Although French labour and tax laws are certainly a consideration, what the bankers will also have to factor in, in their decisions for relocation is Parisian charm and finesses after all “When was the last time you took your partner for a weekend to Frankfurt”?
While French haute cuisine, exquisite wine and haute couture are certainly a big draw and an attraction, the big question facing London’s bankers who are yet to decide on relocating to Paris following Brexit is, how will this affect my tax profile?
“Most were interested in income tax and executive tax on pay,” said Gerard Mestrallet, president of France’s finance industry lobby Europlace who led a roadshow on Monday for a delegation of London bankers.
More than 80 representatives from businesses and banks met authorities in Paris who have presented the French capital as a lucrative option for their relocation following Brexit.
British Prime Minister, Theresa May has indicated that she will most likely select the “hard” exit option during Brexit negotiations, which will see Britain totally cut off from the world’s biggest single market.
According to Valerie Pecresse, who heads the wider Paris region, with Theresa May revealing her “hard” Brexit negotiating stance, an onslaught of “fierce competition” has opened up among European Cities, including, Paris, Frankfurt, Luxembourg and Dublin for London’s famed financial giants who are scouting for various relocating options.
Europe’s biggest bank, HSBC, has disclosed it could potentially move some of its operations to Paris where its subsidiary has the necessary licenses required for investment banking purposes.
Although Paris could potentially create 10,000 jobs if some of London’s banks relocate to it, however, bankers have raised concerns about French labour laws and its stringent tax regime.
“The expatriate regime has dramatically improved but there are also some concerns about labor flexibility,” said Mestrallet, chairman of Engie, a French utilities company and Suez .
In 2016, the French government had introduced tax concessions for expatriates hoping to reap in profits from Brexit. However, according to experts, bankers could opt to relocate to other destinations which provide more flexible tax laws and labour rules.
The outcome of the French elections are another reason why London’s bankers are sitting on the fence and have yet to select a location for relocation.
“Many will wait three months to have more clarity on the outcome of the French elections,” said Mestrallet.
Germany is also competing with France to attract more finance jobs to Frankfurt. However the Parisian delegation thinks it has the upper hand.
After all, “When was the last time you took your partner for a weekend to Frankfurt,” quipped Pecresse.