Farewell to IVS: Denmark’s Shift in Entrepreneurial Landscape
In a bid to streamline its entrepreneurial ecosystem, Denmark bid adieu to the Iværksætterselskab (IVS) on June 15, 2019. This marked a significant transition in the country’s business landscape, as IVS, akin to the British limited company or the German GmbH, was a popular choice among startups and small businesses due to its simplified setup process and low initial capital requirements.
The decision to abolish IVS stemmed from the Danish government’s efforts to address certain loopholes and challenges associated with this business structure. Despite its popularity, IVS faced criticism for its lack of credibility in the eyes of investors and creditors, as well as concerns regarding the misuse of the low capital requirement.
Replacing IVS, the Danish government introduced “small companies” as a new business entity. This move aimed to offer entrepreneurs a more robust and transparent framework while maintaining the ease of starting a business. Small companies are subject to similar rules as IVS but with enhanced credibility, making them a more attractive option for startups seeking funding and partnerships.
The shift away from IVS signifies Denmark’s commitment to fostering a thriving entrepreneurial environment while ensuring accountability and sustainability. As entrepreneurs adapt to the new landscape, this change paves the way for innovation and growth, heralding a new chapter in Denmark’s entrepreneurial journey.