Denmark

Sheltons Denmark

We are a very focused accounting firm – working exclusively (since our commencement in 1995) with internationally operating businesses. Our primary focus is on foreign investors dealing with Denmark, whether it be direct investment (FDI), employing just one person in Denmark, or exporting or selling on-line to Denmark. We pride ourselves on our quality and reliability. We are extremely successfully in providing advice and corporate services which ensure our clients do not receive unwelcome surprises.

These scenarios involve an array of tax, legal and other challenges that most professional advisers do not deal with.

To this niche client base we offer a comprehensive range of services from high-level tax consulting to basic bookkeeping, setting up entities and assisting expats sent to Denmark.

Our corporate services team comprises of a mix of Danish, English and other nationalities with different professional backgrounds which specialise in various disciplines. The fact that our official company language is English reflects our focus on foreign businesses with interests in Denmark; yet we have the ability to converse in many languages.

We have been situated in Copenhagen, the capital of Denmark, since 1995.

Accounting  and related

Accounting  and related

Providing the full range of accounting services to foreign-based businesses’ Danish units is our daily bread and butter. Our language skills, knowledge of non-Danish (and Danish) accounting software, familiarity with relevant aspects in many head office countries, familiarity with what foreigners find odd about Danish accounting and related areas equips us extremely well in serving our clients.

Our systems and procedures ensure that the matter at hand is not dependent on the availability of a particular person – we work as a team.

We also work in a way that enables us to easily avail of the resources in any of the other Sheltons Group offices should the need arises.

 

Bookkeeping

We prepare accounts from source documents, or on the basis of preliminary work from the client, taking Danish rules and the foreign client’s wishes into account.

We use a variety of Danish and non-Danish accounting software packages.

Accounting

We prepare statutory (legally required) accounts – as well as regular management accounts, with or without reports, analyses, etc.

We also prepare special-purpose accounts (such as pro forma accounts) and consolidated accounts.

Our services include reviewing client-prepared accounts and supporting the client’s internal accounting team, as appropriate.

We are ‘fluent’ in IFRS and have a good knowledge of the GAAP of a number of countries.

Audit assistance

An important role is to liaise with the Danish auditors of the client’s Danish company. We have clear systems for preparing material to facilitate efficient audits in Denmark.

We can often satisfy all questions from the auditors or at least significantly reduce the time demands on the client.

We very regularly liaise with the auditors of other parts of the group in other jurisdictions.

As a completely independent firm, we are not a member of any accounting/audit network, resulting in a comfortable relationship with the auditors of the non-Danish parts of the group who will usually be in such a network. We are free to liaise with the audit firm that the client prefers, we are not ‘tied’ to any specific audit firm.

VAT services

See also under tax advice

We assist with all aspects of VAT compliance, from registration to setting up routines with the clients to ensure comfortable meeting of filing deadlines and the preparation and filing of VAT returns.

Salary administration

Apart from advising employers and employees on the Danish and international tax aspects of the employment (see under tax services), we provide efficient payroll administration services.

Many of our client cases involve employers based in other countries, directly employing staff in Denmark.

The employees may well be Danish residents or non-residents in Denmark for shorter or longer assignments, and may be in Denmark under the special expat tax regime.

Providing payroll administration services for foreign businesses, or Danish units thereof, often involves extensive interaction with the foreign part of the group. We pride ourselves in our ability to understand the needs of the foreign parts of the group and in our flexibility in providing the services.

Our broad range of services includes matters such as

  •  employer registration
  • drafting and review of employment contracts
  • visa assistance
  • generation of payslips
  • filing regular PAYE returns
  • assistance with payment (net salaries, tax, etc)
  • annual administration (reports to the tax authorities, the employer and the employees)
  • and so on

Apart from providing advice on employer obligations, we also provide comprehensive tax advice and expat relocation services.

 

Local tax advice and compliance

We are widely recognised as being leading professionals in the area of Danish and international tax advice. Our origins in this regard goes back to the late 1980’s where Ned Shelton founded the specialist international consulting division of Crowe Horwath in the Netherlands (then known as Horwath International) being then and still now the 10th largest accounting network in the world. On Ned’s return to Denmark he founded Sheltons in Copenhagen in 1995.

