Nye økonomiske regler for internationale ægtefæller

The property regime of international spouses changes after five (5) years of residence in Denmark

As at 1 January 2023, new choice of law rules come into force regarding law applicable to spouses’ property regime. The new choice of law rules break with the so far unalterable principle that the husband’s domicile regulates spouses’ financial relationship during marriage and in the event of divorce. The rules entail that as at 1 January 2023 all foreign nationals with five (5) years of residence in Denmark are subject to the Danish property regime and the rules in the Danish Act on spouses’ financial relationship, which e.g. stipulates an equal division of spouses’ total assets in the event of divorce.

Background for amendment of the Act

On 1 January 2018, the Danish Parliament adopted new legislation which laid down the rules for spouses’ financial relationship in connection with entry into marriage, during marriage and in the event of separation and divorce.

At the same time, it was decided to change the previously established legal practice that the husband’s domicile (residence) at the time of entry into marriage was decisive for the choice of law governing the spouses’ financial relationship. Where the previous choice of law rule was gender-specific and subject to an unalterable principle, it was decided to make gender-neutral rules and to break with the previously unalterable principle.

The rules were made gender-neutral as at 1 January 2018, where it was no longer the husband’s domicile which was decisive for choice of law, but rather the country where both spouses lived at the time of entry into marriage, alternatively where they both lived at the same time after entry into marriage.

A transitional arrangement has been introduced in relation to breaking with the unalterable principle, which comes into force as at 1 January 2023, according to which everyone who has lived in Denmark for five (5) years after 1 January 2018 will automatically be subject to the Danish property regime.

An argument for the change has i.a. been a request for uniformity, as rules on inheritance, spousal support and custody follow the country of residence. Therefore, it has been found most appropriate that going forward the rules on spouses’ financial relationship, for example in connection with the division of property, are subject to the country of residence after five (5) years of residence in Denmark.

Nye økonomiske regler for internationale ægtefæller
New economic law rules for international spouses

You can change the choice of law by marital agreement

It can have major consequences if you think that the rules applicable in your country of origin or former country of residence continue to apply, as there may be a huge difference between the Danish property regime and rules in other countries, both in Southern Europe, the US and Asia. Therefore, it is possible to change the choice of law in a marital agreement or similar, where you decide that applicable law in the country/state where one spouse lives (if both parties do not live in Denmark) or is a citizen at the time of conclusion of the agreement applies to their financial relationship.

A choice of law agreement concluded in Denmark, while both spouses are domiciled here, must be entered into a marital agreement which complies with the Danish rules for entering into such agreement. A choice of law agreement entered into abroad is valid only if it is in writing, dated and signed by both parties, notwithstanding if it does not meet the Danish marital agreement requirements, assuming that one or both parties lived in that country when concluding the agreement.

It is not possible to freely choose which country’s law is to apply. It is only possible to choose the law of the country where you live, or the country of which you are a citizen when the agreement is concluded. However, transitional rules have been adopted enabling you to maintain that applicable law from before the law came into force shall continue to apply.

Foreign rules which are obviously incompatible with basic Danish legal principles (ordre public) cannot be applied in Denmark.

Ask CLEMENS Law Firm

CLEMENS Law Firm advises on family law matters, including international family law. If you have questions concerning property regimes applicable to you and your spouse, or if you want to change your property regime, our international family law experts are ready to assist. If you are a company interested in offering a presentation regarding the new choice of law rules to your foreign employees, we will be happy to come to you and give a presentation.

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