How to start an ApS in Denmark: the checklist from holding question to first invoice

We talk to new company owners every week, and the question is nearly always the same: what do I need to do, and in what order? This is the checklist we walk our customers through — from choosing between a holding structure and a single ApS to filing the first VAT return.

The checklist in short

• Choose a structure: a single ApS, or a holding company that owns an operating company
• Incorporate the company and pay in the share capital
• Register the company for VAT and as an employer
• Open a business account and make it the company's NemKonto
• Set up payroll if you will be employed by your own company
• Get started with bookkeeping
• Plan your cash for the first months
• Put the first deadlines in your calendar

The rest of this article takes the steps one at a time. Where we link to a deeper article, it is in Danish.

1. Holding company or a single ApS?

The first choice is who owns the company. Either you own your ApS (anpartsselskab, the Danish private limited company) directly. Or you own a holding company, which owns the operating company — the ApS that has the clients, sends the invoices and employs you.

Ongoing tax is the same either way: the operating company pays 22% corporate tax, and your salary comes from the operating company. The difference only shows once there is profit you don't need privately, or when the company is one day sold.

What a holding company gives you:

• Savings shielded from the business. Dividends from the operating company to the holding company are tax-free. You can move the profit up every year, away from the risk in the operating company. If a client brings a claim against the operating company, it doesn't reach the money in the holding company.
• A tax-free sale. The holding company can sell the operating company without tax on the gain. Tax only arises when you take the money out privately.
• Room to grow. Several activities can sit in separate operating companies under one holding, and with several owners, each can have their own holding company.

What it costs:

• Two companies mean two sets of books, two annual reports and two general meetings a year. The holding company rarely has many receipts, but it still needs its accounts.
• Money only moves up as dividends, which must be decided at a general meeting and booked correctly in both companies.

Without a holding company, the profit can simply stay in your ApS — it has already been taxed at 22%. You just get neither the shield from the business risk nor the tax-free sale. And if you take most of it out as salary, a holding company adds almost nothing.

From the start or later? From the start it is simple: with rolling capital you pay DKK 20,000 into the holding company, which uses the same money to set up the operating company. If you add a holding company later, it is usually done through a tax-free share exchange (skattefri aktieombytning). That takes professional advice, and as a rule the holding company must then keep the shares in the operating company for three years before it can sell them tax-free.

Our rule of thumb: if you are a consultant or freelancer whose value is you and your hours, and you spend most of the profit privately, choose a single ApS with yourself as owner and employee. It is clean and simple. Choose a holding structure from the start if you expect to build something that can be sold, if there are several owners, or if you expect profit that will stay in the company for years. If you are unsure, start with a single ApS — a holding company can always be added later.

Read more in holdingselskab: fordele og ulemper. If you are unsure whether you need a company at all, see enkeltmandsvirksomhed eller ApS.

2. Incorporate the company and get a CVR number

An ApS needs at least DKK 20,000 in share capital, a memorandum of association (stiftelsesdokument) and articles of association (vedtægter), and the company must keep a register of owners (ejerbog). The capital has to be paid in before the incorporation is filed, and a bank, lawyer or auditor must confirm it to the Danish Business Authority (Erhvervsstyrelsen). The filing itself must happen no later than 2 weeks after the memorandum is signed — otherwise you start over. Once the company is registered, it gets its CVR number.

The easiest route is a digital incorporation service such as Legal Desk, which is what we usually recommend to our customers. It receives and confirms the capital, drafts the documents and registers the company and its beneficial owners on Virk, the government's business portal. If you want a holding and an operating company, both can be set up in the same process. A lawyer or an auditor can do the same.

Two things are worth thinking about along the way:

• Timing. Allow a few working days from paying in the capital to getting the CVR number. If you start an assignment on a fixed date, incorporate well before it.
• The financial year. The calendar year is the simplest. The first financial year may run for up to 18 months, so if you incorporate late in the year, the first year can run until the end of the next one.

If the terms are new to you, we explain them in fra CVR-nummer til NemKonto.

3. VAT registration and employer registration

Once the company exists, it has to be registered with the Danish Tax Agency (Skattestyrelsen) for the obligations it has. You do this on Virk, either as part of the incorporation or afterwards.

• VAT (moms). The company must register for VAT once its taxable sales exceed DKK 50,000 over 12 months. If you sell advice or consulting hours, you will pass that quickly, so most register from the start. New businesses file VAT quarterly for at least the first year and a half — see the VAT deadlines.
• Employer. If the company pays a salary — including to you — it must register for A-tax (A-skat) and labour market contribution (AM-bidrag).

A pure holding company with no activities of its own usually needs neither VAT nor employer registration.

4. Business account and NemKonto

The company needs its own account, separate from your personal finances. Our customers usually pick Lunar or Danske Bank. Choose one that connects to your bookkeeping software so transactions flow in automatically.

If you have clients or costs in several currencies, Revolut Business is a good choice, because it makes it easy to hold accounts in many currencies.

Make the account the company's NemKonto, so payments from the public sector — a VAT refund, for example — have somewhere to land. And keep the two economies apart from day one: private purchases on the company account quickly turn into a mess in the books, and in the worst case into tax for you personally.

5. Paying yourself a salary

If you are employed by your own company, your salary has to run through a payroll system. We recommend Salary or Danløn. They calculate A-tax, labour market contribution and ATP, report to eIndkomst, and both integrate directly with Numina, so payroll is booked automatically.

It is also worth deciding how much to take as salary and how much to leave in the company — see løn eller udbytte.

The company must also have statutory workers' compensation cover (arbejdsskadeforsikring) as soon as anyone works for it — even if that is only you. As director you count as an employee of your own company, even when you own every share, and that includes office work and a home office. Have it in place before you send the first payslip.

6. Bookkeeping from day one

An ApS must keep its books digitally in a registered bookkeeping system and store every receipt. Start at the incorporation: the incorporation costs and your first purchases have to be booked too.

Set the company up in Numina as soon as the CVR number is in place, and connect the business account. From there you can send invoices, snap receipts and keep an eye on your money from the app or your computer. If you would rather not deal with it at all, our bookkeepers can take over bookkeeping, bank reconciliation and VAT for you. Check the invoice requirements before you send the first one.

7. Cash flow in the first months

The first payment often arrives later than you expect. If you invoice at the end of the month with 30 or 45 days' payment terms, nearly two months can pass from when you start until the money is in the account.

Meanwhile the company owes the VAT on what you have invoiced — even if the client has not paid yet. Use the share capital as a buffer, and wait to pay yourself a salary until the money is there.

8. Deadlines for VAT, tax and the annual report

• VAT: quarterly at first. The deadlines are on momsfrister, and you can add them straight to your calendar.
• Payroll: the payroll system reports every time you run payroll.
• Corporate tax: new companies are usually not charged ordinary tax on account (acontoskat) in their first years. The tax on the profit then arrives in one go later, with a surcharge, unless you make voluntary payments — so set the money aside. See B-skat og acontoskat.
• Annual report: no later than 6 months after the first financial year ends, and after a general meeting — see årsrapport for ApS. With a holding structure, both companies file one.

VAT is the deadline that comes first and most often. It is where mistakes surface fastest, so it is also where having your receipts in order from the start pays off.