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LEGAL NEWS - A new regulation on remuneration of foreign employees came into force

7. September 2017

On June 2nd 2017 the Danish parliament passed a bill amending the amount scheme that is currently in place and regulates whether a foreign employee can get a Danish working permit on a special basis. Since July 1st 2017, foreign employees, who apply within the amount scheme, are solely able to add their basic salary, labour-market contributions and paid holiday allowance.

When certain requirements are met, foreign employees can obtain a working and residence permit on a special fast-track basis. One of these requirements is, that the employee earns at least DKK 408,000 a year (roughly DKK 34,067 a month, or EUR 5,000). The fast-track application reduces the processing time significantly, and increases the chances of obtaining such a permit. 

Until recently, the wages up to the amount limit were calculated by including salaries and wages, containing value of a company paid car, phone, internet etc. However, this calculation method can no longer be used after the bill came into force on July 1st 2017, and only the basic salary, labour-market contributions and paid holiday allowance could be counted towards the limit. 

Furthermore, wages up to the amount limit must be transferred to a Danish bank account and cannot be paid to a foreign bank account. Wages that exceed the amount limit can still be paid in another way or to a foreign bank account and may consist of other payables. The requirement for transfer to a Danish bank account entails in practice that a foreign employee cannot apply for a residence and working permit for a period of less than three months under these schemes. 

In case that it is required that a foreign employee seeks for an extension of their residence and working permit, this will still be under the old rules, assuming that the employee is hired under the same conditions and for the same job as before.