Mobility and Integrated Labour Markets for Third‑country Nationals in Greater Copenhagen

3. Legal barriers to cross-border labour market inclusion of third-country nationals

Abstract

This chapter analyses legislative and administrative barriers to cross-border labour mobility for third-country nationals (TCNs) in the Greater Copenhagen Region (GCR). In particular, the chapter analyses the interaction between legislation on work and residence permits in Denmark and Sweden and how this influences options for TCNs to work in one of these countries while residing in the other. In addition, some of the more general barriers to cross-border labour mobility in the Greater Copenhagen Region are analysed, including digital ID solutions, taxation and social security rules.

In Brief

• Third-country nationals (TCNs) residing in the Greater Copenhagen Region (GCR) face limited opportunities for cross-border work. Unlike other categories of cross-border workers, the primary obstacle to cross-border employment for TCNs stems from national and EU legislation regarding residence and work/study permits. Denmark and Sweden impose various requirements for granting residence and/or work or study permits. Consequently, the ability to reside and work/study in the country is restricted to specific categories of TCNs.

• As an initial step, a TCN seeking cross-border employment must fulfil the work permit requirements in Denmark or Sweden. In Denmark, work permits are regulated by the Danish local mobility schemes, which aim to attract foreign workers. Among the most prominent schemes (regarding the number of applicants) are the fast-track scheme, the pay-limit scheme, and the positive lists. In Sweden, obtaining a work permit necessitates a gross salary above SEK 28 480 per month (approximately EUR 2 502). In both countries, TCN cross-border workers are permitted to work without residence in the host country, an essential provision for facilitating cross-border labour mobility for TCNs.

• The second step for a TCN seeking cross-border employment is to consider the potential impact on their temporary or permanent residence permit in the country of residence. Employment in a country other than their country of residence could adversely affect the status of TCNs in Denmark or Sweden. Both countries offer various legal grounds for granting temporary or permanent residence permits, which primarily include 1) labour migration or studies, 2) family reunification or 3) asylum. Additionally, there are pathways for transitioning from a temporary to a permanent residence permit, which eventually requires nationality through naturalisation. However, the legal basis for a residence permit may change in response to cross-border work activity.

• In Denmark and Sweden, most TCNs have limited options for cross-border employment due to the potential withdrawal of an existing residence permit or the eligibility for a permanent residence permit. Labour migrants and TCNs participating in traineeships or internships cannot engage in cross-border employment, as their residence permits are closely tied to their work permits in their country of residence. Upon the expiration of the student residence permit, the TCN may transition to a jobseeker residence permit, which does not permit cross-border employment. Family members of TCNs and EU citizens are entitled to work in Denmark and Sweden, and cross-border work is possible without the risk of losing their existing residence permit. However, such employment generally does not count towards fulfilling the employment requirement for permanent residence in the country of residence. In Demark, TCNs with a residence permit based on asylum will not risk losing their residence permit solely due to cross-border commuting as long as they return daily. In contrast, in Sweden, there is a risk that the Swedish Migration Agency may determine that the grounds for asylum have changed if the individual engages in cross-border commuting.

• Additional general barriers to cross-border commuting also affect TCNs. These include identification checks at the border, national digital ID systems, and taxation and social security rules.

Introduction

Despite numerous examples of co-operation between Denmark and Sweden in the Greater Copenhagen Region (GCR), barriers to cross-border labour mobility persist. As outlined in the previous chapter, cross-border labour mobility has increased in GCR, particularly since the opening of the Oresund Bridge in 2000. Labour mobility benefits from the longstanding passport union between Denmark and Sweden, as well as their shared membership of the European Union (EU). This ensures the free movement of EU citizens and legal persons under EU law. However, the competence over taxation and social security remains national, creating obstacles to cross-border mobility. Furthermore, differing digital systems in both countries may lead to digital exclusion for individuals in cross-border situations. For third-country nationals (TCNs), the primary obstacle to cross-border mobility and labour market integration is national migration laws, which regulate work and residence permits in both countries.

This chapter examines the national legal frameworks in Denmark and Sweden that affect the cross-border labour mobility of TCNs in GCR. Firstly, it reviews the interaction between national regulations on work and residence permits and how these affect mobility options in both directions. Secondly, it explores broader barriers to cross-border mobility (digital systems, taxation, and social security). The main findings from the analysis on the interaction between national rules on work and residence permits are summarised in Table 3.1.

Table 3.1. Overview of the assessment of options for TCN cross-border commuting in GCR

Assessment of options for cross-border commuting for TCNs in GCR
TCN category	DENMARK 🡺 SWEDEN	SWEDEN 🡺 DENMARK
Labour migrants	The residence permit will be withdrawn since the legal ground for the permit is no longer in place	The residence permit will be withdrawn since the legal ground for the permit is no longer in place
Students	For most students (e.g. in higher education institutions), taking up employment in Sweden may result in the termination of their residence permit in Denmark unless 1) the employment in Sweden is an internship in connection with the study programme in Denmark or 2) the student continues studying full-time in Denmark. In both cases, it is still a condition to maintain the residence permit that the student resides in Denmark. PhD students get a limited work permit, which allows them to take on other work in addition to the full-time work as a PhD student. When the residence permit for studies ends, the TCN may stay on a jobseeker residence permit. As long as the student resides in Denmark while the jobseeker residence permit is valid, they are allowed to commute to work in Sweden	Taking up employment in Denmark may terminate their residence permit in Sweden unless the student continues studying full-time in Sweden. When the residence permit for studies ends, the TCN may stay on a jobseeker residence permit. If the TCN is employed in Denmark, the legal grounds for this residence permit will no longer be in place.
Trainees/internships	Trainees and interns must have a work permit in Denmark. Their residence permit will be withdrawn since the legal basis for it is no longer in place.	Trainees and interns must have a work permit in Sweden. Consequently, their residence permit will be withdrawn since the legal basis for it is no longer in place
Family members of TCNs	When granted a residence permit in Denmark, family members of TCNs obtain the right to work in Denmark but are not obligated to do so. Should they choose to work outside Denmark, they must be granted the necessary permits. Employment in Sweden will not fully meet the employment requirement for a permanent residence permit, which is the precondition for applying for naturalisation to become a Danish citizen. Two years of employment abroad can sometimes be counted towards fulfilling the employment requirement of three years and six months.	When granted a residence permit in Sweden, family members of TCNs obtain the right to work in Sweden but are not obligated to do so. As the residence permit relies on the work activity of a family member, cross-border commuting should, in principle, be an option. Yet, there might be a risk to the validity or renewal of the residence permit or obtaining a permanent residence permit if the Swedish Migration Agency deems that the grounds for stay are altered due to cross-border commuting. In particular, employment in Denmark will not fulfil the employment requirement for a permanent residence permit in Sweden.
Family members of EU citizens	The risk of losing their legal residence status or obtaining a long-term residence permit in Denmark should be very low as the residence is based on the Residence Directive 2004/38. Family members of EU citizens obtain the right to work in Denmark but are not obligated to do so. They have the option to cross-border commute.	The risk of losing their legal residence status or obtaining a long-term residence permit in Sweden should be very low as the residence is based on the Residence Directive 2004/38.
Asylum seekers	Cross-border commuting will not affect the assessment of an asylum application. However, asylum seekers must be present and available whenever necessary during asylum application processing. Moreover, if the asylum seeker has a strong attachment to Sweden in the form of i.e. close family ties or a long history of residence in Sweden, an asylum application may be rejected because the asylum seeker can take up residence in Sweden. Cross-border commuting to Sweden will not in and of itself indicate a sufficiently strong attachment to Sweden in this regard.	Based on existing praxis, there is a high risk that the Swedish Migration Agency will find that the need for asylum has changed if the person engages in cross-border commuting.
Permanent residence permit holders	Once a permanent residence permit is acquired, there are no employment obligations to keep it. Consequently, there should be no risk of losing the permanent residence status due to cross-border commuting. However, employment is required to obtain naturalisation to become a Danish citizen. In a few situations, up to two years of employment abroad can be counted towards fulfilling the employment requirement of three years and six months (when stationed or deployed abroad or if there is a significant reason for working abroad). The permanent residence permit can be revoked if the TCN no longer reside in Denmark (e.g. when moving to Sweden).	Once acquired, there should be little risk of losing permanent residence status as the place of residence is kept in Sweden. However, longer periods of stay outside the country might change the national authorities' assessment of the validity of the permanent residence permit. In addition, employment in Denmark will not fulfil the employment requirement for naturalisation in Sweden.
Posted workers	Posting should not affect the validity of the work and (permanent) residence permit in Denmark. However, longer periods of stay outside the country might affect the national authorities’ assessment of the validity of the (permanent) residence permit.	Posting should not affect the validity of the work and (permanent) residence permit in Sweden. However, longer periods of stay outside the country might affect the national authorities’ assessment of the validity of the (permanent) residence permit.

