In Europe’s major capitals, the race is on to scoop up the windfall from Britain’s decision to leave the European Union, and Paris is actively showering Brexit-wary businesses in London with promises to lure them across the Channel

Britain’s vote to leave the European Union sparked outpourings of shock and regret across the continent – followed quickly by calculations of the potentially rich pickings to be had from its departure.



Nowhere more so than in Paris, which set about rolling out not one but many red carpets to lure the Brexit-wary away from London. Promises came fast and thick: lower taxes, easing of employment laws, even the possibility of filing official documents in English – some departure in a country where the “language of Shakespeare” has long been seen as a threat to French.

Today, those behind Paris’s campaigns to become the EU’s new financial hub say their efforts are bearing fruit and are generating “enormous interest” from world banks and financial institutions who, they claim, are planning to move all or part of their operations to Paris. Nobody is naming names, although a fortnight ago banking giant HSBC announced it was preparing to move 1,000 workers from London to Paris because of confusion over the UK government’s Brexit plans.



French officials predict up to 60,000 jobs – half from the financial sector and half from other British-based industries – could move to Paris following Brexit. “And every one of these jobs creates another three or four in commerce, services and property,” says Valérie Pécresse, president of the Île-de-France region. “Brexit is profoundly regrettable, but we cannot be passive or naive.”

Brexit is an opportunity that presents itself only once in a century Jean-Louis Missika

The potential arrival of tens of thousands of residents with money to spend on luxury housing, designer goods and private schooling is seen as a golden opportunity across the French capital. High-end estate agents are already anticipating a London-style property boom, and say they have had a sharp spike in requests from wealthy French clients planning to return home.

Britain’s fashion industry, which has supplied talent like Stella McCartney, Alexander McQueen, Phoebe Philo and John Galliano to some of the biggest names in French haute couture, is also worried it could be sidelined as Europe seeks talent from within.



For campaigners pushing the City of Light as an alternative to the City of London it is a case of tant pis (too bad).



“Brexit is an opportunity that presents itself only once in a century,” Jean-Louis Missika, Paris deputy mayor in charge of economic development, tells the Guardian. “Paris already has a significant financial sector and we have had large banks, mostly from Asia, as well as large and small financial institutions who have approached us saying they want to move to here. They believe what we have to offer is good.”

Facebook Twitter Pinterest Models present work by British designer Stella McCartney during last year’s Fashion Week in Paris. Photograph: Gonzalo Fuentes/Reuters

Ross McInnes, an Australian and naturalised French citizen, who studied at Oxford University and is chairman of the French aeronautical company Safran, has been appointed ambassador of the Paris “guichet unique” (gateway), set up to help foreign businesses that want to relocate.

“Many people see this as a financial issue but it’s mostly a human resources issue,” McInnes says. “For example, we were asked recently if there is a club for Japanese women in Paris – in fact, there are two. These questions may seem petty, but it’s about people’s lives and human capital, which is hugely important.

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“The questions we are being asked to work on are HR, real estate and regulatory – it’s really bread-and-butter stuff. But if the bigger question is ‘why Paris?’, my question is ‘where else?’ And that’s without even talking about the lifestyle or attractiveness of Paris as a city, which is something else – as I often say, when did you last book a weekend in Frankfurt?”

Britain and France have jostled for the title of world’s fifth-largest economy for years; according to the IMF, Britain lost the slot after sterling plummeted following the Brexit vote. With Paris, and especially its modern high-rise business district La Défense, having long thrown covetous glances at investment across the Channel, both government and city officials have been on a business charm offensive since last June.

After the vote, Pécresse promised – in English – to “roll out the blue, white and red carpet” to new arrivals from the City of London. Her comment was a barbed riposte to David Cameron and Boris Johnson’s promises to “get out the red carpet” for businesses fleeing François Hollande’s threatened 75% tax on those earning more than £1m when he was elected in 2012 (a threat the French president never enacted).

“If I need to go and grab jobs with my teeth, then I’ll do it,” Pécresse added.



While the campaign catchphrases (“Tired of the fog? Try the Frogs! Choose Paris La Défense”) may be more crass than catchy, Pécresse also directly mailed 4,000 British-based company executives with an invitation to relocate.

