Proposal to ensure and attract more qualified labour to Denmark

By Mia Boesen, Pia Skovgaard Hansen


In his opening speech to the Parliament, the Prime Minister presented a proposal on how Danish companies may recruit more qualified labour to Denmark. The proposal i.a. involved the rule known as "the pay limit scheme" for which it was proposed to reduce the annual minimum income from DKK 417,793.60 to DKK 330,000 for a specific group of labour from third countries.

"The pay limit scheme" and the explanation for the changes

On 3 October 2018, the government presented a proposal for enhancing the recruitment. The government suggested reducing the annual minimum income requirement under the pay limit scheme to DKK 330,000 in regards to applicants from third countries placed on a top 3o list of countries with the highest investment flow to and from Denmark. This is, among other countries, USA, Canada, Singapore and Japan.

The new proposal is reasoned by the fact that Denmark is facing an economic boom where the Danish companies are facing some difficulty in attracting and recruiting sufficiently qualified labour. With the adjustment of the of the annual minimum income requirement, Danish companies may thereby – in a relatively simple way – recruit more qualified labour.

The government emphasises that another advantage will be that wealthy third country citizens from the first working day will contribute to the Treasury and therefore to the welfare state.

In Denmark, it is a requirement that all citizens from countries outside of the EU/EEA have a work and residence permit allowing them to work and live in Denmark. Such citizens may apply for the permit in a number of ways depending on the specific situation of each applicant. One of the most frequently used models is "the pay limit scheme".

The pay limit scheme provides third country citizens who have been offered a well-paid job with an easy access to the Danish job market. As a general rule, there are no specific requirements for the educational level, the line of business or the particular nature of the position, but first and foremost, an annual minimum income is required.

Bird & Bird's comments

As a consequence of the new proposal, Danish companies will find it easier to attract more qualified labour as the requirements to obtain a work and residence permit for third country citizens in regards to the pay limit scheme will be easier to meet.

Bird & Bird has great experience in applying for work and residence permits and may assist you and your company in choosing which kind of permit to apply for. Furthermore, we can assist you with the actual application process, acting as an agent on your behalf.

Please note that the above-mentioned is just a proposal and not a formal bill. A possible bill must be enacted by majority of the Parliament. Especially the Danish People's Party is expected to vote against such a bill.

Bird and Bird will keep an eye on this case and follow up if the government presents a bill etc.

Bird & Bird has previously written an article in regards to the pay limit scheme. You can read the article here.