Source: OECD assessment based on publicly available information and consultations with stakeholders.

Labour mobility for TCNs in the Greater Copenhagen Region: Movements from Sweden to Denmark

The following section examines the rules for TCNs residing in Sweden who wish to work in Denmark. Due to Denmark’s opt-out from EU co-operation on Justice and Home Affairs, any intra-EU mobility rights acquired under such legal instruments in Sweden cannot be extended to TCNs seeking access to the Danish labour market. Instead, Danish national migration law stipulates that a TCN residing in Sweden who intends to work in Denmark must be included in one of the Danish labour mobility schemes for non-residents (for a detailed description of the EU rules and their application in Denmark and Sweden, please refer to Annex 1 of this report). At the same time, depending on the legal grounds on which a TCN has obtained a Swedish residence permit, working in Denmark could jeopardise the validity of the individual’s residence permit in Sweden. This interaction between national regulations on work and residence permits means that most TCNs living in Sweden risk losing their residence permit or adversely affecting their chances of obtaining permanent residence or naturalisation if they work in Denmark.

Options for TCNs to work in/commute to Denmark to work

Denmark regulates immigration to the country, including for employment purposes. Different rules apply to granting work permits to non-residents, depending on their nationality. Citizens of Nordic countries (Finland, Iceland, Norway and Sweden) are permitted to enter and stay in Denmark without the need for a residence and/or work permit. Citizens of EU member states are not required to apply for a work permit to access the Danish labour market. To obtain an EU residence card, Union citizens must apply to the Danish Agency for International Recruitment and Integration (Styrelsen for International Rekruttering og Integration, SIRI) and attend one of the agency’s offices. This application aims to verify that the employment is genuine by checking the number of hours worked, the duration of the employment contract (a minimum of 10-12 weeks is required), and the agreed-upon pay.

For TCNs wishing to work in Denmark, the Danish government has implemented a range of labour mobility schemes These schemes include the fast-track schemes, the pay limit scheme (both the ordinary pay limit scheme and the supplemental pay limit scheme), the positive lists for skilled work and individuals with higher education, the schemes for researchers, PhD and guest researchers, special individual qualifications, herdsmen and farm managers, Start-up Denmark, trainees, and authorisation as a medical doctor, dentist, or nurse. Of particular relevance, in terms of the number of applicants, to labour mobility in GCR are the fast-track scheme, the pay-limit scheme and the positive lists schemes, the key features of which are outlined in Box 3.1.

Box 3.1. Overview of the main Danish labour mobility schemes for third-country national (TCNs)

The pay limit scheme

The pay limit scheme (beløbsordning) requires that the TCN entering Denmark has a job offer with a minimum salary of at least DKK 487 000 (~ EUR 65 310) in 2024. Both the salary and employment conditions must comply with standard Danish terms, and the salary must be paid into a Danish bank account. The weekly workload must be no less than 30 hours. Additionally, there is a supplementary pay limit scheme (supplerende beløbsordning), which only requires a minimum salary of at least DKK 393 000 (~ EUR 52 703) if the job has been posted for at least two weeks on the Danish job portal Jobnet and the Europe-wide EURES Portal (other websites for job search cannot be used to qualify for this scheme). This scheme also stipulates that the seasonally adjusted gross unemployment rate in Denmark must not exceed 3.75% on average in the three months preceding application date (among other conditions).

The positive list scheme

The Danish government also issues work permits based on the positive list schemes (positivlisterne). The jobs included on these lists are in sectors with a shortage of skilled labour. Applicants under this scheme must have been offered jobs requiring higher education or a skilled level of expertise in areas where there is a recognised shortage of skilled workers. The lists are updated annually. The job offered must generally entail a full-time, 37-hour work week, although some positions in specific sectors may have a reduced weekly workload and still be considered standard employment terms.

The fast-track scheme

The fast-track scheme was introduced to provide employers with a quicker access to the foreign labour force. The scheme applies to employment in specially certified companies, where residence permits can be obtained through an expedited procedure, which includes five tracks. These are 1) the pay-limit track (which requires a minimum pay level of DKK 487.000 DKK (~ EUR 65.310 in 2024); 2) the researcher track; 3) the education programme at a high qualification level track; 4) the short-term track; and 5) the supplementary pay limit track. Employers must be certified to use the fast-track scheme to hire TCNs. There are various conditions for certification, such as employing at least ten people, being covered by a collective agreement or declaring that the company follows standard employment terms, and not having any outstanding order from the Danish Working Environment Authority.

The short-term track within the fast-track scheme allows for shorter residence periods in Denmark. There is no limit on the number of short-term stays, provided that each stay does not exceed 90 days per year from the date of entry into Denmark. From July 2024, it is possible to apply for an extension of a short-term stay.

Processing fees and times for labour mobility schemes in Denmark

The processing fee for these work schemes is DKK 6 290 (~ EUR 844). The expected processing time for a work permit is one month, as stated on the website, which provides general information on labour mobility schemes and immigration rules.

Source: Ny i Danmark (2024[1]), Du vil ansøge om arbejdstilladelse, available online at: Ny i Danmark (accessed on 08.10.2024)

TCNs commuting to Denmark for work have two options. First, the TCN may apply for a residence and work permit under the fast-track scheme. This scheme does not require the TCN to take up residence in Denmark, allowing them to retain their residence in Sweden while working in Denmark. The fast-track schemes does not mandate daily commuting, and the TCN is in general free to decide when to stay in Denmark. Second, the TCN may utilise the so-called commuter exemption, which applies to all other Danish labour mobility schemes. This exemption enables the TCN to apply for and obtain a Danish work permit without simultaneously applying for or acquiring a Danish residence permit. As such, the Danish authorities will issue a work permit for a TCN with a valid residence permit in Sweden (or another country), provided that the requirements for the Danish work permit are met. With a valid residence permit in Sweden, the TCN worker will be exempt from visa requirements in Denmark. For this option, the Immigration Service (Udlændingestyrelsen) and the Danish Agency for International Recruitment and Integration define a “commuter” as “a person who travels daily between Denmark and his or her country of residence to work”.1 Consequently, TCNs must commute to and leave Denmark at the end of each workday and comply with the general requirements of the work permit per Danish rules. It is important to note that this definition does not align with the EU’s definition of a cross-border commuter (i.e. a person who work in one EU country but live in another and returns home daily or at least once a week).

As described in Chapter 2 and shown in Table 3.2, in practice, only a few TCNs residing in Sweden use the option to commute to Denmark for work through the Danish labour mobility schemes. In 2023, the Danish authority granted 54 first-time permits to TCNs residing in Sweden.

