Operating a Business

Denmark: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

Legal Forms of Companies

Anpartselskab or ApS (Private Limited Company): Number of partners: One or more. Minimum 1 director is required.
Capital (max/min): Minimum DKK 40,000 totally subscribed and released.
Shareholders and liability: Liability is limited to the amount contributed.
Aktieselskab or A/S (Public Limited Company): Number of partners: One or more. Three directors and one manager required, must be citizens in the EU
Capital (max/min): Minimum DKK 400,000. 25% of the share capital has to be paid when the company is registered
Shareholders and liability: Liability is limited to the amount contributed.
Interessentskab or I/S (General Partnership): Number of partners: One or more.
Capital (max/min): No minimum capital.
Shareholders and liability: Partners' liability is indefinite and several.
Kommanditselskab or K/S (Limited Partnership): Number of partners: Two or more. Two types of partners: active partners and sleeping partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed.

Business Setup Procedures

Setting Up a Company	Denmark	OECD
Procedures (number)	5.00	5.21
Time (days)	3.50	9.47

Source: Doing Business - Latest available data.

The Competent Organisation: The Danish Business Authority handles the registration of the company and issues a CVR-number.
For Further Information: Doing Business, Consult this website to know about procedures to start a Business in Denmark.

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Kompass - Denmark Business Directory

Proff - Financial content about Danish companies

Virk Data - Central business register of Denmark

The Active Population in Figures

	2018	2019	2020
Labour Force	2,982,472	3,023,904	3,022,416

Source: International Labour Organization, ILOSTAT database

	2017	2018	2019
Total activity rate	77.89%	78.20%	79.01%
Men activity rate	80.61%	81.00%	81.93%
Women activity rate	75.13%	75.35%	76.04%

Source: International Labour Organization, ILOSTAT database

Employed Persons, by Occupation (% of Total Labour Force)	2015
Human health and social work activities	17.4%
Wholesale and retail trade; repair of motor vehicles and motorcycles	14.4%
Manufacturing	12.0%
Education	9.5%
Construction	6.0%
Professional, scientific and technical activities	5.4%
Public administration and defence; compulsory social security	5.3%
Transportation and storage	4.6%
Accommodation and food service activities	4.3%
Information and communication	4.1%
Administrative and support service activities	3.8%
Financial and insurance activities	2.7%
Arts, entertainment and recreation	2.5%
Agriculture, forestry and fishing	2.5%
Real estate activities	1.2%
Water supply; sewerage, waste management and remediation activities	0.6%
Electricity, gas, steam and air conditioning supply	0.5%
Mining and quarrying	0.2%

Working Conditions

Opening Hours
Legal Weekly Duration: 37 hours
Maximum Duration: According to the Danish implementation law the maximum average weekly working hours cannot exceed 48 hours averaged over a
4-month period.

Working Rest Day: Employees are also entitled to at least one full day off each week.
Paid Annual Vacation: Employees are entitled to take at least 3 weeks of their 5 weeks holiday consecutively during the period between 1 May and 30 September.
Retirement Age: 65
Child Labour and Minimum Age For Employment: Children under the age of 13 cannot lawfully take on work except for performances in cultural contexts.

The Cost of Labour

Pay

Minimum Wage: According to the government data, the average monthly income is DKK 44,513 in 2020 (Statistics Denmark).
Average Wage: According to the government data, the average yearly income is DKK 326,048 in 2019.
Other Forms of Pay
Pay For Overtime: In collective agreements overtime is typically subject to a 50% premium
for overtime in excess of 1 hour and a 100% premium for
overtime during weekends and public holidays.
Pay For Night Hours: Like overtime.

Social Security Costs

The Areas Covered: The level of social security is high in Denmark and much is covered via taxes, including illness, childbirth, childcare and pension. Unemployment insurance, however, is not covered by taxes or through the individual workplace. It is up to the employee to become a member of a Danish unemployment fund.
Contributions: Contributions Paid By the Employer: Supplementary Pension Scheme (ATP) : DKK 2,271.60 annually
Maternity fund : DKK 1,350 annually
Industrial injury insurance : around DKK 5,000 annually (depends on type of work, number of employees, insurance company etc.)
Other social contributions : around DKK 5,000 annually
Contributions Paid By the Employee: Supplementary Pension Scheme (ATP) : DKK 1,135.80 annually.
Competent Organization: Danish Ministry of Employment
Danish Financial Supervisory Authority

Management of Human Resources

The Contract

Type of Contract: Permanent contract, fixed-term contract, training contracts.

Breach of Contracts

Retirement: 65 years (67 in 2012).
Dismissals: According to Section 2b of the Salaried Employees’ Act the employer may be obliged to pay a compensation for unfair dismissal, if the
employee dismissed has been employed by the employer for at least 1 year, and if the dismissal is not deemed reasonably justified in the conduct of the employee and/or the circumstances of the company.
Any compensation as a result of unfair dismissal will be based on the employee’s length of employment and an estimate of the circumstances of the case, and will generally represent a maximum amount equal to the salary paid to the salaried employee in half of the period of notice. The compensation may amount to up to 6 months’ salary.
Labour Laws: Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

Dispute Settlement

Conciliation Process

Cases of Dispute

According to Article 2 of its Statutes, the object of Danish Arbitration is to promote arbitration in accordance with the Rules of Arbitration Procedure laid down by its Council through arbitral tribunals appointed by Danish Arbitration on a case-by-case basis.

The Rules of Arbitration Procedure were revised in 2004 to bring them in line with general international standards, and again in 2006 to bring the Rules in line with the Arbitration Act adopted in Denmark in 2005. The Rules of Arbitration Procedure were changed in October 2007.

Legal Framework

Consult the Danish Arbitration's website.

Procedure

Danish Arbitration also offers mediation in accordance with the Rules of Procedure for Mediation laid down by the Council in 2006.

Judicial Structures

Legal Framework: Consult the Danish Arbitration's website.
Competent Legal Body: Danish arbitration

Social Partners

Social Dialogue and Involvement of Social Partners: The labour market is quite regulated by collective agreements. Many employers are members of the Danish Employers’ Confederation (Dansk Arbejdsgiverforening/DA) or one of the special employers’ associations (e.g. the Financial Sector or Agriculture). Employees are often members of the relevant trade union (Metal Workers, Commerce and Office, etc.), although most of these unions are also members of the 'umbrella' employee's confederation, the Danish Federation of Trade Unions (Landsorganisationen/LO). The LO is a service organisation that negotiates and co-ordinate various matters common to all trade unions.
Unionisation Rate: According to OECD data, as of 2013, Denmark's trade union density is 67%.
Regulation Bodies: Danish Employers' Confederation (DA)
National Labor Market Authority

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