Greenland is the largest island in the world, located in the Arctic and North Atlantic Oceans, and approx. 81% of the island is covered with ice. Geographically it is a part of the North American continent, but geopolitically it is a part of Europe as a self-governing region within the Kingdom of Denmark, along with the Faroe Islands. Although Greenland is a part of Denmark, it is no longer a part of the European Union.
The Greenlandic government is in need of diversifying its economy and it is working on investment attraction. In Greenland, the main sector of economic activity is fishing. Its economy depends mostly on fish and shellfish catches, which are priced highly. It is also supported by resource extraction and consumption. The government seeks to increase economic growth by promoting the development of the tourism and mineral extractives sector.
Disclaimer: This article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Types of businesses in Greenland
It is important to decide the nature of your business activities. Here are the main types of business you can start in Greenland :
- Aktieselskab is a public limited company (A/S);
- Anpartsselskab is a private limited company (ApS);
- Personligt drevet virksomhed is a sole proprietorship;
- Filial is a branch office;
- Kommanditselskab is a limited partnership.
There are also joint ventures, permanent establishments, and branches of foreign companies, partnerships, and cooperatives.
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What is a sole proprietorship
A sole proprietorship is owned by one individual in charge of operating the business, and this is the simplest form of business entity. The owner has all its capital and is entitled to all its profits. All obligations and liabilities of the sole proprietorship are the personal responsibility of the proprietor.
Registration process
In order to live and work in Greenland, citizens from countries outside the Nordic region must have a work and residence permit. Even if you are a Nordic citizen, certain occupations require special permission. Only the government of Denmark can decide who can work in Greenland. In order to start any business in Greenland, it is required to first register in the Danish Central Business Register (CVR) and it has to be performed digitally.
For your registration, you will need the following: name of your company, type of business you are going to conduct, legal address, current status (active/inactive), main activities, registered capital, key management, corporate statistics.
As an established company planning to do business in Greenland, you must obtain a GER (Greenland’s Company Register) registration number. GER was created in 1999. and is supervised by the local tax authorities. Registered companies in Greenland are also present in the Danish Business Register.
You can get a registration number from the Greenlandic Tax Authorities, official website of the Greenland Tax Agency.
Taxes in Greenland
Greenland is not a tax haven. Here business activities are regulated by, Commercial Code, Mineral Resources Act, Companies Act, and Trade Act. Greenlandic legislation is also based on Danish law.
In Greenland, the taxable income is calculated as a total net amount after deductions, according to the net income principle based tax system. It means that all income is treated equally, regardless of whether the income comes from employment, self-employment, investment income, etc.
The accounting profit is used as the base figure for calculating the taxable income of companies. However, various tax adjustments are made to these figures in order to calculate the taxable income. The taxable income of companies is stated as their gross income net of operating expenses, i.e. expenses incurred during the year in acquiring, securing and maintaining the income.
The corporate income tax rate is 25%. There is no Value Added Tax (VAT) system of any other similar taxes.
Want to hire an independent contractor in Greenland? Learn how to do it with full compliance.
