No, it is not essential to establish a business but it must have a CVR number in order to apply to and be accepted into the incubation program. The company must be created at the latest by the middle of the incubation period if there isn’t an entry in the commercial register when it starts.   It is important that all of the formal requirements are met, e.g. that a connection to space exists. But, besides the formal criteria, the TEB board mainly evaluate the startups on their business case. This includes the team, the market, etc. But, since this is a very transparent process, you can find all of the selection criteria in the Open Call on the apply pages.