Along with the double tax treaties signed by Denmark and Parent-Subsidiary directive, which grants major minimizations or even exemptions from the withholding tax on dividends, interests and royalties, Denmark has signed tax exchange information agreements which grants the access of financial nature information regarding the companies to the foreign tax authorities. These measures are taken in order to prevent tax frauds.
Also in order to avoid tax frauds, Denmark is following the controlled foreign corporation regime (CFC taxation). This way, the incomes of all its subsidiaries are added to the Danish parent company, but only if a parent company controls more than 50% of the voting rights in the subsidiary and more than 10% of the subsidiary’s assets and 50% of the taxable income consists in financial income.
These measures are usually taken in order to make the holding companies opened in Denmark appealing for the investors.
The usual Danish corporate tax rate is 25%, but using the provisions of the double tax treaties, this tax can be refund or even exempt. Our Danish lawyers can offer you more information on how the double tax agreements work.
The holding companies created in Denmark can be organized as “Anpartselskab” (private limited company- ApS) or“Aktieselskab” (public company- A/S).
The requirement for establishing these types of businesses in Denmark is that a minimum share capital is ncessary: 125,000 DKK (payable half in the first two months from the formation and half in maximum one year) for a private limited liability company and 500,000 DKK (payable in the first six months) for a public limited liability company. The contribution can be paid in cash or in kind.
Besides the above possibility, the holding companies establised in Denmark can be formed from shelf companies. A shelf company is a company that has fulfilled all the requirements for registration and can be purchased by investors that wishes to avoid the waiting time caused by the registration of a company in Denmark.
The process of registration a holding company in Denmark is very easy and involves only four steps: obtaining an electronically signature (Nem ID), opening a bank account and depositing the minimum share capital, register with the Danish Business Authority system and registering the employees for the workmen insurance.
It takes around six days to open a private or a public limited liability company in Denmark. Do not hesitate to get in touch with our corporate lawyers in Denmark for any company formation request.
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