Company Due Diligence in Denmark

Updated on Monday 15th May 2023

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Starting a company in a foreign country is not easy, however when reaching an agreement with another company and setting up a joint venture seems simpler. Before going into business with another company, it is advisable to have it verified. This process is called company due diligence and it is very common in Denmark.

During the last several years, Denmark has become an attractive investment destination and the number of foreign companies asking for company due diligence procedures have increased as a consequence of the merger and acquisition transactions taking place.

If you are interested in opening a new company in this country, you can rely on the services provided by our law firm in Denmark.

What are the steps of a correct company due diligence process in Denmark?

No matter the reason an individual or company has asked for company verification in Denmark, there are a few steps which must be completed in order to have a full, but of all correct picture of the situation. The steps to follow when asking for company due diligence related to a Danish business are:

seeking for assistance in the right place, like a law firm or specialized company;
verifying the information with the Danish Trade Register;
verifying the information based on its relevance for the case.

In the case of mergers and acquisitions, one must also make sure the legal requirements are complied with. Also, spending time in the Danish company to be purchased can help in the company due diligence.

Documents to be revised when asking for company due diligence in Denmark

Choosing to verify a Danish company is easy, however, the company due diligence procedure can be lengthy and hard unless one knows from the start what to look for. This is why requesting assistance from Danish lawyers, for example, can be of great help.

Among the documents our attorneys recommend having verified when conducting company due diligence in Denmark are:

the company’s incorporation documents;
the financial records;
the assets and debts of the company;
the contracts signed by the company, when and if possible;
the history of the company.

Financial due diligence

The financial company due diligence in Denmark is a systematic analysis of data from the target company to obtain an overall picture of the company in connection with the corporate deal, while also identifying and assessing risks and opportunities. With our expert Danish law firm, you can manage risks, take advantage of opportunities, and achieve your desired business results.

Conducting due diligence is important for companies in Denmark to minimize the risk of various issues, including unpaid debts. In some cases, debt collection may be a result of a company's failure to conduct proper due diligence before entering into a business relationship with another company or individual. If a company fails to conduct proper credit checks or investigate the financial history of a potential customer or supplier, it may end up with unpaid debts that require debt collection services.

Please contact our Danish lawyers for more details about financial due diligence for companies in Denmark.

Commercial due diligence

Demand for commercial due diligence in Denmark companies has increased in recent years due to the growing complexity of products and services available in the market. By conducting commercial due diligence, buyers can accelerate their investment decision-making process. This may also involve assessing the company's supply chain, distribution channels, and other factors that may impact its commercial success. Commercial due diligence is very important for e-commerce companies, as it can help buyers analyze the competitive landscape, and potential for future growth.

Commercial due diligence is part of the due diligence company process in Denmark, where potential buyers evaluate a target company's commercial viability as part of their investment decision-making process. Commercial due diligence is important for software companies as well. You can discuss more about this process with our attorneys in Denmark.

Legal due diligence process in Denmark

Legal due diligence consists in gathering and evaluating all legal documents and information related to a target company. This allows both the buyer and seller to carefully examine any legal risks. By understanding the target company and any potential liabilities, both parties can make an informed decision.

Legal due diligence may involve a review of various documents and agreements, including customer, supply, operating, and employee contracts and licenses, leases, and potential or pending lawsuits. This step is a critical part of the company’s due diligence process in Denmark that helps ensure that both parties are fully aware of any legal risks and liabilities associated with the transaction.

All can be explained by our lawyers in Denmark, as well as other issues regarding the complexity of Denmark’s legal system.

Here are some statistics and data that highlight the importance of company due diligence in Denmark and why you should consider investing or starting a company there:

In 2021, the number of transactions involving Danish companies reached a new high, with 561 mergers and acquisitions deals taking place in Denmark;
Technology, Media, and Telecommunications (TMT) deals continued to make up a significant proportion, with a relatively high share of 31% in 2022;
Denmark’s GDP was estimated at approximately 398 billion dollars in 2021;
The World Economic Forum's "Network Readiness Index" ranked Denmark in third place out of 130 economies in 2021;
About 99% of businesses in Denmark are classified as small and medium-sized enterprises (SMEs), according to the Confederation of Danish Industry. Our law firm in Denmark can offer more details if you are interested in opening a small or medium-sized company, as well as other types of businesses such as a Denmark holding company.

For company due diligence services, please feel free to contact our lawyers in Denmark. You can also rely on us if you want to set up a company in Denmark.

An important part of the due diligence process focuses on the company’s financial situation. For complete solutions, we recommend discussing any tax and reporting matters with our Danish accountants. Our team is ready to assist you with bookkeeping services, payroll processing, tax accounting, as well as audit, as needed. You can reach out to us for more information.