Get in touch with us+44(0)800 009 6007
get in touch

France steps up bid to lure London banks to Paris

French authorities have stepped up efforts to attract London banks to Paris after Brexit by pledging to cut labour costs.

By Jon Francis | Published: 7th July 2017 Business

They will also ensure they do not face tougher regulations than European rivals.

Many international banks in London are trying to decide where to shift operations to maintain access to the European Union's single market after Britain leaves the EU.

There is fierce competition between Paris, Frankfurt and other European cities to woo the banks based in the City of London financial centre and some have already announced plans to move staff.

Until now, Paris' rivals, including Frankfurt, Dublin and Luxembourg, have been making the headlines as the locations banks, insurers and asset managers have chosen to open new hubs.

Prime Minister Edouard Philippe said the government would scrap the highest bracket of payroll tax for firms like banks that do not pay VAT, cancel a planned extension of tax on share trading. It would also make sure that bankers' bonuses are no longer taken into account when labour courts decide on unfair dismissal compensation.

"Promoting the financial attractiveness of Paris, is promoting France's economic attractiveness," Philippe said. "Every banker, every trader ... who settles in Paris triggers the creation of other jobs."

The payroll tax France charges banks and some other sectors such as real estate and healthcare is a charge that companies pay on each salaried employee. It is not levied in most other European countries.

Tax was a big concern for London bankers at a roadshow organised by a French finance industry lobby in February this year to promote Paris as a financial centre.

Germany is also looking at making it easier to hire and fire senior bankers in a relaxation of its labour laws to help to attract financial firms to Frankfurt after Brexit.

Philippe also pledged to review and change on a case-by-case basis the way EU financial regulations are transposed into French law.

"The French law has sometimes opted for overregulation when the European standards for the financial sectors were transposed," a document published by Philippe's office said.

"This could have had imposed additional burden on businesses, compared to European rivals."