How to choose a bank for your business in Denmark

When you start or run a business, choosing a bank is about more than where you get the lowest price. The bank must approve you as a customer under the anti-money-laundering rules, you need a NemKonto (Denmark's designated account for payments from public authorities) to receive money from the public sector, and you must decide on payment solutions, credit needs and prices that are often different from those for private customers. Here is what you should have sorted out before you choose.

What should a business account be able to do?

According to Virksomhedsguiden (Danish Business Authority), a business account is not a formal requirement, but banks can in practice require you to have one before they will handle the business’s finances. The advantage of keeping the business’s money separate from your private finances in a dedicated business account is that it makes bookkeeping, auditing and any tax inspection simpler, because receipts and payments that relate to the business are not mixed with your private spending.

Which functions you need depends on your type of business. A sole proprietorship (enkeltmandsvirksomhed) without employees typically needs basic functions such as receiving payments from customers, paying suppliers and possibly handling VAT. A company with employees also needs payroll payments, and a business with physical sales may need card terminals and cash handling.

Whatever the form of business, the same basic consideration applies: the account must support the payment flows your business actually has, neither more nor less. A business that invoices a few large customers once a month has different needs from a shop with many small daily transactions. It is therefore a good idea to map your own payment patterns before you compare banks, instead of assuming that all business accounts are alike.

Also consider where the business is expected to be heading over the coming years. If you are starting small but plan to hire staff, take on investors or expand to several countries, it can be an advantage to choose a bank that can keep up with that development, rather than optimising only for what is cheapest right now. Conversely, a smaller, simple solution may be the right choice if the business is expected to stay small and your top priority is low, predictable costs.

Sole proprietorship, company or association

The legal form of your business can affect how the bank treats you as a customer. If you run a sole proprietorship, you are personally liable for the business’s obligations, and the bank may therefore have an eye on your overall private finances. If you instead run a company, such as an IVS, ApS or A/S (Danish company forms), it is the company as a separate legal entity that the bank deals with, and your personal finances may play a less direct role, although the bank must still know you as a beneficial owner. This is our own general observation, not something the sources below establish. Associations have their own requirements for articles of association and signing authority, which the bank will ask to see before it opens an account.

NemKonto and the CVR number

According to Virksomhedsguiden, the business must have a NemKonto. NemKonto is the account the public sector uses when it pays money to the business, for example when the Danish Tax Agency (Skattestyrelsen) refunds VAT. Once the business has been assigned a CVR number, you ask your bank to designate a NemKonto.

Virksomhedsguiden states that the NemKonto can be an account you already have, or a new one. Note, however, that as mentioned banks can in practice require a business account. If the business has separate units with their own SE or P numbers, it can, according to Virksomhedsguiden, choose a NemKonto for each unit, but the individual authority decides whether payment can be made to an SE or P number. If you want to use a foreign bank account as your NemKonto instead, Virksomhedsguiden says this requires a separate approval, so it is not something you can simply choose freely.

What the bank needs to know about you

When you open a business account, most people find that the bank asks for far more information than they are used to as private customers. This is because of the Anti-Money Laundering Act, which obliges banks to carry out so-called customer due diligence procedures before they begin or continue a customer relationship. The information from the Danish Financial Supervisory Authority (Finanstilsynet) and the Danish Business Authority (Erhvervsstyrelsen) mentions, among other things, that the bank must:

• Obtain basic information about the customer. For associations, Finanstilsynet mentions name, CVR number if any, founding document, articles of association and an extract from the CVR register. Which documents a bank asks for from other forms of business, only the bank can tell you.
• Identify the business’s beneficial owners, that is the natural persons who ultimately own or control the business. According to the Danish Business Authority, more than 25 per cent of the ownership interests or voting rights is an indication of beneficial ownership, but not a fixed limit.
• Obtain identity information, for natural persons name and CPR number (the Danish personal ID number) or an equivalent number, and verify it against an independent and reliable source, for example a passport or driving licence.
• Know why the customer wants the customer relationship and what activities the customer expects to have at the bank. For associations, Finanstilsynet mentions that the bank obtains identity information on the board members with signing authority, for example the chair and treasurer.

Finanstilsynet writes that the bank carries out an individual risk assessment of all customer relationships, and that it is the bank that assesses how much and what documentation it needs. This can, for example, mean a simpler process for a simple sole proprietorship than for a business with foreign owners or activities in industries the bank assesses as higher risk for money laundering (our illustration, not an example from Finanstilsynet).

It is also worth knowing that customer due diligence is not something that happens only at opening. The bank can ask for updated information on an ongoing basis if there are changes in the business’s ownership, activities or behaviour on the account, because the Anti-Money Laundering Act obliges the bank to keep its knowledge of the customer up to date throughout the customer relationship, not only at the time of opening.

The business account and the deposit guarantee

Like private customers’ deposits, the deposits of businesses and associations are, as a starting point, covered by the Danish deposit guarantee, administered by Garantiformuen (Denmark’s deposit guarantee fund) under Finansiel Stabilitet. This means that the balance in your business account is, as a starting point, covered up to EUR 100,000 per depositor per bank if the bank fails, in the same way as for private accounts.

If your business at times has unusually high balances, for example after a major sale or an investment, it may be relevant to know both the ordinary limit and the special rules that in certain situations give a higher, temporary cover. Read more about how the deposit guarantee works in practice, including when cover can be higher than the ordinary limit, in our review of the deposit guarantee.

Deposit guarantee: how much are your deposits covered for?

Prices and fees for business customers

Banks’ price lists for business customers can be a separate document from the price list for private customers, and the prices can be different, both higher and lower, depending on the product. Typical items to watch for on a business price list are (our own overview, not taken from a specific source):

• Account fee or package price for the business account.
• Fees for card terminals and card transactions, if you sell to customers with payment cards.
• Prices for transfers, both in Denmark and abroad, which can matter more for a business than for a private customer.
• Any fees for credit or overdraft facilities.

