Denmark to reduce minimum salary for non-EU work permits, but it’s only partially helpful for fintech's

With increasing prices and a decreasing supply of talent in Denmark, many companies are looking towards offshore talent to ease the strain on labour within the workforce.?

In response to this, Denmark grants work permits through the?Pay Limit Scheme?to foreigners who are offered high-paying jobs. There’s no education requirement and the scheme applies to all industries, as long as the annual salary requirement is met - a requirement which is set to be lowered from DKK 448,000 to DKK 375,000 for a three year trial on December 1st of this year. ?

A reduction to the Pay Limit Scheme essentially means that Danish companies can now hire skilled foreign staff on contracts paying an annual salary of DKK 375,000. This will allow foreign employees to be granted work and residence permits on that basis, in a move which hopes to remedy the shortage of qualified labor for Danish companies.?

As for Danish start-ups, and thus the fintech industry, the news has sparked mixed responses.

Beneficial for young start-ups?

For years the fintech ecosystem has hoped for a lower salary requirement in order to be able to attract?young IT talent to the country. Amongst newly started fintech's, the high salary limit was seen as a ‘hindrance to growth’, with many within the industry unable to pay DKK 448,000 for?newly trained employees.?

It is for these startups that the limit will be of great aid - allowing them to hire the young, junior employees who are required to drive the growth of newly started tech companies. ?

Of no help to established fintech's

On the other hand, the agreement does not do much to help the more established fintech's, who are looking for strategic hires to help drive competitiveness and innovation in the long run.??

This innovation is driven and controlled by the need for?more specialised employees, who require a relatively high salary when compared to newly trained employees. The problem lies within leveraging the Danish labour market above other markets for these candidates, who can be deterred by the high cost of living and taxes required to fuel the Danish welfare system. In order to remedy this, the Copenhagen Fintech Policy* recommends that the Ministry of Trade and Industry set up a fast-working committee, which will, among other things, look at current recruitment schemes and revise some of them.?

Thomas Krogh Jensen, CEO of Copenhagen Fintech comments:?

- It is positive that something is finally starting to happen. It's a small step, but after all a step. It is hopefully part of the recognition that there is a challenge and that the competition is global, and therefore something must be done that can attract talent to Denmark.?

He wants the agreement to be more permanent so that it could be counted on to a greater extent.?

- This is just one of several initiatives and does not solve the challenge that we face in the long run, that there is a lack of tech skills and specialists. The agreement helps the younger part of the segment and the new graduates. But it does not take care of the problem of the lack of specialists and heavy competencies that are needed.

*The Copenhagen Fintech Policy appeals to the Folketing with nine recommendations that can strengthen access to talent for fintech in Denmark. Read more here.