Many businesses often face challenges when trying to set up a business account. This is especially true for businesses in risky sectors like cryptocurrency. In addition, all businesses find that the onboarding period can be disproportionately long. Under current law, there is no right for companies to get a bank account. In practice, the absence of a bank account makes doing business impossible, as a bank account is often a prerequisite for running a business.

The new bill will change this situation by giving Danish companies the right to a basic business account.

What does the right to a "basic business account" entail?

The key feature of the bill is that all Danish companies will now have the right to open a so-called basic business account. This type of account is designed to fulfill the most basic needs for banking services and must include at least the following functions:

1. Account management. The company must be able to open, use and close the account as needed.
2. Deposit of money. It must be possible to deposit money into the account, both electronically and in cash, with a monthly limit of DKK 20,000 for cash deposits.
3. Cash withdrawals. The company must be able to withdraw cash throughout the EU and partner countries, both through bank branches and ATMs.
4. Payments and transactions. The account must allow for direct debits for fixed expenses such as rent, debit card payments, including online payments, as well as credit transactions via terminals, online banking or in person at the bank. 

In other words, you must be able to use the account for general operational purposes.

Requirements for companies and possibilities for refusal

Access to the basic business account only applies to companies that have their main business activity in Denmark. In addition, one of the following conditions must be met:

• At least one member of the company's manager must be resident in Denmark.
• For companies without an executive board, at least one of the owners must be resident in Denmark.
• If the company does not have an executive board or owners, at least one of the managers must be resident in Denmark.

This delimitation ensures that the banks' offer of basic business accounts is aimed at companies with a real connection to Denmark. A Danish licensed company (CASP/EMI/PI) will by definition have this. At the same time, the bill stipulates that the banks can only refuse applications for a basic business account under special circumstances. A refusal can only be given if:

• The company does not provide the necessary information for the bank's KYC procedures or if there is a documented suspicion of money laundering.

In addition, refusal can be given in the following cases:

1. The company already has an account in Denmark that meets the necessary needs, unless a planned closure is documented.
2. The company or related persons have previously committed criminal offenses against the bank.
3. The company lacks a required license to operate the business.
4. The company or associated persons have behaved offensively towards the bank's customers or employees.
5. The company cannot demonstrate a genuine interest in opening the account.
6. The company or related parties have in the past grossly or repeatedly breached their obligations towards the bank.

What does the bill mean for cryptocurrency businesses?

It has been notoriously difficult for crypto businesses to get a bank account. This has been in contrast to payment institutions (PI), which have a statutory right to obtain a bank account under section 63 of the Payment Act. It is our assessment that companies that obtain a MiCA license (CASP) and, to a certain extent, AML-registered crypto companies (VASP) with this bill will obtain the same rights as PI companies under section 63 of the Danish Payment Act. There will thus also be a comparative advantage for Danish-licensed CASP companies compared to other member states, where the starting point is the same as it has been in Denmark so far: that banks can discretionarily reject companies as customers.

Fees and efficient case management

Many Danish companies have had to turn to foreign banks to open a business account as Danish banks have rejected them as customers. This has resulted in higher costs, as fees for basic banking services abroad are often significantly higher than in Denmark. With the new legislation, there is a concern that Danish banks, which are now required to offer basic business accounts, will raise their fees for customers they classify as high-risk.

To address this concern, the bill includes a provision that basic business accounts should either be free of charge or offered for a reasonable fee that covers a maximum of the bank's actual costs and a reasonable profit. This measure should ensure that the account remains financially attractive and accessible, especially for smaller businesses.

Furthermore, the bill ensures that applications for basic business accounts must be processed within 10 working days of receiving a "complete application". 

Possibility of appeal in case of unreasonable refusal

To ensure that banks process applications in accordance with the law, a complaints board will be established where companies can bring cases if they believe they have been wrongfully refused a basic business account. The appeals board – whose name has not yet been decided – will require banks to justify refusals in writing, which strengthens the company's legal security and ensures a uniform practice among banks. It is therefore important that applicants are required to provide written reasons in the event of a refusal. This should already be stated in the application.

When does the law come into effect?

The law is expected to come into force on January 1, 2025. This means that you can have a bank account as early as January 15, 2025.

The bill can be accessed here (in Danish).

Contact us 

At Samar Law, we are following the development of the bill closely. Therefore, if you want advice to ensure that you file a "complete application" for the first time, if you want advice on preparing a "complete application" or preparing a letter of appeal to the Board, we at Samar Law are at your disposal. Please contact us via 60793777 or payam@samarlaw.dk.