Peter Madsen was arrested Friday on preliminary manslaughter charges after his 40-ton, almost 18-meter-long (60-foot-long) ship, named the UC3 Nautilus, sank off Denmark's eastern coast.
He denies any involvement in the disappearance of 30-year-old Kim Wall who had been on board the 60ft-long vessel before it sank.
Madsen, an entrepreneur known as an artist, submarine builder and aerospace engineer, will go before a judge for preliminary questioning on Saturday.
Police said the man had denied killing the missing woman and claimed he dropped her off on an island on Thursday night. The 40-ton, 18-meter-long craft named UC3 Nautilus was his third submarine project.
"It took about 30 seconds for Nautilus to sink, and I couldn't close any hatches or anything", he said.
Copenhagen Police confirmed the charges on Friday evening, but its divers have been unable to enter the submarine thus far. "But I guess that was pretty good, because I otherwise still would have been down there".
"Whether the woman was on board the submarine at the time of her disappearance is unclear", police said in a statement.
Police are hunting for witnesses and camera footage to determine whether the missing woman had disembarked after setting off. "They were the only two on board [on Thursday]". She also was not identified by name. Denmark's navy says that Madsen's privately built submarine that had been feared missing in Danish waters has been found and the crew is safe.
A Danish court today ordered that Madsen be held in pre-trial detention while authorities investigate Wall's disappearance, the Associated Press reported. RML Spacelab is seeking to send people into space and is developing a rocket, floating launch pad and astronaut testing machine among other projects, the site says.
Ms Wall had been writing about Madsen for a story and is believed to have set sail with him from Refshale Island at 7pm on Thursday.
A salvage vessel, the Vina, was Saturday working on raising the submarine, which was seven meters (23 feet) under water off Copenhagen's south island of Dragoer. It was spotted by a lighthouse in Koge Bay, a seaport south of the city, at 10:30 a.m. It was expected to arrive in the Danish capital by the end of the evening, said a police statement.
Before his arrest, Madsen told TV2 that the submarine sank when a minor ballast problem rapidly escalated and sunk the boat.