Atrium and Associates Corporate and Legal Services

Why Set up a Business Company

in Denmark when starting a business?

Denmark is one of the highest and most developed members of the European Union. Its corporate tax rate is 25%, which can in no way be considered as a “tax haven”.

However, Danish legislation provides an excellent type of entity, the K/S entity, equivalent to the UK Limited Liability Partnership, offering a zero rate of tax - reason why the K/S popularity amongst foreign entrepreneurs which increase every year.

A Limited Partnership in Denmark - Danish K/S (Kommanditselskab) is a type of partnership where there are general partners and limited partners. General partners have unlimited liability for the partnership's obligations, while limited partners have liability limited to their investment.

The registration of a K/S company in Denmark is taken care by the DCCA, the Danish Commerce and Companies Agency.

Danish K/S

Tax Advantages

K/S structures can be used for various business purposes, including investments and real estate ventures. However, tax laws and regulations can change, so it's crucial to consult with a tax advisor or legal professional for the most up-to-date and accurate information.

It's important to emphasize that tax laws can be complex and can change over time. For accurate and up-to-date information tailored to your specific situation, it's recommended to consult one of our Tax or Legal Advisors who is well-versed in Danish tax regulations and familiar with the latest developments. And that’s why we are here for. Atrium & Associates will provide you all tax and legal support to help you deciding for the most suitable business structure for your business project; here are some general tax considerations related to Danish K/S structures with no resident partners:

Non-Resident Taxation:

If the K/S has no resident partners, the tax treatment may vary depending on whether the income generated in Denmark is considered "Danish-source income" or "foreign-source income."

Danish-Source Income:

Income generated within Denmark is typically subject to Danish taxation. This includes income from Danish real estate, business activities conducted in Denmark, and other sources of income derived from within the country.

Foreign-Source Income:

Income generated outside Denmark may be subject to different rules. Some types of foreign-source income may not be taxed in Denmark, depending on double taxation agreements between Denmark and the country where the income is earned.

Tax Deductions and Allowances:

The K/S may be eligible for certain tax deductions and allowances, depending on the nature of its activities and income sources. For example, expenses related to generating income may be deductible, reducing the taxable income.

Withholding Taxes: Denmark may impose withholding taxes on certain types of payments made to non-resident partners, such as dividends and interest. Tax treaties may influence the rate of withholding tax applicable.

Investment Holding Structures:

Some non-resident investors use Danish K/S structures for holding and managing investments in Denmark, such as real estate. The taxation of capital gains, rental income, and other investment-related income would depend on the specifics of the investment and the applicable tax rules.

Tax Reporting Obligations:

The K/S and its partners may have tax reporting obligations in Denmark, even if the partners are non-residents. These obligations could include submitting tax returns and providing relevant financial information.

Denmark K/S companies with non-resident partners are not considered as resident for tax purposes in Denmark and for this reason they are not entitled to take advantage of international Double Taxation agreements concluded by Denmark with several countries. In such case, the assets or profits of a K/S entity, without any additional tax liability, they can be reflected on its annual financial statements, which can be requested for inspection when registering subsidiaries.

The advantages offered by Danish K/S are the same as those offered by UK LLPs.

Atrium is offering packagesoffering a higher degree of confidentiality and anonymity,our Premium Packages, including our Nominee Services. Please do contact us for related information in terms of services included and special fees.

Denmark K/S Limited Partnership

General Information Procedures to incorporate

To register a company in Denmark is a simple process that just takes a few key steps and starts with choosing the right business structure. Due to its attractive business environment, many overseas entrepreneurs have incorporated their local Nordic headquarters in Copenhagen or other Danish cities.

Atrium offers a wide range of services to local and foreign investors who are interested to register their company in Denmark. We can help investors since the moment the company has been set up, and from the moment the company is needing solutions or other types of legal services.

Key Corporate Features

General Partners

The Danish Limited Partnership consists of minimum 2 partners: the General Partner and the Limited Partner.

The General Partner, which has management control, shares the profits of the Company according to the predefined proportions of the K/S share distribution, and have full liability for the partnership debts. Like shareholders in a corporation, Limited Partners have a limited liability, meaning they are only liable for the debts originated by the company to the extent of its investment, and they have no management authority.

Offshore entities can be used as partners, but at least 50% is to be held by an EU company or offshore company with DTT in Denmark.

Capital

Limited Partnerships do not have share capital, rather “capital” which is contributed by the limited partners (the amount is determined by the partners).

Management: No need for director, Danish Limited Partnership is managed by the General Partner.

Taxation

In Denmark a Limited Partnership K/S is not taxable and does not pay corporation taxes. This means that the assets of the K/S is taxed as personal assets of the owners. This is a great advantage for the K/S owners in case the K/S has a deficit as this can be deducted from their taxable income. A Danish Limited Partnership pays 0% Danish corporate tax if profits are passed to the offshore partners.

A structure option for your consideration, is to register your Denmark Limited Partnership with 2 corporate partners, both incorporated in offshore, such as in Cayman Islands, Isle of Man, USA (LLC or UK (LLP) amongst others.

How we can Help You!

Should you have any question or matter you would like to discuss or clarify with us, or

Should you like to receive further Information about our services and fees,…

Our multilingual team of business advisors is happy to assist you with all upcoming questions and issues in relation to your application.

You may call or email us, and we will be happy to assist you in a fast and efficient manner.

Contact us today for an initial complimentary consultation and find out how we can help you achieve your investment goals!

Check all further and related information on our website

Our offices

Central Office | Dublin, Ireland

Office 1 Sobo,

Southbound Platform Pearse Street Dart Station,

Dublin 2, D02PP40

Phone: +353 19 069 498

Email: enquiries@atrium-associates.com

London Office | England

SVS House,

Oliver Grove,

London, SE25 6EJ

Phone: +44 203 769 2963

Email: enquiries.uk@atrium-associates.com