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From London to Paris?

The City of Lights' famed culture and lifestyle may prove attractive as a post-Brexit destination

This edition of RBC Investor & Treasury Services' Flight from London series examines Paris as a potential destination for UK-based financial services firms following Brexit.

Even before the UK's decision to leave the European Union (EU) was finalized, France was prepared to 'roll out the red carpet' to the UK financial services sector.1 Finance ministers, bankers, and traders have all spoken frankly about the opportunities that Brexit represents for the French capital. Now that the UK has formally triggered Article 50, London-based financial firms can expect a warm reception from the City of Lights.

Currently, the finance industry in Paris has approximately 150,000 employees, including back-office staff. After Brexit, it could lure 20,000 or more from Britain, as estimated by Paris Europlace, the city's financial lobby group.2

Paris already serves as headquarters to four globally systemic banks, and insurance giant Axa SA, is also located in the Paris region. Despite the presence of these financial institutions, Paris trails London as Europe's dominant financial services hub.

Key insights

  • With more fund managers located in Paris than in Germany, and the largest international corporate bond market in Europe, France's bid to lure London firms may have weight

  • French authorities are campaigning to present Paris as an international fund and fintech centre

  • Possible tax and labour exemptions for UK financial firms serve as a counterpoint to criticism that France's relatively high corporation tax and restrictive labour laws make it an unlikely candidate to replace London as the financial center of Europe

One of the first firms to indicate its willingness to relocate staff to Paris is HSBC Holdings Plc. Chief Executive Officer Stuart Gulliver said in January 2017 that staff generating about 20 percent of its London investment-banking revenue may move to the French capital.3 HSBC already owns one of France's top consumer-banking networks and could look to expand its reach throughout the continent.

Bond and asset markets

One of Paris' main draws for traders and investment firms is the size and reputation of its bond and asset markets. As well as being home to Euronext, one of the continent's biggest stock markets, Paris is the largest international corporate bond market in Europe, with a 45 percent market share of total outstanding corporate bonds.4

Paris could also be an attractive market for asset managers looking to retain access to European capital markets. France is the second largest asset management pool in the world, with more asset management firms located in Paris than in Germany.5 The further development of both bond and asset markets is set to become a priority of the French government upon the UK's departure from the EU.

An international fund centre

In a bid to attract London-based fund management firms to Paris, the French financial regulator, the Autorité des Marchés Financiers (AMF), is campaigning to establish the City of Lights as an international fund centre. Together with the Association Française de la Gestion Financière (AFG), the AMF has created the French Routes and Opportunities Garden (FROG) group, with the aim of promoting international growth and establishing incentives for foreign investors to domicile their funds in France.6

The AMF is also targeting London-based financial technology firms. In September 2016, the AMF announced that foreign fintech firms relocating to Paris can open offices in just two weeks under its 'Agility' program,7 undertaken in co-operation with the Autorité de contrôle prudentiel et de résolution (ACPR).

Agile development

The AMF's Agility program aims to make Paris a more appealing location to London- based fintech firms

The AMF's Agility program aims to make Paris a more appealing location to London- based fintech firms by reducing the regulatory burden when changing jurisdictions. In addition to the 2WeekTicket scheme, which allows firms to be authorized as a regulated body within two weeks, the program provides access to English-speaking coaches that provide courses and lessons on French regulatory requirements and compliance procedures.

Regulators in Paris hope that initiatives such as the Agility program will hasten development of the city's fintech scene.

Tax and labour incentives

Despite France's commitment to attracting banks and funds from London, many firms may be deterred by high tax levels. To further incentivize firms to relocate to Paris, the government has offered certain returning nationals and foreigners income tax breaks of up to 50 percent for eight years, and have exempted overseas assets from France's wealth tax.8 In comparison to London's 45 percent top income tax rate, Paris' effective rate would be 28 percent for expat executives during the period of the break.9

The French government has also sought to relax labour laws as a way of attracting more foreign firms. In August 2016,  France's Constitutional Council approved a reform that lifts restrictions on working hours and reduces severance pay, as well as effectively making it easier for firms to recruit and dismiss staff.10

Regulators and policymakers in France recognize the importance of establishing appropriate incentives to attract foreign banks and investment funds. As rival bids for London-based firms are launched by Frankfurt and Dublin, Paris is reassessing its strength as a financial hub. As Brexit negotiations get underway, the AMF is hoping that UK bond traders and asset managers find their way to the City of Lights.


Flight from London to Paris Infographic


Next in RBC Investor & Treasury Services Flight from London series: Luxembourg

Other articles in the series

June 01, 2017

Flight from Frankfurt?

May 31, 2017

From London to Dublin?

May 26, 2017

Flight from London?


  1. Politico (February 16, 2016), France to 'roll out red carpet' for UK bankers: Macron
  2. Bloomberg (January 3, 2017), Paris Eyes Luring 20,000 Bankers From London Amid Brexit Rupture
  3. Bloomberg (January 17, 2017), HSBC CEO Says Bankers Generating 20% of London Revenue May Move
  4. Paris Europlace (April 7, 2016), Key Facts About Paris as an International Financial Center - Capital Markets
  5. Paris Europlace (February 6, 2017), Paris Top Officials Engage UK-based Finance Industry Leaders
  6. AMF (October 27, 2016), FROG: the AMF and the AFG unveil seven measures to promote the international development of the French asset management industry and turn Paris into a leading financial centre
  7. AMF (September 28, 2016), The AMF is creating a dedicated welcome programme for management firms and FinTech companies based in the UK: AGILITY
  8. Bloomberg (April 5, 2017), Sick of Brexit Limbo, Foreign Bankers Are Asking to Be Sent Home
  9. BBC (February 6, 2017), Paris tries to seduce the City
  10. BBC (June 23, 2016), France labour law: Thousands protest in Paris