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Denmark: Types of Company

Holding Companies

Denmark has high rates of corporate and personal income tax and has never been considered a financial centre. However changes to its holding company law in 1999 provide outstanding opportunities for the international investor, and subsequent adjustments to the law have if anything increased its attractiveness.

For a country to be an attractive location in which to set up a holding company 4 criteria must be satisfied:

Incoming Dividends: Incoming dividends remitted by the subsidiary to the holding company must either be exempted from or subject to low withholding tax rates in the subsidiary's jurisdiction.

Dividend Income Received: Dividend income received by the holding company from the subsidiary must either be exempted from or subject to low corporate income tax rates in the holding company's jurisdiction.

Capital Gains Tax on Sale of Shares: Profits realized by the holding company on the sale of shares in the subsidiary must either be exempt from or subject to a low rate of capital gains tax in the holding company's jurisdiction.

Outgoing Dividends: Outgoing dividends paid by the holding company to the ultimate parent corporation must either be exempt from or subject to low withholding tax rates in the holding company's jurisdiction.

By these criteria Denmark is a fiscally attractive jurisdiction in which to locate a holding company.

 

 

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