We give no specific prices here, because they vary from bank to bank and change over time. See instead the article on how to read a bank’s price list if you want to know more about how to compare prices systematically.

How to read a bank’s price list

Payment solutions and integrations

Besides the account itself, you should consider which payment solutions your business needs. If you sell in person, it may be a card terminal. If you sell online, it may be a payment gateway that can be integrated with your web shop. Many businesses also use a business solution for MobilePay (the Danish mobile payment app) or similar to receive payments from private customers.

It can also be relevant to look at whether the bank offers integration with your accounting software, so that transactions can be booked automatically, and whether the bank supports the payment standards that your suppliers or customers abroad expect. The more automated the bookkeeping can become, the less manual work you or your accountant need to put in.

If your business trades abroad, it may also be relevant to ask how the bank handles payments in other currencies, and whether the price differs depending on whether the payment is made inside or outside the EU. This is an area where prices and solutions can vary quite a lot from bank to bank, and where it is therefore worth asking specifically about your own expected payment flows.

Advice and the relationship with the bank

For some businesses the day-to-day banking is what matters most. For others, especially businesses with growth plans, investment needs or a need for credit, the advice and the relationship with the bank can weigh heavily. A bank that knows your industry and has experience with businesses of your size can be easier to talk to when you apply for a credit facility or need to finance a larger purchase.

It is worth clarifying in advance whether you get a dedicated contact person or adviser, how the bank handles credit applications, and what documentation it typically asks for in that connection. If you already have an accountant or bookkeeper, it can be an advantage to ask them about their experience with different banks’ business departments.

Some businesses find that a smaller bank or a local branch gives a closer and more personal relationship, while others prefer a larger bank’s broader range of products and digital solutions. There is no single right answer, but it is a good idea to be clear about what type of relationship you value most before you choose.

If your business needs financing, for example for machinery, stock or a building period before income starts coming in, it is worth asking which forms of business financing the bank offers beyond an ordinary overdraft facility, and how it assesses security. Banks can have very different appetites for financing particular industries or types of business, so it is an advantage to clarify that early if financing is a central part of your business plan.

If you are refused

It happens that a bank refuses to open a business account for a business, for example because the business’s activities lie outside the bank’s business model, or because the bank cannot get sufficient clarity about ownership or activities in the customer due diligence procedure. If you are refused by one bank, you can try another bank whose business model fits your business better.

If your business or association meets certain conditions on registered location in Denmark, you may in addition be entitled to a basic business account at certain banks, even if they do not want to offer you an ordinary business account with all functions. Read more about the conditions, which banks are covered and what the account can be used for in the article on the basic business account.

Basic business account: who is entitled to one?

Switching business bank

If you are already a customer somewhere but are considering switching because the prices, payment solutions or advice no longer suit the business, many of the same considerations apply as for a private bank switch: you should have a clear picture of what the current banking relationship costs, and what a switch would concretely give you in improvements, before you decide. For a business, a bank switch may also require you to move the NemKonto registration and update recurring payments and agreements with suppliers, so it is a good idea to plan the transition so that operations are not disrupted along the way.

If the business has an ongoing credit facility at its current bank, you should also clarify whether and how it can be transferred or re-established at the new bank before you cancel anything at the old one. A bank switch for a business is rarely something that should happen from one day to the next, precisely because several links, such as payment agreements, credit facilities and NemKonto, typically have to fall into place in the right order.

How to compare offers

When you get quotes from several banks, it can be an advantage to ask for the same thing across the banks, so that you can compare on equal terms:

1. Ask for the full business price list, not just the prices the bank highlights in its first contact.
2. Ask specifically about the products you expect to use most, such as card terminal, foreign payments or credit.
3. Find out how long opening typically takes and what documentation the bank needs.
4. Ask whether there are binding periods or notice periods on any of the products.

What to ask the bank

• What documentation do you need about the business and its owners before you can open the account?
• How long does it typically take to open a business account with you?
• What does the account cost in total for my expected use of card transactions, transfers and any cash handling?
• Can I get integration with my accounting software, and do you support the payment solutions I need?
• How do you handle applications for credit or an overdraft facility, and what documentation does that require?
• What happens if at some point you no longer want to be my bank?

Do I have to choose the same bank for the business as privately?

It is not a requirement. Some choose the same bank for convenience, others choose a different bank for the business because it has better terms or more experience with the business’s industry. The deciding factor should be whether the bank can deliver what your business concretely needs, at prices and terms you find reasonable.

Why does the bank ask for so much information when I just want an account?

It is because of the Anti-Money Laundering Act, which requires banks to know their customers and understand the purpose of the customer relationship before they establish it. The customer due diligence requirements apply to all banks, but how much, and what, the individual bank asks for depends on its individual risk assessment.

Can I have several business accounts at different banks?

As a starting point there is nothing to prevent a business from having accounts at several banks at the same time, for example a current account in one place and a savings account in another. Some businesses do this deliberately to spread risk or to make use of different banks’ strengths. It can, however, make bookkeeping more complicated, so it is worth weighing the advantage against the extra administrative work.

Does it matter for my price how many other products I have at the bank?

It can. Some banks give better terms across several products if you gather more of your business’s banking in one place, while others price each product separately, whether or not you are already a customer. It is therefore relevant to ask specifically whether there is a link between the number of products and the prices or terms you can get, rather than assuming that it works one way or the other.

See what you should compare

Read also: business, What does a business account cost?, Business account for a sole proprietorship, Business account for an ApS and NemKonto for businesses.