Opening a foreign startup in Denmark

Here are some questions that after several years of exposure to Denmark and Europe that I need answers for to a) effectively start a small business based in Denmark, and b) turn a profit. I will update this as I am able to answer each question.

  • What association/resources are available in Denmark to help with questions about starting and operating a small business in Denmark?
  • When opening new business accounts with your local bank what accounts are typically needed (e.g. income, expenses, VAT input, VAT output, etc.)?
  • What reporting is required to SKAT and how often?
  • What is the standard software platform to connect to webshops to expedite business reporting (e.g. MYOB, Xero, etc.)?
  • How is VAT refunded between EU countries?
  • How can moms and/or customs duty be prepaid on purchases from outside the EU?

Update: In October 2015 I left Denmark. Without being able to distribute VAT collected from EU customers I never commenced business operations in Denmark. I will be registering a new business in Germany in March 2017 with the ability to collect and effectively distribute VAT from EU customers.

Here’s what I’ve learnt…

What association/resources are available in Denmark to help with questions about starting and operating a small business in Denmark?

  • Virk Startvækst – Danish start-up resources intended to reduce administrative burdens for businesses.
  • Company registration in Denmark – A small set of videos produced by Virk.dk explaining company registration in English
  • Tax in Denmark – An introduction to the Danish tax system in English produced by SKAT

When opening new business accounts with your local bank what accounts are typically needed

The bank just needs to know your CVR number and will set you up with a simple cheque account. Additional accounts can be linked to your business account opened at any time for income, expenses, VAT collection, etc.

What reporting is required to SKAT and how often?

No idea, find a local accountant who can assist in these matters.

What is the standard software platform to connect to webshops in Denmark?

E-conomic (nice little monopoly there)

How is VAT refunded between EU countries?

You need to register for MOSS (Mini One Stop Shop) via SKAT’s website. It’s aimed at large companies who are able to integrate their e-commerce site into their MOSS platform. Good luck.

How can moms and/or customs duty be prepaid on purchases from outside the EU?

No idea, find a local accountant who can assist in these matters.

5 thoughts on “Opening a foreign startup in Denmark”

  1. Hi guys!
    As I will maybe soon face the same situation (beeing a Software Developer and moving from Germany to Denmark or live in both countries) I wanted to ask if you could share some experiences in how to best organize things with companies, taxation and so on…
    If you would be up for some writing or a should call, would be awesome!

    Greetings from Berlin
    Steffen

    1. Hallo Steffen (moin from Hamburg), my informal advice would be to operate your German business from Denmark and issue invoices from your DE-company unless there are significant business expenses you can put through a new DK-based company that you can’t process through your DE-company.

      If the only reason for opening a DK-business is so that you can issue bigger invoices to DK-based customers then you’ll be expected to put those earnings through your new DK-based company as customers will want to pay via DIBS or local bank transfers vs. IBAN transfers outside of DK. Hope this helps 🙂

      1. Thanks so much for the quick reply! (BTW could switch to German but not sure if you are native or the blog should continue in German ;)).
        So just to be sure: you had no problems operating a DE-company (GmbH, Einzelunternehmen, whatever) all under DE-taxation and still live entirely in Denmark for some time?

        1. Hi Steffen, I just arrived in Hamburg so not a native by any means. English helps readers too. 🙂

          I’ve not yet commenced business operations in Germany (starts in March, 2017) so you’ll need to speak with a DE-based accountant to be sure of the rules of operating businesses in multiple EU countries.

          There shouldn’t be a difference between operating your DE-based company from DE vs DK, especially since you are a) an EU Citizen, b) if you’re living in both countries you can claim you’re spending most of your time in DE.

          If you’re invoicing DK-clients and putting earnings through your DK-company then you’ll be paying tax on earnings in DK, you won’t pay it also to DE as both countries have signed double-tax treaties; you only get taxed once for earnings by either country.

Leave a Reply

Your email address will not be published. Required fields are marked *