France woos Brexit exiles with tax changes, expat school

 French Prime Minister Edouard Philippe leaves after a weekly cabinet meeting at the Elysee palace in Paris, on July 11, 2018.
French Prime Minister Edouard Philippe leaves after a weekly cabinet meeting at the Elysee palace in Paris, on July 11, 2018.PHOTO: AFP

PARIS (BLOOMBERG, REUTERS) - French Prime Minister Edouard Philippe detailed new measures, seeking to attract investors and expats to Paris as financial firms leave post-Brexit London.

Measures will include a new school for expat children, the possibility of including financial goodwill in the amortisation tax regime and the capping of the tax at 30 per cent on the so-called carried interest of investment funds relocating to France.

Rules on the opening or expansion of clearing businesses will be eased this year, according to the prime minister's office.

Philippe detailed the measures in a speech at the Paris Europlace conference on Wednesday (July 11).

"A financial centre is built with patience, by being consistent. I want this consistency to be the trademark of our economic strategy and our attractiveness policy," he said.

The moves add to steps already taken by President Emmanuel Macron aimed at boosting Paris as a financial centre, such as plans to gradually cut corporate tax to 25 per cent and scrapping a wealth tax on financial assets.

Macron's government has also set a flat tax of 30 per cent on all capital income and removed the top marginal band of payroll tax, although the moves have led to criticism of Macron as being a president for the rich.

 

Earlier this year, Macron wooed executives including Google CEO Sundar Pichai and Facebook Chief Operating Officer Sheryl Sandberg at the Palace of Versailles in an effort to get them to invest more in the country.

Paris is competing with the likes of Frankfurt, Dublin and Luxembourg to win over finance jobs in the wake of Britain's departure from the EU next March.

The Paris Europlace financial sector lobby said on Wednesday that Paris was set to win 3,500 financial sector jobs leaving Britain due to Brexit.

HSBC would make up the bulk, with 1,000 jobs, while French banks moving posts back to their base in Paris would add another 1,000 jobs, and the rest would come from a host of Wall Street banks and other financial firms.

Bank of America Merrill Lynch, JPMorgan, Citigroup, Morgan Stanley, Goldman Sachs, Standard Chartered and Wells Fargo have all made "announcements in favour of Paris", Paris Europlace said.

The European Banking Regulator is also slated to move to Paris as Britain exits the EU.