Frequently asked questions
We advise Danish companies on American law. On this page we answer frequently asked questions.
Contact us, if you want to know more.
US Visas FAQ
How long does my passport have to be valid in order to apply for a U. S. visa?
Six months past the duration of your stay.
Do you need a work permit/visa to work in the US?
Yes. Some types of short term work assignments for a Danish company, or preparations for setting up a business in the US may be allowed without a work visa. You should check the rules or seek advice from an immigration attorney.
I am going to the U.S. for a job interview, do I need a visa?
No, as long you intend to return to your home country.
Is an ESTA a work visa?
No.
Can you extend your ESTA (travel authorization on the visa waiver program) in case you want to stay longer in the U.S.?
No.
Can you apply for a work visa to the US yourself?
Generally, no. You will need a US employer to offer a job and petition for a visa for you. If you invest a substantial amount of money in a US company, you can obtain a visa by yourself.
Do you need a work permit/visa to the US in order to own a US company?
If you travel to the US to conduct day-to-day management of the company, you will need a work visa.
I have a visa to work for one company in the U.S., can I work for another company in the U.S.?
No. Some types of visas can be transferred from one employer to another, but an application is required from the new employer.
If I hire someone in the U.S., am I required to confirm their ability to work in the United States?
Yes. USCIS form I-9.
Corporate Law FAQ
Can a Danish company or individual own shares in a US S-corporation?
No. The S-corporate status is a tax election for US federal corporate tax purposes. It requires all the shareholders to be US persons or companies.
What is a “director” in a US corporation?
A director is a member of the “board of directors” – in Danish “bestyrelsen”.
What is an “officer” of a US corporation?
“Direktører” in a US corporation are called officers. There are generally three positions/types of officers:
- President/CEO
- Treasurer/CFO
- Secretary
Contracts FAQ
I am negotiating a contract with a US counterpart. Would it be appropriate to agree that US law applies and US courts have jurisdiction?
No. Contract law in the US is state law (not federal law). You would have to specify the law of a US state.
The jurisdiction would have to specify the courts of a US state, not “US courts”.
I am negotiating a contract with a US counterpart. Some of the paragraphs of the contract are incorrect, but the US counterpart says we can just clarify that in a separate email. Would the separate email be binding?
No. Generally under US contract law, anything not included in the written contract – within the “4 corners” of the document itself – are not considered part of the agreement between the parties and are not even admissible as evidence in court under the “parol evidence rule”.
Is an oral agreement for selling/buying a product for $2,000 binding under US contract law?
No. In most states, the rules regarding the enforceability of oral contracts are governed by a statute generally known as the “statute of frauds”, which requires the agreement to be in writing if the value of the agreement is more than $500 or has a duration for more than one year.
Taxes and sales tax FAQ
Do you have to file a US tax return, if you own shares in a US corporation?
No. Ownership of shares in a US corporation does not in itself trigger an obligation to file a US tax return.
Do you have to file a US tax return if you own a US LLC?
Yes. Unless the LLC has made a tax election to be taxed as a corporation, the LLC is “transparent” for tax purposes, meaning that the owners (often called “members”) of an LLC are directly liable to report and pay taxes of the LLC’s profits.
Do you have to file a US tax return if you are in the US for more than 6 months in one year?
Yes.
US federal income tax: If you are in the US for more than 6 months in a year, but are exempt from US federal taxes under the USA-Denmark tax treaty, do you still have to file a US federal tax return?
Yes. And claim treaty benefits.
We are a Danish company selling products in the US via a logistics warehouse in the US. Do we need to register our Danish business in the US?
Yes. You need to register as doing business in the state where the warehouse is located.
We a Danish company selling products in the US via a logistics warehouse in the US. Do we need to collect and pay sales taxes in the US?
Yes. You need to register for, collect and pay sales taxes in the state where the warehouse is located.
I have a “green card”, but I currently live in Denmark. Do I have to file a US tax return?
Yes. All US citizens and green card holders must file US tax returns. Failure to file can result in a fine of up to $10,000 per year.
I am a dual US-Denmark citizen. I have lived in Denmark for many years and have not been to the US. Do I have to file a US tax return?
Yes. All US citizens and green card holders must file US tax returns. Failure to file can result in a fine of up to $10,000 per year.
Does Delaware have a state corporate income tax?
Yes, 8.7% (2022). If you do not conduct actual/physical business in Delaware, you do not have to file and pay the corporate income tax. The same principles apply to all other states.
Courts – Litigation – FAQ
I have won a lawsuit regarding a contract dispute over a US company in a Danish court. Can I enforce the Danish judgment in the US?
Generally, no. The US and Denmark does not have an agreement about mutual recognition and enforcement of judgments.
However, a number of US states have passed a law that – on a state-by-state basis – recognizes a non-US judgment for payment of money, under certain conditions.
