KYC at the bank: beneficial owners and documents for a business account

You have set up a business, booked an appointment at the bank and expect to sign for an account. Instead you get a list: who owns the business, who owns them, what the account will be used for, and how much you expect to send abroad. It feels like distrust, but it is a duty that rests on the bank. Here you get an explanation of what know your customer (KYC) and beneficial owners are, what the authorities' own guidance says about ownership structure and documentation, when a bank can say no or close an account, and how to prepare so that the process is shorter. The guide is not legal advice.

Why does the bank ask?

Banks are covered by the Danish Anti-Money Laundering Act (hvidvaskloven). Finanstilsynet writes: “The bank is obliged to know its customers and carry out an individual risk assessment of all customer relationships” (our translation of the Danish wording). See also the glossary entries for AML and KYC.

So the bank asks in order to meet its own obligation, both when the account is opened and later in the customer relationship. Finanstilsynet also writes that the bank must not only know the customer but also know why the customer wants the relationship. That explains why the questions are not only about names but also about what the account will be used for.

The questions come whether you are a new sole proprietorship (enkeltmandsvirksomhed) or an ApS (a Danish private limited company). How many there are and how detailed they are depends on the individual risk assessment. That is why two businesses can get different questions at the same bank. What applies at your bank, only the bank can answer.

Know your customer (KYC)

KYC stands for “know your customer”, in Danish kundekendskab. Finanstilsynet writes that, for natural persons, the bank must obtain the name and CPR number (the Danish personal ID number) or an equivalent number, and verify the identity details against an independent and reliable source. According to Finanstilsynet, showing photo ID is not a requirement under the Anti-Money Laundering Act.

Finanstilsynet writes that the bank must know why the customer wants the customer relationship, and gives as examples of information income, expected payments abroad and the extent of cash deposits. These are examples from Finanstilsynet’s page about bank customers in general, and they do not say that precisely these three questions are put to every business.

As a business customer you meet KYC in three layers:

• Who is the business? Name, CVR number (the Danish company registration number), legal form and who can act on its behalf.
• Who owns and controls it? The beneficial owners and the whole ownership structure. That is the subject of the next sections.
• What will the account be used for? Purpose and expected activity.

How the process looks for a newly formed company is covered in Business account for an ApS, and for a sole proprietorship in Business account for a sole proprietorship.

Who is a beneficial owner?

The Danish Business Authority defines beneficial owners as “the natural person or persons who ultimately own or control a business” (our translation of the Danish wording). A beneficial owner is thus always a person, never a company. See the glossary entry on beneficial owner.

25 per cent is an indication, not a rule

The Danish Business Authority writes that a sufficient share as a starting point means that a person has more than 25 per cent of the ownership interests or voting rights, and that “it is not a fixed limit, only an indication of beneficial ownership” (our translation of the Danish wording). In practice, a person with more than 25 per cent is a signal of beneficial ownership, and a person can be a beneficial owner without reaching the limit. The Business Authority writes: “It is thus the overall de facto influence that is decisive for whether a person is a beneficial owner” (our translation of the Danish wording).

Control by means other than ownership interests

The Danish Business Authority explains that control by other means means that the person has substantial influence on decisions. As examples the guidance mentions appointing the majority of the management members, approving the annual report in relation to dividend payments, and a right of veto. A right to appoint board members, but not the majority, requires according to the Authority a concrete assessment of “the overall de facto influence”. On veto rights the Authority writes: “A concrete assessment may find beneficial ownership through veto rights.” This does, however, presuppose that there is also some form of ownership, “since a veto right alone cannot lead to beneficial ownership” (our translation of the Danish wording).

Ownership chains: when a company owns a company

If the business is owned through other companies, the Danish Business Authority writes that “the business must establish the whole ownership structure (the ownership chain)” (our translation of the Danish wording). Indirect ownership is calculated by multiplying the percentages through the chain. Example with invented figures: if a person owns 60 per cent of a holding company, and the holding company owns 50 per cent of your business, the person’s indirect share is 30 per cent (60 per cent times 50 per cent), and the person is thus above the 25 per cent indication limit. The example only shows the method.

