Denmark Starting a Business Guide (Registration, NemKonto, CVR)

Business Registration (CVR Register)

Every business in Denmark must be registered in the CVR register (Det Centrale Virksomhedsregister). This is the central business registry maintained by Erhvervsstyrelsen (Danish Business Authority). Registration is done through the virk.dk portal, which serves as the single digital gateway for all business registrations and filings in Denmark.

The registration process requires a MitID Erhverv digital signature. If you are registering as a sole proprietor (enkeltmandsvirksomhed), you can use your personal MitID. For companies like ApS or A/S, at least one founder must have MitID Erhverv to sign the registration. The process typically takes 1–3 business days for approval.

Key legal forms available:

• Enkeltmandsvirksomhed (sole proprietorship) — No minimum capital, personal liability, taxed through personal B-income. Most affordable and simple structure for freelancers and small traders.
• ApS (Anpartsselskab) — Private limited company, minimum capital 40,000 DKK, limited liability, 22% corporate tax. The most popular form for small and medium enterprises.
• A/S (Aktieselskab) — Public limited company, minimum capital 500,000 DKK, two-tier board structure, suitable for larger enterprises.
• IVS (I værksætterselskab) — Discontinued in 2019. Existing IVS entities can continue but no new registrations are accepted. Conversion to ApS is recommended.

After registration, your CVR number is automatically created. This number functions as your business identity and is required for all official communication, invoicing, and tax filings. Your business address, industry code (Branchekode), and contact information are publicly visible in the CVR register.

IMPORTANT: You must also register for SKAT during the application process. Select the tax schemes that apply to your business — typically VAT (moms), A-skat (payroll tax), and AM-bidrag (labour market contribution). If you expect turnover below 50,000 DKK in the first 12 months, you can opt out of VAT registration initially, but you may register voluntarily. See our VAT registration guide → for details.

Getting a NemKonto and Business Certificate

NemKonto is a mandatory Danish bank account linked to your CVR number for receiving government payments, including tax refunds, VAT refunds, and any public grants or subsidies. Every business registered in Denmark must have a NemKonto. You set it up through your bank by linking your existing business bank account as the designated NemKonto for your CVR number.

The Virksomhedscertifikat (business certificate) is a digital signature certificate used for making changes to your CVR registration, filing annual reports, and signing official documents with Erhvervsstyrelsen. It can be obtained through NemID Medarbejdersignatur (gradually being phased out) or the newer MitID Erhverv system, which has been the standard since 2024.

MitID Erhverv replaces the older NemID Medarbejdersignatur and provides:

• Digital signing — Sign CVR changes, annual reports, and tax filings electronically
• Employee signatures — Issue MitID Erhverv to employees who need to act on behalf of the company
• Role-based access — Define who can sign what (hæftelsestype, tegningret)
• TastSelv Erhverv — Access SKAT's business tax portal for filing VAT, A-skat, and corporate tax returns

Without a valid digital signature solution, you cannot make CVR changes, file annual reports, or submit tax returns electronically. Ensure your MitID Erhverv is active and linked to your CVR number before starting operations. For more on B-income reporting, see our B-income guide →.

SKAT Registration

Registering with SKAT (Skattestyrelsen) is automatic when you register your business through virk.dk, but you must actively select which tax schemes apply. The key registrations are:

• VAT (moms) — Mandatory if your taxable turnover exceeds 50,000 DKK within any 12 consecutive months. You can also register voluntarily below this threshold. VAT returns are filed quarterly or yearly depending on turnover.
• A-skat and AM-bidrag — Required as soon as you hire employees. You must register as an employer, report wages through eIndkomst, and withhold A-skat and AM-bidrag from employee salaries. Semi-annual reporting and payment deadlines apply.
• eIndkomst — The digital reporting system for income information. All employers must report wages, benefits, and tax withholdings to eIndkomst no later than the day after payment.
• Mothers account (moderskabsordning) — If you have employees, you must register for the mothers account system to handle maternity/paternity leave reimbursement.

SKAT will assign you a SE number (Skatteforvaltningens Erhvervsnummer) which is the same as your CVR number for most purposes. You will receive a Virksomhedsskattekort (business tax card) that shows your registered tax schemes and filing frequencies.

Failure to register for VAT on time can result in penalties. If your turnover exceeds 50,000 DKK and you have not registered, contact SKAT immediately. Refer to our personal tax guide → for individual tax obligations alongside your business tax responsibilities.

What Counts as a Business for Tax Purposes?

