Both Sweden and Denmark have well-functioning company registration systems with online portals and reasonably fast turnaround times. Sweden has a slight edge on corporate tax rate. Denmark has a simpler minimum capital requirement since 2025. Neither country is particularly hostile to foreign founders – but both have quirks that can slow things down if you are not prepared.
| Factor | Sweden (AB) | Denmark (ApS) |
|---|---|---|
| Main limited company structure | Aktiebolag (AB) | Anpartsselskab (ApS) |
| Minimum share capital | SEK 25,000 (~2,200 EUR) | DKK 20,000 (~2,700 EUR) |
| Corporate tax rate | 20.6% | 22% |
| Standard VAT rate | 25% | 25% |
| VAT registration threshold | SEK 120,000/year | DKK 50,000/year |
| Registration authority | Bolagsverket | Erhvervsstyrelsen (Danish business Authority) |
| Typical registration time | 5-10 business days | 1-2 weeks |
| Registration fee (online) | SEK 1,900-2,200 | Approx. EUR 100-150 |
| Foreign ownership permitted? | Yes, fully | Yes, fully |
Registration: both are online, Sweden is slightly faster
Sweden's company registration goes through Bolagsverket via the Verksamt.se portal. According to Scandicorp, the registration fee for an online application is SEK 1,900 to SEK 2,200 (roughly 180-210 EUR), and processing takes five to ten business days. The minimum share capital for a private limited company (AB) is SEK 25,000, which must be deposited into a corporate bank account before registration completes. That requirement – opening a bank account before you officially exist as a company – is the most common sticking point for foreign founders in Sweden. Banks apply thorough KYC checks, and the process can take weeks.
Denmark registers companies through the online Virk portal operated by the Danish Business Authority (Erhvervsstyrelsen). Since early 2025, the minimum share capital for an ApS dropped from DKK 40,000 to DKK 20,000, according to Doing Business International. The online portal assigns a CVR number (the Danish company ID) on completion. Typical registration takes one to two weeks. The registration fee runs around 100 EUR via the online portal, making Denmark modestly cheaper for the initial filing.
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Corporate tax: Sweden wins by 1.4 percentage points
Sweden's corporate tax rate has been 20.6% since 2021 and applies as a flat rate on taxable profits. Denmark's corporate rate is 22%, also a flat rate on profits. For a small business earning DKK/SEK 1 million in annual profit, that 1.4-point difference amounts to roughly 1,200-1,500 EUR in additional Danish tax. Not enormous, but it adds up over time.
Denmark does offer a business tax scheme for sole proprietors that allows the 22% corporate rate to apply to retained earnings – the part of profit not withdrawn to a personal account. The Dania Accounting firm's 2025 guide describes this as a way to postpone personal income tax rather than eliminate it, since withdrawals are later taxed at the personal rate. It is useful for people who can leave profits in the business, but it is not a permanent advantage.
VAT: identical rate, different thresholds
Both countries charge 25% standard VAT. Denmark requires VAT registration once annual turnover exceeds DKK 50,000 – a low threshold that catches side businesses and freelancers quickly. Sweden's threshold is higher, which gives micro-businesses slightly more room before VAT compliance kicks in.
From 2025, Denmark requires all businesses to use a digital accounting system approved by the Danish Business Authority, with the ability to auto-report VAT and taxes to Skattestyrelsen and store records for at least five years. Sweden has similar record-keeping requirements but did not introduce an equivalent mandatory system standard in 2025.
Employing people
If you hire staff, both countries have employer obligations around income tax withholding, social contributions, and pension. Sweden's employer contributions run about 31.42% on top of gross salary (with reduced rates for young and older workers). Denmark's system includes labour market contributions (AM-bidrag of 8%) plus employer pension contributions via ATP. Both countries have collective agreements in many sectors that set minimum wage and benefit floors – these are not legally mandated minimums in the way France or Germany operates, but they are practically binding in sectors with union coverage.
Which is better for foreign founders?
Denmark's system is more straightforward for EU citizens in one respect: there is no strict residency requirement for directors. You can register an ApS and serve as director without living in Denmark. Sweden technically requires at least one EEA-resident board member for an AB – non-EEA founders need to apply for an exemption or appoint a local contact person. This makes Denmark marginally easier to set up remotely.
For founders who plan to live in the country and run the business day-to-day, the practical differences narrow considerably. Sweden's lower corporate tax is a genuine long-term advantage. Denmark's lower VAT threshold and mandatory digital accounting system add some compliance overhead early on. For most small businesses, the differences will not determine where you set up – but it is worth knowing them before you sign the paperwork.
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