Although Sheltons has branched out and is now a specialist accounting firm (working only with internationally operating businesses), tax is still a strong string to our bow.

Compliance

Our compliance services covers areas such as

  • Personal and company tax return preparation and reviewing assessment notices
  • Obtaining tax residence certificates
  • Obtaining tax clearance certificates
  • VAT return preparation
  • Procedures for paying withholding taxes in Denmark and abroad and for requesting refunds thereof

Corporate tax

Our services on corporate tax covers a wide range. Some key areas on which we commonly advise are as follows:

  • Corporate tax generally
  • Deductibility of interest
  • Determination of residency
  • Obtaining tax rulings
  • Tax consolidation
  • Tax efficient financing
  • Tax treatment of K/Ss
  • The application of anti-avoidance rules
  • Thin capitalisation rules
  • Transfer pricing
  • Treatment of foreign exchange gains and losses

See also under Danish international tax and International tax

Personal tax – including Danish international tax

Our services here cover a wide range. Some key areas on which we commonly provide advice are as follows:

  •  Inheritance and gift taxes
  • Residency issues
  • Salary packaging
  • Structuring local investments
  • Tax issues connected with pensions
  • Taxation of Danish-sourced investment income
  • Taxation of foreign-sourced Investment income
  • Taxation of expats coming to Denmark
  • Taxation on departing Denmark
  • Taxation on working abroad

 

See also under Corporate tax, Danish international tax and International tax

Danish international tax – corporate

Our services in the area of Danish international tax cover a wide range. Some key areas on which we commonly provide advice are as follows

  •  Beneficial ownership under treaties
  • Controlled foreign company (CFC) matters
  • Determination of the profits attributable to a permanent establishment – in Denmark and abroad
  • Existence – or not – of a permanent establishment in Denmark
  • Existence of permanent establishment abroad
  • Interest & Royalties Directive
  • Management and control
  • Other EU tax aspects
  • Parent-Subsidiary Directive issues
  • Planning for foreign investment income
  • Reducing Danish and foreign withholding taxes
  • Residency under tax treaties
  • Structuring investments abroad
  • Tax treaty application
  • Tax treaty interpretation
  • Taxation of foreign real estate owned by Danish taxpayers
  • Transfer of residency to and from Denmark
  • Withholding tax issues on payments from Denmark
  • Withholding tax refunds

See also under Corporate tax, Personal tax – including Danish international tax and International tax

VAT advice

Our VAT advice cover a range of services . Some key areas on which we commonly provide advice are as follows:

  • Disputes with the tax authorities
  • Eligibility for registration
  • VAT issues generally
  • Non-residents liability

See also under International tax

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Entity set-up and management

Working exclusively with internationally operating businesses over more than two decades has resulted in us having played a leading role in the formation of several hundred entities – companies, general and limited partnership, trust and other entities – in many countries throughout the world.

During our many years’ of experience in establishing Danish companies and partnerships for foreign-based businesses, we have developed and fine-tuned our systems and procedures, enabling us to provide efficient and reliable services in this regard.

We only establish Danish entities where the entity is conducting real business in Denmark and has actual economic activity in Denmark.

Our extensive international experience means we are often quite familiar with the shareholders’ jurisdictions and the shareholding entity – whether it be a Delaware LLC, a German GmbH, an Indian Pvt Ltd, a Brazilian Limitada, a UK LLP, a Dutch closed CV, etc. etc.

Apart from our expertise in establishing new entities we are also very experienced in the field of liquidations and winding up. We regularly assist in this in cases where the entity is solvent and a registered liquidator is not legally required to be involved.

 

A/S

This is the public company form, requiring at least three directors and a minimum share capital of DKK 500,000 (~EUR 67,000). It is similar to the German AG, the UK PLC, the Australian Limited, the Dutch NV, etc.

Nearly half of all Danish-owned companies are in this form, mainly for prestige reasons. Almost no foreign-based groups use this form for their Danish subsidiaries.

It is a ‘per se’ corporation for US check-the-box rules. The A/S can be listed on the Danish stock exchange (whereas the other business forms dealt with here cannot be).

ApS

See model below.

