How to set up a business in Greenland

In order to conduct business in Greenland, registration in the Danish business (CVR) register is required. This registration must be completed digitally on:https://datacvr.virk.dk/. In English: https://businessindenmark.virk.dk/

Furthermore, companies planning to have employees must register as an employer with the employer register Sulinal: https://sulinal.nanoq.gl

Below is information on how to establish a company in Greenland in accordance with the Companies Act, which entered into force in July 2018. Foreign companies may start operating in Greenland either through a subsidiary (both ApS and A/S type companies) or via a registered branch office.

The rules for Greenlandic companies are here (in Danish): https://erhvervsstyrelsen.dk/groenlandske-selskabsformer.

An ApS (private limited company) or A/S (public limited company) is a separate legal entity with limited liability for its shareholders.

The main difference between an ApS and an A/S is that the shares (anparter) of an ApS (private limited company) cannot be issued publicly. An ApS can therefore not be subject to listing, or otherwise issue shares to the public to secure more capital. This would require a private placement. In addition, there are a few differences in relation to capital and management requirements. Under the Companies Act, the minimum share capital requirement for an ApS is DKK 40,000, which must be paid up. The minimum share capital requirement for an A/S is DKK 400,000. However, it is possible to incorporate an A/S and only pay 25% of this amount (i.e. DKK 100,000), leaving the company with a receivable from the shareholders for the outstanding amount (DKK 300,000).

An ApS may be incorporated with only an executive board. From the outset there is no requirement for a board of directors. An A/S requires both an executive board and a board of directors / supervisory board.

Both foreign and Greenlandic individuals (natural persons) and legal persons can form a company.

Procedure of establishment of an A/S and ApS
Both types of company can be registered via the Danish Business Authority’s online system. The board of directors is obligated to register the company with the Danish Business Authority by no later than five weeks after signing the memorandum of association.

A company in the process of incorporation is not considered an independent entity. Thus, until registration, the founders are liable for the company’s activities. After the formal registration, the company takes over all liabilities, including the liabilities related to activities carried out between the date of founding and the date of registration.

a) Management in an A/S
Shareholders in an A/S company may choose between two management models.

The first model is a system with a board of directors with overall responsibility for managing the company, plus an executive officer (or an executive board in case of multiple executive officers) responsible for the day-to-day management of the company.

There is no requirement for members of the management to be of Danish nationality.

The second model is to have a supervisory board (Danish: tilsynsråd) to ensure internal control and an executive board appointed and dismissed by the supervisory board responsible for the day-to-day management of the company. No member of the supervisory board or the board of directors may be a member of the executive board.

b) Management in an ApS
The same options as for A/S exist for ApS companies. However, contrary to an A/S company, an ApS company is not required to have a two-tier management.

The management may consist of an executive board, which must have at least one member. Note that if the employees are entitled to representation on the board, the company must establish a board of directors.

A foreign company may normally establish a registered branch office in Greenland instead of establishing a Greenlandic company. It should be noted that a Danish company cannot have a registered branch in Greenland. However, note that a Danish company can be registered with a permanent establishment in Greenland. A Danish company which pursues activities in Greenland does not have to register for these activities, but it must submit separate tax returns in Greenland for its Greenlandic activities. 

A branch of a foreign company may be created through application to the Danish Business Authority, provided there is authority in an international agreement or, after consulting with the Government of Greenland, the minister for business affairs deems that similar rights are afforded Greenlandic limited liability companies in the country in question, or permission is granted in some other manner.

The foreign company must register the Greenlandic branch office with the Danish Business Authority, which must be performed via the online registration system of the Danish Business Authority. When registering, it is required to provide a certificate, no more than three months old, that documents that the foreign company is registered in accordance with the legislation of its home country, as well as the foreign company’s memorandum of association and statutes, and the branch manager’s power of attorney. Companies registered outside the EU and EEA must also submit an official certificate from the company’s home country that documents that a Greenlandic company with the same objects as notified by the branch can operate in the relevant country through a branch office.

Accounting, auditing and bookkeeping requirements for Greenlandic companies
According to the Financial Statements Act, the board of directors and the executive board of Greenlandic companies (A/S and ApS) are responsible for the maintenance of the company’s accounting records and for the preparation and filing of annual reports.

The Financial Statements Act contains the legal and formal requirements for the annual report.

Accounting requirements for registered branch offices
Greenlandic branches are not obligated to prepare and file an annual report for activities in Greenland. However, the branch must annually file an audited annual report of the foreign company or the branch with the Danish Business Authority. The annual report of the foreign company is publicly available at https://datacvr.virk.dk/. A foreign company with a branch office or a permanent establishment in Greenland must submit financial statements to the Greenlandic Tax Agency.

The auditing requirements in Greenland are regulated in the Companies Act, the Financial Statements Act and the Auditor Act. The bookkeeping requirements must comply with the Bookkeeping Act.