Foreigners need permission from the Minister of Justice to purchase real estate assets used for commercial purposes in Denmark, unless investing through a corporation which has its registered office in Denmark. The need for a permit can easily be avoided by establishing a Danish subsidiary company.
The need for a permit does not apply to corporations registered in EU member states, as long as the purpose of purchasing the real estate is business related.
Last modified 22 Mar 2024
The concept is not relevant.
Last modified 22 Mar 2024
The types of corporate vehicles are:
It is necessary to register all types of corporate vehicles with the Danish Business Authority.
Last modified 22 Mar 2024
A partnership comprises partners who are either individuals or companies. Each partner has unlimited joint and several liability for the activities of the partnership. A partnership is not governed by the Danish Companies Act. However, certain provisions of the Act on Certain Commercial Undertakings, law no. 249 of 2 January 2021 (Lov om erhvervsdrivende virksomheder) apply, for instance regarding the partnership’s name. The partnership is tax transparent.
Partnerships where at least one partner is not a limited company must be registered with the Danish Business Authority in accordance with the registration rules regarding sole trader businesses.
However if all partners are limited companies the partnership must be registered with the Danish Business Authority in accordance with the rules applicable to public limited companies, where the articles of association and the partnership's annual report will be available to the public.
In a public limited company, the capital contributed by the shareholders is divided into shares. The shares of a public limited company may be offered to the public through a listing on a stock exchange.
The shareholders' liability for the activities of the public limited company is limited to their respective capital contributions. A public limited company is governed by the Danish Companies Act.
In a private limited company, the capital contributed by the shareholders is divided into shares. The private limited company has traditionally been used for businesses with only a few shareholders who do not seek to raise capital from a wide circle of investors. A private limited company cannot have its shares listed on a stock exchange.
The shareholders' liability for the activities of the private limited company is limited to their respective capital contributions. A private limited company is governed by the Danish Companies Act.
In a limited partnership, the general partner is personally liable for the liabilities of the limited partnership. Consequently, the general partner is often a private limited company or a public limited company. The limited partners are only liable up to the extent of the capital they have contributed. A limited partnership is tax transparent.
A limited partnership is not governed by the Danish Companies Act. However, certain provisions of the Act on Certain Commercial Undertakings, law no. 659 of 1 July 2019 (Lov om erhvervsdrivende virksomheder) apply, for instance regarding the limited partnership’s name, power of procuration and the requirement for administrative and financial powers of the general partner.
Partnerships where the general partner is not a limited company must be registered with the Danish Business Authority in accordance with the registration rules regarding sole trader businesses.
However, a limited partnership must be registered with the Danish Business Authority, in accordance with the registration rules for public limited companies, if the general partner is a public limited company or a private limited company. The articles of association and the limited partnership's annual report will be available to the public.
A limited partnership company is a public limited company, in which the limited partners (shareholders) have contributed a certain amount of capital which is divided into shares. However, like a limited partnership a limited partnership company includes a general partner with unlimited liability. A limited partnership company is considered transparent for tax purposes.
A limited partnership company is governed by the Danish Companies Act with necessary adjustments.
Last modified 22 Mar 2024
There is no minimum capital required to set up a partnership.
A public limited company must have a minimum share capital of DKK 400,000. There is no maximum share capital. A minimum of 25% of the share capital must be paid when the company is registered.
A private limited company must have a minimum share capital of DKK 40,000. There is no maximum share capital. A minimum of 25% of the share capital but not less than DKK 40,000 must be paid when the company is registered.
There is no minimum capital required to set up a limited partnership.
A limited partnership company must have a minimum share capital of DKK 400,000. There is no maximum share capital. A minimum of 25% of the share capital must be paid when the company is registered.
Last modified 22 Mar 2024
In general, the legal costs for setting up a partnership, are approximately DKK35,000 to 50,000.
DKK 10,000 to 25,000.
DKK 10,000 to 25,000.
Setup costs between DKK 35,000 and 50,000.
Setup costs between DKK 35,000 and 50,000.
Last modified 22 Mar 2024
A partnership can become operative immediately but applications for VAT registration normally take two to four weeks.
A public limited company can become operative in one or two days.
A private limited company can become operative in one or two days.
A limited partnership can become operative in one or two days.
A limited partnership company can become operative in approximately 6-8 weeks.
Last modified 22 Mar 2024
There are no corporate governance requirements in Denmark for a partnership.
A public limited company may have either (i) an executive board and a board of directors or (ii) an executive board and a supervisory board.
In public limited companies where management is divided between an executive board and a board of directors (classical Danish management system); the executive board is in charge of day-to-day management under the guidelines and directions issued by the board of directors.
In public limited companies with no board of directors, the executive board must be appointed by a supervisory board that oversees the executive board (classical two-tier system).
In a public limited company with at least 35 employees (on average over the past three years), the employees are entitled to elect a number of members of the board of directors among themselves.