Table 3.2. First-time permits in the business area granted for TCNs residing in Sweden

	2016	2017	2018	2019	2020	2021	2022	2023
Fast-track schemes	1	11	9	29	22	30	20	33
Pay limit scheme	6	9	8	17	4	9	24	14
Researchers	5	8	7	5	5	4	2	5
Special individual qualifications	0	1	2	2	1	2		1
Supplementary pay limit scheme	-	-	-	-	-	-	-	1
Positive list for people with higher education				2		1
Total	12	29	26	55	32	46	46	54

Source: Data provided by SIRI.

Danish employers must ensure that their TCN employees commuting to Denmark for work hold a valid residence permit in the country where they reside. The general rule in the Danish Aliens Consolidation Act stipulates that a fine or imprisonment of up to two years may be imposed on anyone who employs a foreigner (residing in Sweden or any other country) without the necessary work permit or in breach of the conditions specified for a work permit.2 As there are no mechanisms for automatic data exchange on this matter between the Swedish and Danish migration authorities, the Danish authorities and the Danish employers may not be immediately aware that the Swedish Migration Agency (Migrationsverket) has revoked the Swedish residence permit for the TCN in question. While this rule, according to consulted stakeholders, is not applied rigidly in Denmark, it creates uncertainty among Danish employers and may deter them from hiring TCNs cross-border workers.

Interaction with Swedish residence permit rules

Working in Denmark may adversely affect the status of TCNs residing in Sweden. There are multiple legal grounds on which a TCN may obtain a temporary or long-term residence permit in Sweden. These depend on a combination of EU and national Swedish legislation, which can influence cross-border mobility for TCNs residing in Sweden who wish to work in Denmark. In accordance with general EU legislation (for a more detailed description, see Annex 1), the three main scenarios under which a TCN may obtain a temporary residence permit in Sweden are 1) labour migration or studies, 2) family reunification, or 3) asylum. Over time, TCNs may be eligible to apply for a permanent residence permit or even become naturalised. The following sub-sections analyse the options for these groups to retain their Swedish residence permit while working in Denmark. The main points are summarised in Table 3.3. It should be noted that this area of law, particularly in Sweden, remains unclear and allows a significant degree of discretion for state agencies in interpreting and implementing general legislation.

Table 3.3. Overview of the potential consequences for residence permits in Sweden when working in Denmark as a cross-border commuter

	Main requirements for granting residence permits	Potential consequences for a temporary permit when taking up work in Denmark (withdrawal)	Potential consequences for eligibility for a permanent residence permit when taking up work in Denmark
Labour migrants	Amongst other requirements: employment with minimum wage (SEK 28  480)	The residence permit will be withdrawn since the legal ground for the permit is no longer in place	Any withdrawal of a temporary residence permit will lead to a loss of eligibility for a permanent residence permit.
Students	Amongst other requirements: the pursuit of studies at a higher education institution	Taking up employment in Denmark may terminate a student's residence permit in Sweden unless the student continues studying full-time in Sweden.	When the residence permit for studies ends, the TCN may stay on a jobseeker residence permit. If the TCN is employed in Denmark, the legal grounds for this residence permit will no longer be in place.
Trainees/internships	Having a traineeship or internship in Sweden	Trainees and interns must have a work permit in Sweden. Consequently, their residence permit will be withdrawn since the legal basis for it is no longer in place.	A traineeship or internship permit usually is not considered for a permanent residence permit.
Family members of TCNs	Being a family member of a TCN working or studying in Sweden	As the residence permit relies on the work activity of a family member, cross-border commuting should, in principle, be an option. Yet, there might be a risk to the validity or renewal of the residence permit if the Swedish Migration Agency deems that the grounds for stay are altered due to cross-border work.	Eligibility for a permanent residence permit might be affected if the Swedish Migration Agency deems that the grounds for stay are altered due to cross-border work.
Family members of EU citizens	Being a family member of an EU citizen with lawful residence in Sweden based on the Residence Directive 2004/38	The risk of losing their legal residence status or obtaining a long-term residence permit in Sweden should be very low as the residence is based on the Residence Directive 2004/38.	They would likely not risk the possibility of achieving permanent residence status in Sweden as residence is based on the Residence Directive 2004/38I.
Asylum seekers (request being processed)	Asylum grounds as a basis for a temporary residence permit in Sweden	They will most likely not be found to need asylum in Sweden if they work in Denmark, and consequently, the legal grounds for their temporary residence permit will change.	N/A
Asylum holders/refugees	Asylum grounds as a basis for a temporary residence permit in Sweden	They will risk that the grounds for the temporary residence permit based on asylum needs in Sweden are reassessed.	Any change in the grounds for the temporary residence permit based on asylum needs will also impact eligibility for acquiring a permanent residence permit.
Permanent residence permit holders	It usually requires that the applicant have resided continuously in Sweden for a certain amount of time (from 3 to 7 years) based on a temporary residence permit.	N/A	Once acquired, there should be little risk of losing the permanent residence status. However, if the Tax Agency finds the TCN to have “emigrated” and should no longer be registered as a resident in Sweden, this might change the validity of the permanent residence permit.
Posting	Must have a regular work and residence permit in Sweden and be employed by a Swedish service provider wishing to post the TCN to Denmark.	In theory, posting should not affect the validity of the work and residence permit. However, if the Tax Agency finds the TCN to have “emigrated” and should no longer be registered as a resident in Sweden, this might change the validity of the temporary work and residence permit.	If the place of residence is kept in Sweden and the underlying residence and work permit are up to date, there should be little risk of eligibility for a permanent residence permit. However, if the Tax Agency finds the TCN to have “emigrated” and should no longer be registered as a resident in Sweden, this might change the validity of the permanent residence permit.

Source: OECD assessment based on publicly available information and consultations with stakeholders in Denmark and Sweden.

Labour migration and students

A Swedish temporary residence permit granted to a TCN-based employment in Sweden is only valid if the TCN continues to work in Sweden. If a TCN with a labour migration residence permit stops working in Sweden to take up employment in Denmark or elsewhere, the legal grounds for the Swedish permit are no longer met. In such cases, the Swedish Migration Agency may withdraw the residence permit. The reason is that the underlying grounds for their residence permit – to work in Sweden – are no longer valid grounds for having the permit.

If the TCN’s residence permit is based on studying in Sweden, there is no legal barrier to cross-border employment. A temporary student residence permit in Sweden includes the right to work there, with no restrictions on hours. As long as the TCN maintains their studies in Sweden, working in Denmark will not affect the validity of their Swedish permit. However, if the TCN stops studying and intends to work or stay in Sweden for other reasons, they must apply for a new residence permit based on the new purpose. After completing their studies, a TCN can apply for a jobseeker permit to search for employment or start a business in Sweden. If the TCN uses this period to seek work in Denmark, they must apply for a work and residence permit in Denmark, as the Swedish permit will no longer be valid.

Family members

An accompanying family member (e.g. spouse or children) of a TCN who holds a temporary residence permit in Sweden as a worker or a student will also be granted a residence and work permit in Sweden. As a general rule, the temporary residence permit is linked to the conditions of the primary TCN’s residence permit and will not be affected by taking up work in Denmark. However, the Swedish Migration Agency assesses this on a case-by-case basis. During this assessment, the family member has no legal certainty regarding their right to work in Denmark.

