Learn about everything you need to register a sole proprietorship in Denmark.
Ranked as the tenth most competitive economy globally, Denmark has emerged in the 21st century as a hotbed for technological leadership and business development. And with its high standard of living and excellent ranking on the human development index, it’s no surprise that Denmark would attract thousands of specialists to its workforce.
If you’re a Danish resident looking to start your own freelance business in Denmark, we’ll explain everything you know to get started! Just keep in mind that nothing you read here should take the place of legal counsel.
What is a sole proprietorship in Denmark?
Like many other countries, Denmark defines a sole proprietor or sole trader as a self-employed individual who is legally not a different entity from their business. In other words, the sole proprietor is legally liable for any debts they accrue through their business activities.
That being said, the benefit to becoming a sole proprietor is the speed and ease through which you can register your business and the lack of capital required to get started.
How do I become a sole proprietor in Denmark?
First and foremost, you’ll need to be a Danish resident to become a sole proprietor. You’ll need to log in with your Danish NemID on the Central Business Registrar’s (CVR) website, which will require you to prepare the following in advance:
Choose a unique business name that hasn’t already been registered in the CVR’s business registry.
Determine a start date for your company
Research the activity code that covers the kind of work you intend to do
After you register your company, you’ll be assigned a CVR number which you’ll then use to register your company with the Danish Tax Agency (SKAT) if you expect to do more than DKK 50,000 in business.
What kind of taxes will I pay as a sole proprietor in Denmark?
As a self-employed sole proprietor, you’ll be required to pay a B-tax, or B-skatterater, divided into 10 payments throughout the year. This amount is based on the estimated amount of income, or SKAT Borger, you predicted when registering your business. Your payments will be due on the 20th of each month, except for June and December, when no payments will be due.
If your business sells more than DKK 50,000, you’ll also be required to remit VAT to the Danish Tax Agency SKAT. This will vary between 6.25% and 25% depending on the type of business you perform and can be calculated using the site’s E-tax for business tax return (TastSelv Erhvelv).
Receiving payments in Denmark via Liquid.
As a resident of Denmark, you have access to one of the most developed workforces and data infrastructures possible to support your business. When you’re ready to invoice your clients in America, you can use Liquid to send invoices in DKK and other select foreign currencies. Work Orders / Project Proposals can also be agreed to in DKK in Liquid.
In fact, Liquid supports payments to Denmark and 175+ countries worldwide in USD and select foreign currencies, including DKK. Payments arrive in 2-5 business days via wire transfer, whether the invoice was sent to an existing client using Liquid or a client who is new to Liquid.
Liquid charges clients who initiate payments $3 per US invoice paid and $8 per international invoice paid.
Liquid never charges Vendors to receive payments, even when Vendors are requesting payments from Clients who are not current users of Liquid.
Now you’re ready to start making money in Denmark!
Denmark leads the globe in social development and progressive businesses, and as a new member of its entrepreneurial workforce, you’re primed to take advantage of everything it has to offer! And when your clients are in the US, Liquid is your seamless way to accept work orders, manage invoices, and get paid.
Ready to invoice your United States-based clients? Try Liquid today.