Employer of Record in Denmark (EOR in Denmark)

Q: What industries benefit most from Employer of Record services in Denmark?

Industries such as technology , pharmaceuticals , finance , and manufacturing benefit greatly from the flexibility and ease of hiring provided by Employer of Record services in Denmark.

Hire Globally, Pay Locally, Expand Effortlessly

We act as your Employer of Record in Denmark, using it simplifies the process, allowing companies to hire local employees and stay compliant without establishing a legal entity. Denmark is a thriving hub for innovation, known for its high standard of living and strong economy. With a highly skilled workforce and a focus on sustainability, Denmark presents a wealth of opportunities for businesses looking to expand. However, entering the Danish market requires navigating a complex array of labor laws, tax regulations, and compliance challenges.

In this guide, we’ll explore how Employer of Record services can help you expand into Denmark efficiently and in full compliance with local regulations.

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Want to Have a Team in Denmark TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

How an Employer of Record in Denmark Operates in 3 Steps

Step 1: Initial Planning

Your journey with an Employer of Record in Denmark begins with a thorough consultation to understand your business’s specific needs. This review includes evaluating the number of employees, their roles, and the timeframe for establishing operations in Denmark. The Employer of Record will then customize its services to align with your goals, ensuring smooth market entry.

Step 2: Recruitment & Onboarding

Once your plan is set, the Employer of Record handles all necessary steps to bring your employees onboard legally. This includes managing visas, work permits, payroll setup, and ensuring that all employment contracts comply with Danish labor laws. The Employer of Record also oversees recruitment and onboarding processes, ensuring that your staff are fully compliant with Danish regulations from day one. Acting as the legal employer, the Employer of Record handles everything, saving your company from needing to set up a local entity.

Step 3: Ongoing HR Management & Compliance

Once your operations are running in Denmark, the Employer of Record takes over day-to-day HR functions such as payroll, managing employee benefits, and ensuring continuous compliance with health insurance and social security contributions. The Employer of Record acts as a local HR contact between you and your team, handling all administrative tasks and allowing you to focus on business growth without the worry of legal and compliance issues.

The Advantages of a Danish Employer of Record When Expanding Your Business

Better Market Entry

Denmark has a strict regulatory framework, but an Employer of Record in Denmark can help your business navigate the complexities of Danish tax laws and labor regulations from the outset, ensuring compliance from day one.

Expert Compliance Management

Denmark’s employment laws are detailed and must be followed meticulously. An Employer of Record takes care of all compliance-related tasks, ensuring your company operates legally under local tax laws, employment regulations, and social security requirements.

Risk Reduction

By acting as your legal employer in Denmark, an Employer of Record reduces your company’s exposure to risks tied to non-compliance with Danish employment laws. This minimizes the possibility of legal issues and penalties.

Cost-Effective

Using an Employer of Record in Denmark is often more cost-effective than setting up a local entity, especially for small or temporary operations. An Employer of Record allows you to bypass incorporation costs and reduce ongoing administrative overhead.

Prioritize Core Business Objectives

By outsourcing HR tasks such as recruitment, payroll, and tax management to an EOR in Denmark, you free up your company to focus on core business activities and growth strategies, instead of dealing with administrative burdens.

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

 5/5

Choosing Between an Employer of Record and Company Incorporation in Denmark

While establishing a local subsidiary in Denmark is an option, partnering with an Employer of Record can offer distinct advantages:

Speed – An Employer of Record allows you to set up operations in Denmark much faster. Incorporation can take months, while an Employer of Record can have your team operational in just a few weeks, enabling rapid market entry.

Compliance – Both Employer of Records and local subsidiaries must comply with Danish labor laws and tax regulations, but an Employer of Record brings local expertise to handle these challenges, ensuring continuous compliance without the need for in-house specialists.

Cost – For smaller teams or projects, Employer of Record services are often more cost-effective than creating a local entity. An Employer of Record helps you avoid upfront incorporation costs and reduces ongoing administrative expenses. For larger companies, an Employer of Record also integrates smoothly into multi-country payroll systems.