Working in Denmark may affect an accompanying family member’s long-term prospects for obtaining permanent residence status in Sweden and, subsequently, Swedish citizenship. Any trips outside Sweden could influence the Swedish Migration Agency’s decision to grant a permanent residence permit. This decision typically considers several factors, such as the residency requirement (four years for TCNs with a work permit and three years for other TCNs) and an overall assessment of the individual’s ties to the country, such as working or residing in the country. Swedish legislation does not explicitly recognise cross-border employment when evaluating the eligibility for permanent residence status, which may be viewed as periods of inactivity or time spent abroad. While TCNs can request an assessment of the case from the Swedish Migration Agency before taking up work in Denmark, case handling times may delay the decision, making it difficult for the family member to accept a job opportunity in Denmark. Greater legal clarity in Swedish legislation or legal precedence from a higher court on how work in another EU Member State might impact an accompanying TCN family member’s short-term residence permit in Sweden and their chances of obtaining permanent residence would be beneficial.

A TCN family member of a Union citizen residing in Sweden under the Residence Directive 2004/38/EC (European Union, 2004a[2]) does not face the same legal uncertainty. As long as the Union citizen meets the requirements for the retained right of residence under Swedish legislation, the TCN family member should not jeopardise their right to reside in Sweden by working in Denmark (Swedish Parliament, 2005[3]).

Asylum seekers and beneficiaries of international protection in Sweden

TCNs residing in Sweden while their asylum applications are being processed by the Swedish Migration Agency risk jeopardising their asylum prospects if they work in Denmark or elsewhere. Asylum seekers arriving in Sweden are granted temporary residence while the Swedish Migration Agency process their asylum request. The agency’s decision is based on an assessment of the individual’s need for protection by the Swedish state. If the asylum seeker begins commuting to Denmark for work during this period, the rationale for protection by the Swedish state may be weakened. Therefore, asylum seekers residing in Sweden while their application is pending do not have the legal right to take up cross-border work in Denmark. If the individual applies for asylum in Denmark after registering as an asylum seeker in Sweden, they will likely be returned to Sweden under the Dublin Regulation (European Union, 2013[4]).

Generally, a TCN granted refugee status or asylum in Sweden will be issued a temporary residence permit. When the initial permit expires, the individual may apply for renewal. However, to be granted a renewed permit, the person must remain in Sweden. Taking up employment in Denmark could suggest that the individual no longer requires international protection from the Swedish state. As a result, working across the border could prompt the Swedish Migration Agency to reassess the basis for the temporary residence permit.

Permanent residence permits in Sweden or naturalisation to Swedish Citizenship

The Swedish Aliens Act (Utlänningslagen) outlines the conditions for acquiring a permanent residence permit in Sweden (Swedish Parliament, 2005[3]). To qualify for permanent residence status, an individual must first have lived in Sweden for a certain period with a valid temporary residence permit. The required length of residence with a temporary residence permit depends on the migration scheme under which the person resides. For example, individuals whose residence is based on humanitarian grounds, such as for asylum, must have resided with a temporary permit for three years before they can apply for permanent residency. For an individual who has held a temporary permit based on having a work permit, the requirement is that the person must have continuously fulfilled the conditions for having a work permit and have performed actual work for at least four out of the last seven years. Economic self-sufficiency (försörjningskrav) is another requirement for acquiring permanent residence status.

Once a permanent residence permit is granted, a TCN acquires substantial rights to reside and work in Sweden. There is no requirement to maintain employment to retain the status. Typically, daily commuting to work in Denmark should not jeopardise the validity of the permanent residence status. However, the Swedish Migration Agency may withdraw permanent residence if there is clear evidence that the TCN is no longer residing in Sweden or has spent an excessive amount of time abroad. Generally, an absence of up to 24 months from Swedish territory is acceptable, provided there is evidence that the individual is maintaining Sweden as their primary residence.

While daily commuting is generally not problematic, the Migration Agency may receive other indications that the TCN is not maintaining physical residence in Sweden. One such indication is if the Swedish Tax Agency (Skatteverket) register the individual as “emigrated” in the national population registry (folkbokföringen). The Swedish Tax Agency makes decisions on changes to registry status on a case-by-case basis. If the Swedish Migration Agency is notified that an individual’s registry status has changed to “emigrated”, it will review the validity of the person’s residence permit in Sweden.3

The rules for acquiring Swedish citizenship are set out in the Act on Citizenship (Medborgarskapslagen) (Swedish Parliament, 2001[5]). The requirements vary depending on whether the applicant is from another Nordic country, an EU Member State, or a third country. One key requirement for a TCN adult to naturalise as a Swedish citizen is to hold a permanent residence permit. Another key requirement is having a “settled residence” (hemvist) in Sweden. This generally means that the individual has had both a factual and legal residence in Sweden for at least five years and intends to remain in the country. Only factual residence time spent with a valid residence permit (temporary or permanent) counts towards the settled residence requirement. There are exceptions regarding how residence time is calculated and what absences from the country do not affect this time. Generally, an individual’s settled residence in Sweden will be interrupted if the Swedish Tax Agency registers them as “emigrated” in the national population registry. Consequently, for naturalisation, both the continuity of physical residence and valid residence permits are crucial.

According to the Swedish Migration Agency, commuting to work in Denmark from a primary and legal residence in Sweden should not affect a person’s chances of naturalisation.4 However, this is only so if commuting to work in Denmark has not impacted the validity of the residence permit the individual originally held. Any disruptions in the continuity of residence status in Sweden may affect the likelihood of a successful naturalisation process. In 2023, the Swedish Government initiated an inquiry into reforming the Swedish naturalisation law for acquiring Swedish citizenship, and stricter rules in this area are expected soon. However, there are no indications that the new regulations will take cross-border labour mobility into account when determining eligibility for Swedish citizenship. to Swedish citizenship.

Posting

Posting a TCN who has a Swedish work and residence permit and is employed by a Swedish employer is feasible under the EU legal framework. Posting a TCN from Sweden to Denmark requires that the TCN has a regular work and residence permit in Sweden and is employed there by an employer who wishes to post him or her in Denmark. The TCN worker must apply for an A1 certificate issued by the Swedish Social Insurance Agency (Försäkringskassan). Such a certificate is required when posting workers within the EU since it attests that the posted worker remains socially insured in the Member State of residence and employment. Posting is different from cross-border commuting as the person who is posted from Sweden to Denmark is not employed in Denmark and does not benefit from the same equal treatment rights as a cross-border commuter does. Posting a TCN worker from Sweden to Denmark means that the worker does not have to qualify under Denmark’s work permit rules, as the worker remains employed in Sweden.

In theory, and under EU law, posting from Sweden to Denmark should not affect the validity of the Swedish residence permit. A worker may be posted to another Member State for up to two years while maintaining a residence and being socially insured in the first Member State. Beyond two years of posting, the worker may opt to become socially insured in the Member State of posting, which in this case would be Denmark. However, if the person spends many or long periods abroad, the Swedish Tax Agency might find that they should no longer be registered as a resident according to the Swedish national registry. If the person is registered as emigrated in the national registry, the validity of the person’s residence permit in Sweden might be compromised.

As described in Chapter 2, the number of postings from Sweden to Denmark has been increasing in recent years – albeit from a low starting point. Nine hundred posted workers, defined as employees temporarily sent by their employer to work in another country while retaining their contract with the original, were posted from Swedish employers to Denmark in 2021. Among posted workers in Denmark, 8.5% were TCNs (De Wispelaere, Pacolet and De Smedt, 2024[6]). These posted workers are not included in cross-border commuter statistics. By 2023, the number of postings from Sweden to Denmark almost doubled to 3 422.5 While detailed breakdowns by nationality are not yet available, these trends underscore the growing demand for workers in Denmark, which TCNs could help to address. This finding is backed by input from various stakeholders, who, in interviews, stressed that employers in the region increasingly use posting as an alternative to cross-border commuting for TCNs.

