Denmark – Self-Employment

How does self-employment work for expats in Denmark?

Nordic and EU/EEA nationals are free to launch a business in Denmark without restriction. Citizens from countries outside the Nordic region, the EU/EEA, and Switzerland, however, must obtain a residence and work permit before they can be self-employed or run an independent company in Denmark.

As an EU citizen, you are entitled to live and work in Denmark with or without an EU residence document. You may enter Denmark and begin working straight away, with no permit required. For non-EU/EEA nationals, the route is considerably more structured: valid immigration status must be in place before any commercial activity begins, and operating without the correct authorisation can put both your business registration and future residency prospects at serious risk.

The CPR number — Denmark’s personal identification number — is a prerequisite for most official procedures, from opening bank accounts and registering for tax to accessing the MitID digital identity platform. EU/EEA nationals can obtain a CPR number once they have registered their presence in Denmark, while non-EU nationals are issued one as part of their residence permit process.

Denmark establishes tax residency on the basis of physical presence and personal ties to the country. Your residency status has a substantial bearing on your tax obligations: Danish tax residents are liable for tax on their worldwide income, whereas non-residents are only taxed on income generated within Denmark. This mirrors the approach taken in countries such as Australia or Germany, where settling permanently triggers full liability on global earnings.

What are the different self-employment and business structures available in Denmark?

The four most widely used business structures in Denmark are the Sole Proprietorship, the Limited Liability Company, the Branch Office, and registration as a Foreign Company. Each comes with its own obligations, liability exposure, and administrative demands, so picking the right structure at the start is essential.

Sole Proprietorship (Enkeltmandsvirksomhed)
This is the most straightforward form of business ownership, operated by a single person. Liability is unlimited — your personal assets are directly exposed to the debts of the business. There is no minimum share capital, and the structure is simple and inexpensive to create. The business has no legal identity separate from you; its profits are taxed as part of your personal income. You must hold a Danish CPR number and be resident in Denmark to register a sole proprietorship, which means it is not accessible to non-resident foreigners, even EU passport holders who have not yet established Danish residency.

Private Limited Company (Anpartsselskab — ApS)
The ApS is by far the most popular company form in Denmark, particularly for startups, small and medium-sized enterprises, and foreign investors. An ApS requires a minimum share capital of DKK 40,000 (as of 2024) and provides shareholders with limited liability protection. It accommodates multiple owners, flexible management arrangements, and gives the business credibility with banks, partners, and investors. Notably, as of January 2025, the minimum share capital requirement was reduced to DKK 20,000. Both residents and non-residents may be shareholders and directors of an ApS or an A/S.

Public Limited Company (Aktieselskab — A/S)
The A/S is aimed at larger enterprises, particularly those intending to raise capital from the public or issue shares to outside investors. It requires a minimum share capital of DKK 400,000 and mandates compliance with stringent corporate governance standards. This structure delivers full limited liability and bolsters credibility and transparency in international dealings.

Personal Business (Personlig Virksomhed — PMV)
This is a highly simplified structure intended for individuals carrying out very small-scale business or hobby activities. Liability is unlimited and personal assets are exposed. There is no minimum share capital, but annual turnover may not exceed DKK 50,000. Crucially, PMV businesses cannot register for VAT and cannot take on employees.

According to Copenhagen Business House, the ApS and sole proprietorship are the structures most relevant to expats. The sole proprietorship suits resident freelancers and low-risk operators, while the ApS appeals to those who want liability protection, intend to work with larger clients, or wish to keep personal and business finances clearly separated from the outset.

How do you register as self-employed in Denmark?

Registering as a sole proprietor in Denmark is a straightforward process managed almost entirely online and at no cost. Below is a step-by-step guide. Always verify the current requirements with the Danish Business Authority’s Virk portal or the Business in Denmark official service point, as procedures can change.