Before you start, it is important to understand how SKAT determines whether your activity qualifies as a business (virksomhed) for tax purposes. The classification affects your right to deductions, VAT obligations, and loss relief. The distinction matters most for sole proprietors and freelancers — companies (ApS/A/S) are always treated as businesses.

SKAT's criteria for business activity: SKAT considers several factors when determining if an activity is a genuine business rather than a hobby or passive investment:

• Profit motive (fortjenestehensigt) — The activity must be carried out with a genuine intention to make a profit. Regular losses over several years can indicate a hobby rather than a business. If you have losses for 3+ consecutive years, SKAT may reclassify the activity and deny loss deductions unless you can demonstrate a credible path to profitability.
• Regularity and scope (regelmæssighed og omfang) — The activity should be regular and systematic, not occasional. Occasional one-off sales (e.g., selling a piece of furniture on a marketplace) are not business activities. The scope matters — part-time activities with small turnover may still qualify as a business if conducted regularly.
• Independence (selvstændighed) — You must act independently and at your own risk. If you work under detailed instructions for a single client, you may be considered an employee (A-income) rather than a business (B-income). SKAT looks at factors like: who provides equipment, who bears financial risk, and whether you can hire substitutes.
• Commercial character (erhvervsmæssig karakter) — The activity must be carried out in a commercially organised manner — with proper bookkeeping, marketing, business premises (or home office), and professional conduct. Having a CVR number, business bank account, and proper invoices all support the commercial character.

Hobby vs business: Hobby activities are not tax-deductible. If SKAT determines your activity is a hobby, you cannot deduct expenses, and any income is not taxable (but also not deductible against other income). The distinction is common for: horse breeding, art creation, antique dealing, small-scale farming, and sports-related activities. For comprehensive guidance on agricultural tax rules, flat-rate VAT, and farming-specific obligations, see our Agriculture and Farming Tax Guide →. If you are unsure, you can request a binding ruling (bindende svar) from SKAT to get a definitive classification before starting. A binding ruling costs approximately 1,000–3,000 DKK depending on complexity and gives you legal certainty.

Passive investment vs active business: Owning rental property without significant activity (e.g., a single apartment rented out long-term) is generally treated as passive capital income (kapitalindkomst), not business income. Rental income from 1-3 properties is typically capital income. With 4+ properties or significant services (hotel-like operations), SKAT may classify it as a business. The classification matters because business income allows broader deductions (e.g., VAT registration, full loss offset against other income) that passive capital income does not. For more on how business income is reported, see our B-Income Guide →.

Tax on Your Business

The taxation of your business depends entirely on the legal form you choose. Understanding these differences is critical for tax planning:

Enkeltmandsvirksomhed (Sole Proprietorship): Taxed entirely through your personal tax return. Business income is reported as B-income in your forskudsopgørelse (preliminary income assessment) or on the final tax return under field 221 (overskud af virksomhed). You pay personal income tax rates (up to 52.07% in 2026 including AM-bidrag) on business profits. You can also choose the Virksomhedsordning (business tax scheme) which allows you to defer tax on retained profits at a reduced rate — see the VSO section below for full details.

ApS and A/S (Limited Companies): Subject to corporation tax (selskabsskat) at a flat rate of 22% on taxable profits. This is one of the lowest corporate tax rates in the European Union. Dividends paid to shareholders are taxed separately at the shareholder level (27% up to 61,000 DKK and 42% above, 2026 rates).

VAT Reporting: Most businesses file VAT returns quarterly (Q1 Jan-Mar, Q2 Apr-Jun, Q3 Jul-Sep, Q4 Oct-Dec) with a filing deadline one month after each quarter end. Payment is due simultaneously. Small businesses with turnover up to 5 million DKK may apply for yearly filing.

A-skat and AM-bidrag: If you have employees, you must register as an employer and file semi-annual A-skat returns (A-skat og AM-bidrag halvårligt). The filing deadlines are typically March 1 (for July-December of previous year) and September 1 (for January-June).

All amounts must be reported in Danish kroner (DKK). Foreign currency amounts must be converted using SKAT's published exchange rates at the time of the transaction or at year-end. See our VAT registration guide → for detailed VAT compliance rules.

Virksomhedsordning (VSO) — Business Tax Scheme for Sole Proprietors

The Virksomhedsordning (VSO / business tax scheme) is a special tax regime under the Virksomhedsskatteloven (VSL) available to sole proprietors (enkeltmandsvirksomhed) and partners in I/S, K/S, and P/S. It allows you to pay a flat 22% provisional business tax on profits retained in the business, deferring the difference between 22% and your personal marginal rate (up to ~52%) until you withdraw the funds. This can provide significant cash flow and tax planning advantages. All amounts are handled in DKK through your SKAT TastSelv Erhverv portal.