Labour mobility for TCNs in the Greater Copenhagen Region: Movements from Denmark to Sweden

The following section examines the options for TCNs to obtain a work permit in Sweden while maintaining residence in Denmark. A TCN residing in Denmark wishing to work on the other side of the Oresund Strait in Sweden will require a Swedish work permit and, beyond 90 days of working, a Swedish residence permit. This can challenge TCNs wishing to commute to Sweden without residing there. However, since 2020, legal precedence established by the Swedish Migration Court of Appeal (Migrationsöverdomstolen) in the case MIG 2020:17 (see Box 3.1 below) allowed the Swedish Migration Agency to issue residence permits for cross-border commuters. Nevertheless, cross-border commuting may affect the TCN’s residence permit and eligibility for permanent residence status or naturalisation as a Danish citizen.

Rules for taking up work in Sweden as a non-resident TCN

A TCN residing in Denmark (or any other country) and wishing to work in Sweden generally needs a Swedish work permit. This rule has some exceptions, including for diplomats, sportspersons, journalists, artists, and certain professions. However, these exceptions typically apply to short-term work, internships and projects, usually lasting less than 60-90 days within a twelve-months period (Swedish Parliament, 2005[3]).6 As of March 2024, obtaining a work permit in Sweden requires a gross salary of at least SEK 28 489/month (~ EUR 2 422),7 a significant increase from the previous gross pay limit in force until 2023.

Swedish law generally requires a work and residence permit to be issued together. The main rule in Sweden is that TCNs must also apply and qualify for a residence and work permit to access the country for work reasons. This poses a challenge for TCN cross-border commuters. However, in 2022, the Swedish Migration Court of Appeal ruled in the case MIG 2020:17, which made it possible for the Swedish Migration Agency to issue work and residence permits to TCNs who are commuting from a residence abroad (Box 3.2).

Box 3.2. Judgment from the Swedish Migration Court of Appeal on options for TCNs to commute to Sweden to take up work

In 2020, the Swedish Migration Court of Appeal (Migrationsöverdomstolen) ruled on case MIG 2020:17. The case involved an American national with a Danish residence permit who maintained a factual residence in Denmark. He had been commuting from Denmark to Sweden for two years, and in 2018, he applied to the Swedish Migration Agency (Migrationsverket) for an extension of his Swedish work and residence permit. The Agency asked whether he intended to reside in Sweden, to which he responded that he did not. The applicant wished to continue commuting to Sweden while maintaining his residence in Denmark. The Agency subsequently denied his application for an extension of this work and residence permit, arguing that since he had not resided in Sweden for the past three years and had no intention of doing so, there was no basis for granting him a residence permit. The Agency contended that his daily commute was insufficient to justify a residence permit, as he did not spend his evening and nights in Sweden. The decision was appealed and brought before the Swedish Migration Court of Appeal, which issued its ruling in MIG 2020:17. The Court determined that the applicant’s daily commute to work in Sweden was enough to qualify for a Swedish residence permit. It ruled that it should not be necessary for a person to take up actual residence in Sweden, as requiring this would contradict the objectives of the rules concerning work permits for third-country nationals.

Source: MIG 2020:17 (2020[7]), Judgment of the Swedish Migration Court of Appeal, issued on 3 September 2020

Interaction with Danish rules for residence permits

Once a TCN has been granted a work permit in Sweden, the interaction with Danish residence permit rules may present a barrier to commuting. Access to short-term (i.e., non-permanent) residence in Denmark depends on the category or grounds for staying. Nordic and Union citizens do not require a work or residence permit to reside in the country, whether for short or long-term periods. For TCNs, the Danish Aliens Act (udlændingeloven) stipulates that residence can be obtained for the following reasons.8 1) work-related purposes (as explored in the previous section); 2) studies at higher education institutions, 3) international protection as a refugee or for humanitarian purposes; and 4) as family members of EU citizens, Danish nationals or TCNs. Additionally, there are provisions for obtaining a permanent residence permit and naturalisation in Demark. The following sub-sections analyse the options for these groups to maintain their Danish residence permit when taking up employment in Sweden. The main findings of this section are summarised in Table 3.4.

Table 3.4. Overview of the potential consequences for residence permits in Denmark when working in Sweden as a cross-border commuter

	Main requirements for granting residence permits	Potential consequences for a temporary permit when taking up work in Sweden (withdrawal)	Potential consequences for eligibility for a permanent permit when taking up work in Sweden
Labour migrants	Must hold a work permit according to one of the labour mobility schemes in the Danish Aliens Consolidation Act	The residence permit will be withdrawn since the legal grounds for the permit are no longer in place.	Any withdrawal of a temporary residence permit will lead to a loss of eligibility for a permanent residence permit.
Students	Must be enrolled in a higher education programme.	It depends on the type of student/study. For some students (e.g., students at higher education institutions), taking up employment in Sweden may result in the termination of their residence permit in Denmark unless 1) the employment in Sweden is an internship in connection with the study programme in Denmark or 2) the student continues studying full-time in Denmark. PhD students are exempt from the requirements to promote labour mobility during their studies.	When the residence permit for studies ends, the TCN may stay on a jobseeker residence permit. If the TCN is employed in Sweden, the legal grounds for this residence permit will no longer be in place.
Family members of TCNs	Must meet requirements for integration potential and other requirements in the Danish Aliens Consolidation Act	When granted a residence permit in Denmark, family members of TCNs obtain the right to work in Denmark but are not obligated to do so. Should they choose to work outside Denmark, they must be granted the necessary permits.	Employment in Sweden will not fully meet the employment requirement for a permanent residence permit, which is the precondition for applying for naturalisation to become a Danish citizen. Up to two years of employment abroad can sometimes be counted towards fulfilling the employment requirement of three years and six months.9
Family members of EU citizens	Being a family member of an EU citizen with lawful residence in Denmark based on the Residence Directive 2004/38, which has been implemented in Danish law through the EU Residence Order.	They are not likely to risk losing their legal residence status in Denmark, as their residency is based on the EU Residence Directive 2004/38, which has been implemented in Danish law through the EU Residence Order.	If the TCN works in Sweden as a cross-border worker, the right to obtain permanent residence under EU Rules will not be affected, as long as they meet the requirements in Directive 2004/38 and can document five consecutive years of legal, actual, and genuine residence in Denmark (without long periods of residence outside of Denmark).
Asylum seekers (request being processed)	Must meet the requirements for being granted asylum according to the Danish Aliens Act. The asylum seeker must also be at the disposal of the Danish Immigration Service throughout the processing of their asylum application.	Cross-border commuting will not affect the assessment of an asylum application in and of itself. If an asylum seeker has a strong attachment to Sweden in the form of i.e. close family ties or a long history of residence in Sweden, an asylum application may be rejected because the asylum seeker can take up residence in Sweden. Cross-border commuting to Sweden will not indicate a sufficiently strong attachment to Sweden in this regard.	N/A
Asylum holders/refugees	Asylum grounds as a basis for a temporary residence permit in Denmark	Work in Sweden would result in the withdrawal of benefits according to the Act on the Integration of Foreigners in Denmark. Cross-border commuting will not, in and of itself, lead to the residence permit being revoked. The residence permit may lapse if the asylum holder gives up their residence in Denmark.	Any change in the grounds for the temporary residence permit based on asylum needs will also impact eligibility for acquiring a permanent residence permit. Employment in Sweden will result in the TCN not meeting the employment requirement for a permanent residence permit (i.e. only two years of working outside of Denmark can, in some cases, be counted towards fulfilling the employment requirement of at least three and a half years of active employment in the four years before the application).
Permanent residence permit holders	Must meet numerous requirements, e.g., residence, work, and language.	Employment in Sweden will result in the TCN not meeting the employment requirement for a permanent residence permit (i.e. only two years of working outside of Denmark can, in some cases, be counted towards fulfilling the employment requirement of at least three and a half years of active employment in the four years before the application).	Once acquired, there should be little risk of losing the permanent residence status. However, it may affect the changes in naturalisation.

