Published on and written by Cyril Jarnias
Moving to Denmark to start your own business isn’t just about changing countries: it’s about entering one of Europe’s most dynamic ecosystems for entrepreneurship, green tech, and innovation. But between visas, choosing a legal structure, taxes, cost of living, and opening a bank account, the journey can quickly become overwhelming for a non-resident.
This guide provides a concrete overview of the entrepreneurial process for expatriates, detailing opportunities, pitfalls to avoid, and is based on official frameworks and available key figures.
Why Denmark Attracts Foreign Entrepreneurs
Denmark combines several characteristics that few countries bring together at the same level: great ease of doing business, a stable political and legal environment, a highly digitalized society, a highly skilled workforce, and a state strongly committed to innovation, particularly green innovation.
It is ranked number one globally for the lowest perceived corruption.
These elements translate concretely for an expatriate business founder: fast procedures via the internet, broad access to English-speaking talent, efficient public contacts, and a dense network of incubators, accelerators, tech clusters, and public funds.
To visualize the country’s overall strengths for entrepreneurs, we can summarize some indicators in a table.
| Indicator | Position / Approximate Value |
|---|---|
| European ranking for doing business | 1st |
| Global ease of doing business ranking | Top 5 |
| Global corruption ranking (CPI) | 1st |
| Corporate tax rate | 22 % |
| Share of SMEs in the economic fabric | 99 % of companies |
| Startup ecosystem growth (2024–2025) | +31.3 % |
This macroeconomic framework is coupled with a strong commitment to the green transition: about 44% of energy consumption comes from renewables, and the capital has committed to an ambitious carbon neutrality goal, with already a massive reduction in CO₂ emissions.
Understanding the Cost of Living and its Impact on Your Project
Starting a business in Denmark isn’t just about filing articles of association: you also need to be able to live there during the launch phase, sometimes without significant income. However, the country is one of the most expensive in Europe. The authorities themselves require, for certain entrepreneurial permits, proof of sufficient resources to cover one year of living expenses.
For an expatriate, the monthly cost of living (including housing) is around €2,100 to €2,200 for a single person and around €5,800 for a family of four. The median salary exceeds €5,000 per month, which reflects the general price level.
To better calibrate your personal funding plan, base it on a simplified overview of typical budgets. This approach gives you concrete reference points for assessing and adjusting your own expenses and savings.
| Profile | Estimated monthly cost (excluding business, with rent) |
|---|---|
| Single person (country average) | ≈ €2,169 |
| Family of 4 persons | ≈ €5,832 |
| Frugal single person in Copenhagen | ≈ $2,500 (approx. €2,300) |
| Comfortable living in Copenhagen | $3,500–$4,000 (€3,200–€3,700) |
Danish authorities, as part of the Start-up Denmark scheme, in fact set minimum savings amounts to be demonstrated to obtain an entrepreneurial residence permit. These requirements, expressed in Danish kroner (DKK), provide a realistic basis for measuring the minimum budget needed for the first year.
| Family composition (Start-up Denmark) | Personal funds to demonstrate (order of magnitude) |
|---|---|
| Sole entrepreneur | ≈ 153,240 DKK |
| Entrepreneur + spouse | ≈ 306,480 DKK |
| Entrepreneur + spouse + child(ren) | ≈ 356,904 DKK |
| Entrepreneur + child(ren) (without spouse) | ≈ 203,664 DKK |
This high standard of living directly affects your strategy: it requires securing personal resources (savings, remote income, seed funding) before or alongside launching the business, and carefully anticipating the time before the company generates sufficient cash flow.
The Main Legal Structures for Getting Started
Denmark offers a range of legal forms suitable for both freelancers and ambitious startups. The choice of structure affects your liability, your taxes, and your administrative procedures.
The ApS: The Leading Form for Startups and SMEs
The Private Limited Company (Anpartsselskab – ApS) is by far the most commonly used format. It is a limited liability company, with its own legal personality. Shareholders are only liable up to the amount of their contributions.
The minimum capital required to establish an ApS is 40,000 DKK. A single shareholder is sufficient, and that shareholder does not need to be Danish or even a resident. The company is subject to corporate tax at 22%. Dividends paid to individuals are then subject to separate, progressive taxation (rate of 27% then 42% beyond a certain income threshold).
This structure is ideal for a project intended to raise funds, hire employees, and clearly separate personal and professional assets.
The A/S: The “Large Company” or Public Listing Version
The Public Limited Company (Aktieselskab – A/S) is a public limited company. It requires much higher capital (400,000 DKK), and is subject to heavier governance requirements. The profit tax rate is also 22%. This status targets large-scale projects, likely to have a large number of shareholders or to consider an IPO.
