A sole proprietorship in Denmark is a great option for people who don't have a lot of financial resources or are just starting out as an entrepreneur. Enkeltmandsvirksomhed is Denmark's simplest form of business, and is also a popular choice for people from abroad. If you are thinking about starting your own sole proprietorship in Denmark and don't know where to start, we are happy to help.
Establishing an Enkeltmandsvirksomhed is much easier than with other Danish legal forms, as no share capital is required in this case. However, it is worth bearing in mind that the owner is burdened with any financial obligations that accrue to the company. In the case of a Danish sole proprietorship, as with its Polish counterpart, the owner's private assets may be at risk if the company's debts arise. As the name suggests, in a sole proprietorship, only one person makes strategic decisions about the future fate of the business. However, it is possible to grant a power of attorney so that other people can also take certain actions on behalf of the business.
The registration process of Enkeltmandsvirksomhed is very short and simple. It consists of the following steps:
I. Preparing the required documents and information.
II. Completion and submission of the registration form.
III. VAT registration (optional).
IV. Establishing a company bank account.
I. Preparation of required documents and information.
In order to start the registration process, you need to prepare in advance such documents and information as:
- CPR number (personal identification number),
- company name,
- PKD code (business activity code),
- company address.
II. Completing and submitting the registration form.
In Denmark, it is possible to register a sole proprietorship online, through the virk.dk portal. There is a registration form on the site, where you need to fill in the required information, such as the name of the owner, the name of the company, etc. After preparing the above-mentioned documents and information in advance, filling out the form should not take more than a dozen minutes. Once you have entered all the data, it is worth making sure again that it is correct, and then approve the form.
Once the form is sent to the state authorities and approved, you will be given a CVR number. It is necessary for the performance of various formalities in connection with your business and is a unique identification number for your business.
III. VAT registration (optional).
Registering a sole proprietorship is not always mandatory in Denmark, but if the company's annual turnover is likely to be higher than DKK 50,000, then such an obligation arises. The easiest way to register a business for VAT is through the Virk.dk portal. All you need to do is log into your account, fill out the VAT registration form and then approve it. You can also do this later than during the company formation process. It is also worth considering tax representation services.
IV. Setting up a company bank account.
It is advisable, also when running a sole proprietorship, to open a separate bank account exclusively for carrying out company-related transactions. This makes tax settlements and accounting for finances much clearer and easier than if the founder uses one account for both business and personal purposes.
During the process of registering your sole proprietorship in Denmark, you should make sure that you have all the necessary permits and licenses. These are required for certain types of business and failure to do so can result in penalties. In addition, you should also consider taking out insurance for your business, tailored to the individual nature of your business.
As is the case with running a business in other countries, Denmark has individual regulations governing how the bookkeeping of a sole proprietorship should look like. It is necessary to document the operations carried out in accordance with the current regulations, since in the event of an inspection by state authorities, any irregularities may result in penalties. The owner can choose to do the bookkeeping on his own, however, if he does not have the necessary knowledge and experience, it is recommended to use the services of a specialist. If you do not know to whom to entrust the bookkeeping of your company, we will be happy to assist you.
Of course, it's also worth mentioning that, as an entrepreneur in Denmark, you must keep an eye on all deadlines related to tax filing. The tax returns you file should not only be delivered on time, but also completed in accordance with the current requirements of SKAT, the Danish tax authority. If you have any doubts about taxation in Denmark, it is advisable to contact an experienced accountant.
Enkeltmandsvirksomhed has numerous advantages, which is why many people each year choose to open just this type of business. Here are the most important of these:
- No share capital, making it an affordable option for people who don't have a lot of money to start.
- Ease of running and managing the business, making it easy for many budding entrepreneurs to take their first steps without too much stress.
- No need to register the company as a VAT payer.
- A simple structure in which all decisions regarding the business are made by the owner, but at the same time the possibility of granting power of attorney to selected persons.
- Support from the Danish administration in the process of registering the company and all formalities related to it.
- One tax return per year, i.e. one time taxation of the income obtained by the company.
Our company offers comprehensive assistance with Enkeltmandsvirksomhed registration, ensuring that all the necessary steps, from document preparation to VAT registration, are carried out easily and quickly. Take advantage of our experience to avoid mistakes and smoothly start your business in Denmark with convenient solutions for you.