VSO is elected per income year on your tax return (field 147 on the final return, or box 184 on your forskudsopgørelse). Once chosen, VSO applies to all your sole proprietor businesses collectively for the full income year. You may retroactively elect or change VSO by June 30 of the second year after the income year (VSL §2, stk. 2).

Eligibility & Requirements

• Who can use it: Sole proprietors (enkeltmandsvirksomhed), partners in I/S, K/S, P/S. Both fully and limitedly tax-resident persons in Denmark qualify (VSL §1).
• Separate business bank account — You must have a bank account registered to your CVR number that is strictly separated from your private finances. Personal and business transactions cannot be mixed. All business income goes into this account, and private withdrawals come out of it.
• Proper bookkeeping — You must prepare a separate annual accounting for the business that satisfies the Bogføringsloven, with clear separation between business and private economy (VSL §2, stk. 1).
• Cannot use for: Anpartsvirksomhed (PSL §4, stk. 1, nr. 9 or 11), konkursindkomst (bankruptcy income), or certain financial assets like shares unless you actively trade in them (VSL §1, stk. 2).
• Mixed-use assets: Business cars, home computers, phones, and mixed-use property can be included. The private portion is taxed separately via ligningslovens §16 (private drawal value). For a mixed-use property, the business portion (e.g., office area) is included in VSO.
• Multiple businesses: If you run several sole proprietor businesses and choose VSO for one, all must enter VSO and are treated as a single business (VSL §2, stk. 3).

How VSO Works — The Four Accounts

VSO operates through a system of four notional accounts that track your capital movements between business and private spheres:

• Indskudskonto (equity/contribution account) — Records the capital you have contributed to the business (cash, assets at market value when contributed). This amount can be withdrawn tax-free at any time. It is the first in the withdrawal hierarchy only after retained profits are exhausted? No — see the hierarchy below.
• Mellemregningskonto (interim/current account) — Tracks short-term transfers between your private and business economy within the year. Must be settled by year-end or within the following year. Interest correction (rentekorrektion at 5% in 2025) applies if there is a net positive balance (i.e., you owe the business money).
• Opsparingskonto (accumulated profits account) — Retained profits taxed at the 22% provisional business tax rate. When you later withdraw from this account, you pay the difference between 22% and your personal marginal rate for that withdrawal year.
• Kapitalafkastgrundlag (capital base) — The net asset base (assets minus debt) at the beginning of the income year, used to calculate the kapitalafkast (notional return on capital). The kapitalafkast is taxed as capital income (lower rate) unless you elect to transfer up to 60,300 DKK (2025) to personal income.

Withdrawal Hierarchy (Hæverækkefølge)

When you transfer money from the business to your private account, SKAT taxes it in this specific order:

1. Årets kapitalafkast — First, withdrawals are treated as drawing the year's notional capital return. Taxed as capital income (not personal income), unless you elect to transfer up to the grundbeløb (60,300 DKK in 2025) to personal income via VSL §23a.
2. Opsparet overskud (accumulated retained profits) — Next, withdrawals are from retained profits that were taxed at 22%. You must pay the difference up to your personal marginal rate for the withdrawal year. This is known as efterbeskatning (subsequent taxation).
3. Indskudskonto (capital contributions) — Finally, withdrawals of contributed capital are tax-free. These are amounts you originally put into the business or later added as capital.

Interest correction (rentekorrektion) at 5% (2025 rate) is charged if the mellemregningskonto shows a net claim by the business against your private economy (i.e., you have borrowed from the business). This correction is personal income.

Key Rates (2025)

• Provisional business tax (foreløbig virksomhedsskat): 22%
• Kapitalafkastsats (capital return rate): 2%
• Rentekorrektionssats (interest correction rate): 5%
• Max kapitalafkast transferred to personal income (VSL §23a): 60,300 DKK (63,200 DKK in 2026)
• Counter-cyclical reserve (konjunkturudligning): Up to 25% of annual profit; 22% tax on the reserved amount; 78% must be deposited in a separate bank account (bunden konto). Minimum annual reserve: 5,000 DKK.
• Minimum share purchase threshold (VSL §22c): 821,400 DKK (2025) / 860,900 DKK (2026) — for the special capital return scheme for buying shares in a company.

