DENMARK Trends and Developments Contributed by: Poul Guo, Martin Søndergaard, Patricia Rasch and Jonas Miller Rasmussen, Moalem Weitemeyer
Affairs blocking an investment. The investment was subsequently approved. Policy Reforms Improving the Investment Climate Legislative reforms have played a crucial role in shaping Denmark’s VC market. Amend - ments to the Danish Companies Act, effective from 1 January 2025, have simplified capi - tal-raising for private limited companies (in Danish: anpartsselskab ), allowing them to offer shares to the public under certain conditions. This change, previously limited to public limited companies (in Danish: aktiesselskab ), has cre - ated new financing opportunities for start-ups. Additionally, the minimum capital requirement for private limited companies was reduced from DKK40,000 to DKK20,000 as of 27 February 2025, thereby lowering entry barriers for entre - preneurs. The approval of equity crowdfunding platforms has further diversified the sources of investment, broadening access to capital for early-stage businesses. The new Danish legislation thereby enhances access to financing for Danish limited liabil - ity companies by allowing them to offer equity shares to the public through equity crowdfund - ing. For companies operating within the venture market, this provides an opportunity to reach a broader pool of investors. Government Initiatives Fuelling Growth One of the most impactful government measures supporting the growth of the Danish VC market is the elimination of dividend taxes on unlisted shares, introduced in July 2024. This policy has made investments in start-ups and early-stage companies significantly more attractive to inves - tors. By removing the tax burden on dividends from unlisted shares, the Danish government
has incentivised early-stage funding, providing start-ups with the critical growth capital they need to scale their operations and innovate. This measure not only enhances potential returns for investors but also fosters a more dynamic and supportive investment environment for emerging companies. In alignment with Denmark’s sustainability agen - da, the government has allocated DKK2 billion to EIFO, specifically to boost green technology investments. This substantial funding under - scores the government’s commitment to foster - ing environmental innovation and supporting the development of green technologies. By channelling significant financial resources into the green sector, the Danish government aims to strengthen the country’s position as a leader in environmental innovation. This initia - tive not only attracts VC to green start-ups but also promotes the development of sustainable solutions that address global environmental challenges. Challenges and Future Outlook One of the primary challenges facing the Dan - ish VC market is global economic uncertainty and market volatility, both of which significantly affect investor confidence and the availability of funding. Economic fluctuations and geopolitical tensions can lead to more cautious investment behaviour, reducing the flow of capital into the venture market. This uncertainty makes it more difficult for start-ups to secure the funding need - ed to scale operations and innovate. Another challenge is the intense competition for top talent and resources among start-ups. As the number of start-ups increases, so too does the demand for skilled professionals, particularly in specialised fields such as technology and life
162 CHAMBERS.COM
Powered by FlippingBook