Sole Proprietorship and Partnerships: Simplicity but Personal Risk
The sole proprietorship (Enkeltmandsvirksomhed) corresponds to the individual enterprise. No capital requirements, simple formalities, but the entrepreneur is legally indistinguishable from the business. Profits are taxed as personal income, with progressivity that can approach 56% for the highest brackets. Liability is unlimited: business debts and private assets are merged.
Danish partnership structures, such as the I/S (interessentskab) and the K/S (kommanditselskab), are fiscally transparent. Partners are personally taxed on their share of the profits, not the structure itself, with unlimited liability for some partners.
Subsidiary or Branch of a Foreign Company
A company already incorporated abroad can choose to open a branch (filial) or a local subsidiary (for example, an ApS owned by the parent company). The branch has no autonomous legal personality: it is an extension of the foreign company, which remains responsible for its commitments. However, it is taxed in Denmark at 22% on its Danish-source profits.
To establish a presence in Denmark, a foreign company can create a subsidiary, often in the form of a limited liability company (ApS). This structure offers clear legal separation from the parent company, facilitates access to certain local funding, and allows autonomous management of operations in Denmark.
Tax Advantages for the Sole Proprietor
The Danish system provides for an optional tax scheme for sole proprietors (« business tax scheme » or VSO) allowing the application of the 22% rate on profits left in the business, instead of immediate taxation at the personal rate. Personal income tax is only paid when these profits are withdrawn, which allows smoothing out taxation over time and optimizing investment in the business. This scheme requires strict separation of private and business accounts and a dedicated bank account.
Incorporation Procedures: An Ultra-Digitalized Process
One of Denmark’s great strengths is administrative simplicity. In most cases, a company can be legally operational in less than 24 hours after online registration.
It all starts with obtaining a CVR (Central Business Register): this unique number identifies your company with all public authorities and private partners.
Procedure for creating an ApS via the official portal of the Danish Business Authority
The procedure is carried out via the official portal of the Danish Business Authority, accessible at **virk.dk**.
The “Start Company” service allows you to complete all administrative formalities via self-service.
For an ApS, you must first draft articles of association and bylaws. Templates are available, usually in Danish.
It is necessary to deposit the minimum capital into a blocked account or a lawyer’s escrow account before finalization.
Enter all required information on the online platform to finalize the company’s creation.
Creation fees remain modest: registering a limited liability company costs around 670 DKK, or less than €100. Sole proprietorships, associations, simple partnerships, and K/S are often exempt from this fee.
As soon as the application is validated, the CVR is issued. The information is automatically transmitted to the tax authorities (SKAT), triggering your tax obligations (VAT, declarations, etc.) according to the type of activity.
VAT, Corporate Tax, and Innovation Incentives
The Danish tax system combines a relatively low corporate tax rate for the OECD (22%) with high levels of personal taxation, but a set of powerful incentives for R&D and innovation.
VAT: A Single Rate of 25%
VAT (Moms) is set at 25% on most goods and services, with no reduced rates. Some operations are exempt (financial services, health, education), and exports benefit from a 0% rate. Companies exceeding 50,000 DKK in annual turnover must register for VAT, typically at the time of registration with the business register.
Declarations are quarterly in most cases, but companies with high turnover (> 50 million DKK) file declarations monthly. Deducting VAT on purchases is possible, provided you have compliant supporting documents.
Corporate Tax and Group Taxation
Corporate tax applies to profits at 22%. For groups, an internal joint taxation system allows offsetting the losses of one subsidiary with the profits of another. This group taxation is mandatory for companies more than 50% commonly owned for the Danish part, and can be extended, optionally, to foreign entities in the group (with a ten-year commitment).
Resident companies are taxable on their worldwide income, under a partially territorial approach. Profits related to permanent establishments or real estate located abroad may be excluded from the Danish tax base. A tax credit is provided to avoid double taxation on income already taxed abroad.
R&D Super-Deduction and Refunds for Loss-Making Startups
One of the major levers for innovative entrepreneurs is the R&D super-deduction scheme. Research and development expenses can be deducted at a rate exceeding 100% of their amount. The super-deduction rate has been around 108% recently and is expected to rise further (with projections up to 120% in the medium term), subject to very high annual ceilings (on the order of billions of DKK in expenses).
Maximum annual cash amount a Danish startup can receive via the refundable tax credit on R&D deficits.
