Danish Business Authority Increases Control with Foreign Addresses

New intelligent digital solution now validates the foreign address during the registration process to ensure due validity and quality of the registered corporate data. The digital solution automatically validates foreign addresses worldwide right down to the postbox level.

The registration of foreign ownership data has long been a problem for company registrars where the incorporation has been conducted through an online process. The data entered into any register to record legal and beneficial ownership needs to be verified to ensure due validity.

Ulitmate Beneficial Ownership Register

In Denmark, the ulitmate beneficial ownership register is maintained by the Danish Business Authority (DBA) in connection with the Central Business Register (CVR). The beneficial ownership register is integrated into the CVR system and made publicly available via online company transcripts and registration.

Registration of Danish Residents

All natural persons ordinarily resident in Denmark will be issued a Danish social security number from the Central Register of Persons (CPR-number). When a natural person is being registered as a director, board member, legal or beneficial owner of a Danish company for corporate entity, the CVR system will automatically conduct a number of verification procedures. It automatically retrieves the person’s address from the Central Register of Persons (CPR). This will also detect if a person is recorded as being deceased, without a registered residential address, missing, or a minor, etc.

Foreign Beneficial Owners

The registration of a foreign beneficial owner or company officer does not benefit from the data ordinarily available for Danish persons and corporations in in the CVR and CPR systems. It is therefore not possible to conduct automatic verification procedures.

When a foreign-domiciled natural person is being registered as an ulitmate beneficial owner (UBO) in the CVR system, the following data will be required: full legal name, registered residential address, citizenship, and passport number or equivalent.

Submitting false information to the CVR register is a criminal offence, for which the registrant submitting the information can be held liable. The registration procedure will require the registrant to register online by CPR to identify the registrant directly and to settle any registration fees.

The DBA will conduct a number of verification procedures to verify the data submitted in connection with the registration:

• The address is verified via an international database, to ensure that the address exists.

• The DBA sends the UBO a letter by post informing the UBO of the registration. If the letter is returned, the DBA contacts the registrant for further information to ensure that the registered address is correct.

• The UBO must submit a passport copy or equivalent. It will be scanned and verified automatically.

The automatic verification serves as a first step to ensure the validity of the data submitted. In addition, the DBA may also conduct manual checks to verify the information. The DBA is empowered by statute to administratively dissolve companies and other corporate entities that fail or refuse to provide the necessary documentation.

Denmark benefits from fully digitised register of companies and persons. The system makes it convenient to incorporate companies and to register mutations in a swift and efficient manner without resorting to notaries. At the same time, the registration system is based on trust and verification whereby registrants are permitted to submit documentation which will be verified automatically and manually where necessary.

Mandatory Electronic Mailboxes for Companies

All commnumication from the CVR will be by eletronic mail. To that end, once a CVR-number has been issued, it becomes mandatory for the company to have a digital mailbox to receive letters and notices from public authorities in Denmark. The mailbox is made available free of charge and can easily be activated. Upon activation, the company will receive all important messages directly from the relevant authorities in its digital mailbox. When a message is received, the company will receive a notification by emmail or by SMS. It will have the same status as a regular mailbox. This means that it is the responsibility of the company and its officers to read and review any new digital messages received.

Further Information

For further information on Danish company law and incorporations, please contact a member of Carsted Rosenberg.