You Won’t Believe How Easy It Is to Start a Business in Denmark – Here’s What Every Entrepreneur Should Know

Denmark is often associated with bicycles, clean cities, and happy citizens. But behind its calm and orderly image lies one of the most business-friendly environments in the world. Whether you’re a tech startup founder, a solo freelancer, or a company looking to expand into Europe, Denmark offers a compelling blend of simplicity, transparency, and digital innovation. The best part? Starting and running a business in Denmark might be far easier than you think. In this article, we uncover the key reasons why Denmark is a hidden gem for entrepreneurs and what you need to know before taking the leap.

Business Registration in Denmark Takes Just a Few Clicks

Registering a business in Denmark is a fast, straightforward, and fully digital process. In most cases, entrepreneurs can complete all registration steps online in less than 48 hours. The main government portal used for company formation is virk.dk, where you can submit your business application, register for VAT, and get your Central Business Register (CVR) number.

To register a business, you will need:

A Danish CPR number (personal ID number) or representation via a local agent,
A MitID login (Danish digital ID),
Company details such as name, structure, and business activities.

The most common legal forms include:

Enkeltmandsvirksomhed (sole proprietorship),
Anpartsselskab (ApS) – similar to a limited liability company,
Aktieselskab (A/S) – a public limited company.

There is no need to be physically present in Denmark to complete the process, and many non-residents set up companies with the help of local service providers.

Denmark’s Government Works for Entrepreneurs, Not Against Them

Forget long queues at the tax office or complicated paperwork. Denmark’s public administration is built around efficiency, user-friendliness, and trust. All communication with government bodies happens through secure digital mailboxes (e-Boks), and systems like TastSelv allow you to file VAT returns, corporate taxes, and even pay employee wages – all online.

Denmark ranks among the top countries in the world for ease of doing business, especially when it comes to dealing with permits, taxation, and enforcing contracts. As an entrepreneur, you’ll be surprised by how few obstacles there are in your day-to-day operations. The public sector is highly digitized, which drastically reduces bureaucracy and speeds up decision-making.

A Transparent Tax System That Rewards Good Planning

Yes, Denmark is known for its high taxes – but they come with clarity, consistency, and digital tools that make compliance manageable. Here’s what business owners need to know:

VAT (MOMS): The standard VAT rate is 25%. Businesses that earn more than DKK 50,000 annually must register and file VAT returns quarterly or monthly, depending on their revenue.
Corporate Income Tax: The current CIT rate is 22%.
Personal Tax: Entrepreneurs running sole proprietorships pay personal income tax based on a progressive scale, which can reach over 50% in total.

The silver lining? You can deduct most business expenses, and the Danish tax agency (SKAT) provides real-time overviews of your tax liabilities. Additionally, taxes fund world-class public services, infrastructure, and social safety nets – reducing private business costs in the long run.

Digital Accounting Is the Norm – Not an Option

In Denmark, bookkeeping and accounting are fully integrated into the digital ecosystem. Paper invoices and spreadsheets are a thing of the past. Most businesses use cloud-based accounting software that is synced with the Danish tax system.

Popular tools include:

Dinero – great for small businesses and freelancers,
e-conomic – used by medium and large enterprises,
Billy – user-friendly and affordable,
Microsoft Dynamics 365 – for corporations needing complex solutions.

These platforms allow you to:

Send invoices,
Track expenses,
Prepare VAT and tax reports,
Generate financial statements,
Communicate directly with your accountant or bookkeeper.

Not surprisingly, many entrepreneurs handle their day-to-day accounting themselves – or outsource it cost-effectively to local firms.

A Supportive Startup Ecosystem with Real Opportunities

Denmark is more than just a great place to start a business – it’s a hub for innovation, particularly in sectors like technology, renewable energy, biotech, and design. Copenhagen, Aarhus, and Odense are thriving startup cities, home to accelerators, incubators, and co-working spaces.

The government and EU-backed programs actively support startups through:

Innovation grants,
Access to investors and venture capital,
Startup visas for non-EU founders,
Business development mentoring.

Programs like Startup Denmark, Innofounder, and Innovation Fund Denmark offer financial and strategic assistance to early-stage companies. Networking events, pitch contests, and public-private partnerships make it easier to connect with key players in the ecosystem.

Hiring Employees Is Easier Than You Think

Denmark’s labor market is known for its flexibility, high productivity, and skilled workforce. The flexicurity model ensures that employers can hire and fire with ease, while employees enjoy strong social protections.

Important points for employers:

No mandatory minimum wage, but most industries follow collective agreements.
Social contributions are relatively low; most social benefits are funded through income taxes.
Salaries are high but matched by worker quality, efficiency, and language skills.

Most Danes speak English fluently, making it easier to onboard international teams or serve global clients. There are also schemes that support the hiring of foreign professionals, interns, or university graduates.

Denmark Is the Gateway to Scandinavia and the EU

Once you’re registered in Denmark, you gain access not only to the local market but also to:

The entire European Union single market,
The highly developed Nordic region (Sweden, Norway, Finland),
Robust international trade agreements.

The country has world-class logistics infrastructure, including ports, highways, and tech connectivity. Whether you’re shipping goods across Europe or running a remote SaaS business, Denmark gives you a competitive edge in reliability and scalability.

What to Watch Out for Before Launching Your Business

While Denmark is a dream destination for business, it’s important to plan ahead and avoid common mistakes. Here are a few things to keep in mind:

Language barrier: Most business is conducted in English, but official documents are often in Danish.
High living and labor costs: Budget accordingly, especially if relocating.
Strict deadlines: Tax and VAT reporting must be done on time – penalties apply quickly.
Cultural formality: Danes value precision, punctuality, and modesty in business.

It’s strongly recommended to consult with a local lawyer or accountant, especially during setup. Also, consider working with a business services firm that can help you register the company, set up accounting, and stay compliant from day one.