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Brexit: France takes steps to lure businesses from London

If the British economy is going to struggle in the aftermath of Britain’s decision to leave the EU then France is determined to profit from it, it seems.

Brexit: France takes steps to lure businesses from London
Photo: AFP/DcnH/Flickr

French Prime Minister Manuel Valls unveiled on Wednesday a series of measures to boost the lure of Paris after the Brexit vote raised doubts about London's future as a European finance hub.

He also confirmed a decrease in a company tax previously announced by President Francois Hollande, which will be lowered from 33 percent to 28 percent.

Britain's vote to leave the European Union “created shockwaves, for all European citizens but also, in a very concrete manner, many businesses settled in the United Kingdom,” Valls said.

“In this new environment which is taking shape, we want an attractive France,” he said, adding that he wanted to improve the tax and legal framework to “welcome even more companies (and) make Paris the capital of smart finance.”

Most of the measures are tax-related, such as reductions for foreign employees which would be valid for eight years instead of the current five, Valls said.

The prime minister announced a tweak to a system allowing foreign employees to benefit from tax reductions, making it applicable for eight years instead of five.

Beyond these fiscal measures, the government also plans to put in place a “unique entry point” to facilitate administrative matters for foreign companies seeking to set up shop in France.

READ ALSO: Ten reasons why Paris is better than London

This service will help companies with questions about real estate, residency permits, schools and other issues.

Valls said France would open “as many international sections as needed in schools” to allow children of foreign employees to have classes in their mother tongue.

The Brexit vote has several European capitals clamouring to take London's spot as a major finance centre and hub for investors and bankers.

'Time to cooperate not compete'

Valls' measures, that came just two weeks after the Brexit vote, appeared to be in contrast to a recent commitment made by the mayors of Paris and London Anne Hidalgo and Sadiq Khan.

The pair promised to cooperate rather than compete amid all the post-referendum uncertainty.

“Despite the outcome of the EU referendum, our two cities must now work more closely together than ever before in order to deliver on our shared agendas,” read a joint letter from the pair published in the French and British press.

Other economists and essayists in France have however suggested Brexit could be beneficial for France.

Essayist Edouard Tetreau said it would be a “windfall” for Paris.

“The City of London would force away all the banks and asset management funds who want to continue to operate in the European market, without the barriers caused by regulations and taxes that would be applied to London-based institutions once they are outside the Union.

Thousands of managers, lawyers, financiers, and also the heads of the European subsidiaries of multi-national companies would have to leave the UK to remain within the EU to continue their work.

Paris is easily the city, along with Berlin, that is best placed to welcome their talents.

 

 

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TRAVEL NEWS

France may cut Channel islands ferry service after post-Brexit collapse in visitor numbers

Visits to the Channel islands from France have halved since Brexit, and French local authorities say they may be forced to cut the regular ferry service, asking for the passport requirement to be waived for French visitors.

France may cut Channel islands ferry service after post-Brexit collapse in visitor numbers

Travel to and from the Channel islands – which are British crown dependancies – has reduced significantly since Brexit, when passports became a requirement for those travelling in and out of the islands and their ports.

Now the president of the local authorities in the Manche département of France has asked that passport requirements be lifted, with hopes of increasing travel to and from the islands.

Jean Morin told Ouest France that there has been a “considerable reduction in the number of passengers on routes between the Channel ports and the islands” and as a result the ferry service between France and the islands was seriously in deficit.

“On these lines, we will never make money, but we cannot be in deficit”, explained the Morin. 

He added that if a solution is not found by the deadline of May 1st, 2023, then local authorities will stop funding the shipping company DNO, which runs the Manche Îles Express ferry service.

“If the passport requirement is not lifted by then, we will have no choice but not to renew the service contract for 2024-2025”, Morin told Ouest France.

Only around half of French people have a passport, since the ID card issued to all adults is sufficient to travel within the EU. 

READ MORE: Ask the Expert: How Brexit has changed the rules on pensions, investments and bank accounts for Brits in France

DNO re-launched operations in April and since then, the company, and by extension the département – who plays a large role in funding it via a public service delegation – has been losing significant funds.

According to Franceinfo, the number of passengers has been cut in half since passport requirements were introduced. Franceinfo estimates that for one ticket for one passenger costing €30, the département spends €200.

According to Morin, the ideal solution would be to require a simple ID for tourists seeking to take just day-long or weekend-long stays on the islands – which reportedly represents at least 90 percent of the boats’ usual passengers.

“The Jersey government is working hard on the issue and is waiting for an agreement from London and the European Union. There is the possibility that things could move quickly”, Morin told Franceinfo on Tuesday.

Prior to the Covid-19 pandemic and Brexit, boats going to and from the French mainland carried at least 110,000 people per year. In 2022, only 40,000 passengers made the journey, Olivier Normand, the sales manager of Manche Îles Express, told Actu France.

Normand had expected the decline, however. He told Actu France that the company had taken a survey, which found that almost half (between 40 and 50 percent) of their clientele did not have a passport. 

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