Source: OECD assessment based on publicly available information and consultations with stakeholders in Denmark and Sweden.

Labour migrants and students

A temporary residence permit granted based on a work permit in Denmark is only valid for employment in the country. Generally, TCNs with a residence permit based on a work permit can obtain a residence permit for an initial period of four years and, in some cases, up to five years. A Danish residence permit issued to a TCN based on employment will only remain valid if the individual works in Denmark. Therefore, if they decide to commute to Sweden for work, violating the conditions of their residence permit, they will lose the right to remain in Denmark. Students are granted a resident permit for the duration of their studies, with PhD students eligible for a maximum permit of three years. For most students, working in Sweden may lead to the termination of their Danish residence permit unless 1) the employment in Sweden is an internship connected with the study programme in Denmark or 2) the student continues to study full-time in Denmark. PhD students are exempt from the requirements as they are granted a part-time work permit to engage in work unrelated to their PhD studies.

Family members

Generally, family members of EU citizens, Danish nationals, or TCNs living in Denmark will be granted a residence permit in line with the primary applicant for residence. Family members accompanying TCNs with a permit under one of the labour mobility schemes are typically granted permits for up to four or five years. The direction can be shorter depending on the TCN’s work permit (e.g. if the work permit is based on a fixed-term employment contract) or if the family member’s passport expires before the TCN’s work and residence permit. Family members of labour migrants are generally free to take up employment, including in Sweden, without affecting their Danish residence permit, provided they meet the cohabitation conditions and live continuously with the TCN in Denmark.

As a general rule, family members of Danish nationals initially receive a residence permit for two years. After this period, the permit can be renewed for a maximum of four years. A residence permit based on family reunification is also considered a work permit. This permit allows the individual to reside and work in Denmark but does not automatically grant the right to work in another country. However, cross-border work does, in itself, lead to the revocation of a residence permit granted on the grounds of family reunification or asylum. If a residence permit based on family reunification is set to be revoked for other reasons, the individual may retain their residence permit if they can demonstrate a sufficiently strong attachment to Denmark. Employment in Denmark may positively affect the assessment of an individual’s attachment to Denmark

Asylum seekers and beneficiaries of international protection in Denmark

If granted prior approval, asylum seekers in Denmark may work while awaiting a decision on their asylum application, subject to several conditions. The asylum seeker's identity must be verified; they must have resided in Denmark for at least six months; their asylum case must proceed under the standard procedure (during which they are granted temporary permission to stay); and they must enter into a contract with the Danish Immigration Service. Without prior authorisation from the Immigration Service, both employer and employee risk fines or imprisonment. The job must be a concrete offer from an employer, with no public subsidy, and must adhere to standard salary and employment conditions comparable to those of other employees. Asylum seekers may also apply to work in positions listed under the positive lists, the pay limit scheme, or the fast-track schemes. However, these options are limited to work in Denmark. Danish legislation does not specifically address the possibility of maintaining an asylum case in Denmark while working in Sweden, meaning the consequences of cross-border commuting for asylum seekers are unclear. However, cross-border commuting to Sweden alone will not typically be considered sufficient evidence of a strong attachment to Sweden for this purpose.

Refugees who are granted a work permit alongside their refugee status must either work or actively seek permanent employment once. They are included in the Danish Self-sufficiency and Repatriation Programme (Selvforsørgelses- og hjemrejseprogram). Refugees receive a residence permit for one or two years, depending on whether their status is based on international protection as defined in the Refugee Convention or protection status. To qualify for social and housing benefits, refugees must be enrolled in the Self-sufficiency and Repatriation programme, which requires that the individual actively strives to become self-sufficient by participating in the labour market as soon as possible. Danish municipalities are responsible for assisting refugees in finding work under this programme. As permanent residence or naturalisation is closely linked to work and residence in the country (as outlined in the following section), cross-border commuting could negatively affect a refugee’s prospect for permanent residence in Denmark. The legislation encourages refugees to contribute to Danish society, find employment and become self-sufficient. Therefore, the integration programme is focused on employment in Denmark, and the incentives for refugees to find work outside Denmark are limited.

Acquiring permanent residence and citizenship status via naturalisation in Denmark

The Danish Aliens Consolidation Act outlines the rules for acquiring permanent residence permits in Denmark.10 The general requirements for a permanent residence permit in Denmark include several conditions, such as uninterrupted legal residency in Denmark for eight years, not having been convicted of certain crimes, not having received certain social benefits, and having worked full-time for at least three years and six months during the four years before applying for permanent residence. Up to two years of employment abroad can be counted towards fulfilling the employment requirement if the individual is stationed or deployed abroad as part of their employment in Denmark. Mobile TCNs who reside in Denmark and work in Sweden must consider the impact of any short stay abroad on their chances of maintaining their existing permit or requiring a permanent residence permit in Denmark. The Danish Immigration Service or the Danish Agency for International Recruitment may withdraw a residence permit if a foreigner resides outside Denmark for an extended period. Short stays abroad, such as holidays, are not considered residence abroad. However, individuals who leave their registered address in Denmark for more than six months may risk losing their residence permit.

After obtaining a long-term residence permit, TCNs must meet additional criteria before being granted Danish citizenship through naturalisation. Most of these criteria, including those related to active employment, residence and language proficiency, can only be met while residing in Denmark. As a result, TCNs who live in Denmark and work in Sweden may be particularly affected by the requirements when applying for naturalisation. While employment is a condition for naturalisation, generally, only employment in Denmark is recognised to fulfil this requirement.11 Employment in Sweden does not meet this condition. The authorities verify the applicant’s income history through the national register “E-income,” which records information about the income of all Danes and residents in Denmark.

Institutional set-up to support third-country nationals in pursuing cross-border work

The responsibility for regulating or promoting cross-border labour mobility for TCNs is not assigned to a specific agency or ministry in Denmark or Sweden. While the Danish Immigration Service and the Danish Agency for International Recruitment share the responsibility for overseeing the implementation of Danish immigration laws, neither agency has a clear mandate to oversee legislation on TCN cross-border labour mobility. A similar situation exists in Sweden, where the Swedish Migration Agency does not have a clearly defined mandate to oversee this policy area. This lack of clear responsibility may pose challenges for TCNs seeking advice or guidance on their options for cross-border work in GCR. For example, neither Denmark nor Sweden have issued clear guidelines for individuals, employers or public authorities regarding the various options and limitations of TCN cross-border work.

Oresund Direct is the primary cross-border information point in GCR, frequently receiving requests from TCNs interested in cross-border work. The organisation is an information service that conveys public information from Swedish and Danish authorities to citizens and businesses in GCR (for more details, see Chapter 5). In practice, staff at the Oresund Direct office in Malmö meet TCNs seeking information about cross-border work and businesses looking to hire TCN cross-border workers However, the organisation only have limited expertise in this field, which restricts its ability to offer comprehensive guidance to individuals and businesses. For example, there are no case offices from the national migration agencies present at the office in Malmö, and the organisation lacks official guidelines to base its advice on when assisting individuals and businesses. This also hampers the organisation’s ability to provide essential information on its online portal (oresunddirekt.dk/oresunddirekt.se).

The European Spallation Source (ESS)

The European Commission established the European Spallation Source (ESS) as a European Research Infrastructure Consortium (ERIC) in 2015 (European Union, 2015[8]). The ERIC legal framework, created by the European Commission in 2009, was designed to facilitate the joint establishment and operation of pan-European research infrastructures like the ESS (European Union, 2009[9]). The ESS comprises a multi-disciplinary research facility based on a neutron source in Lund and a Data Management and Software Centre (DMSC) in Copenhagen.

