{"id":1852,"date":"2026-04-28T15:50:26","date_gmt":"2026-04-28T13:50:26","guid":{"rendered":"https:\/\/flexum.dk\/uncategorized\/setting-up-an-aps-company-pros-and-cons-in-2026\/"},"modified":"2026-06-10T12:00:02","modified_gmt":"2026-06-10T10:00:02","slug":"setting-up-an-aps-company-pros-and-cons-in-2026","status":"publish","type":"post","link":"https:\/\/flexum.dk\/en\/company-formation\/setting-up-an-aps-company-pros-and-cons-in-2026\/","title":{"rendered":"Setting up an ApS company \u2013 Pros and cons in 2026"},"content":{"rendered":"\t\t
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Starting a private limited company (ApS) is one of the most popular ways to run a business in Denmark. However, as with any business decision, an ApS comes with both advantages and disadvantages that you should be aware of before making your choice. In this article, you will get a complete overview of what it means to set up an ApS company in 2025. <\/p>

What is an ApS?<\/h2>

A private limited company (ApS)<\/strong> is an independent legal entity that is separate from its owners. Under the new rules from 27 February 2025<\/strong>, the capital requirement has been reduced to DKK 20,000<\/strong>, making it more accessible for entrepreneurs to set up an ApS company<\/a>. <\/p>

The 8 biggest advantages of an ApS<\/h2>

1. Limited liability \u2013 your greatest protection<\/h3>

The most important advantage of setting up an ApS is limited liability. As an owner, you are only liable up to the capital you have contributed to the company \u2013 typically DKK 20,000<\/strong>. <\/p>

What this means in practice:<\/strong><\/p>

Your personal assets are protected<\/p>

Creditors cannot pursue your house, car, or savings<\/p>

Your maximum risk is your contributed capital<\/p>

Example:<\/strong>If your ApS goes bankrupt with a debt of DKK 500,000<\/strong>, you only lose your contributed DKK 20,000<\/strong>.<\/p>

