Denmark Company Forms Guide (ApS, A/S, Enkeltmandsvirksomhed)

Enkeltmandsvirksomhed (Sole Proprietorship)

The enkeltmandsvirksomhed is the simplest and most common business form in Denmark, particularly for freelancers, consultants, and small traders. Key characteristics:

• No minimum capital — You can start with zero capital. There is no legal requirement for contributed capital. This makes it the most accessible form for new entrepreneurs.
• Personal liability — You are personally liable with all your personal assets for business debts. Creditors can pursue your personal savings, home, and other assets. This is the most significant disadvantage of this form.
• Taxed via B-income/personal tax return — Business profits are reported as B-income on your personal tax return (årsopgørelse). You pay personal income tax rates (including progressive state tax, municipal tax, and AM-bidrag) on business profits. In 2026, the top marginal rate including AM-bidrag is approximately 52.07%.
• Simple accounting — You must maintain bookkeeping (bogføring) but have fewer reporting requirements than limited companies. No annual report filing with Erhvervsstyrelsen is required, though you must retain records.
• VAT same rules — The same VAT rules apply as for other business forms: mandatory registration if turnover exceeds 50,000 DKK in 12 consecutive months, quarterly or yearly filing, 25% standard rate.
• Affordable for freelancers and small traders — No registration fees (CVR registration is free), no minimum capital, and no annual report filing costs. This makes it ideal for low-capital, low-risk businesses.

Many sole proprietors also use the Virksomhedsordning (business tax scheme / VSO) which allows deferral of tax on retained profits at a flat 22% rate, with the remaining tax due only upon withdrawal. A simpler alternative, the kapitalafkastordning (return on capital scheme), gives you a partial tax shift without the full VSO accounting. See our starting business guide → for a detailed walkthrough of both schemes.

ApS (Anpartsselskab) — Private Limited Company

The ApS (anpartsselskab) is the most popular company form for small and medium-sized enterprises in Denmark. It offers a balance of limited liability and moderate administrative burden:

• Minimum capital 40,000 DKK — The required minimum share capital is 40,000 DKK. This must be paid in cash or assets (apportindskud) at formation. The capital can be used for business operations after registration.
• Limited liability — Shareholders are not personally liable for company debts beyond their contributed capital. This is the primary reason entrepreneurs choose ApS over a sole proprietorship. Creditors can only pursue company assets, not personal assets of shareholders.
• 22% corporate tax — Profits are taxed at the flat 22% corporate tax rate (selskabsskat). Dividends distributed to shareholders are separately taxed at the shareholder level (27% up to 61,000 DKK, 42% above in 2026). This creates a potential double tax on distributed profits, but the lower corporate rate allows more retained capital for growth.
• Separate legal entity — The company is a legal person separate from its owners. It can enter contracts, own property, sue and be sued, and incur debt in its own name. Shareholders generally have no personal liability.
• Annual report filing — An ApS must file an annual report (årsrapport) with Erhvervsstyrelsen within 5 months of the financial year-end. The report includes a management review, income statement, balance sheet, and notes. Audit may be optional for small companies (see thresholds below).
• Board of directors optional — An ApS with share capital below 500,000 DKK can operate without a board of directors if the articles of association so provide. The company can be managed by a single director or a management board. For larger ApS, a board is required.

The ApS form is best for businesses with moderate capital needs, risk of liability, and growth ambitions. For more on corporate tax obligations, see our business tax return guide →. Shipping companies considering the tonnage tax should also see our shipping tax guide →.

A/S (Aktieselskab) — Public Limited Company

The A/S (aktieselskab) is designed for larger enterprises. It has stricter requirements but offers the possibility of listing shares on a stock exchange:

• Minimum capital 500,000 DKK — The required minimum share capital is significantly higher than for an ApS. This must be fully paid in at formation. The higher capital requirement makes the A/S form unsuitable for most startups and small businesses.
• Two-tier board system — An A/S must have both a board of directors (bestyrelse) and an executive board (direktion). The two-tier system provides separation between supervision and day-to-day management. The board of directors must have at least 3 members.
• Supervisory board and executive board — The board of directors supervises the executive board and makes strategic decisions. The executive board handles daily operations. No person can serve on both boards simultaneously (unlike ApS where roles can be combined).
• Shares can be listed — Only an A/S can list its shares on a regulated stock exchange (e.g., Nasdaq Copenhagen). If you plan to go public, the A/S is the only option. Listed A/S companies have additional reporting and governance obligations under the Capital Markets Act.
• Stricter governance — The Danish Companies Act imposes stricter governance requirements on A/S, including mandatory audit regardless of size, more detailed annual reports, and additional shareholder protection rules.
• Same 22% corporate tax — The A/S pays the same 22% corporate tax rate as an ApS. Tax rules for dividends, capital gains, and loss carryforwards are identical.

The A/S form is appropriate for large enterprises, companies planning an IPO, and businesses that need the prestige and credibility associated with a higher capital requirement. For comparison of taxation across forms, see our personal tax guide →.

IVS (I værksætterselskab) — Discontinued

The IVS (I værksætterselskab) was introduced in 2014 as a low-capital alternative to the ApS, with a minimum capital requirement of only 1 DKK. However, it was discontinued on April 20, 2019, and no new IVS registrations are accepted.