Unless agreed otherwise, the shareholders have a right to pass resolutions which is exercised at the general meeting.
A general meeting must be held no more than five months after the end of each financial year. The annual accounts accompanied by the auditor's adopted annual report, the resolutions passed concerning the adoption of the accounts, the allocation of profits or the covering of losses, as well as any other business which the articles of association prescribe, must be presented at the general meeting.
Extraordinary general meetings must be held upon request from the central governing body (the board of directors or the executive board depending on the management system), the supervisory board, the auditor elected by the general meeting or when otherwise required by the law. Shareholders that hold 5 percent of the share capital, or any smaller fraction of the capital as prescribed by the articles of association, and shareholders that are so authorized under the articles of association can also request an extraordinary general meeting in writing.
Extraordinary general meetings to consider specific issues must be convened within two weeks of receipt of a request to that effect. At the end of each financial year, the company must prepare financial statements to be audited and filed within five months. The financial statement is subject to publicity requirements.
A private limited company may have either:
In a private limited company where management is divided between an executive board and a board of directors (classical Danish management system); the executive board is in charge of the day-to-day management under the guidelines and directions issued by the board of directors.
In a private limited company with no board of directors, the executive board can be appointed by a supervisory board that oversees the executive board (classical two-tier system), but the private limited company is also allowed to operate solely with an executive board only (one-tier system).
In a private limited company with at least 35 employees (on average over the past three years) the employees are entitled to elect a number of members of the board of directors from among themselves.
If the employees are entitled to elect directors and choose to do so, the private limited company must have a board of directors or a supervisory board.
Unless agreed otherwise, the shareholders have a right to pass resolutions, which is exercised at the general meeting.
A general meeting must be held no more than five months after the end of each financial year. The annual accounts, accompanied by the auditor's annual report, the resolutions passed concerning the adoption of the accounts, the allocation of profits or the covering of losses, as well as any other business which the articles of association prescribe, must be presented at the general meeting.
Extraordinary general meetings must be held upon request from the central governing body, the supervisory board, the auditor elected by the general meeting or when otherwise required by law. For private limited companies, any shareholder can request that an extraordinary general meeting is convened.
Extraordinary general meetings to consider specific issues must be convened within two weeks of receipt of a request to that effect. At the end of each financial year, the company must prepare financial statements to be audited and filed within five months. The financial statement is subject to publicity requirements.
There are no corporate governance requirements in Denmark for a limited partnership.
A limited partnership company follows the same rules as a public limited company with necessary adjustments.
Last modified 22 Mar 2024
There are no mandatory corporate compliance costs connected with the operation of a partnership. Costs for accounting compliance, for a simple organisation, will normally be between DKK 25,000 to 35,000 annually.
Compliance costs between DKK10,000 and 25,000 annually for a simple small company.
Compliance costs between DKK 10,000 and 25,000 annually for a simple small company.
Annual accounting compliance costs between DKK10,000 and 25,000 for a simple limited partnership.
Compliance costs between DKK10,000 and 25,000 annually for a simple small company.
Last modified 22 Mar 2024
A partnership is tax transparent. The applicable tax depends on the status of each partner.
Capital gains in Denmark are subject to tax and for corporate owners (resident or non-resident) the applicable rate is 22% (2024). For individuals, the rate is up to 42%.
Danish-resident entities are subject to taxation in Denmark on all income deriving from Denmark. Income from permanent establishments and properties located in foreign jurisdictions is generally not subject to taxation in Denmark.
Taxable income comprises gross income minus deductible costs as shown in the company’s profit and loss statement. This may then be further adjusted to allow for exempt income, disallowable expenditure and losses brought forward.
All resident group entities and the Danish branches of non-resident companies are subject to mandatory tax consolidation.
Dividends from a Danish company distributed to a foreign parent company are exempt from Danish withholding tax if both the following conditions are met:
Subsidiary Directive or a tax treaty with the state in which the parent company is resident. Additionally, it is a requirement that the shareholder is treated as the beneficial owner of the dividends.
Capital gains on shares in Danish companies owned by foreign shareholders are generally not subject to Danish taxation.
A limited partnership is tax transparent. The applicable tax depends on the status of each partner.
Like the limited partnership a limited partnership company is treated as transparent for tax purposes.
Last modified 22 Mar 2024
How much does corporate and accounting compliance cost for each type of corporate vehicle used to invest in real estate?
There are no mandatory corporate compliance costs connected with the operation of a partnership. Costs for accounting compliance, for a simple organisation, will normally be between DKK 25,000 to 35,000 annually.
Compliance costs between DKK10,000 and 25,000 annually for a simple small company.
Compliance costs between DKK 10,000 and 25,000 annually for a simple small company.
Annual accounting compliance costs between DKK10,000 and 25,000 for a simple limited partnership.
Compliance costs between DKK10,000 and 25,000 annually for a simple small company.
Last modified 22 Mar 2024