Denmark’s Proposed Bank Account Requirement Updates: Increased Flexibility for Employers

On 24 January 2024, the Danish Ministry of Immigration and Integration introduced a new bill proposal amending the Danish Immigration Act, which, if enshrined in law, will provide employers in Denmark with more flexibility when hiring non-EU employees.

Danish employment landscape

Danish employers have faced challenges in employing non-EU talent on a non-permanent basis since 2017 when the requirement to pay a salary in a Danish bank account was first introduced. This new proposal comes on the heels of continued challenges faced by employers and is seen as a welcome change.  

Initially, the requirement only applied to pay limit schemes and only the minimum salary level had to be paid in a Danish bank account. However, since 2021, the authorities have required the salary to be paid in full in a Danish bank account. The requirement was also expanded to include positive list permits for stays over 180 days.

This created an additional administrative, payroll and tax burden for secondments and short-term stays, where, in most cases, individuals are not willing to relocate fully to Denmark nor wish to register with the local authorities to open a Danish bank account.

Consequently, many employers were forced to renounce sending employees to Denmark, turning instead to either the local or EU workforce to fill in the gaps when available or cancelled altogether their short-term work plans in Denmark.

Employers and immigration partners have raised these concerns to the Ministry of Immigration and Integration many times previously, and this bill proposal is a sign that their voices have now been heard.

Impacts

With this new bill, the government wishes to exempt certified employers from this requirement when using the fast-track pay limit, researcher, education and short-term permit schemes.

Non-certified employers will also benefit from more flexibility in that the requirement to pay the salary in full in a Danish bank account will now kick in later, within 180 days, compared to 90 days from the arrival of the applicant in Denmark at this time.

This new rule will likely still benefit non-certified employers, as many requests for assignments are over 90 days but under 180. For certified employers, this means all assignments will now be possible, regardless of their duration, which would be a major improvement across the Danish immigration landscape.

One other likely impact of this proposal will be that an increasing number of Danish employers will seek certification with the immigration authorities, which will exempt them from the bank account requirement.

The certification grants employers access to the fast-track permit schemes but also allows such permit applications to be processed faster than applications outside of this fast-track (5-10 days in comparison to 30 days on average). The fast-track scheme was implemented in April 2015 and has been very successful in granting certified companies quicker and easier access to highly qualified non-EU workers.

To increase employment and fill labour gaps in Denmark, the certification requirements were relaxed in April 2023 and now require only Danish employers to have 10 permanent employees to be eligible, among other financial requirements.

Once obtained, the certification is valid for four years and can be extended should eligibility requirements still be met. This expected increased popularity for the certification might trigger longer processing times (currently one month) for the certification to be awarded.

Fragomen recommends eligible employers apply for the certification as soon as possible to avoid potential delays closer to the bill implementation date.

Next steps

The proposal is expected to remain in the hearing stage until 6 February 2024. Should the bill be approved, the bill would come into effect beginning on 1 July 2024.

Fragomen will closely monitor the situation and will continue to publish updates on any new information on the topic.

Need to know more?

For questions on this matter or to discuss your company’s eligibility for certification with the Danish authorities, please reach out to [email protected].

This blog was published on 7 February 2024, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.