France Boosts Up Efforts to Attract London Banks to Paris

France has beefed up its attempts to woo banks and other financial institutions considering a move out of London due to Brexit, as the government unveiled a raft of proposals targeted at making Paris more appealing. These include pledging to cut labor costs and ensure they do not face tougher regulations than European rivals as well as the abolition of the highest bracket of a payroll tax levied on each salaried employee and the cancellation of plans to increase France’s 0.3% tax on financial transactions.

A document presented by the French Prime Minister, Édouard Philippe, on Friday listed reforms he said could turn Paris into “Europe’s leading financial centre after Brexit” amid fierce competition from Dublin, Frankfurt and Luxembourg”.

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 European cities to seduce 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.

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