I have won a lawsuit regarding a contract dispute over a US company in a Danish arbitration proceeding. Can I enforce the arbitration award in the US?
Yes. The US and Denmark are both parties to the New York Convention on the mutual recognition and enforcement of commercial arbitration awards.
My Danish company has been sued in the US for breach of a contract that was signed in California. Does the California court have jurisdiction over my company in Denmark?
Yes. If you fail to defend yourself in the lawsuit, the court may issue a judgment against you. This judgment is not enforceable in Denmark; but if you have assets in the US, they can be seized.
My Danish company has been sued in the US. The plaintiff has demanded that we hand over our computer hard-drives and internal company communications, emails etc. as part of the process of “discovery”. Are we obligated to do that?
Yes. All the plaintiff has to show is that it is likely that the hard-drives etc. contain information that is of relevance to the plaintiffs claim.
My company has won a lawsuit regarding breach of contract in the US over a US company. Does the US company have to pay our attorney’s fees and other costs?
No, unless the original contract had a provision for payment of attorney’s fees and costs. This is called “The American Rule” of attorney’s fees and costs, and it applies in all US state civil procedure.
There are exceptions for lawsuits regarding certain types of claims, e.g. if you hold a US trademark registration and need to take legal action in the US to defend your trademark rights.
My Danish company entered into a contract with a US company under US state law. After signing the contract, my company realized that we would lose money on the contract. The US company agreed to pay more. But after we delivered, the US company refused to pay the extra price. Can we get a judgment in the US forcing the US company to pay the extra price?
Generally, no. Under US contract law, modification of an already binding contract requires that each party give additional “consideration”. Here, only the US company gave consideration when the modification was agreed to, thus the modification is not enforceable under US contract law.
Employment FAQ
My Danish company hired a sales consultant to sell our products in the US. He has a business card with our company logo and the title “Head of Sales, USA”. I instruct him on a daily basis. On the way to a meeting with a potential customer, the consultant’s car hits a pedestrian who sues my company for $10 million. Is my company liable?
Yes, most likely.
Simply calling someone a consultant rather than an employee does not change the nature of the relationship. Here, the “consultant” was subject to the instructions from the head office, and he appeared to the outside world as an employee, thereby making him an employee of the Danish company.
As the employer, your Danish company is liable for accidents caused by the consultant/employee in the course of carrying out his/her duties for your company, including on the way to or from a meeting etc.
My company hired a consultant to run a showroom in New York City. The consultant was instructed on a daily basis on what to do and how to do it by our Danish head office. The contract has ended. He now demands unemployment benefits and filed a claim with the New York Department of Labor, which has fined us $1,000 dollars for failure to register as employers for unemployment insurance. Are we obligated to pay?
Yes. Simply calling someone a consultant rather than an employee does not change the nature of the relationship. Here, the “consultant” was subject to the instructions from the head office, thereby making him an employee.
As an employer, you are required to register for tax withholding, unemployment insurance and carry workers compensation insurance. Failure to do so can result in heavy fines.
My company hired an employee in California. We used an English language version of our standard Danish employment contract. This contract provides that the employee is entitled to 5 weeks of vacation each year but will lose any vacation not spent each year. After three years, the employee leaves the company. She has only spent 3 weeks of vacation each years and she demands payment for 3 years x 2 weeks’ worth of vacation. Are we obligated to pay her?
Yes. Under California law, “use-it-or-lose-it” policies in employment are not enforceable. Vacation time that has been earned, but not spent, must be paid out to the employee immediately at termination.
Can we enforce non-compete clause against an employee in New York?
Yes. Provided the non-compete clause is reasonable with respect to its scope, geographical limits, duration.
Can we enforce non-compete clause against an employee in California?
No. In California, non-compete clauses for employees are generally not enforceable.
My company hired an employee in California. We used an English language version of our standard Danish employment contract. This contract provides that the employee is bound by a non-compete clause for one year after leaving, and that we must pay her half of her salary for one year after leaving. She has now left the company and we do not want to enforce the non-compete clause. She demands payment of the half-salary for one year. Can she force us to pay that, even if we withdraw the non-compete clause?
Yes. The rules under Danish law that an employer can withdraw/terminate a non-compete clause and thereby free itself of the obligation to pay the compensation for the non-compete clause do not apply in California (or anywhere in the US).
My company hired an employee in the US to do computer programming. We used an English language version of our standard Danish employment contract. This contract provides that the employee is not entitled to overtime payment. The employee worked 45 hours a week for a couple of months during a busy period. He now demands 1½ x his normal salary (per hour) for the 5 hours per week of overtime. Can he force us to pay that?
Yes. US federal law requires employers to pay 1½ times the regular pay for overtime, unless the employee falls in an exempts category (computer programmers generally don’t).
US federal law requires employers to pay 1½ times the regular pay for overtime, unless the employee falls in an exempts category (computer programmers generally don’t).