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BREXIT

Brexit: France to cut income tax and open international schools to entice London’s bankers to Paris

The French Prime Minister on Friday laid out a raft of measures aimed at boosting Paris's attractiveness to high finance in order to cash in on Britain's exit from the European Union, including cutting income tax for high earning bankers and opening international schools.

Brexit: France to cut income tax and open international schools to entice London's bankers to Paris
Photo: AFP

France continues to make eyes at London's bankers and on Friday the Prime Minister Edouard Philippe laid out a raft of measures to attract financiers who may have to leave London when the UK leaves the EU.

Among them are scrapping a plan to widen a current 0.3 percent tax on financial transactions, eliminating the top income tax bracket for top earning bankers (those picking up over €150,000 a year), and keeping bonuses out of the calculation of severance pay for “risk-takers” such as stockbrokers in order to make redundancies less expensive.

Those measures might have been unthinkable in France under the previous government of former President François Hollande, who famously declared the world of finance was his “enemy”, but given the fight for the scraps from the Brexit fallout, France under former banker Emmanuel Macron seems prepared to do whatever it takes to fight off the competition.

“You can regret this (Brexit) decision or welcome it, but it's a fact,” said Philippe, speaking on the roof of the Monnaie de Paris — the national mint — with the city's glass-and-steel La Defense financial district visible in the distance. “You have to deal with it.”

“Welcome back to Europe”

Paris regional president Valerie Pecresse said in English: “To investors, and to those disappointed by Brexit, I want to say that we are ready to roll out the blue, white and red carpet for you. Welcome back to Europe.” 

In another step aimed at attracting foreign businesses, the Paris area is to open three more international high schools by 2022 (Lycée Internationales).

The Lycee Lucie-Aubrac de Courbevoie near the La Defense business district to the west of Paris will become a Lycee International next year, meaning classes are taught in several languages on top of the French curriculum.

By 2021 another Lycee International will open in Saclay to the south of Paris, which is aiming to become a “global innovation cluster” and finally another one will open at Vincennes to the south east of Paris.

READ ALSO:

Brexit blues? Here are ten reasons to exchange London for Paris

 

Prime Minister Philippe also announced that work had begun to establish an international tribunal in Paris to handle financial cases in English.

Most international financial contracts are written in English and make reference to British law.

It will be possible “to plead in English and British law will be applied,” according to senator Albéric de Montgolfier, who wrote a report on how Paris could benefit from Brexit.

Also in the pipeline is the “CDG Express”, a rail line linking Charles de Gaulle airport to the city.

French President Emmanuel Macron has pledged to relax France's rigid labour laws to free its economy from red tape and excessive taxation.

 

In another carrot for businesses tempted by a move to Paris Macron has also pledged to cut corporation in tax from the current level of 33 percent to 25 percent by 2022.

The French financial sector currently represents about 4.5 percent of national output and employs around 800,000 people.

Paris is competing with Dublin, Frankfurt and other centres for an expected shift in finance jobs out of London as a result of Brexit.

Several banks, especially Asian institutions, have recently announced that they would move European headquarters from London to Frankfurt in response to Brexit.

Bloomberg News said Thursday it would move investment banking activities from London to its Frankfurt headquarters.

With Britain at risk of losing the “passporting rights” financial firms use to deal with clients in the rest of the European Union when it leaves, employees in direct contact with customers may need to be based on EU territory in future.

Other jobs will need to move to deal with business that must be booked in the European Union, as will risk management workers, who must be based in the EU to satisfy banking supervisors' requirements.

So far Brexit has had a limited impact in Paris, apart from banking giant HSBC's decision to relocate 1,000 employees from London to the French capital. JP Morgan Chase, for its part, is moving to Dublin, Frankfurt and Luxembourg.

“At this stage there are no commitments besides HSBC's,” said junior finance minister Benjamin Griveaux. “We're working on it. Today is an important signal to investors.”

The French government and Paris city chiefs have already carried out several charm offensives aimed at wooing talent and companies from London.

In November last year the government announced itwas opening a one stop shop to provide firms everything they and their staff need to relocate across the Channel.

It will be located at 11 Rue Cambrai in the 19th arrondissement of the city and will essentially help businesses and staff overcome the administrative hurdles of resettling in France.

And in February this year the government sent a raiding party across the Channel to woo bank and finance chiefs.

In September it announced it was cutting red tape for British based businesses and even President Emmanuel Macron got in the act when during a campaign trip to London in February he brazenly urged French expats and British talent to move across the Channel.

His message was “France is changing”.

