Debate in Copenhagen has intensified after the Finance Ministry floated a wealth tax on illiquid shares held by private founders. The measure would force entrepreneurs to extract cash from operating companies to meet annual liabilities, diverting funds that could otherwise fuel growth or seed new ventures. Critics argue the tax translates paper valuations into real‑world bills, squeezing nascent startups.

Norway offers a cautionary tale. Its similar levy taxes the estimated value of privately held shares each year, regardless of liquidity. Investors there report pulling money from angel portfolios to cover the charge, shrinking the pool of capital available for early‑stage deals. The added drag nudges them toward foreign markets, eroding domestic deal flow over time.

Denmark’s tech scene already lags behind neighbours such as Sweden, Estonia and the UK, which have cultivated generations of founders, operators and seasoned angels. Without a critical mass of successful exits, the local mindset remains risk‑averse, limiting the ambition needed for globally competitive startups. Policy that adds fiscal friction threatens to widen this cultural gap further.

With capital now highly mobile, a punitive Denmark tax regime could prompt founders and investors to relocate to more tax‑friendly hubs. The immediate effect would be a measurable dip in startup formation and funding rounds in Copenhagen, reinforcing Norway’s example of capital outflow. In practice, the proposal jeopardises Denmark’s ambition to become a Nordic innovation centre.