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Company Formation

A simple 4-stage process completes incorporation for companies in Denmark. This is as follows:

1. Obtain a digital signature; a one-day process.
2. Deposit the start-up capital raised into the bank. This also takes one day.
3. Register with the Danish Commercial and Companies Agency. This takes about 3 days.
4. Register employees with a private insurance company. This takes one day.

Incorporation

A foreign corporation may establish a business in Denmark either as a Subsidiary Corporation, as a Registered Branch Office or as a Representative Office.

In order to found a company in Denmark, a memorandum of association must be prepared and signed by the founders of the company and must contain a draft of Articles of Association.

A draft of Articles of Association must include the following:

• Information about the name of the company
• Location of the registered office
• Objectives of the company
• The share capital
• The Board of Directors
• The general assembly of the company
• Auditors
• The companys fiscal year

The Board of Directors need to register the company with the Commerce and Companies Agency within 6 months from the date on which the memorandum of association was signed. It may take 3-4 weeks to have the company registered due to the investigation into the companys chosen name which must take place.

Registered Offices

To establish a registered office, the head office must register the Danish branch office with the Commerce and Company Agency and file the following documents:

A copy of the Articles of Association of the head office.

The incorporation certificate of the head office

A certified power of attorney to a branch manager with documentation that the branch manager meets the requirements as to residency and citizenship

A registered branch office must have a name, which includes the word filial (branch office) together with the name of the foreign corporation and the country of incorporation.

The two most common legal structures which foreign investors choose when setting up a company in Denmark are:

• A Public Limited Company (Aktieselskab, A/S) This can be formed by one or more founders, with at least one founder being a resident of Denmark, an EU national resident in another member state or a resident of an EEA country.
• A Private Limited Company (Arpartsselskab, ApS) This only requires one founder who need not be a resident of Denmark. ApS companies are suited to businesses that have only a few proprietors. An ApS company may have an unlimited number of shareholders.

Offshore Companies

By choosing to incorporate an offshore company, business owners and  investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.

The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:

• Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
  
• Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
  
• Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
  
• Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability

Characteristics of an offshore company:

• Memorandum and Articles of Association
  
• Certificate of Incorporation
  
• Registered Office/Agent
  
• Shareholders / Members
  
• Directors / Managers
  
• Company secretary
  
• Statutory Register
  
• Bookkeeping
  

Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.

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