Counter-Cyclical Reserve (Konjunkturudligning)

VSO allows you to set aside up to 25% of annual business profit into a counter-cyclical reserve (konjunkturudligning). You pay 22% tax on the reserved amount, and 78% must be deposited in a dedicated bank account (bunden konto) that cannot be used for other purposes. The minimum annual reserve is 5,000 DKK. When you later release the reserve, the released amount is added to your personal income (or if still in VSO, to the accumulated profits account). This is useful for smoothing income across high-profit and low-profit years.

How to Elect VSO

• During the year: On your forskudsopgørelse (preliminary income assessment), mark box 184 to indicate you expect to use VSO.
• After year-end: On the final tax return (oplysningsskema), mark field 147 to elect VSO.
• Retroactive change: You can change your election (opt in or out of VSO) until June 30 of the second calendar year after the income year ends (VSL §2, stk. 2).
• Filing: All VSO fields are part of the standard personal tax return (not a separate filing). If you use a revisor, they will handle the VSO calculations and the four-account reconciliation.

Kapitalafkastordning — Simplified Alternative to VSO

The kapitalafkastordning (return on capital scheme / VSL §22a) is a simplified alternative to the full VSO. It gives you some of VSO's benefits without the full four-account structure. Key features:

• Simplified calculation — A notional capital return (kapitalafkast) is calculated as: business assets (acquisition values) × kapitalafkastsats (2% in 2025). Debt is generally not deducted from the capital base (unlike VSO where net assets are used).
• Tax effect: The calculated kapitalafkast is deducted from your personal income (saving up to ~52% tax) and added to your capital income (taxed at ~37-42% max). This shift typically results in a net tax saving, especially if you have large business assets and low debt.
• Interest deduction: Business loan interest is fully deductible in personal income under this scheme, which can be valuable if you have significant business debt.
• Same eligibility: Same group as VSO — sole proprietors and partners in I/S/K/S/P/S. Cannot be used by dødsboer (estates) or for konkursindkomst.
• Election: Choose by marking field 141 on your tax return (or box 184 on forskudsopgørelse).
• VSL §23a transfer: You can also transfer up to 60,300 DKK (2025) of the kapitalafkast to personal income if you have low personal income (e.g., to utilize pension deduction capacity).

When to Use VSO vs Kapitalafkastordning vs Neither

• Use VSO if: You retain significant profits in the business year after year. The 22% rate on retained profits gives you cash flow benefits by deferring personal tax until withdrawal. Also useful if you expect lower personal income in future years when you eventually withdraw.
• Use Kapitalafkastordning if: You have substantial business assets (e.g., equipment, vehicles, property) and/or significant business debt. The scheme shifts capital return to lower-taxed capital income and gives you full personal-income deduction for interest. Best when you withdraw most profits annually.
• Use neither (PSL rules) if: You withdraw all profits each year and have minimal business assets and debt. The administrative simplicity of standard personal taxation may outweigh the benefits.
• Switch yearly: You can choose VSO, kapitalafkastordning, or neither independently each year. There is no multi-year commitment.

Exiting VSO

If you close your business or leave VSO, all accumulated retained profits (opsparet overskud) become immediately taxable at your personal marginal rate for that year. This can create a large tax bill. Plan the exit carefully — ideally by withdrawing retained profits gradually over multiple years to stay in lower tax brackets. Upon exit, the counter-cyclical reserve is also released and added to personal income. A revisor should always be involved in VSO exit planning.

For more on how business income interacts with your personal tax, see our personal tax guide → and B-income guide →.

Bookkeeping Requirements

Danish law requires all businesses to maintain proper accounting records under the Bogføringsloven (Accounting Act). This is known as lovpligtig bogføring, and non-compliance can result in fines and penalties. Key requirements include:

• Digital bookkeeping — From 2025 onwards, Denmark is moving towards mandatory digital bookkeeping. Businesses are expected to use digital accounting systems that comply with the Bogføringsstandard (accounting standards) issued by Erhvervsstyrelsen.
• Receipt and invoice retention — All accounting records, including receipts, invoices, contracts, and bank statements, must be retained for 5 years from the end of the financial year. This applies to both paper and digital records.
• Accounting system — You must maintain a double-entry bookkeeping system that records all transactions chronologically. Cash-basis accounting is not permitted for VAT purposes. The system must be able to produce a balance sheet, profit and loss statement, and annual report.
• Annual report (årsrapport) — ApS and A/S companies must file an annual report with Erhvervsstyrelsen within 5 months of the financial year-end. The report must include a management review, income statement, balance sheet, notes, and auditor's report (if applicable).
• Revisor (auditor) thresholds — Small companies meeting at least two of these criteria for two consecutive years may opt out of auditing: balance sheet total under 4 million DKK, revenue under 8 million DKK, and average employees under 12.

