“We want Paris to become Europe’s new number one financial hub after Brexit”, Prime Minister Edouard Philippe said on Tuesday while international bankers said they wanted to see if such pro-business reforms would stick over time. Eager to attract banking jobs leaving London, Philippe promised to reduce costs to boost the competitiveness of finance companies.
Several business-friendly measures
Catch up with Frankfurt to attract finance jobs moving from London and reduce unemployment rate. That is the goal that President Emmanuel Macron, former investment banker, is pursuing since his election in May. While other big European cities are wooing banks based in the City of London financial center, Paris can count on Macron’s aura but also on fiscal advantages. In fact, Prime Minister Edouard Philippe recalled France’s commitment to reduce the scope of France’s wealth tax to just real estate and to set a tax on all capital income at a flat rate of 30 %. Other business-friendly measures include cutting corporate tax rate to 25 % from 33 % over the next few years and overhauling France’s labor code in the upcoming months.
France has its work cut out to convince international banks
While most bank executives welcomed such measures, others showed skepticism over the longevity of the fiscal measures as France experienced decades of high taxes and strict labor laws. “It’s important to have consistency, the rule of law, stability, steadfast… it’s not just important for banks, but for all economies”, JP Morgan Chase & Co Chief Executive Jamie Dimon told the conference. So far, HSBC is the only international bank that announced the transfer of 1 000 posts if Britain opts for a “hard Brexit”. “It’s very early within the presidency and people still have the impression in their minds of president Hollande declaring finance is the enemy, there were demonstrations, there was a very high tax rate”, HSBC’s Chief Executive Stuart Gulliver said.