When there are no beneficial owners

The Danish Business Authority writes: “If a business has no beneficial owners, the business’s own management must be registered as beneficial owners” (our translation of the Danish wording). A public limited company (aktieselskab) must register the members of its executive board as beneficial owners. Finanstilsynet’s guidance says something similar about the bank: if it cannot be established who owns or controls the customer, the day-to-day management must be regarded as the beneficial owners, and the bank must first record which steps it has taken to find them.

Associations and foundations

For associations, Finanstilsynet writes in its questions and answers that in the vast majority of cases there are no natural persons who own or control the association to a sufficient degree to be beneficial owners. In those cases the bank must instead regard the association’s day-to-day management as the beneficial owner, and in associations that will often be either the board or the executive board. Finanstilsynet also writes that a higher risk is not the same as the association being suspected, and that the number of questions does not indicate suspicion either. According to Finanstilsynet’s guidance on associations, the board members with signing authority can in a wide range of cases be regarded as the persons about whom identity information must be obtained, and the assessment can “never lead to no identity information being obtained”. The purpose of the guidance’s risk model is, according to the guidance itself, that low-risk associations should find they use fewer resources on documentation. For commercial foundations (erhvervsdrivende fonde), the Danish Business Authority writes that the foundation’s board members are always regarded as beneficial owners.

Your own duty: registration in the CVR

Beneficial owners are not only the bank’s concern. The Danish Business Authority writes that a wide range of businesses must register their beneficial owners in the Authority’s IT system, and that it is the business’s responsibility to identify them. For persons with a Danish CPR number, the registration includes, among other things, full name, CPR number, ownership interests and voting rights in per cent, and the start date of the beneficial ownership.

The Danish Business Authority also writes:

• “The business must subsequently check at least once a year whether the information on the beneficial owners is correct.”
• “Businesses must keep documentation for each identification attempt for 5 years.”
• “If the business does not register information on its beneficial owners, the business may be fined.” And if necessary a company may “be sent for compulsory dissolution if the information on the beneficial owners is deficient.”

(All three are our translation of the Danish wording.)

The Danish Business Authority mentions only certain types of associations on the list of those that must register: employers’ associations, trade unions and other professional associations, and associations whose funds mainly consist of contributions from them. For these: “Only the associations whose assets exceed DKK 250,000 are obliged to register beneficial owners” (our translation of the Danish wording). The ordinary association, such as a sports club, is not on the Authority’s list, but can still meet the bank’s customer due diligence. First check what the register says about your business, and whether it is correct. Finanstilsynet’s guidance mentions that the bank can use an extract from the Danish Business Authority’s register of beneficial owners as part of establishing the ownership structure. If the information in the register is wrong, that can therefore lead to follow-up questions.

Ownership structure and documents

The practical question many people ask is: “Which documents do I need to bring?” I have not found an official, combined list of standard documents that all banks must require. What Finanstilsynet’s guidance (the November 2020 edition) says is what the bank must establish, and what may be necessary when the risk rises.

Finanstilsynet writes that when the customer is a legal person, the bank must always establish the ownership and control structure. That means the bank obtains information on, among other things, the customer’s owners, management, signing rules, shareholder agreements and share classes, and that the bank itself assesses which information is relevant. The bank must establish the whole ownership chain, including foreign owners, to find the persons who ultimately own or control the customer.

The guidance distinguishes by risk:

• Limited risk, transparent structure: According to the guidance, it may be sufficient for the bank to draw up a group chart showing the ownership interests, or to use the information from the CVR, including on the beneficial owners.
• Increased risk: “it may be necessary for the business to obtain documentation of the ownership interests in the form of articles of association, share register or similar” (our translation of the Danish wording).

The guidance also says that the bank must keep the information it has used to identify the beneficial owners, for example a diagram of the ownership chain or an extract from the register of beneficial owners.

Read this as a bearing, not a shopping list. Documentation such as articles of association, share register, shareholder agreements and an ownership diagram are mentioned as examples, but whether your bank asks for them depends on its assessment. Ask the bank in advance what it needs, and use Bank documents to gather what you have.

Purpose, expected activity and updating

Finanstilsynet’s guidance says that the bank must know the purpose of the customer’s business relationship, and that, where relevant, the bank may need information on, among other things, why the customer wants a particular product and the expected size, number or frequency of transactions. The guidance explains that this knowledge is used to assess whether a transaction is unusual for the customer. If you answer the questions precisely, you give the bank something to measure against.