• Existing IVS can continue — IVS companies registered before April 20, 2019 can continue to operate under the existing rules. However, they face certain restrictions that make conversion to ApS advisable.
• Special retained earnings rules — IVS companies were required to retain 25% of annual profits in a restricted reserve until the company's capital (including reserves) reached 40,000 DKK, at which point the IVS could convert to ApS. These rules continue for existing IVS entities.
• Conversion to ApS recommended — SKAT and Erhvervsstyrelsen recommend converting existing IVS companies to ApS. The conversion is a straightforward process involving a capital increase to 40,000 DKK (from retained earnings or new contributions) and filing a conversion notice with Erhvervsstyrelsen.
• Permanent IVS status not recommended — Staying as an IVS permanently is not recommended due to the restricted reserve requirements and the fact that the IVS form was designed as a transitional form. Most businesses should aim to convert to ApS as soon as the retained earnings reach 40,000 DKK.

For more on starting a business in Denmark, including how to choose between available forms, see our starting a business guide →.

Foundations (Erhvervsdrivende Fond)

The erhvervsdrivende fond (business foundation) is a unique legal form used for businesses that are owned by a foundation rather than shareholders. This form is common for certain types of enterprises in Denmark:

• Charitable or business purpose — A foundation may be established for a charitable purpose (e.g., research, education, social welfare) or a commercial purpose (e.g., owning and operating a business). Many well-known Danish companies (e.g., Carlsberg, Novo Nordisk) are foundation-owned.
• Minimum capital 300,000 DKK — The foundation must have minimum capital of 300,000 DKK. This is higher than for ApS but lower than for A/S. The capital must be fully contributed at formation.
• 22% corporate tax — Foundations are subject to the same 22% corporate tax rate as ApS and A/S. However, foundations that pursue charitable purposes may qualify for partial tax exemptions on certain types of income.
• Foundation authority supervision — Foundations are supervised by the Erhvervsstyrelsen (Danish Business Authority) specifically through the foundation supervision unit (Fondstilsynet). Foundations must file detailed annual reports and are subject to stricter governance rules.
• Separate tax treatment — While the corporate tax rate is the same, foundations have special rules for dividend income (may be tax-exempt under the participation exemption) and capital gains (certain exemptions apply for qualifying shareholdings).
• Purpose-locked assets — The foundation's assets are dedicated to its stated purpose (erhvervsformål or almennyttigt formål) and cannot be distributed to founders or beneficiaries. This makes the form unsuitable for businesses whose owners wish to extract profits as dividends.

The foundation form is rarely used by new entrepreneurs and is generally suited to established businesses with a long-term purpose beyond profit maximization. For more on business structures and tax planning, see our business tax return guide →.

Comparison Table

Here is a direct comparison of the key features of each Danish business form:

• Capital requirements — Enkeltmandsvirksomhed: 0 DKK. ApS: 40,000 DKK. A/S: 500,000 DKK. IVS: 1 DKK (discontinued). Foundation: 300,000 DKK.
• Liability — Enkeltmandsvirksomhed: Unlimited personal liability. ApS/A/S: Limited to share capital. Foundation: Limited to foundation assets.
• Tax rate — Enkeltmandsvirksomhed: Personal progressive rates up to ~52.07%. ApS/A/S: Flat 22% corporate tax + dividend tax on distribution. Foundation: Flat 22% corporate tax with certain exemptions.
• Accounting burden — Enkeltmandsvirksomhed: Bookkeeping required, no annual report filing. ApS/A/S: Bookkeeping + annual report filing. Foundation: Bookkeeping + detailed annual report under supervision.
• Governance — Enkeltmandsvirksomhed: No formal governance requirements. ApS: Single director or board (optional below 500K DKK capital). A/S: Mandatory two-tier board (bestyrelse + direktion). Foundation: Mandatory board under Fondsrådet supervision.
• Cost of formation — Enkeltmandsvirksomhed: Free (CVR registration only). ApS: ~4,000-6,000 DKK (attorney/formation service). A/S: ~10,000-15,000 DKK. Foundation: ~10,000-20,000 DKK depending on complexity.

Your choice of business form has significant tax and legal implications. We recommend consulting with a revisor (accountant) and advokat (lawyer) before deciding, especially if you are considering an ApS, A/S, or foundation. For next steps, see our starting a business guide →, personal tax guide →, and holding companies guide → for group structuring and sambeskatning. For tax considerations in startup fundraising, venture capital structures, and M&A transactions, see our M&A and Startup Tax Guide →. For VAT group treatment of related companies, see our VAT Groups Guide →. For taxation of financial institutions, see our Financial Sector Tax Guide →.

FAQs

Which business form is best for a freelancer in Denmark?

For most freelancers, an enkeltmandsvirksomhed is the best choice due to zero minimum capital, simple administration, and lower costs. If you face significant liability risk, consider an ApS with 40,000 DKK capital to gain limited liability protection.

Can I convert my enkeltmandsvirksomhed to an ApS later?

Yes. You can convert a sole proprietorship to an ApS through a skattefri virksomhedsomdannelse (tax-free conversion) under Danish tax law. This allows you to transfer the business assets to the new ApS without triggering immediate taxation. The conversion must be done within specific rules and deadlines.

What is the difference between ApS and A/S governance?

The main difference is that an A/S requires a two-tier board structure: a board of directors (bestyrelse) with at least 3 members and a separate executive board (direktion). An ApS with capital below 500,000 DKK can operate with a single director and no board. A/S also requires mandatory audit regardless of size.

Can a foreign company operate a subsidiary in Denmark?

Yes. A foreign company can establish a Danish subsidiary (dattervirksomhed) as an ApS or A/S, or operate through a branch office (filial). A branch office is not a separate legal entity but must be registered in the CVR register and file annual reports. Cross-border tax rules apply.

Are there tax advantages to using a foundation form?

Foundations may qualify for tax exemptions on certain types of income (e.g., qualifying dividends under the participation exemption, capital gains on qualifying shareholdings). However, foundations cannot distribute profits to founders, making them unsuitable for profit-oriented entrepreneurs. The form is best for long-term asset locking and charitable purposes.