1. Confirm your residency and work status. Danish residency is a requirement for registering a sole proprietorship. Non-EU/EEA nationals must have a valid residence and work permit that permits self-employment before taking any further steps.
2. Obtain your CPR number. A CPR number is indispensable for virtually all official procedures. EU/EEA nationals can register at their local municipality (kommune). Non-EU nationals receive their CPR number as part of the residence permit process.
3. Set up MitID. You will need MitID — Denmark’s digital signature — to log in to Virk and register your business. If you have recently arrived in Denmark, you must get MitID in place before you can proceed with registration.
4. Choose a unique business name. Your chosen name must be distinct from any already registered. You can check for name conflicts on the Virk website before applying. Submitting a name already in use will result in your application being rejected, requiring you to start the process again.
5. Select a business address. A registered business address is required. Many sole traders use their home address initially, and the business authority generally accepts this arrangement.
6. Select an activity code (branchekode). You must identify the activity code that best describes what your sole proprietorship does. This code categorises the nature of your business operations.
7. Register online via Virk.dk. Once you have gathered all necessary information, submit your registration application through the Virk website. There is no charge for registering a sole proprietorship.
8. Receive your CVR number. After your application is submitted, you will receive your CVR number within a few days. This eight-digit identifier serves as both your business registration number and your VAT number.
9. Register for VAT if applicable. Once your turnover exceeds DKK 50,000 within a 12-month period, VAT registration becomes mandatory. This is also done through Virk.dk.
10. Open a business bank account. A separate business account is not a legal requirement, but it is highly recommended. Keeping finances separate makes bookkeeping and tax filing considerably simpler, and most banks will ask for your CVR number when opening a business account.

The registration process typically takes only a few days. If you already have both a CPR number and MitID, you can complete the registration on Virk.dk and receive your CVR number almost immediately.

How do you set up a company in Denmark as an expat?

Establishing a private limited company (ApS) is the favoured route for expats who are not yet Danish residents or who want personal liability protection. The process is conducted digitally and does not generally require a notary for document signing. All founding documents can be drafted in English, and no notarial certification of signatures is required. Check the Danish Business Authority’s official guide for the latest requirements, as rules and fees are subject to change.

1. Check your eligibility. Non-residents and foreign entities may be shareholders and directors — there is no strict Danish residency requirement for directors. You will, however, need a CPR number or an accepted foreign eID to complete registration online.
2. Choose and verify a unique company name. Search for name availability in the Danish Business Registry (CVR) via the Virk portal. The name you select must differ clearly from any company already on the register.
3. Prepare founding documents. You must draft articles of association, a memorandum of association, and any relevant shareholder agreements. The Danish Business Authority provides templates to assist with this.
4. Deposit the minimum share capital. The minimum share capital for a new ApS is DKK 20,000 (effective January 2025). In practice, founders typically place the capital into a lawyer’s client (escrow) account or into a bank account that confirms the deposit ahead of registration.
5. Open a corporate bank account. Once the capital deposit is verified, the company bank account is opened. Bank onboarding can take additional time, as KYC procedures for international clients often involve more extensive documentation requirements.
6. Register with the Danish Business Authority. Once the founding documents are drafted and signed and the share capital has been paid, the company can be registered online with the Danish Business Authority. The company will then receive its CVR number — typically within minutes for uncomplicated applications. The registration fee is DKK 670 (as of 2024). Always confirm the current fee at the official Virk portal.
7. Register for tax and VAT. Following registration with the Danish Business Authority, the company must register for VAT and tax with SKAT. The application for VAT registration must be submitted no later than eight days before commercial activity in Denmark begins.
8. Establish a registered office address in Denmark. A Danish ApS must maintain a registered office address within Denmark and keep its shareholder register there. Virtual office providers are a common solution for this, particularly for non-resident founders.

When documents are in order, incorporation usually takes one to two weeks, though bank account setup or permit requirements can cause delays. Even though the process of setting up a Danish company can be completed quickly and straightforwardly, it is always wise to consult an attorney and/or tax professional before establishing a business in Denmark.

Can you work as a digital nomad in Denmark?

Denmark does not currently offer a dedicated digital nomad visa of the type introduced by countries such as Portugal or Estonia. That said, several pathways exist for location-independent workers, depending on their nationality and plans.

EU and EEA citizens, along with citizens of Liechtenstein and Switzerland, need no visa to travel to Denmark and are free to work there without a work permit. This makes Denmark a relatively uncomplicated base for EU/EEA remote workers, who simply register their residency and establish their business or freelance operation through the standard routes described elsewhere in this article.

