The capital requirement for private limited companies (ApS) has been reduced

On 9 April 2019, it was decided that the capital requirement for private limited companies (ApS) will be reduced. In the same legislative amendment, the entrepreneurial company (IVS) was abolished and the existing entrepreneurial companies ceased to exist – you can read more about this in this post: Entrepreneurial company (IVS) has now been abolished.

The capital requirement for private limited companies (ApS) is reduced to a minimum of DKK 20,000. This means, among other things, that only DKK 20,000 is now required to establish a private limited company (ApS). Alternatively, the formation of a private limited company (ApS) can continue to be done by contributing values other than cash (this is called contribution in kind). In connection with this, an appraiser must also make an assessment of the assets to ensure that they have the value that the company’s equity represents at the time of incorporation.

The history of the capital requirement for private limited companies (ApS)

In recent years, the capital requirement for private limited companies (ApS) has been reduced significantly. Of the most recent changes, the capital requirement was reduced from a minimum of DKK 125,000 to a minimum of DKK 80,000. After this, it was reduced to DKK 50,000 in 2013 and DKK 40.000 in 2021.

And today, the minimum requirement for the start-up capital for private limited companies (ApS) is DKK 20,000. It will hardly be long before the minimum requirement is reduced further.

Why is the minimum capital requirement for private limited companies (ApS) reduced?

One might ask oneself the question: why is the minimum requirement being reduced?

One of the answers to this is that internal competition among the Member States of the European Union has become tougher. Since the beginning of 2000, there has been a tendency for each Member State to reduce the capital requirement and to try in other ways to improve the conditions for setting up a business in its respective countries. The reason for this is based on the case law which formed the basis for the opportunities to set up and operate across the European Member States became more favourable.

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