Your accounting records must be kept in Danish kroner (DKK) or another SKAT-approved currency with proper translation. For detailed expense documentation requirements, consult our business expenses guide →.

First-Year Obligations

Your first year of business involves several critical deadlines. Here is a timeline of key obligations:

• VAT returns — If your turnover exceeds 50,000 DKK in any 12 consecutive months, you must register for VAT and file returns quarterly. If your turnover remains below this threshold, you have momsfri omsætning (VAT-free turnover) and do not need to charge or file VAT, though voluntary registration is possible.
• Quarterly VAT deadlines — Q1: due May 1, Q2: due August 1, Q3: due November 1, Q4: due February 1 (following year). Late filing incurs a daily penalty of approximately 0.7% of the unpaid amount.
• Preliminary income assessment (forskudsopgørelse) — You must update your forskudsopgørelse to reflect expected business income (B-income for sole proprietors). This determines your monthly tax withholdings and AM-bidrag. Update via SKAT's TastSelv.
• Semi-annual A-skat returns — Due March 1 (for July-December) and September 1 (for January-June). Also applies if you pay yourself a salary from an ApS/A/S.
• Annual report (årsrapport) — For ApS/A/S, file within 5 months of year-end. First report covers the period from registration date to the financial year-end.
• Corporate tax return (selvangivelse) — Due June 30 following the income year. For a calendar-year company, the 2026 return is due June 30, 2027.

We recommend setting up a SKAT deadlines calendar with alerts for all recurring filing dates. Missing a deadline results in automatic penalties and interest charges. Many businesses use a revisor (accountant) to handle filings, which is especially recommended for the first year. For year-end tax filings, see our business tax return guide → and personal tax guide →. If you are starting a construction business, see our construction industry tax guide → for industry-specific rules on reverse charge VAT, subcontractor liability, and RUT registration. For group structures and holding companies, see our holding companies guide →. If your business sells VAT-exempt services (healthcare, education, financial services), see our payroll tax guide → for lønsumsafgift obligations. For startup fundraising, venture capital structures, and M&A tax considerations, see our M&A and Startup Tax Guide →. For group VAT treatment, see our VAT Groups Guide →. For banks, insurance companies, and pension funds, see our Financial Sector Tax Guide →. If you are bidding on public-sector contracts or infrastructure projects, see our Public-Private Partnership Guide →. For digital platform and gig economy businesses, see our Digital Platform Business Tax Guide →. For cross-border M&A and international group structuring, see our Cross-Border M&A Tax Guide →. For double taxation treaty rules and treaty relief procedures, see our Tax Treaties Guide →. For foreign businesses operating in Denmark and PE compliance, see our Permanent Establishment Guide →.

FAQs

Can a foreigner start a business in Denmark?

Yes. EU/EEA citizens can start a business in Denmark without additional permits. Non-EU citizens need a residence and work permit. A CPR number (Danish civil registration number) is required for sole proprietorships, while companies like ApS/A/S can be founded by non-residents with a Danish representative.

How long does CVR registration take?

Standard processing takes 1–3 business days via virk.dk. If the application is incomplete or requires manual review, it can take up to 2–3 weeks. Rush processing is not available, so apply well before your planned start date.

What is the difference between NemKonto and a regular business account?

Your NemKonto is a designation on an existing bank account (business or personal) that receives government payments. It is not a separate account type. You designate one existing account as your NemKonto through your bank. A separate business account is recommended for bookkeeping clarity but is not legally required.

Do I need a revisor (accountant) from day one?

Not legally required, but strongly recommended. A revisor helps with VAT registration, tax planning, bookkeeping setup, and ensures you meet all deadlines. For ApS/A/S with turnover over 8 million DKK or balance sheet over 4 million DKK, an auditor is mandatory.

What happens if I miss a VAT deadline in my first year?

SKAT imposes a daily penalty of approximately 0.7% of the unpaid VAT amount, plus a late-filing fee. After repeated violations, SKAT may demand a deposit or increase the frequency of your filings. Contact SKAT immediately if you miss a deadline. For more on managing tax debts, payment plans, and SKAT's enforcement process, see our Tax Debt Collection Guide →. For tax consequences of business failure, debt forgiveness, and bankruptcy, see our Insolvency & Bankruptcy Tax Guide →.