A couple of examples of wording that is concrete rather than vague (invented examples, not requirements): “The account is used for invoice payments from Danish customers and payment of suppliers” is more useful than “ordinary operations”. The guidance on associations says in the same spirit: “The more complete and precise an association can answer the firm’s questions … the better the firm can correctly risk-classify the association from the start” (our translation of the Danish wording).

Why does the bank ask again when I have already answered?

Finanstilsynet writes that the bank has a duty to keep its knowledge of all its customers up to date. The guidance states that customer due diligence procedures must be carried out when the customer’s relevant circumstances change, and gives as examples that the purpose changes materially, for example because the customer starts making much larger transactions, or that the ownership and control structure changes, for example in a business conversion. If there are new beneficial owners, the bank must identify and verify them.

The guidance on associations (VEJ no. 9875 of 28 August 2025) writes that customer due diligence must be carried out on an ongoing basis at an interval that depends on the risk. It adds: “The new anti-money-laundering regulation, which enters into force on 10 July 2027, lays down specific rules on this interval. For high-risk customers the ongoing due diligence will have to be carried out once a year, while the ongoing due diligence for customers with low or medium risk will have to be carried out at least every five years” (our translation of the Danish wording). That is the guidance’s description of the regulation, not the regulation’s own text. How your bank does it today, you will have to ask the bank.

In practice this means: tell the bank when the ownership group, the management or the activity changes, before the bank discovers it for itself.

Refusal and closing of an account

Why does a bank refuse a business account? Finanstilsynet writes in its questions and answers that the bank must first try to obtain the information in another way, but that if that is not possible and the customer will not provide it, the bank may conclude that it cannot know the customer well enough. “In such cases the bank is obliged to discontinue or wind up the customer relationship” (our translation of the Danish wording). That is the short version. The longer one is in Finanstilsynet’s guidance (November 2020), and it is more nuanced:

• The bank is only obliged to discontinue or wind up if it has exhausted all possibilities for completing the customer due diligence procedures.
• The bank must first try to complete them in a different way from the normal one.
• “It is, for example, not a sufficient reason to wind up the customer relationship that the customer does not wish to hand over information, or that the customer does not have the type of identification information that the firm normally collects under its internal procedures” (our translation of the Danish wording).
• The bank must assess whether the customer’s refusal entails a risk of money laundering. According to the guidance, the duty is conditional on customer due diligence not being possible and a risk being assessed to exist, and the scope is “very limited”.

The guidance on associations adds: “It is quite common to have customers with high risk”, and the anti-money-laundering rules do not prescribe that firms must wind up customer relationships merely because the customers are high risk. The bank can instead put measures in place such as enhanced procedures and increased monitoring. That nuance is important: a high risk classification is not in itself a refusal, and a refusal is not the same as an accusation.

Note that the anti-money-laundering guidance does not deal with all the other reasons a bank may have for saying no. Whether a bank can freely choose its customers, and what the limits are, is covered in Can a bank refuse you an account?. The notice rules for existing business accounts, including the length of notice, are in the bank’s terms, and I have not found an official source that states a general notice period.

Basic business account and customer due diligence

For the basic business account, Finanstilsynet states that the institution may refuse if the applicant does not provide the information the institution requires to complete the customer due diligence procedure. Other grounds, the page says, are that the applicant does not have the necessary permission to carry on the business, or cannot show a genuine interest in opening the account. The institution may not refuse solely because the applicant lies outside its business area or geographical area. See Basic business account. The private counterpart, where a refusal can only be made on the grounds the law states, is in Basic payment account.

Your rights and how to complain

• Reasoned refusal of a basic business account: Finanstilsynet states that the bank must respond as soon as possible and no later than 10 working days after receiving a complete application, and that a refusal must as the overwhelming rule be reasoned, without the institution being allowed to charge for the reasons.
• Complaints: Finanstilsynet writes that you can first complain to the institution’s complaints scheme for basic business accounts and then to the Danish Financial Complaints Board’s basic business account board (Det finansielle ankenævn Basal Erhvervskonto). For other matters you can first complain to the bank’s complaints officer and then to the Danish Financial Complaints Board (Det Finansielle Ankenævn).
• Finanstilsynet and individual cases: Finanstilsynet states that it has no authority to deal with specific disputes between a customer and an institution, but can ask an institution to account for its practice.
• No requirement for photo ID under the law: Showing photo ID is according to Finanstilsynet not a requirement under the Anti-Money Laundering Act. The bank may, however, have its own procedures.

