Denmark is an excellent location for international companies that want to open their Nordic headquarters. Foreign companies can establish their presence in the country by opening a branch or a subsidiary in Denmark.
The main characteristics, as well as the advantages of the branch and the subsidiary, are presented by our Danish company formation experts.
The advantages of the branch in Denmark
The branch in Denmark is used to carry out the same business activities as the foreign company abroad. It cannot perform any other commercial activities apart from the ones that make up the objectives of the head office. In a sense, it is merely an extension in Denmark of the foreign legal structure.
The branch, like other types of companies, is registered with the Danish Business Authority. An important advantage of the Danish branch is that it is only subject to tax on its profits derived from the country and it has lighter reporting and accounting requirements compared to a registered legal entity.
Investors who do not wish to open a company in Denmark and handle the entire formation and registration process can open a branch, with no minimum share capital and easier incorporation requirements. However, investors should bear in mind that the branch in Denmark has no legal capacity and the foreign company abroad is fully liable for its debts and obligations.
The advantages of the subsidiary in Denmark
The main advantage of the subsidiary in Denmark is that it is a legal structure, incorporated as per the Danish laws, separate from the foreign head office. The subsidiary can take the form of a private limited liability company, suitable for small and middle-sized companies or of a joint-stock company, suitable for middle-sized and large companies. Both business forms have requirements for a minimum share capital and registration with the Danish Business Authority.
Both the branch and the subsidiary have their unique advantages and characteristics. While the branch has lighter incorporation and reporting requirements, the subsidiary is a naturally preferred choice for those investors concerned with liability.
Investors who want to open a company in Denmark can contact us and find out more information about the advantages of the subsidiary and the branch office.