PARIS – The French government unveiled Friday new measures to attract bankers to Paris after Brexit, pledging to cut taxes and labor costs and provide more international schools for expatriates' families, as competition for London's jobs heats up.
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French Prime Minister Édouard Philippe, at a Friday conference in Paris, said the government would scrap the highest bracket of its payroll tax, and cancel a planned extension of a tax on financial transactions. Some bonuses of traders and banking executives classified by the European Banking Authority as "risk takers" won't be included as a part of severance packages, he said.
"Our government's ambition is to reinforce France's attractiveness and competitiveness," said Mr. Philippe. "Companies must want again to set up and develop their business here," he added.
Paris has stepped up its efforts to win business from financial firms currently based in the U.K. since the election of pro-business Emmanuel Macron as French president in May.
In addition to tax and labor-cost cuts, the government plans to open three international schools near La Défense, the sprawling business district on the Western edge of Paris, and invest in an express train line from Paris's center to Charles de Gaulle Airport.
"This package of measures meets the expectations voiced over the last months by the financial institutions and international investors that we have met," said Gérard Mestrallet, the chairman of Paris Europlace, a group that promotes the French capital as a financial center.
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French labor laws that make it hard to hire and fire workers have become a major hurdle for banks considering relocating business to Paris. Banks that pay hefty bonuses to lure traders and other talent don't want those sums later factored into severance payments, as is currently required under French law.
"The arrangement with bonuses is that you live by the sword and die by the sword...That's not the way the law plays it" in France, said Ross McInnes, chairman of aerospace firm Safran SA, who has been lobbying companies to move to France.
So far, HSBC Holdings PLC has said it would transfer about 1,000 jobs to France, where it already has a retail presence.
"Senior executives from all the major U.S. and Swiss banks have met with French government officials and regulators in recent months," said Christian Noyer, former governor of the Bank of France, who was appointed last year by the French government to head a special envoy to defend the country's financial interests.
About 30 asset-management funds have also applied for a license in France, according French Asset Management Association AFG.
Paris, however, is facing fierce competition. Regulators and government officials across Europe are also trying to lure London finance companies ahead of Brexit. The sweeteners range from the promise of cheap rents to protection of bankers' bonuses.
--Max Colchester and Nick Kostov contributed to this article.
Write to Noemie Bisserbe at firstname.lastname@example.org
(END) Dow Jones Newswires
July 07, 2017 15:25 ET (19:25 GMT)