Denmark offers a wealth of opportunities for freelancers, allowing self-employed individuals the freedom to define their work hours, services, and clientele. However, setting up a freelance business in Denmark requires navigating a few specific steps to ensure compliance and access to Denmark’s benefits for residents.
*Please be aware that we do not update this information in real time, so you should verify that the law has not changed recently.
To establish a freelance business in Denmark, you’ll primarily operate as a sole proprietorship under the Danish Commercial Code, meaning the business and the individual are legally considered the same entity. Here’s the process to get started:
Obtain Necessary Permits: Foreign nationals require a work permit. EU and EEA citizens must also present an EU residence document.
Get a NemID and CPR Number: All freelancers in Denmark need a NemID (digital ID) and CPR number (personal ID number). These are issued to residents with a Danish passport or driver's license.
Register with the Danish Business Authority: Formally registering your business grants you a CVR number, essential for invoicing and official communications.
Freelancers in Denmark are subject to Denmark’s progressive income tax, which can reach a maximum of 51%. Taxes cover extensive social benefits, including healthcare, education, parental leave, and unemployment support.
VAT Requirements: Denmark has a standard VAT rate of 25%, required for all freelancers with annual earnings above 50,000 DKK. Freelancers earning less may choose not to register for VAT. However, once registered, VAT applies to all income, regardless of the amount. Notably, VAT is charged based on the customer’s location, which may require registration in different countries, especially if clients are within the EU.
Danish regulations mandate specific requirements for invoices to ensure tax compliance:
Invoice Format: Each invoice must have a unique, sequential number, issue date, and detailed descriptions of services or goods.
VAT Details: Invoices should clearly list the VAT rate, any exemptions, and the VAT amount, displayed in either euros or Danish kroner.
Record Retention: Freelancers must keep all invoices on file for at least seven years to comply with Denmark’s record-keeping requirements.
Launching your freelance business in Denmark involves a few critical steps to ensure your business complies with Danish regulations:
Choose Your Business Entity: For freelancers, a sole proprietorship is often the easiest to establish and manage, as it does not require a separate tax return.
Work Permit and Residence Requirements: Secure work and residence visas if you’re a foreign national.
Apply for NemID and CPR Number: Request these digital IDs to register your business officially.
Register Your Business: Register with the Danish Business Authority to receive your CVR number.
Open a Business Bank Account: Link this account to your CVR number for managing business transactions.
Register for VAT: Register to pay VAT in Denmark and other EU countries where you intend to do business.
Implement a Financial Management System: Track expenses and income efficiently, and use automated systems for VAT-compliant invoicing.
Marketing Your Business: Develop a marketing strategy, including creating a website and using social media, to attract clients locally and internationally.
Setting up a freelance business in Denmark can be a rewarding decision, providing both economic benefits and a high quality of life. Although the setup requires time and effort, each step brings you closer to enjoying the independence and potential profitability of freelancing in Denmark. Starting now ensures you’re well-prepared to meet these requirements and launch a compliant, successful business in the Danish freelance market.