Immigration consultant's notes. Together with a startup to Denmark.
Most owners of Startup projects certainly striving to Germany, UK, USA ...
Well, but if look closely at Denmark? Each year, the World Bank publishes a rating of countries in which the most favorable conditions for business are created, and among which Denmark has already taken first places year after year.
The Danish government went further and launched the Startup Denmark program, which (in their opinion) opens a direct path to the modern local entrepreneurial ecosystem that meets the requirements of any business.
In order to become a participant in the above program, it is necessary (as a first step) to obtain approval of the business plan by at least three independent experts involved in Startup Denmark. The following criteria are used as evaluation criteria:
- how innovative is the business model? A group of experts prefers new projects that maximize the potential of the market & industry. The applied part is evaluated in terms of the possibility of introducing new products, services or processes;
- how attractive is the market? The examination focuses on assessments of market size, commercial potential and barriers to entry, the level of competition and how candidates plan to enter the market and subsequently develop;
- how scalable is the business model? Expertise selects startups with the potential to create jobs and grow in Denmark;
- how able is the applicant & team to implement the project? Applicants should not only come up with an excellent business model, but they must also be able to build a successful business in practice. Therefore, experts evaluate whether applicants possess the skills, competencies and experience necessary to turn their business plan into a viable enterprise;
- integrated assessment of the startup of its owners. It is an expression of the general perception by a group of experts of the quality of the business plan and the applicants standing behind it.
The term of business plan evaluation is limited to six weeks.
If the commission approves the business plan, the applicant (or a group of applicants consisting of no more than three people) has the right to apply for a residence permit & work permit, which is issued for a period of up to two years with the possibility of further extension for another three years.
In this case, the applicant must play an active role in doing business, his direct participation in the business is a necessary condition. In other words, if the applicant plans, for example, to remain only a shareholder of the company being created, then he cannot obtain a residence permit under the Startup Denmark program.
An indispensable requirement for obtaining a residence permit is the availability of adequate financial support:
- if the applicant moves without a family, it must be DKK 138,648,
- provided that the applicant moves with his wife - DKK 277,296,
- with wife and child - 322,908 DKK.
The term for considering an application for a residence permit is one month.
It should be noted that the Startup Denmark program does not provide for project financing. For these questions, it is advisable to contact one of the Business Financing Centers, the Danish Innovation Fund or the Danish Development Fund, which are ready to assist in obtaining funds for the development of a startup.
Shortly about taxes. Denmark is not one of the countries with preferential taxation. However, there is a preferential tax regime for expats, valid for up to 84 months (after moving) and expressing at a fixed rate 27% of personal income tax or 32.84%, taking into account various non-financial compensations (using a corporate phone, car, etc.). Corporate tax rate - 22%.
For questions regarding the organization of Startup projects in Denmark, obtaining a residence permit & work permit, arranging financing, and optimizing taxation, please contact our company specialists.
