[ESTABLISHING A BUSINESS ENTITY IN DENMARK]
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4.3 Special business or investment visa issues It is not necessary for investors to have a visa to invest in Denmark. If the owner would like to work or live in Denmark, a residence/- or work permit might be necessary. Visas are issued for the purpose of stays less than three (3) months and employment is not permitted during the stay. For residence/- or work stays which is longer than three (3) months, a residence-/ or work permit is required. Special rules apply to citizens from Nordic Countries, the EU members States, Switzerland and Liechtenstein. It is advised to seek specific guidance concerning visa, residence/- or work permit issues. 4.4 Restrictions on remitting funds out of the jurisdictions Danish entities distributing dividends must report information about the recipients of dividends to the Danish Tax Authorities. There are no specific restrictions on remitting funds out of Denmark, but the funds may be applicable to taxation. The taxation of the distributed funds depends on whether Denmark has entered an agreement with the foreign country concerning the avoidance of double taxation. This section concerns the situations where Denmark has the right to tax the distributed funds. The entities are obligated to withhold the tax of the distributed dividends to individual persons and to companies. 4.4.1 Partnerships distributing funds In partnerships the profits and losses are distributed equal between the partners. The different partnerships are taxational transparent and the individuals will be subjected to paying tax if receiving funds from the partnership. Denmark has the right of taxation if the activity is qualified as a permeant establishment in Denmark (such as a
branch office). If the activity is not qualified as a permeant establishment, the taxation depends on the regulation in the country the participant is domiciled in. 4.4.2 Limited Companies distributing dividend The taxation of the distributed dividend depends on a variety of factors and to some extent it depends on the percentage of ownership in the company distributing the divided. If the shareholder is an individual person, the person will be subjected to paying tax of the distributed dividend. The taxation rate is 27 % of the amount of 58,900 DKK (2023) and the taxation rate is 42 % for the dividend which exceeds 58,900 DKK. The limited companies: Shareholders that are limited companies and owns less than 10 % of the shares in the company distributing shares, will always be subjected to taxation of the distributed shares. It is only 70 % of the distributed shares which will be taxed with 22 %, if the company is not professional investing in shares. For shareholders that are limited companies (in accordance with Danish law) and owns more than 10 % of the shares in the company distributing shares, the company can to some extend receive the dividend without the dividend being taxed. There are following requirements: a) the foreign company owns more than 10 % or more of the share capital of the Danish company or more than 50 % of the voting rights, b) the company receiving the dividend is the beneficial owner, c) the company is Danish, or the company is foreign, and the EU Parent-Subsidiary Directive applies, or the subsidiary is resident in a
ILN Corporate Group – Establishing a Business Entity Series
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