For non-EU/EEA nationals, the situation is more involved. Those from countries with visa-free short-stay access to the Schengen Area may remain for up to 90 days in any 180-day period, but carrying out work for clients — even entirely remotely — during a tourist stay occupies a legal grey zone that carries real risk. Denmark actively enforces its work permit requirements, and operating without the correct status can jeopardise future visa applications and residency eligibility.

Start-up Denmark is a government-backed visa scheme designed to enable talented entrepreneurs to build high-potential startups or branches in Denmark. The scheme is open to non-EU, non-EEA, and non-Swiss citizens, as well as Danish citizens. Applicants submit a business plan that is assessed by an independent expert panel. If the panel endorses the plan, the applicant becomes eligible to apply for a residence and work permit as a self-employed entrepreneur. The permit is issued for up to two years, with the possibility of extension for three years at a time. This is the closest Denmark currently comes to a formal founder visa — though it is aimed at startup founders rather than freelancers working for clients abroad.

While the Start-up Denmark permit allows an extended stay, the criteria around establishing a business with significant growth potential are demanding. Digital nomads who simply want to work remotely from Denmark for a few months without founding a Danish entity will find this route unsuitable and should explore whether any immigration treaty arrangements between Denmark and their home country offer alternative options.

For the most up-to-date information on pathways and eligibility, visit startupdenmark.info and the Danish Immigration Service (nyidanmark.dk).

What taxes and social contributions apply to self-employed expats and business owners in Denmark?

Denmark carries one of the highest overall tax burdens in the world, and this is a central factor for anyone considering self-employment or running a business there. At the same time, the tax system funds an extensive welfare state, high-quality public services, and universal healthcare — benefits from which resident business owners draw directly.

Personal income tax (self-employed individuals and sole traders)
For sole proprietors, business profits form part of your personal income tax return. Allowable expenses — such as office costs or equipment — can reduce your taxable income. Individuals are subject to national income tax, municipal tax, labour market contribution (AM-bidrag), and an optional church tax. Municipal tax rates differ depending on where you live, averaging around 25%. The combined effective rate for many self-employed people can reach approximately 45–55% on income above certain thresholds — broadly comparable to the top personal rates in countries such as Sweden or Belgium, though Denmark’s social contribution model differs in that it is largely folded into income tax rather than collected as a separate employer/employee split.

Labour market contribution (AM-bidrag)
The AM-bidrag is levied at 8% of gross income before other taxes are applied. Sole proprietors do not make social scheme contributions for themselves beyond ordinary taxes. Unlike the PAYE-style social security systems common in many other countries — where employers and employees each pay separate contributions towards state pensions, healthcare, or unemployment cover — Denmark’s social spending is financed predominantly through general taxation rather than dedicated payroll charges.

Corporate tax (for ApS and A/S)
The corporate tax rate in Denmark is 22%, which sits below the OECD average. This rate applies to the taxable profits of limited liability companies. Dividends distributed to shareholders are subject to additional tax: dividends from shares are taxable at a rate of 27%.

VAT (Moms)
VAT registration becomes obligatory once turnover exceeds DKK 50,000 within a 12-month period. The standard VAT rate is 25%, placing Denmark among the highest in Europe. VAT is known locally as “moms” and is administered by SKAT. VAT-registered businesses must file periodic returns — typically quarterly for newly registered businesses.

The Researcher and Expat Tax Scheme
Denmark provides a special tax arrangement for qualifying highly paid foreign employees and researchers. Rather than progressive tax rates, eligible individuals pay a flat 27% income tax (plus labour market contributions, making a combined rate of 32.84%) for a period of up to seven years. This scheme applies to employees of Danish companies and is generally not available to self-employed sole traders. From 2026, the scheme will be open to a wider group of people because the minimum monthly salary threshold is being lowered to DKK 65,400 (down from DKK 78,000 in 2025).

Double taxation treaties
Denmark has concluded double taxation agreements with approximately 70 countries. These treaties can have a major impact on the tax position of expats who have income from, or continuing tax obligations in, their home country. Seek advice from a tax adviser with expertise in both jurisdictions before starting self-employment. For current rates and official guidance, visit SKAT’s official English-language portal.