But it still has a way to go before it might be seen as the best option for banks and finance centres.

A recent study by the World Bank ranked France below the likes of Georgia, Macedonia and Latvia for ease of doing business.

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VISAS

‘Be ready to wait’: Your tips for getting a French visa post-Brexit

Now that Britain is out of the EU, just how much harder is the process of moving to France from the UK after Brexit? British readers share their experiences of applying for visas as 'third country nationals’.

'Be ready to wait': Your tips for getting a French visa post-Brexit

Whether you’re moving to France to live, or you’re a second-home owner wanting to spend more than 90 days out of every 180 in France, if you’re British you will now need a visa.

You can find more on how to apply for a visa, and how to understand what type of visa you need, in our visa section HERE.

But how these systems work in practice is not always the same as the theory.

To learn more about the process of getting a visa as a UK national, The Local asked British readers for their experiences of going through the system.

The consensus among respondents was that the whole thing was bureaucratic, though there were notable differences in experiences that ranged from the “easy” to the “complicated” and “time-consuming”, while the advice for future applicants was, routinely, have all your paperwork ready – and be prepared for a lengthy wait at one of the UK’s TLS centres

Appointments

Like most visas, French visas for UK nationals must be applied for before you leave home. You can find a full explanation of the process here, but the basic outline is that you apply for the visa online, and then have an in-person appointment in the UK in order to present your paperwork. 

Sue Clarke told us: “As long as you get all your paperwork together correctly and in the right order, the time it takes to receive your passport back with the visa in it once TLS has sent it off is only a few days.

“TLS – the centre which works on behalf of the French Embassy to collate your application – is so very busy,” she added. “That part of the process took hours even when you have an appointment.”

READ ALSO EXPLAINED: What type of French visa do you need?

“The visa process itself was fairly well run, and a decision for the initial visa was quick,” wrote Ian Sheppard, who successfully applied for a visa in July 2022. 

“Although getting the follow up residence permit was a pain, [and] took longer than expected, and there was little to no communication with severely limited ways to get in touch about the application.”

Sheppard thought that, biometrics apart, the process could have taken place online, and wondered whether the follow-up residence permit application could be more closely linked to the initial visa application, “rather than effectively submitting the same application twice”.

Georgina Ann Jolliffe described the process as “stressful”. 

“A lot of the initial stage was unclear and I needed a lot of reassurance about the visa trumping the Schengen 90 days. (The Local helped on that one),” she wrote. 

“[The] lack of ready communication was very stressful. It could be slicker, however staff at Manchester TLS were excellent.”

Jacqueline Maudslay, meanwhile, described the process as “complicated”, saying: “The waiting times for the appointment with the handling agent (TLS in the UK) are long and difficult to book online. We applied for a long-stay visa and were given a short-stay visa, with no reasoning and no option of talking to anyone.  

“We had met every criteria for the long-stay visa. There needs to be a contact link with the French Consular website directly for discussing visa applications.”

Handling agent TLS’s website – the first port of call for applicants from the UK – was a target for criticism.

“The TLS system is probably the most user unfriendly system I have ever used,” wrote Susan Kirby. “It throws up errors for no legitimate reason and even changes data you have keyed in. Dates are in American format so you have to be very careful and it can be very difficult to edit.”

Bea Addison, who applied for a visa in September 2021 with a view to retiring in France, agreed that it was complicated and believes the French system is chaotic and badly organised compared to other countries. “Even staff in the French Embassy in London were not knowledgeable of the process and documentation,” she wrote.

“The renewal in France was applied for in July 2022 … we have received an attestation that we will be granted renewal visas, which expired in October 2022, but we have not yet received a date to attend the préfecture due to a backlog.

Second-home owners

Many of our survey respondents were not moving to France, but were instead second-home owners who did not want to be constrained by the 90-day rule.

They have the option of remaining residents of the UK and applying for a short-stay French visitor visa – which must be renewed every year.

Second-home owner Peter Green told us: “Our appointment with TLS was delayed by two and a half hours and the whole experience was chaotic.

“We now have to go through exactly the same process again to get a visa for 2023. With second-home owners there should be a fast track that just involves proving financial viability, nothing else has changed. The system needs to be fully computerised.”

Second-home owner Alan Cranston told us his application met with no problems, but came with “unwanted cost and effort”. 

“Our six-month visa was for our first stint at our house in France in the spring, and that then overlapped our second visit in the autumn which was under Schengen. How that is handled seems to be a muddle (we did not leave the country for a day at the end of the six months, as some advise),” he said. 

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