Sceptics who argue Paris is no rival to London often cite France’s hostility to business in the form of red tape, high taxes, inflexible working regulations and high social charges. On the World Bank’s list of business-friendly countries, France ranks only 29th.

But Paris supporters say significant measures have been taken to reduce business running costs in the city, including corporate and individual tax breaks and increased flexibility in its notoriously complex employment laws. They argue the disadvantages can be offset against pluses which include cheaper office rents and property prices, the city’s talent pool, first-world financial regulation, a world-recognised health system, good schools, and excellent road and rail transport networks.



Facebook Twitter Pinterest ‘Brexit is profoundly regrettable, but we cannot be passive or naive,’ Valérie Pécresse. Photograph: Bloomberg/Getty Images

McInnes rejects outright suggestions Paris is not competitive in terms of employment costs: “If you look at the foreign companies who have come here, you find they represent 13% of the French workforce, 32% of exports, 25% of manufacturing and 28% of research and development. Why would they come here if we were not competitive? Many foreign companies use France as a base for R&D.

“The cost of employment in France is exactly the same as in Germany. In the case of letting people go, downsizing – something very important for financial institutions – the fact is, it’s no easier in Germany than in France.”

McInnes says that while French social charges are high, you “get something for them” in terms of schooling and healthcare. The French authorities have also said they will accept official documents in English, and the government is encouraging more language teaching in schools. McInnes points out a number of respected English language international schools that are cheaper than British private schools, if often heavily over subscribed.

“On the financial side, there is a very significant flow of inquiries,” McInnes adds. “There won’t be any sudden shock announcements, there won’t be any “everyone on the Eurostar tomorrow morning” – but companies are making a Plan A, B, C and D …”

The loss of “passporting rights”, which allow UK-based banks, insurance and asset companies to sell services freely across the EU and visa versa, is what worries British finance leaders most.



Facebook Twitter Pinterest The Euronext Stock Exchange services in Paris’ financial district, La Défense. Photograph: Thomas Samson/AFP/Getty Images

In September, the House of Commons Treasury select committee revealed that 5,476 UK-registered firms have a total of 336,421 passports to do business freely with another EU or EEA member state, while 8,008 European companies have passports to do business in Britain.



“We’ve had a lot of interest from companies wanting to be in Paris to be certain of benefiting from the passport in future,” says Pierre Bollon, chief executive of the French asset management association AFG, which has 400 members. “The fact is, if you’re not in the EU, then normally you are not part of the passport system.

“These people are not fleeing London, but they are considering enlarging their bases in continental Europe and looking seriously at Paris. And why not? Paris has a great pool of talent and resources and, London aside, is by far the biggest asset management centre in Europe.”



“We know the ‘passport’ will evolve in some shape or form,” McInnes says. “If you want a base in the European Union, you want to go somewhere the regulation is of an internationally recognised high standard, and in that respect we are confident that our regulators in France are world class. If you are a big company you want to come somewhere where you are going to find lawyers, accountants and consultants. That ecosystem is present in London, and there is not any other place that has the same concentration of talent except Paris.”

Arnaud de Bresson of Paris Europlace, the French equivalent of the City of London Corporation, says his organisation is actively trying to lure London businesses to Paris.



“We were very strongly for Remain, but now Brexit is happening, we have been energetic in meeting big international companies who are looking at rebalancing their operations to be nearer their clients in the EU. We are in contact with those in industry, investment, banks … they are approaching us and we are approaching them.”



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De Bresson says new rules on corporation tax rates – which give French and foreign company chiefs a 30% reduction on their income tax for eight years if they return or set up in Paris – plus the reduction in social charges for businesses and more flexibility in employment laws, make the French capital an attractive and competitive proposition when compared to other European cities.

“London will remain an international financial centre, but I believe Paris can become Europe’s financial centre,” he says.



And while Missika – perhaps only half-jokingly – suggests the City of London could always become a “tax haven”, McInnes says the future doesn’t have to be either Paris or London – it can be both.



“Nobody is going to turn out the lights in London, it’s not a black and white issue … It will still have a huge concentration of talent, but it does seem inevitable that London, and the UK, will lose some of its business and status.



“This is not a situation I would have wished for the UK,” McInnes adds. “But my job is to make sure that when people make that decision to move, they come to Paris.”

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