Control – Although company incorporation offers full control over HR, financials, and operations, partnering with an Employer of Record still provides significant oversight over your Danish workforce while reducing administrative responsibilities and minimizing legal liabilities.

5 Essential Factors for Selecting the Best Employer of Record in Denmark

Choosing the right Employer of Record in Denmark is crucial for a smooth market entry. Consider these key factors:

Proven Expertise and Track Record – Look for an Employer of Record with a solid track record and a strong industry reputation in Denmark. Client testimonials and industry accolades reflect the Employer of Record’s reliability and experience.
Comprehensive Service Offering – Ensure the Employer of Record offers a complete range of services, including visa support, payroll processing, tax compliance, and managing Danish employment regulations. The ability to customize services to meet your business’s specific needs is also important.
Scalability – Select an Employer of Record that can grow with your business. As your company expands in Denmark, your EOR should be able to handle larger workforces and more complex administrative tasks.
Transparent Communication – Choose an Employer of Record known for clear and consistent communication. They should keep you updated on changes in Danish regulations, upcoming deadlines, and any potential issues. Having a dedicated contact point ensures streamlined communication.
Competitive Pricing – Compare the pricing models of different Employer of Record providers in Denmark. Ensure their costs are transparent and competitive, with no hidden fees. Third-party reviews and advice can help ensure you’re getting the best value for your investment.

Denmark Labor Law Overview

Employment Contracts – In Denmark, employment contracts must comply with Danish labor laws and outline essential terms, including salary, benefits, working hours, and termination clauses. An Employer of Record ensures that your contracts are legally compliant and customized to fit your business’s needs.
Probationary Periods – Probation periods in Denmark typically last 3 to 6 months, giving employers and employees time to assess fit. An Employer of Record can assist in structuring probation periods to ensure they comply with Danish law while meeting your business needs.
Working Hours – The standard working week in Denmark is 37 hours, with strict regulations regarding overtime and rest periods. Employer of Record services help monitor working hours and ensure compliance with overtime regulations and collective agreements where applicable.
Paid Leave – Danish employees are entitled to 25 days of paid annual leave, along with paid leave for public holidays, maternity/paternity leave, and sick leave. An Employer of Record manages employee leave, ensuring that your business remains compliant with Danish labor law while accurately compensating employees.
Health Insurance and Social Security – Denmark has a well-developed social security system, which includes health insurance and other welfare benefits. Both employers and employees are required to make contributions. An Employer of Record manages these contributions, ensuring full compliance with the Danish social security framework.
Severance Pay – Severance pay is typically required in Denmark under certain conditions, particularly for long-serving employees. An Employer of Record can provide guidance on severance pay practices and ensure that employee terminations are managed legally, including any required notice periods and compensation.

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FAQs

How can an Employer of Record assist in entering the Danish market?

An Employer of Record simplifies market entry by handling all legal, HR, and payroll tasks in compliance with Danish laws, allowing businesses to hire employees quickly and without the need for a local entity.

What are the cost benefits of using an Employer of Record in Denmark?

An Employer of Record reduces costs by managing payroll, tax compliance, and legal employment without the expense of setting up a local subsidiary, particularly beneficial for smaller teams or temporary projects.

How does an Employer of Record help with compliance in Denmark?

An Employer of Record manages all aspects of compliance with Danish labor laws, including employment contracts, social security contributions, and health insurance, ensuring full legal adherence for your business.

Can an Employer of Record handle visas and work permits in Denmark?

Yes, an Employer of Record in Denmark can manage the process of obtaining work permits and visas for expatriates, ensuring compliance with immigration laws.

Is severance pay mandatory in Denmark?

Severance pay may be required in Denmark depending on the employment contract and length of service. An Employer of Record can guide businesses through the legal requirements related to employee terminations.

What kind of control do I retain over my employees when using an Employer of Record in Denmark?

While the Employer of Record acts as the legal employer, you retain control over your employees’ day-to-day tasks and work-related decisions.

What industries benefit most from Employer of Record services in Denmark?

Industries such as technology, pharmaceuticals, finance, and manufacturing benefit greatly from the flexibility and ease of hiring provided by Employer of Record services in Denmark.