This is the normal private company form, requiring only one director and a minimum share capital of DKK 50,000 (~EUR 6,700). It is similar to the German GmbH, UK Limited, the French Sarl, the Australian Pty Ltd, etc.

Almost all foreign-based groups use this form for their Danish subsidiaries.

IVS

See model below. 

This private company form became available in 2014. It is similar to an ApS, but only requires share capital of DKK 1.00 (one). However there are limitations the use of profits, until equity of at least DKK 50,000 has been built up.

K/S

See model below.

This is a limited partnership. It is a legal person. It is usually transparent for tax purposes in Denmark. In those two respects it resembles a UK LLP. However it can, under certain circumstances, be taxed in Denmark as a company. It is not governed by the companies law but by separate legislation.

P/S

See model below.

This is a partnership limited by shares. This legal form is unknown in common law jurisdictions (except in Malta) but exists in about 20 continental European civil law jurisdictions. It is a legal person and is usually transparent for tax purposes in Denmark. However it can, under certain circumstances, be taxed in Denmark as a company. It is governed by the same legislation as that applicable to companies.

SE

See model below.

This is a European company. Due to Denmark being part of the European Union, the SE form is available. It is a legal person. It is taxed as a company.

EEIG

See model below.

This is a European partnership. Due to Denmark being part of the European Union, the EEIG form is available. It is a legal person but is transparent for Danish tax purposes.

 

Liquidations / winding up

The process of ending the existence of a Danish company is relatively simple where there are no unpaid creditors. In such cases there is generally no requirement that a registered liquidator be involved.

 

 

Domiciliation (director, registered office etc)

When a foreign-based business establishes a Danish company, there will always be a period until the new company has its own premises and own senior staff in Denmark.

We provide not only the registered office but if the client wishes we can arrange for the appointment of a local director.

Even when the entity has its own premises in Denmark the client often prefers that we continue to provide the registered office in order to ensure that important mail, often of legal importance, is handled professionally and with the appropriate degree of confidentiality.

 

Company secretarial

Denmark, being a civil law rather than a common law jurisdiction, does not have the concept of a ‘company secretary’, but nonetheless Danish law requires that a company complies with a range of obligations of a company secretarial nature.

Our services cover attending to all shareholder and directors meetings and resolutions without a meeting, keeping of registers such as the shareholder registers and filing all required forms and documents with the Danish Business Authorities (the DBA).

We have well-developed systems and procedures for this and wherever legally possible we ensure that everything in English (or both in English and Danish), for the benefit of our foreign-based shareholders / clients.

Our two decades of experience in forming and administering Danish entities has resulted in the develop of extensive knowledge, systems, models and routines in this regard.

 

Relocation of expats

As a consequence of our focus on internationally operating businesses, and especially those based abroad doing business in Denmark, and as a result of our close involvement with the incoming employees – with regard to tax matters, visas, registrations with the authorities and the like, it was not a major step to formally offer relocation services.

To make the decision even more obvious, Ned Sheltons himself was originally an expat – coming from Arthur Andersen in Australia to Denmark to take up a position in the head office of Danske Bank, and further, currently we have senior staff in the offices of Sheltons Denmark who are themselves expats. To top it off, we have staff at Sheltons Denmark who have a background in relocation.

So since early 2016 we have offered expat relocation services. We formed a separate company to provide these services but it is very much part of Sheltons Denmark – the offices is shared, the team is shared and facilities are shared.

The services we deliver include assistance in each of the following areas

  • Accommodation
  • Arranging for a temporary, furnished apartment
  • Bank account opening
  • Connecting utilities
  • Culture familiarisation
  • Financial planning
  • Finding a job for the partner or “trailing spouse”
  • Importing a (used) car
  • Insurance matters
  • Language courses – recommending, arranging
  • Moving-out services
  • Obtaining a Danish driver’s licence
  • Other registrations
  • Payroll administration
  • Preparing a move-in report
  • Public transport
  • Removals – transport
  • Schools
  • Shopping
  • Socialising
  • Subscriptions for telephone, internet, TV, Netflix, etc
  • Tax advice – employer
  • Tax advice – expat
  • Tax registration
  • Visas

 

International tax services

To learn about our International tax services please click here