Danish bankers eye Brexit cash-in

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

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.