The strategic location between Denmark and Sweden raised questions about the possibility of residence in one of the two countries while holding a research position at the ESS. To make the region more attractive to prospective international researchers, the Danish Government introduced legal reforms to address challenges related to residence permits and taxation issues for ESS workers wishing to live in one country while working in the other. However, there is limited evidence to suggest that these changes have achieved the anticipated result of increasing mobility in the region.

Danish provisions for residence permits in connection with work at the ESS

Researchers at the ESS in Lund (Sweden) can apply for a residence permit in Denmark. The main requirement for granting the permit is an offer to undertake PhD studies or another form of employment linked to the research activities at the ESS. Another requirement is that the applicant holds a Swedish work permit or has documentation proving they have applied for one. An application for a Danish residence permit based on employment at the ESS will be successful when the PhD studies or employment are comparable to sufficient grounds for obtaining a residence permit in Denmark, had the ESS been located in Denmark. However, no residence permit based on employment or PhD studies at the ESS has yet been issued by the Danish authorities.12

When granted a residence permit based on employment at the ESS, family members of the principal applicant may also be granted a residence permit. Accompanying family members include spouses, registered or cohabitating partners, and children under 18 living at home. A residence permit allows accompanying family members to take up work in Denmark. The family members’ residence permit depends on the primary applicant’s permit, and it is a precondition that the family can support themselves during their stay in Denmark. Their residence permit may be revoked if they abandon their Danish address or stay outside the country for over six months.

Danish provisions for taxation based on work at the ESS

A special taxation system has been established for researchers and other employees at the ESS in Danish legislation (Danish Parliament, 2016[10]). From 1 January 2017, the Danish Withholding Tax Act (Kildeskatteloven) allows workers at the ESS Data Management and Software Centre in Copenhagen to apply for the Danish researcher tax scheme, even if the work is partly performed in Sweden and the right to tax this work belongs to Sweden. The employee must be affiliated with the Data Management and Software Centre, and the salary must constitute an operating expense for the centre. However, there is no reciprocity in Swedish legislation regarding this provision. In other words, Sweden has not introduced a special taxation regime for workers at the DMSC who reside in Sweden.

General barriers to cross-border mobility in the region

There are a variety of legal and practical barriers to cross-border mobility that affect anyone – not just TCNs – who wish to commute across the border in GCR. One tangible hindrance is the regular ID border checks conducted by the Swedish Border Police at the Swedish border. A more abstract but equally significant hindrance is digital exclusion caused by the heavy reliance, in both Sweden and Denmark, on national digital ID systems for communication between individuals, state agencies, and private service providers. Additionally, every cross-border commuter or employer between Denmark and Sweden must navigate the interaction between two separate national systems relating to taxation and social security. With the recent revisions to the 2003 bilateral agreement between Sweden and Denmark on certain tax matters (Öresundsavtalet), some of these barriers are expected to be alleviated. The following sections provide an overview and analysis of these barriers.

ID checks at the Swedish border

A significant barrier to cross-border commuting in GCR is the regular ID border checks carried out by the Swedish border police. Since their introduction in 2015, border checks have led to changes in the timetable for trains crossing the Oresund Bridge to Sweden, as they must now pause for several minutes on the Swedish side of the border. In early 2024, the Swedish Parliament passed new legislation to simplify the process by which the Government can order the imposition of ID checks at the Swedish border, with carrier liability, i.e. the transport company is fined if a person without valid ID attempts to cross the border (Swedish Parliament, 2024[11]).13 This is in addition to the ongoing border controls at the Swedish border. The purpose of this legislation is to enable the Government to quickly impose temporary ID checks when deemed necessary. However, from the perspective of cross-border integration, regular ID checks remain a practical deterrent to cross-border labour mobility in GCR.

Digital exclusion

Both Denmark and Sweden have made significant strides towards digitisation of public and private services in recent years. Digital systems have been introduced to allow individuals to identify themselves electronically when interacting with various state agencies. These digital ID solutions rely on private sector actors, such as banks, insurance companies, and telecommunication service providers. While these systems offer many benefits, they can also result in digital exclusion, particularly for cross-border commuters (Øresundsinsituttet, 2024[12]).

In Sweden, banks issue digital proof of identity, known as Bank ID, which enables customers to interact with banks and access online banking services. The Bank ID has quickly become Sweden’s primary digital ID solution, used by public agencies and private service providers. Without a bank ID, individuals may face significant practical difficulties. However, the Bank ID can only be issued by Swedish banks, which may refuse to provide it to individuals who do not have a Swedish Personal Identity Number (personummer, PIN). This is typically true for TCNs residing in Sweden on short-term residence permits (such as asylum seekers). It also applies to individuals who have never resided in Sweden but come to the country solely for work or other economic activities. Commuters from Denmark to Sweden typically do not have a PIN, but instead have a co-ordination number (samordningsnummer). These co-ordination numbers are not as widely recognised as the PIN, creating practical problems for individuals who need to engage with Swedish public and private entities (Hyltén-Cavallius, 2018[13]). A new system introducing three categories of co-ordination numbers has not resolved the issues for cross-border commuters. To address this barrier, the Swedish Government is preparing a legislative proposal to introduce a state-run digital ID system (Swedish Government, 2023[14]).

Denmark is similarly a highly digitalised country, with communication from public institutions and private companies to citizens occurring via the digital solution, e-books. Access to the digital mailbox requires obtaining a MyID (MitID) digital identification solution, typically via a smartphone or tablet app. Every resident in Denmark with a Danish identity number (CPR-number) can obtain a MitID from age 15. MitID is the only way to file official applications, sign official documents, and communicate with public offices, educational institutions, health and tax authorities, and private companies, including banks and internet services. A MitID requires a CPR-number, which TCNs first obtain only after receiving a residence permit in Denmark. Foreigners who do not yet have a CPR-number can get an 8-digit number (P-code) to access MitID. However, many functions of the MitID app are tied to having a CPR-number, so this is only a temporary solution.

Digital barriers for commuters can also arise with the widespread use of mobile apps for ticketing and money transfers. Commuters and other travellers are increasingly offered the option to purchase train and bus tickets via apps, which many view as a convenient and time-saving method. However, some apps are not compatible with foreign credit cards (which are not part of the national payment system). As a result, these digital solutions are often limited to residents of a specific country. The same issue applies to mobile payment apps such as MobilePay in Denmark and Swish in Sweden. These apps are growing in popularity as payment methods, and in some shops, they are the only accepted means of payment. However, these apps must be linked to national bank accounts and phone numbers to function, meaning they are generally only available to individuals with Danish or Swedish bank and phone accounts, thus hindering cross-border payments. Taxation

The Nordic Tax Treaty, alongside the 2023 Oresund Tax Agreement (Øresundsavtalet) between Denmark and Sweden, addresses the taxation of individuals who reside in one country but work for an employer in the other. Under Article 15 of the Nordic Tax Treaty, employees living in one country and working for a private employer in the other are generally taxed on their salary in the country of residence unless the work is performed in the other country, in which case that country may tax the income. For employees residing in Sweden and working in Denmark, their salaries are taxed in Denmark and exempt from Swedish tax. Conversely, employees residing in Denmark and working in Sweden are taxed in Sweden, with exemptions from Danish tax, provided they are covered by the Swedish social security system.

These tax rules, reflected in national regulations and the Oresund Tax Agreement, are grounded in the principle of territoriality, which focuses on where the work is physically carried out. This principle is increasingly at odds with cross-border employment in the digital age, where much work can be done remotely. In the case of part-time teleworking, salary taxation is generally divided between the two countries based on the proportion of time spent working in each country. The Oresund Tax Agreement offers a simplification if certain conditions are met: If the employee works at least 50% of their working days in the employer’s country during a three-month period, with the rest of the time spent working from home or on temporary business trips, the employee will be taxed in the employer’s country. However, the employer must not have a permanent establishment in the employee’s home country. If more than 50% of the employee’s work is performed outside the employer’s country, the employee will become tax-liable in their country of residence. In May 2024, the Danish and Swedish governments agreed to revise the Oresund Tax Agreement, addressing cross-border tax issues, particularly those arising from teleworking. While the details are yet to be released, the revision will permit cross-border public sector employees to telework from 2025.