Stock Options, Foreign Experts, and Other Incentives
The country has also implemented a privileged regime for qualified stock options (Article 7P), allowing certain employees to have their options taxed as capital gains (27 to 42%) rather than as salary (about 55%). Ceilings exist (between 10 and 20% of annual salary, or more under certain conditions), and the scheme is particularly suitable for startups with fewer than 50 employees and limited turnover.
To attract foreign talent, a tax scheme for researchers and key employees provides for taxation at a fixed rate, about 32%, on employment income for up to seven years, provided a relatively high monthly salary threshold is exceeded. This scheme applies to employees, but it directly concerns entrepreneurs who wish to recruit highly qualified profiles from abroad.
The Start-up Denmark Visa: The Entry Key for Non-Europeans
For nationals outside the EU/EEA/Switzerland, the big question is access to the right of residence and work to undertake business. This is precisely the purpose of the Start-up Denmark program, managed by the Ministry of Economic Affairs and the Ministry of Employment.
This scheme is designed as a gateway for innovative business projects with high growth potential and international ambition.
Who Can Apply?
The program is aimed at non-European and non-Swiss founders, alone or in teams of up to three people, who plan to establish an innovative company in Denmark, or continue an activity already started elsewhere via a Danish branch. Teams submit a common business plan, with each member then applying for their own permit.
This is not a visa for any type of business: projects considered not very innovative or of a too traditional nature (restaurants, retail stores, small import-export, holding companies without operational activity) are generally excluded. The requirement is to contribute to the Danish economic fabric through new products, services, or business models, with potential job creation and a global dimension.
Two-Step Process: Project Validation Then Residence Permit
The procedure breaks down into two main stages.
Before any permit application, a detailed business plan must be submitted and approved by a panel of independent experts from the Danish Business Authority. They assess innovation, growth potential, relevance to Danish and international markets, and the realism of the business model. Without this approval, the permit application is not admissible.
Once approval is obtained, the founder creates a case order ID on the SIRI immigration agency’s website, pays the processing fee (several thousand DKK), and fills out form SD1, attaching supporting documents: panel approval letter, passport copy, proof of means of subsistence, details on ownership structure, etc. Providing biometric fingerprints and a photo is mandatory within 14 days of submitting the application, at a Danish representation abroad or a SIRI office in the country.
The announced processing time, once the file is complete, is about one month.
Rights and Limits of the Start-up Denmark Permit
The residence and work permit issued under this scheme is valid for an initial period of up to two years, renewable in blocks of up to three years, as long as the company follows the course set in the business plan. It authorizes its holder to work only for the company covered by the plan. Any external salaried activity, any new entrepreneurial project, or significant change in the model requires new authorization.
The beneficiary can perform unpaid volunteer work elsewhere. They also have the right to travel in the Schengen area for short stays (90 days in any 180-day period), without working there.
Beneficiary of international protection
The permit becomes void if the founder abandons their Danish address or stays outside the country for more than six consecutive months, except by specific exemption. It is also prohibited to claim basic social benefits governed by the Active Social Policy Act. On the other hand, the holder can access free Danish language courses (with a deposit), benefit from the public healthcare system after registration, and bring their family (spouse, cohabiting partner, children under 18) who will obtain an associated residence permit.
Beyond that, this path can lead, after a certain number of years of continuous residence, to permanent residence and then to citizenship, subject to fulfilling language, income, and integration conditions (language exams, civic tests, etc.).
Opening a Professional Bank Account: The Often Underestimated Hurdle
While the legal creation of a company is smooth, opening a business bank account in Denmark often proves to be the most frustrating step for foreigners, due to a very strict regulatory context regarding anti-money laundering.
To open a professional account, major banks in Denmark generally require the company’s CVR number and the CPR of the directors. They also ask for a complete file including bylaws, registration certificates, proof of address, identity documents of the beneficial owners, description of the activity, business plan, financial forecasts, and proof of the origin of funds. Foreign documents must be translated by a sworn translator and may require an apostille.
Processing times range from a few days to several weeks, or even longer for foreign structures or sectors considered high-risk (crypto, gaming, etc.). An initial deposit is frequently required, and account maintenance fees, card fees, or even negative interest beyond a certain amount may apply.
To work around banking constraints in Denmark, entrepreneurs can use international fintech solutions (like Wise Business, Revolut Business, Payoneer, or MultiPass). These services allow you to obtain a European IBAN, open multi-currency accounts, and manage flows in Danish kroner without needing an established local presence. Some providers even offer specific Danish IBANs, which avoids IBAN discrimination sometimes practiced by suppliers, despite the European ban.
