Starting a business in Denmark: sole trader, ApS, VAT and CVR

Starting a business in Denmark is easier than most newcomers fear. Its register is digital, the cost of starting is low, and registering a sole proprietorship is free and done online. What trips up foreigners is not the company law but the sequence: you need a CPR number and a MitID before the online forms will talk to you, and the right to live in Denmark comes first, from somewhere else.

This guide to starting a business in Denmark covers the two forms most newcomers choose, the registration steps, VAT, tax and accounting, using the information from virk.dk and the tax authority.

Which legal form should you pick when starting a business in Denmark?

Sole proprietorship (enkeltmandsvirksomhed). The most common choice for a freelancer. Registration is free, no capital is required, and you answer for the business's debts with all your personal assets. A smaller variant, the personligt ejet mindre virksomhed (PMV), is for a small activity alongside a job or a hobby. Both give a CVR number.

Private limited company (ApS, anpartsselskab). Closest to a limited company. Your liability is limited to the capital you put in, the minimum being DKK 20,000. The registration fee is DKK 670, paid online on Virk. The old small-capital form, the IVS, no longer exists. A manager can still be held liable for management faults, so ask a lawyer about your own case.

Before choosing, ask yourself whether you need liability protection, whether clients expect a company, and how you want to pay yourself.

What do you need before you can register?

For a foreign citizen, the order is: the right to reside, then a CPR number and a MitID (CPR number in Denmark). For EU citizens, SIRI's residence document as a self-employed person requires a business already established and registered in Denmark; while it is not yet running, SIRI suggests applying on other grounds, for example as a person with sufficient funds (see EU residence document in Denmark). The "Start virksomhed" service on virk.dk requires a Danish CPR number, used with MitID or with a foreign electronic identity recognised under the eIDAS regulation, according to the Business in Denmark page updated on 20 April 2026. For a special case, the business agency Erhvervsstyrelsen can be contacted by email or by phone at +45 72 20 00 30.

Note that the service does not work on a small screen; use a computer.

Deciding between a sole proprietorship and an ApS, or unsure what to enter on the registration form? Moovy can go through the choices with your situation, list what virk.dk will ask for and draft your questions to Erhvervsstyrelsen or an accountant in Danish with an English translation. You enter the data and file the forms yourself, and an accountant should check any tax choice.

How do you go about starting a business in Denmark as a sole proprietor?

1. Get your CPR number and MitID.
2. Choose the form: enkeltmandsvirksomhed or PMV.
3. Register on virk.dk ("Start virksomhed"). To obtain a CVR number you must register for at least one obligation: VAT, employer, payroll tax or import/export. You then find your registration certificate in TastSelv Erhverv, under your profile, according to Skattestyrelsen.
4. Register for VAT if you expect more than DKK 50,000 in annual sales. Some activities, such as healthcare or teaching, are exempt.
5. Fill in your preliminary income assessment on TastSelv with your expected profit (box 221) or loss (box 435). You then pay B-skat, tax in advance instalments. If you give no estimate, the tax authority assumes a profit of DKK 50,000 to 100,000.
6. Choose your tax regime: personal tax (default), the virksomhedsordning or the kapitalafkastordning. These two require more bookkeeping, and Erhvervsstyrelsen advises an accountant.
7. Keep accounts under the Bookkeeping Act and keep the records for five years.
8. Report your result in TastSelv from mid-March to 1 July of the following year, even with no turnover.

Is freelancing in Denmark the same as running a company?

For most freelancers, yes: freelancing in Denmark means a sole proprietorship, registered on virk.dk, with VAT once you pass DKK 50,000 and advance tax instalments (B-skat) based on the profit you estimate. The line between freelancing and employment is not always where you think. A person who works from Denmark for a single foreign employer is not automatically self-employed, and the social security rules, including the A1 form, decide where you contribute. Check your status before you register, because it changes your tax, your pension and your health cover.

Keep your private and business money apart. A separate bank account for the business keeps the records clean for the accounts the law requires you to keep for five years; see bank account in Denmark.

How do you set up an ApS?

You need a MitID, the articles of association (vedtægter) and the deed of foundation (stiftelsesdokument), a management (direktion), and proof that the capital has been paid into an account in the name of the company in formation. You register on virk.dk, pay the fee online, and most cases are processed automatically within hours; some go through a case officer. Then register for the obligations you need (VAT above DKK 50,000, employer), set up MitID Erhverv, the digital identity for companies, which also lets you read the company's Digital Post, and choose a digital bookkeeping system registered with Erhvervsstyrelsen.

The annual report goes to Erhvervsstyrelsen every year, within six months of the year end (four months for listed and state-owned companies), and no extension is possible. A class B company can opt out of the audit by a state-authorised accountant if, for two years running, it stays under two of these three limits: a balance sheet of DKK 4 million, net turnover of DKK 8 million and 12 full-time employees on average. The law lists exceptions, so check with Erhvervsstyrelsen or an accountant.

What taxes and VAT apply?

• VAT (moms): 25 per cent, compulsory above DKK 50,000 of annual turnover. The first period is quarterly; companies under DKK 5 million turnover can file half-yearly if they file and pay on time; above DKK 50 million, monthly. A late VAT return costs a penalty of DKK 1,400, according to Skattestyrelsen.
• Sole proprietor income: the profit is taxed with your other income, after the 8 per cent labour market contribution. See income tax in Denmark. Under the virksomhedsordning, profit left in the business is provisionally taxed at 22 per cent.
• ApS: corporate tax of 22 per cent of taxable profit. You pay yourself a salary, taxed like any salary, or dividends, taxed at 27 per cent up to DKK 79,400 in 2026 and 42 per cent above. The choice deserves professional advice.
• Late return: up to DKK 400 a day, capped at DKK 10,000.

Since 1 January 2026, a sole proprietorship whose net turnover exceeded DKK 300,000 two years in a row must use a digital bookkeeping system registered with Erhvervsstyrelsen.

What about sickness cover and pensions?

Being self-employed means the safety net is lighter by default. The municipality can pay sickness benefit only after two weeks, and only if you have worked for at least six of the last twelve months and at least 18.5 hours a week. Voluntary sickness insurance from Udbetaling Danmark, which is paid, covers from the first or third day. There is no compulsory ATP pension or work-injury insurance for yourself; voluntary schemes exist, such as ATP at DKK 297 a month according to virk.dk, open if you have at least three years of earlier ATP membership, for example as an employee. For health, see healthcare in Denmark, and for unemployment cover for the self-employed, working in Denmark.

What are the common mistakes?

• Registering before you have the right to reside. Company registration does not give a residence right. For British and other non-EU citizens, see moving to Denmark from the UK.
• Working remotely for a foreign employer and assuming you are self-employed. It may not be a business activity at all; check status, social security and the A1 form.
• Ignoring multi-country social security. If you work in several countries, the EU rules decide where you contribute.
• Quoting an old ApS capital. The figure is DKK 20,000.
• Forgetting the nil return in TastSelv.

Before you choose a legal form or a tax regime, have your situation confirmed by a Danish accountant (revisor) or tax adviser.

Greenland and the Faroe Islands have their own registers, VAT and taxes. See Greenland and the Faroe Islands.