires the acquisition of a NemID signature that was launched in July 2010 as an enhancement of the previous Digital Signature. The other aspect of starting a business in Denmark is the requirement for all workers to be insured against occupational illnesses and industrial accidents with an insurance company that must complete a form and register its policy with the DCCA ("Starting a Business in Denmark," n.d.). Some of the most common types of business that can be established in Denmark include sole proprietor, partnership, limited partnership, limited liability cooperative, private limited company, public limited company, and branch office of foreign firm.

Similar to starting a business in other countries, starting a business in Denmark has some factors that make it an easy process and those that make it relatively difficult. In relation to the easy factors of establishing a business in Denmark, companies can benefit from easy plug and play registration that would make it ready for them to commence their operations within a few hours. This is primarily because the Danish Commercial and Companies Agency offers a single centralized service for business and tax registrations when starting a business. Since the registration can be completed and presented electronically with the Articles of Association and Memorandum of Association, the whole process is online and does not involve any agency official, which makes it instant. Therefore, starting a business in Denmark is not only cost-efficient but it is also tax efficient.

The other easy factors in establishing a business in Denmark include speedy and informal processes, lack of notarial deeds, dividends can be allocated on an interim basis, flexible language requirements, and no resident requirements for management. Moreover, starting a foreign branch of a Danish firm is basically not subject to taxation in Denmark because of a unique tax rule. Consequently, the administrative costs of handling double tax issues may be prevented through having the Nordic headquarter in Denmark rather than in other countries.

Despite of the various easy factors for establishing a business in Denmark, there are also other factors that make it difficult to do business in the country. First, the registration process of a branch is not only costly but also takes various weeks to fully process. Therefore, starting a branch office of a foreign company is more complex and costly that establishing a company in Denmark. Secondly, the required start-up capital of at least 25% share capital or DKK 80,000 may be costly for starting a small business in Denmark. The requirement to register the employees with workforce's insurance could pose significant challenges to certain organizations and businesses.