These solutions do not completely replace a traditional bank (loans, overdraft, certain local services), but they offer a gateway to start the business, receive payments, and pay suppliers, while waiting for a Danish banking relationship.
Innovation Ecosystem and Public Funding
One of the great strengths for a business founder in Denmark, especially in tech, health, or green tech, lies in the density of public funding programs, grants, and support.
Major National Funding Actors
The Innovation Fund Denmark (Innovationsfonden) is the main public body supporting innovation. It distributes about 1.7 billion DKK per year in grants to research and innovation projects, with clearly stated priorities: green transition, digitalization, societal challenges. The fund finances both startup seed funding, business-university collaborations, and large strategic initiatives.
The Export and Investment Fund of Denmark (EIFO), a merger of entities like Vækstfonden, acts as the state’s financial arm. It offers diverse instruments: ‘Startup & Growth’ loans with risk tolerance for SMEs with few guarantees, co-matching loans (Matchlån) linked to private investments, and venture capital tickets (via VF Venture) ranging from 0.5 to 20 million DKK. Its mandate also covers export guarantees and green financing.
Other actors like the Danish Foundation for Entrepreneurship (Fonden for Entreprenørskab) distribute micro-grants for students or recent graduates, while a network of Nordic or European programs complements these schemes (Horizon Europe, Eureka/Eurostars, Nordic Innovation, etc.).
Some Iconic Programs
Several schemes deserve the attention of an expatriate entrepreneur, including:
– InnoBooster: Managed by the Innovation Fund, this program funds development, prototyping, or scaling projects led by Danish SMEs and startups. Grants range from 200,000 to 5 million DKK, covering about 35% of eligible costs, for projects with a maximum duration of two years. It targets companies with fewer than 250 employees and less than €50 million in turnover.
Monthly allowance received by each founder of a startup incubated in the Innofounder program.
– Grand Solutions: Reserved for large collaborative projects between companies, universities, and institutions, these calls target deep tech, climate, AI, life sciences, quantum, etc. Grants vary from 5 to 40 million DKK for projects lasting 1 to 5 years, with high co-financing rates (up to 75% for SMEs).
– Sectoral green programs (EUDP for energy technologies, MUDP for environment, GUDP for sustainable food and agriculture): They support the demonstration and market introduction of low-carbon solutions, from renewable energy integration to low-carbon agriculture, with budget envelopes of several hundred million DKK.
These programs generally require a Danish base (company registered in Denmark, collaboration with local partners, etc.), but they can be a major lever to accelerate your technology roadmap or validate a product in the market.
Venture Capital, Business Angels, and Accelerators
Beyond public funds, Denmark has a dense venture capital ecosystem, with recognized players such as Seed Capital, byFounders, Heartcore Capital, or Antler, the latter selecting about twenty sustainable tech startups in the country each year.
The DanBAN business angel network brings together over 200 investors to fund and support startups.
Many accelerators and incubators structure the early phases of startup life: Beyond Beta, Accelerace, BioInnovation Institute (for health and life sciences), Copenhagen School of Entrepreneurship, DTU Science Park, etc. Some of them already claim several hundred startups supported and cumulative funding rounds amounting to hundreds of millions of dollars.
For an expatriate, these structures constitute not only access to funding but also a formidable lever for networking and a deep understanding of the Danish market.
Integrating into the Ecosystem: Culture, Network, and Daily Life
The success of an entrepreneurial project in Denmark goes far beyond just financial or regulatory dimensions. The local business culture, the relationship to work and professional relations play a decisive role.
A Culture of Equality, Consensus, and Trust
The Danish work environment is characterized by a very flat hierarchy, widespread use of first names, and importance given to discussion and consensus. Decisions are often made collectively, after a factual debate where constructive criticism is valued.
Communication should be direct, clear, and honest, while remaining polite. Overly complex phrasing or exaggerations are poorly received. Modesty is an important value (reference to the “Law of Jante”): it is generally frowned upon to excessively promote oneself or display one’s wealth.
For a foreign entrepreneur, this implies adapting your pitching style: prioritize data, transparency about risks, a calm tone, and emphasize collective contribution rather than your “personal genius vision.”
Punctuality, Efficiency, and Work-Life Balance
Meetings are scheduled well in advance, start and end on time, follow an agenda sent beforehand. Lateness is poorly tolerated. Workdays are dense but end early: it is rare to schedule a meeting after 4 PM, especially if it encroaches on family life.
The country places great importance on work-life balance. This translates into generous vacations, a significant number of public holidays, and common practice of remote work. The goal is to achieve results without compromising the health or personal life of employees.
