Denmark: Operating a Business

Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
Anpartselskab (ApS) is a Private Limited Company Minimum DKK 80,000 totally subscribed and released.	One or more Liability is limited to the amount contributed.
Aktieselskab ( A/S) is a public limited company. Minimum DKK 500,000 totally subscribed and released.	One or more Liability is limited to the amount contributed.
Interessentskab ( I/S) is a general partnership. No minimum capital.	Minimum 2 partners. Partners' liability is indefinite and several.
Kommanditselskab ( K/S) is a limited partnership. No minimum capital.	Two types of partners: active partners and sleeping partners Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed.

Enterprises Federation: Danish Federation of Small and Medium Enterprises
Search a Company or a Financial Report: Danish Exporters, Company and Product Research
Central Business Register

Business Setup Procedures

Setting Up a Company	Denmark	OECD
Procedures (number)	4.00	5.60
Time (days)	6.00	13.80

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Denmark.
Central Business Register (CVR)
The Competent Organization: The Danish Commerce and Companies Agency (DCCA) handles the registration of the company and issues a CVR-number.

The Active Population in Figures

	2010
Labor Force	2,820,000

Source: CIA - The world factbook

	2009	2010
Total activity rate	-	65.40%
Men activity rate	70.60%	-
Women activity rate	60.30%	-

Source: UN - United Nations

Working Conditions

Opening Hours
Legal Weekly Duration: 37 hours
Maximum Duration: According to the Danish implementation law the maximum average weekly working hours cannot exceed 48 hours averaged over a
4-month period.

Working Rest Day: Employees are also entitled to at least one full day off each week.
Paid Annual Vacation: Employees are entitled to take at least 3 weeks of their 5 weeks holiday consecutively during the period between 1 May and 30 September.
Retirement Age: 65
Child Labor and Minimum Age For Employment: Children under the age of 13 cannot lawfully take on work except for performances in cultural contexts.

The Cost of Labor

Pay

Minimum Wage: No legally mandated national minimum wage. Collective agreements are the main mechanism used for regulating low pay.
Average Wage: USD 24,000 a year.
Other Forms of Pay
Pay For Overtime: In collective agreements overtime is typically subject to a 50% premium
for overtime in excess of 1 hour and a 100% premium for
overtime during weekends and public holidays.
Pay For Night Hours: Like overtime.

Social Security Costs

The Areas Covered: The level of social security is high in Denmark, and much is covered via taxes. There are favorable rules concerning e.g. illness, childbirth, childcare and pension. Certain things work differently from most other countries; unemployment insurance, for instance, is not covered by taxes or through the individual workplace. It is up to the employee to become a member of a Danish unemployment fund.

Management of Human Resources

The Contract

Type of Contract: Permanent contract, fixed-term contract, training contracts.

Breach of Contracts
Retirement: 65 years (67 in 2012).
Dismissals: According to Section 2b of the Salaried Employees’ Act the employer may be obliged to pay a compensation for unfair dismissal, if the
employee dismissed has been employed by the employer for at least 1 year, and if the dismissal is not deemed reasonably justified in the conduct of the employee and/or the circumstances of the company.
Any compensation as a result of unfair dismissal will be based on the employee’s length of employment and an estimate of the circumstances of the case, and will generally represent a maximum amount equal to the salary paid to the salaried employee in half of the period of notice. The compensation may amount to up to 6 months’ salary.

Dispute Settlement

Conciliation Process

Cases of Dispute

According to Article 2 of its Statutes, the object of Danish Arbitration is to promote arbitration in accordance with the Rules of Arbitration Procedure laid down by its Council through arbitral tribunals appointed by Danish Arbitration on a case-by-case basis.

The Rules of Arbitration Procedure were revised in 2004 to bring them in line with general international standards, and again in 2006 to bring the Rules in line with the Arbitration Act adopted in Denmark in 2005. The Rules of Arbitration Procedure were changed in October 2007.

Legal Framework

Consult the Danish Arbitration's website.

Procedure

Danish Arbitration also offers mediation in accordance with the Rules of Procedure for Mediation laid down by the Council in 2006.

Judicial Structures

Legal Framework: Consult the Danish Arbitration's website.
Competent Legal Body: Danish arbitration

Social Partners

Social Dialogue and Involvement of Social Partners: Many employers are members of the Danish Employers’ Confederation (Dansk Arbejdsgiverforening/DA) or one of the special employers’ associations (e.g. the Financial Sector or Agriculture). Employees are often members of the relevant trade union (Metal Workers, Commerce and Office etc), although most of these unions are also members of the ”umbrella” employee confederation, The Danish Federation of Trade Unions (Landsorganisationen/LO), a service organisation that undertakes to negotiate or co-ordinate various matters common to all trade unions. The labor market is thus to a very large degree regulated by collective agreements.
Unionization Rate: 80%
Regulation Bodies: Danish Employers' Confederation (DA)
National Labor Market Authority

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