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BREXIT

Danish bankers eye Brexit cash-in

Experts in the Danish finance industry have called for changes to tax laws so that Denmark can take advantage of a potential banking exodus from London following last week's Brexit vote.

Danish bankers eye Brexit cash-in
File photo: Vladimir Wrangel/Iris/Scanpix

The possibility of banks relocating from London in the wake of the UK's vote to leave the EU could be to the advantage of the sector in Denmark, according to the Danish Bankers Association (Finansrådet).

The British rejection of the EU may cause an opening of the asset management market in Europe, which the industry in Denmark could be in place to take advantage of, says Finansrådet.

The “Leave” vote is likely to lead to large international banks considering other locations in the EU for their headquarters.

A number of large international investment banks – many of which donated money to the Remain campaign – have already begun steps towards moving their operations out of the UK, the Financial Times reported last week.

“Brexit means a new window of opportunity that we ought to look into, because there is a lot of potential. We should therefore resume dialogue with the political parties,” said Finansrådet's director Ulrik Nørgaard to Jyllands-Posten.

According to the organisation, Denmark's already sound reputation within asset management gives it the potential to step in where London might lose out in continuing to attract the business of big international banks.

But Denmark's tax rules would likely have to be adjusted in order to fully take advantage of the situation, says Nørgaard.

“We can attract a certain amount of their asset management because we are strong in that area. But it will be an uphill struggle unless we remove the tax wall,” the director told Jyllands-Posten.

The investment sector has tried for a number of years to convince politicians to adjust Denmark's tax rules, which currently make it more difficult for foreign retail clients as well as certain institutions to make use of Danish investment funds, reports Jyllands-Posten.

“It's obvious that Luxembourg and other countries are ambitious about attracting investment in the wake of Brexit –  and that they have a strategy. It's up to individual countries whether they strengthen their position through good frameworks or undermine them. Unfortunately, Denmark has chosen the latter so far,” Anders Klinkby, administrative director of Investeringsfondsbranchen (The Investment Fund Industry) said to Jyllands Posten, adding that growth in the sector in Denmark would also create jobs for lawyers, accountants and I.T. specialists.

Neither Business and Finance Minister Troels Lund Poulsen or Tax Minister Karsten Lauritzen wished to comment on potential changes to tax rules on Wednesday, reports Jyllands-Posten.

BREXIT

Denmark and UK agree deal on voting rights for British nationals

The United Kingdom and Denmark have signed a treaty that will allow all British and Danish citizens to stand and vote in local elections in each other’s countries.

Denmark and UK agree deal on voting rights for British nationals

The agreement will mean that all UK nationals who live in Denmark will be able to vote for candidates in Denmark’s local elections and run for office themselves.

Previously Denmark had imposed a four-year minimum residence requirement for UK nationals to be able to stand and to vote in municipal and regional elections. And those British citizens who registered as resident in Denmark before “Brexit Day” (January 31st, 2020) had also been able to vote in Danish local elections – unlike in most EU countries where Brexit immediately deprived all British residents of the right to vote in local elections.

This new agreement will remove the four-year-minimum and allow all British residents in Denmark to vote.

According to Statistics Denmark figures, this means some 5,388 British citizens who moved to Denmark in the last four years (up to the third quarter of 2023) will benefit from the new treaty.

READ ALSO: How many foreigners can vote in Denmark’s local elections?

It will also apply in reverse, protecting the rights of Danes in the UK to vote and participate in British local council elections.

Britain’s break-away from the EU left both groups without voting rights in their country of residence, whereas prior to Brexit all registered residents had the right to vote as well as to stand as candidates in local elections.

Britons resident in Denmark could also take part in Denmark’s EU elections, but this also lapsed when the UK left the EU.

The deal is a reciprocal agreement which will be treated as an international treaty that has to be ratified by the British parliament. In Denmark’s parliamentary system, this is done by executive order.

The treaty was signed on Thursday at the British Ambassador’s Residence in Copenhagen by the UK’s Ambassador to Denmark, Emma Hopkins and Nikolaj Stenfalk of the Danish Ministry of the Interior and Health.

In a joint statement, Hopkins and Denmark’s ambassador to the UK, René Dinesen, said the agreement will “enhance and protect the rights to participate in local democracy of approximately 50,000 citizens who reside in each other’s countries.”

“As an important outcome of the UK-Denmark Joint Statement signed by our Foreign Ministers last year, this treaty demonstrates the close ties between our countries and underlines our shared commitment to democracy,” they added.

In a statement posted by the Danish foreign ministry on social media X, Foreign Minister Lars Løkke Rasmussen said the deal securing Danes’ voting rights in the UK “pleases me on behalf of ourselves and democracy”.

Denmark is the fifth country to sign a voting rights treaty with the UK, following treaties signed with Spain, Portugal, Poland and Luxembourg.

Citizens of EU member states resident in the UK currently still have the right to vote in UK local elections, but this will change after May this year, when EU citizens who moved to the UK after January 1st 2021 will no longer be able to vote in the elections — apart from the five countries (now including Denmark) with which the UK has bilateral treaties.

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