Are there any incentives, grants, or programmes to encourage expat entrepreneurs in Denmark?

Denmark offers a targeted set of programmes designed to attract high-potential international entrepreneurs, though the country does not run large-scale free zones or blanket tax holidays of the kind seen in some Gulf or Southeast Asian jurisdictions.

Start-up Denmark
Start-up Denmark is a Danish Government visa programme designed to enable talented entrepreneurs to develop high-potential startups or branches in Denmark. Applicants submit a business plan that is reviewed by an independent expert panel. If the panel endorses the plan, the applicant becomes eligible to apply for a residence and work permit as a self-employed entrepreneur. Processing times may extend to eight weeks during busy periods. The scheme targets innovative, scalable ventures rather than conventional freelancers or small traders, and is comparable in ambition to France’s French Tech Visa or Estonia’s Startup Visa — though evaluation criteria differ between programmes. Visit startupdenmark.info for full eligibility details and to begin the application process.

Invest in Denmark
Invest in Denmark, the Danish Government’s investment promotion agency, provides free advisory services to international companies and entrepreneurs exploring whether to establish a presence in Denmark. Assistance covers choosing the appropriate legal structure, understanding the tax landscape, and making connections with local service providers — making it an excellent first point of contact before commissioning paid legal or accounting support.

The Researcher and Expat Tax Scheme
As discussed in the tax section, highly paid foreign employees working for Danish companies benefit from a flat combined tax rate of 32.84% (including labour market contributions) for up to 84 months. While this does not directly apply to sole traders, it may be relevant to founders who structure their operation as an ApS and pay themselves a qualifying salary from the company, provided the minimum salary threshold is met (DKK 78,000 per month in 2025; DKK 65,400 per month from 2026). Confirm your eligibility with a qualified Danish tax adviser and check SKAT’s website for current thresholds.

Municipal and regional startup support
Many Danish municipalities and regions run their own startup support initiatives, incubators, and co-working schemes — particularly around Copenhagen, Aarhus, and Odense. These programmes typically offer mentorship, networking opportunities, and access to subsidised workspace. Availability and eligibility criteria vary by location and change regularly, so check with your local municipality or regional business development body for what is currently on offer.

What are the practical challenges of being self-employed or running a business in Denmark?

Denmark has a well-deserved reputation as one of the easier places to do business, but expat entrepreneurs frequently run into a number of practical obstacles — especially during the initial stages of getting established.

Language and bureaucracy
From setting up your CVR address and managing digital post to ensuring full compliance with Danish tax, payroll, and pension rules, the process can be daunting without a good command of the local language. Many official communications — including SKAT tax notices and Danish Business Authority letters — are sent in Danish as a default, and the consequences of missing or misreading official correspondence can be serious. Engaging a local accountant or bilingual adviser from the outset is strongly recommended.

Banking access
For foreign entrepreneurs, opening a business bank account can be one of the most time-consuming hurdles. Bank onboarding for international clients tends to require more extensive documentation, as KYC processes are thorough. Danish banks are legally required (as of 2025) to open a business account once a CVR number is held, but anti-money-laundering checks can still slow things down. Prepare a thorough documentation pack — including your business plan, financial projections, proof of identity, and proof of address — before approaching any bank.

Bookkeeping obligations
Compliance with the Danish Bookkeeping Act is mandatory — all invoices, receipts, and expense records must be retained for at least five years. These records are required for your tax return and in the event of an audit. For sole traders in particular, this discipline demands either rigorous personal record-keeping or regular involvement from a local bookkeeper.

Tax self-assessment for self-employed workers
If you are self-employed or have complex income sources, the tax filing deadline can be extended to 1 July (compared with 1 May for employees). Self-employed individuals must supply information beyond the pre-filled return, covering business income and expenses, depreciation, and deductible costs. Unlike salaried employment — where SKAT pre-populates most of your return automatically — running your own business requires active management of your tax position throughout the year.

Invoicing and contract norms
Danish business culture places a high premium on clear written contracts and precise invoicing. VAT-registered businesses must include their CVR number on all invoices, show the VAT amount as a separate line item, and file VAT returns on schedule. Failure to comply can attract penalties from SKAT. Electronic invoicing (e-faktura) is increasingly standard for business-to-business transactions, and government contracts require it by law.