Networking: A Necessity, but with its Own Codes
Danes are not known for spontaneous extroversion, but the entrepreneurial ecosystem is teeming with meetups, conferences, professional groups (in-person and online) open to expatriates. In Copenhagen especially, targeted communities exist for international founders, women entrepreneurs, developers, data professionals, etc.
Organizations like the Copenhagen Expat Meetup, engineering networks (IDA), platforms like InterNations, or major events (TechBBQ, Copenhagen Fintech Week, AI conferences, etc.) provide fertile ground for expanding your contact book. The important thing is to come with a clear objective (type of profiles to meet), a succinct pitch of your project, and a patient approach: relationships are built over time.
Choosing Your Location: Copenhagen, Aarhus, Odense…
While Copenhagen concentrates the majority of international visibility, other Danish cities offer specific advantages for a business founder.
The capital, in addition to being a major transport hub for Northern Europe, has a particularly rich tech ecosystem (AI, fintech, cleantech, healthtech, SaaS), 166 coworking spaces, world-class universities, and a high concentration of investors and events. However, costs there are the highest in the country, both for housing and offices.
Denmark’s second city, Aarhus combines a major port economy, an attractive cost of living, and an exceptional survival rate for startups.
Has one of the best startup survival rates in Denmark, a sign of a robust and favorable entrepreneurial ecosystem.
Has a major port, notably specialized in container trade, making it a key logistics and economic hub.
Attracts both large international groups and a network of SMEs and high-growth startups, benefiting from more moderate costs.
Finally, Odense stands out as a European hub for robotics and industrial automation, with over a hundred specialized companies and an ecosystem focused on healthtech and drones. The cost of living there is significantly lower than in the capital, which can be an advantage for a young company.
An expatriate business founder would do well to balance proximity to investors and talent (often in Copenhagen) and level of personal and professional expenses, which are more moderate in regional cities.
The administrative life of an entrepreneur in Denmark is highly digitalized, but this implies mastering a few acronyms:
– CPR (Centrale Personregister): Personal identification number, essential for registering with public services, opening certain accounts, benefiting from social security. It generally requires a local address and a residence permit.
– CVR (Central Business Register): Company’s unique number, obtained upon registration. It is used in all your tax, social, and banking procedures.
– MitID (successor to NemID): Secure electronic identifier for logging into government services, your bank, signing documents, etc.
– NemKonto: Designated bank account for receiving payments from the state (tax refunds, grants, etc.).
Companies are required to use electronic channels and online platforms to communicate with authorities, declare their taxes, VAT, and payroll, and maintain accounting compliant with Danish standards. Any failure to meet these obligations can quickly result in fines.
Some Challenges to Anticipate Before Starting
Despite all its strengths, Denmark is not a problem-free paradise for the expatriate entrepreneur.
The high cost of living and salaries increases a startup’s burn rate and reduces the margin for maneuver if there are delays in generating revenue. The domestic market is relatively small (just under six million inhabitants), which immediately requires an international ambition.
Opening a professional bank account, managing complex taxation (including stock options, VAT, thin capitalization rules, and transfer pricing), as well as recruiting in a highly competitive job market, are major obstacles for companies.
Furthermore, data shows that less than half of micro-enterprises (fewer than 10 employees) survive beyond five years. The environment is competitive, and execution quality and network are decisive.
Nevertheless, the country makes many support tools available to expatriate entrepreneurs: information portals (lifeindenmark.dk, businessindenmark.dk), regional business houses (Erhvervshuse), public investment hubs, university incubators, free Danish language courses, services for spouses, etc.
In Conclusion: A Demanding but Extremely Promising Terrain
Starting your business in Denmark as an expatriate means accepting a dual challenge. On one hand, you must adapt to an expensive environment, highly regulated and culturally specific. On the other, you benefit from one of the world’s most advanced ecosystems in terms of digitalization, innovation support, institutional stability, and quality of life.
Key actions to implement to maximize the chances of success for your entrepreneurial project.
Carefully prepare your personal and professional budget to ensure the project’s sustainability.
Select the legal form most suited to your activity and objectives.
Leverage this specific scheme if the entrepreneur is from a non-European Union country.
Develop a commercial strategy oriented from the outset towards an international market.
Actively participate in Danish business ecosystems and networks to create synergies.
Benefit from the many public support schemes available for innovative projects.
For an entrepreneur who structures their project with rigor and takes the time to understand the local codes, Denmark can become much more than a landing spot: a real springboard towards European and global development.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