As a business customer outside the basic scheme, your options are tied to the bank’s terms and the ordinary right to complain. So get the answer in writing if the bank refuses or closes, and ask to be told the reason. More on rights is in the hub bank, security and rights.

How to prepare

1. Check your CVR extract. Are the owners, management and signing rules correct? Are beneficial owners registered, if your type of business requires it?
2. Map the ownership chain. Draw the structure from the business to the natural persons, and calculate indirect shares through the chain.
3. Gather the documents you have. For example articles of association, share register or shareholder agreement, if they exist. Ask the bank what it wants.
4. Describe the activity in a few concrete sentences. What do you sell, to whom, from which countries, and what do you expect to receive and pay?
5. Bring ID for the people who must be identified. The bank may have its own requirements for what it accepts.
6. Ask for the answer in writing. And for a reason if you are refused.
7. Report changes. A new owner, a new director or a new activity.

If you are about to choose a bank, you will find the overview in How to choose a bank for your business and in the hub for business. The price of the account is covered in What does a business account cost?

What to ask the bank

• Which information and documents do you need to open the business account in my specific situation?
• How do we document our beneficial owners, and does the ownership structure need to be drawn up?
• How often do you update information, and how do I report changes?
• If you refuse or close the account, can I get a written reason?
• How do I complain if I disagree?

Six misunderstandings

“The bank suspects me.” Finanstilsynet writes about associations that an increased risk assessment and many questions are not the same as suspicion. And Finanstilsynet writes that all customer relationships must go through an individual risk assessment.

“25 per cent is a fixed limit.” According to the Danish Business Authority it is only an indication. Both control by other means and the overall de facto influence can make a person a beneficial owner.

“It is only the bank’s job.” The Danish Business Authority writes that it is the business’s responsibility to identify and register its beneficial owners.

“If I will not hand anything over, the bank can just terminate.” Finanstilsynet’s guidance is more nuanced: the bank must first try to complete customer due diligence in another way and assess the risk.

“The bank must always have photo ID.” That is not a requirement of the Anti-Money Laundering Act, says Finanstilsynet, although the bank’s own procedures may be stricter.

“There is an official list of documents.” I have not found one. The guidance mentions examples and describes that the scope depends on the risk.

Frequently asked questions

What does KYC mean for a business?

KYC is the bank’s duty to know its customers. For a business it means that the bank must establish who the business is, who owns and controls it, and what the account will be used for.

Who are the beneficial owners in my ApS?

They are the natural persons who ultimately own or control the company. More than 25 per cent of the ownership interests is an indication, but not a fixed limit. If the company has no beneficial owners, the management must be registered. See Business account for an ApS.

May the bank ask about my private affairs?

Finanstilsynet writes that the bank carries out an individual risk assessment of all customer relationships. If you are in doubt about why the bank is asking for something, you can ask for an explanation.

Why do I have to update information I have already given?

Finanstilsynet states that the bank has a duty to keep its knowledge of all its customers up to date, and the guidance mentions that the bank must carry out customer due diligence procedures when the customer’s circumstances change.

Which documents do I need for a business account?

No official combined list has been found. The guidance mentions, among other things, a group chart, CVR information, articles of association and share register as examples, depending on the risk. Ask the bank what it requires in your case.

Can the bank refuse me because I will not provide information?

Finanstilsynet states that a basic business account can be refused if the applicant does not provide the information the institution requires for customer due diligence. In general, according to the guidance, the bank must first try to complete customer due diligence in another way. See Can a bank refuse you an account?

Do the rules apply to all banks?

Finanstilsynet writes that the rules apply to all firms covered by the Anti-Money Laundering Act, and mentions, among others, banks, savings banks, co-operative banks, mortgage credit institutions, securities dealers, currency exchange firms, money transfer firms and lending firms. Specific requirements depend on the individual risk assessment. Check the current guidance.

Is my NemKonto affected?

KYC is about the customer relationship, not about NemKonto (Denmark’s designated account for payments from public authorities) as such. How you designate a NemKonto for the business is covered in NemKonto for businesses.

Read what you should compare

Read also: Can a bank refuse you an account?, basic business account, Is a business account a legal requirement?, What does a business account cost?, switching bank and compare.