Professional support
Unlike some countries where a licensed tax agent is a legal requirement (as with a gestor in Spain), Denmark does not oblige most businesses to use a professional for registration or tax filing. However, for non-Danish speakers establishing a company, consulting an attorney and/or tax expert before setting up is always advisable. The complexity of the Danish tax system — particularly for those with cross-border income or an ApS structure — means that professional advice typically pays for itself through the errors it prevents and the deductions it uncovers.

Frequently asked questions

Can I be both employed and self-employed at the same time in Denmark?

Yes. Danish law allows you to hold salaried employment alongside a registered sole proprietorship or ApS. You will need to manage both income streams for tax purposes, making use of a primary and secondary tax card as appropriate. Everyone in Denmark may earn a certain amount before tax becomes payable — the personal allowance is DKK 54,100 in 2026 (DKK 51,600 in 2025). Make sure to notify SKAT of your self-employment income through your preliminary income assessment (forskudsopgørelse) to prevent underpaying tax during the year.

How do I handle invoicing foreign clients from Denmark?

If you are VAT-registered in Denmark and providing services to business clients elsewhere in the EU, you generally do not charge Danish VAT — the reverse charge mechanism applies and your client accounts for VAT in their own country. For clients located outside the EU, Danish VAT typically does not apply to services. Always include your CVR number on invoices and state clearly whether VAT is applicable. Consult a Danish accountant to confirm the correct treatment for your specific services and client locations, as the rules can vary depending on the nature of the service.

What happens to my business registration if my residency status changes?

Your business registration is tied to your legal right to be self-employed in Denmark, which depends on your residency or permit status. If your permit lapses or is not renewed, you may lose the entitlement to continue operating. This is especially significant for sole proprietors, since the individual and the business are legally inseparable. If you move from one permit category to another — for example, switching from a work permit to family reunification — confirm with the Danish Immigration Service (SIRI) that your new status still permits self-employment. For ApS owners, the company continues to exist as a distinct legal entity, but your position as a director or active manager may need to be reassessed.

Do I need a Danish address to register a business?

Yes, a registered office address within Denmark is required. Non-resident founders and expats who are not yet fully based in Denmark frequently use virtual office providers for this purpose. For sole proprietorships, using a private home address is common in the early stages and is generally accepted by the business authority.

Is there a minimum income requirement for the Start-up Denmark visa?

The Start-up Denmark scheme is evaluated primarily on the growth potential and innovative quality of your proposed business, as judged by an independent expert panel. There is no fixed personal income threshold as such, but the panel will scrutinise your financial projections and your ability to support yourself financially throughout the permit period. Check the official Start-up Denmark website for current evaluation criteria, which are subject to revision.

What VAT records must a self-employed person keep in Denmark?

The Danish Bookkeeping Act requires you to retain all invoices, receipts, and expense records for a minimum of five years. These documents are needed for your tax return and may be requested in the event of an audit. VAT-registered businesses must also keep copies of every invoice issued and received, submit periodic VAT returns (usually quarterly), and maintain records of any cross-border transactions. SKAT can request documentation at any point, so setting up a well-organised digital accounting system from day one is strongly advisable.

Can a non-resident foreigner own a Danish ApS without living in Denmark?

Yes. Both residents and non-residents are permitted to be shareholders and directors of an ApS or A/S. There is no requirement for the director to hold Danish residency or citizenship. The ApS must, however, maintain a registered office address in Denmark and comply fully with all Danish accounting, bookkeeping, and filing obligations, regardless of where its owners are located.

Does Denmark have a double taxation agreement with my home country?

Denmark has concluded double taxation agreements with approximately 70 countries. These treaties are intended to prevent the same income from being taxed in both Denmark and your home country at the same time. The specific terms differ considerably from one treaty to another — some provide full exemptions, others offer tax credits. You should establish whether a treaty exists between Denmark and your home country and take professional advice on which jurisdiction holds taxing rights over each income stream. A comprehensive list of Denmark’s tax treaties is maintained by SKAT.