2. Tax advantages \u2013 save significant amounts<\/h3>

Corporate tax vs. personal tax:<\/strong><\/p>

An ApS pays 22% corporate tax<\/strong><\/p>

Personal income is taxed at up to 56%<\/strong><\/p>

Significant savings at higher income levels<\/p>

Practical example \u2013 profit of DKK 500,000:<\/strong><\/p>

As an ApS: DKK 110,000<\/strong> in tax<\/p>

As personal income: up to DKK 280,000<\/strong> in tax<\/p>

Potential savings: DKK 170,000<\/strong><\/p>

3. Professional image and credibility<\/h3>

Why an ApS signals seriousness:<\/strong><\/p>

CVR number and official registration<\/p>

Professional business address<\/p>

Increased trust from customers and suppliers<\/p>

Easier access to business credit<\/p>

Marketing advantages:<\/strong><\/p>

Better opportunities for B2B sales<\/p>

Greater credibility in tender processes<\/p>

Professional communication<\/p>

4. Flexible ownership structures<\/h3>

Options for multiple owners:<\/strong><\/p>

Easy allocation of shares<\/p>

Flexible ownership structures<\/p>

Option to bring in investors<\/p>

Succession planning<\/p>

Practical advantages:<\/strong><\/p>

Bring partners into the business<\/p>

Sell parts of the business<\/p>

Plan a generational handover<\/p>

5. Tax-deductible expense options<\/h3>

Business deductions:<\/strong><\/p>

All business-related expenses<\/p>

Better pension schemes<\/p>

Company car and employee benefits<\/p>

Representation and travel expenses<\/p>

6. Continuity and transfer<\/h3>

The company outlives its owners:<\/strong><\/p>

An ApS exists independently of its owners<\/p>

Easy transfer upon sale<\/p>

Succession to the next generation<\/p>

Stable business structure<\/p>

7. Access to financing<\/h3>

Easier access to capital:<\/strong><\/p>

Banks prefer an ApS for business loans<\/p>

Option for equity crowdfunding (from 2025)<\/p>

Attractive company form for investors<\/p>

Better financing terms<\/p>

8. Option to retain profits<\/h3>

Building capital within the company:<\/strong><\/p>

Profits can remain in the company<\/p>

Lower taxation than when paid out<\/p>

Building equity<\/p>

Financing growth<\/p>

The 6 biggest disadvantages of an ApS<\/h2>

1. Capital requirement \u2013 DKK 20,000 must be invested<\/h3>

A minimum of DKK 20,000<\/strong> must be contributed<\/p>

The capital is tied up in the company<\/p>

May be a barrier for start-ups<\/p>

Comparison:<\/strong><\/p>

Sole proprietorship: DKK 0<\/strong><\/p>

ApS: DKK 20,000<\/strong><\/p>

2. Increased administration and compliance<\/h3>

Ongoing obligations:<\/strong><\/p>

Annual report<\/p>

General meeting at least once a year<\/p>

Ongoing bookkeeping and accounting<\/p>

Costs:<\/strong><\/p>

Auditor: DKK 15,000\u201350,000<\/strong><\/p>

Accounting: DKK 20,000\u201360,000<\/strong><\/p>

3. Double taxation on dividends<\/h3>

Corporate tax: 22%<\/strong><\/p>

Dividend tax: 27%<\/strong> (up to DKK 67,500)<\/p>

Dividend tax: 42%<\/strong> (above DKK 67,500)<\/p>

Total taxation may exceed personal income tax.<\/p>

4. Limited options for deducting losses<\/h3>

Losses cannot<\/strong> be offset against personal income<\/p>

Carried forward within the company to later years<\/p>

5. Complex formation and legal requirements<\/h3>

Legal documents<\/p>

Registration with the Danish Business Authority<\/p>

Higher formation costs<\/p>

6. Less flexibility in day-to-day operations<\/h3>

Decisions must be documented<\/p>

General meetings are required<\/p>

Articles of association must be complied with<\/p>

ApS vs. other company types<\/h2>

ApS vs. Sole proprietorship <\/h3>

FactorApSSole proprietorship<\/p>

Start-up capitalDKK 20,000DKK 0<\/p>

LiabilityLimitedUnlimited<\/p>

Tax22% + dividend taxUp to 56%<\/p>

AdministrationHighLow<\/p>

Professional imageHighLower<\/p>

ApS vs. A\/S <\/h3>

FactorApSA\/S<\/p>

Start-up capitalDKK 20,000DKK 400,000<\/p>

Ownership baseFew ownersMany shareholders<\/p>

ManagementFlexibleBoard + executive management<\/p>

DisclosureLimitedExtensive<\/p>

When should you choose an ApS?<\/h2>

An ApS is the right choice if:<\/strong><\/p>

\u2705 Annual turnover > DKK 500,000<\/p>

\u2705 Limited liability is important<\/p>

\u2705 You want to hire employees<\/p>

\u2705 Professional credibility is crucial<\/p>

Consider alternatives if:<\/strong><\/p>

\u274c Turnover < DKK 200,000<\/p>

\u274c Minimal administration is desired<\/p>

\u274c Lack of start-up capital<\/p>

\u274c Expected losses<\/p>

Conclusion: Is an ApS the right choice for you?<\/h2>

An ApS is a strong and professional company form that is best suited to businesses with growth ambitions, higher turnover, and a need for limited liability. For the right businesses, an ApS offers both tax and strategic advantages \u2013 but it also requires structure, capital, and planning. <\/p>

Disclaimer<\/h2>

This article is for informational purposes only and does not constitute legal, tax, or financial advice. Rules may change, and individual circumstances vary. <\/p>

We always recommend that you consult a lawyer, auditor, or tax adviser before deciding on a company form.<\/p><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

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