Register your new business, choose a name and get going
Decide on the type of business you are going to register your company as, and all you need to do is name your company, register it and then get going!
By Polly Phillips
It’s a good idea to check with the CVR register to make sure that your company name has not already been taken.
You might also want to think about buying a domain name to establish your brand, and you can register your brand (or patent) with the Patent og Varemærkestyrelsen. If you register your brand here, you are better protected against it being used by someone else.
You will be required to pay a fee to do this, a couple of thousand DKK, but again you are not obliged to register here.
Once your business has a name, you can register it on the website www.virk.dk.
The registration form is in Danish but opening it in Google chrome will allow you to translate it into your native language.
Once you’ve completed the form, Virk automatically sends it to the Danish Business Agency, Erhvervsstyrelsen, who run Virk.dk , and you should receive an email confirming your registration within a week.
It’s at this point that you would also register for VAT- in Danish ‘moms’, should you be required to do so. Some industries, such as education, health care and financial services, are exempt from VAT (don’t worry they pay a different kind of tax).
And, more relevant to the smaller start-ups, you only need to register for VAT if your revenue exceeds 50,000 DKK a year. If it does not, you do not need to register for VAT. Now that’s what we call a tax break!
Those of you who need to register for VAT should note that it’s 25 percent of the price of goods or services that you supply.
As soon as your business is registered for VAT, you are automatically registered with E-tax for businesses and you must then submit your VAT return electronically to SKAT. As a general rule, VAT accounts must be completed quarterly and submitted to SKAT.
Read also our guide to the different type of limited and unlimited liability companies you can set up and what the financial implications are for you here
A little help from your friends
If any of this seems complicated to you (us too!) there are plenty of hand holding options along the way.
Betina Møller from Business Development Centre Central Denmark actually strongly recommends that you get advice and counselling before starting, and this is to a wide extent available for free.
Most of the municipalities offer local business services for aspiring entrepreneurs free of charge, as well as courses and welcome evenings designed to guide you through the process.
These evenings are arranged through municipality business centres, known in Danish as startvaekst or erhvervscenter.
You can find an overview at the Business Development Centre in your region. If you are in doubt as to which one you belong to, just check with your local municipality’s BorgerService, and they will direct you the right way.
In the Copenhagen area, Copenhagen Business House is also an invaluable source of information. They are available to the wider Copenhagen capital area and will walk you through the process step by step. They also run free courses (tea and coffee provided) and open evenings at least once a month, in English, where you can meet with industry experts, as well as talk through your plans with lawyers and accountants.
This kind of service does not only apply to Copenhagen but also in other municipalities with local business services, so it’s a good idea to check what is available in your municipality or region.
Smaller municipalities or ones with fewer expats may have teamed up on a regional basis, offering this service in a nearby larger municipality. For instance in the Aarhus area, courses are run in cooperation with International Community.
Up and running…
Now that all the administration is out of the way you can get on with making your business a success. Important things to look into at this point include insurance for some business sectors (predominantly service providers) and checking out the rules and regulations relating to your industry.
Betina Møller from Business Development Centre Central Denmark notes: “It’s important not to overlook getting information and knowledge about the Danish regulation and rules regarding starting your own business. Make sure you find out what the requirements are from tax authorities, labour authorities or other special permissions certificates you might need, for instance if you want to make food, you need to register at the Ministry of Food etc.”
Once you consider yourself well versed in your industry, you may want to consider marketing or advertising, or you may just want to get going. Although it might seem a little complicated to determine what kind of business you are, once you’ve jumped through that hoop and then registered your business there’s nothing left but to start it.
As Axel Andreas Beck, project manager at Væksthus Hovedstadsregionen, the Business Development Centre for the Region of the Greater Copenhagen area, dedicated to helping entrepreneurs get started said: “It’s so easy to start a business in Denmark, you can do it in a couple of hours.”
But, while starting a business may be simple, keeping one going requires more work. Of all new business start-ups about 50 percent are still in businesses after five years, and almost 30 percent fail in their first year, so it’s important to think carefully before you put your name and reputation on the line.
Moreover, as some expats have found out to their cost, if you’re the sole proprietor of your business and not a Danish citizen, you are required to close it when you leave, unless you take on a Danish partner or transfer it into a limited liability company.
These are just some of the many things to consider before you go out on a limb and begin your own business.
If, however, you’ve factored these considerations in, and you still plan to open a business in Denmark, it seems that there’s no better place to start.
Five start-up tips from Betina Møller, consultant at Business Development Centre Central Denmark and former consultant at Entrepreneurship in Denmark:
1. Get information and knowledge about the Danish regulation and laws regarding starting your own business, i.e. what kind of business can you start, what are the requirements from tax authorities, labour authorities or other special permissions certificates you might need. For instance, if you want to make food, there are special regulations to comply with.
2.Focus on building a network. Building up a network of Danish and foreign business people, potential customers, and partners can be essential for you when starting up. Go to events and find network groups to join; this is a good way to build up your network. Using your network in DK is essential to create business opportunities.
3.Find out if your national background; your nationality, culture and language skills and former job experience from that country can be an advantage for you in Denmark. Especially if you come from a country with high growth rates, you may be able to help Danish companies create export opportunities to your home country.
4.Consider if it might be a good idea to start your business with a local Danish partner. Either an ethnic Dane or someone who has been in DK for a longer time, because when you are new in a country, you lack a network and knowledge of DK and you might find it very beneficial to get this from your partner while you can represent the international perspective in the business.
5.Make a small market study before you start. Find out what the customer needs and how they behave, and where you can combine your own skills and knowledge with that potential in the market.