A further example of territoriality in tax design arose in 2021 when Sweden introduced the “economic employer” concept for foreign workers (Swedish Government, 2019[15]). This concept mitigates tax competition between Sweden and other EU Member States. It requires foreign employers to send workers to Sweden to register with the Swedish Tax Authority for preliminary tax withholding of employees’ salaries. More broadly, foreign employers with Swedish residents working in Sweden – from home or elsewhere – must also register for Swedish tax withdrawals. An unintended consequence of this rule is that Danish employers with employees teleworking from Sweden must register for Swedish tax withholding. To avoid this, Danish employers can apply for an exemption if the conditions of the tax agreement are met. However, this introduces an additional administrative burden for Danish employers, with employees working remotely from Sweden.14

References

[10] Danish Parliament (2016), Act amending the Aliens Act and the Withholding Tax Act (Lov nr. 1745 af 27.12.2016 om ændring af udlændingeloven og kildeskatteloven), https://www.retsinformation.dk/eli/lta/2016/1745 (accessed on 10 October 2024).

[6] De Wispelaere, F., J. Pacolet and L. De Smedt (2024), “Posting of workers: Collection of data from the prior declaration tools: reference year 2021”.

[8] European Union (2015), Commission Implementing Decision (EU) 2015/1478 of 19 August 2015 on setting up the European Spallation Source as a European Research Infrastructure Consortium (European Spallation Source ERIC) (Text with EEA relevance), Document 32015D1478, https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX%3A32015D1478 (accessed on 8 October 2024).

[4] European Union (2013), Regulation (EU) No 604/2013 of the European Parliament and of the Council of 26 June 2013 establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person (recast) (Dublin III Regulation) [OJ L 180], Document 32013R0604, https://eur-lex.europa.eu/eli/reg/2013/604/oj (accessed on 8 October 2024).

[9] European Union (2009), Council Regulation (EC) No 723/2009 of 25 June 2009 on the Community legal framework for a European Research Infrastructure Consortium (ERIC), Document 32009R0723, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32009R0723 (accessed on 8 October 2024).

[16] European Union (2004), Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems [OJ L 166/1].

[2] European Union (2004a), Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC (Consolidated version: 16/06/2011) [OJ L 158, 30.4.2004], https://eur-lex.europa.eu/eli/dir/2004/38/oj (accessed on 8 October 2024).

[13] Hyltén-Cavallius, K. (2018), “‘The Need of Residence Registration for Enjoyment of EU Citizenship in Sweden’”, in Pennings, F. and M. Seeleib-Kaiser (eds.), Possibilities and Impediments to Access Social Rights of European Citizens, Edward Elgar.

[7] MIG 2020:17 (2020), Judgment of the Swedish Migration Court of Appeal, issued on 3 September 2020.

[1] ny i danmark (2024), Du vil ansøge om arbejdstilladelse, https://www.nyidanmark.dk/da/Du-vil-ans%C3%B8ge/Arbejde.

[12] Øresundsinsituttet (2024), Digitalisering - Udfordringer og initiativer på tværs af den dansk-svenske grænse..

[14] Swedish Government (2023), Swedish Government Official Reports: En säker och tillgänglig statlig e-legitimation SOU 2023:61.

[15] Swedish Government (2019), Regeringens proposition 2019/20:190 Ekonomiskt arbetsgivarbegrepp – förändrade skatteregler vid tillfälligt arbete i Sverige.

[11] Swedish Parliament (2024), Lag (2024:70) om tillfälliga förbud att transportera personer utan giltiga identitetshandlingar till Sverige..

[3] Swedish Parliament (2005), Aliens act (2005:716), SFS 2005:716 Utlänningslag, https://www.government.se/government-policy/migration-and-asylum/aliens-act/ (accessed on 8 October 2024).

[5] Swedish Parliament (2001), Medborgarskapslagen (2001:82), https://www.riksdagen.se/sv/dokument-och-lagar/dokument/svensk-forfattningssamling/lag-200182-om-svenskt-medborgarskap_sfs-2001-82/ (accessed on 10 October 2024).

Notes

← 1.  See the definition on the Danish Immigration Service website https://www.nyidanmark.dk/en-GB/Words%20and%20Concepts%20Front%20Page/SIRI/Commuter.

← 2.  Section 9 a, subsection 18, no. 6 in the Aliens Consolidation Act.

← 3.  Correspondence with the Swedish Migration Agency (Migrationsverket) on 9 February 2024.

← 4.  Correspondence with the Swedish Migration Agency (Migrationsverket) on 9 February 2024.

← 5.  Danish Busines Authority: Registret for Udenlandske Tjenesteydere (”Register of Foreign Service Providers”, RUT); data available online at: https://erst.virk.dk/rut3/public/forespoergsel/liste (accessed 19/09/2024).

← 6.  Sections 5 and 6, 6a-6c, the Swedish Aliens Act (5, 6 och 6a-c kap. Utlänningslagen) (2005:716).

← 7.  This is equivalent to 80% of the median salary level in Sweden (Swedish Parliament, 2005).

← 8.  The Danish Aliens Act includes other types of residence permits for TCNs, including for example on the basis of Danish descent or ties to a Danish minority group, the International Cities of Refuge Network or religious workers.

← 9.  Employment abroad can be counted towards fulfilling the employment requirement if, as part of the employment in Denmark, you were stationed or deployed abroad. That means that you are employed in a Danish company but you have been deployed to solve a task or work abroad. It is a requirement that the employer in Denmark is, a Danish public authority, a private company, a non-governmental organisation, or a foreign or Danish aid agency. When being stationed abroad for a private company it is a requirement that the organisation has a certain size. This means that the private company must have an average of at least 10 employees over a 12-month period. In the calculation all the employees must be taken into account without regards to the working hours. Work abroad for other reasons than those mentioned above – that is, not being stationed or deployed – can count towards fulfilling the employment requirement, if there is significant reason for doing so. It is a specific assessment if there are such significant reasons to the employment relationship in which the work abroad should count towards the employment requirement. It is important in the assessment: whether the position in Denmark is related to the position abroad, whether you were working in Denmark prior to taking the position, whether you have been granted a leave of absence from the position in Denmark, and whether you will resume working in the previous position upon returning to Denmark. If you have been stationed or deployed for a Danish company or organisation abroad, you will be able to count up to 2 years of work abroad towards meeting the requirement of at least 3 years and 6 months employment and if applicable the supplementary requirement of at least 4 years employment. If you have held other employment abroad, up to 1 year can count towards you meeting the requirement concerning 3 years and 6 months of employment and if applicable the supplementary requirement of at least 4 years employment. Spouses or partners of someone stationed or deployed abroad who find an employment of their own while abroad will be able to count the time spent working towards meeting the employment requirement.

← 10.  Section 11, subsection 3 in the Aliens Consolidation Act.

← 11.  There are certain exceptions to this rule, for example if the employment is with a Danish public authority or if the employee is sent abroad as part of their employment for a Danish company or organisation. In this case the work abroad can be included in the assessment of the requirement for up to two years.

← 12.  Meeting of 6/1/2024.

← 13.  Lag (2024:70) om tillfälliga förbud att transportera personer utan giltiga identitetshandlingar till Sverige.

← 14.  Interview with the Swedish Social Insurance Agency (Försäkringskassan), 28 February 2024.