Cities Contending For European Financial Center

Written by William Byrnes | Posted in Europe • Tax Law Changes • Tax Legislation • Tax Updates

As I hear it, if the Netherlands were to substantively amend its ‘maximum 20% bonus of salary’ regulation, then the relocation decision for many EU facing funds would be an easy choice. But because of that regulation, it has created an opportunity for other cities to pitch to the institutions for the funds and trading business relocation.

Luxembourg and Ireland have government staff visiting the banks to promote their respective countries as the “right” place to take over London’s role as the new EU Financial Center offering full financial service passporting and certainty of treatment.

The Netherlands, Germany, and now France are rumored to also be reaching out to the banks and investment funds. Paris is even making a play with the Socialist President proposing up to a 50% income tax reduction for expatriate workers (investment bankers from London) for up to 8 years, and a reduction in corporate income tax. Very two-faced given France’s support for the OECD’s efforts against such national competition for jobs and France’s calls to the EU to clamp down on The Netherlands offering similar deals. C’est la vie…

The UK issued a Joint statement from the Chancellor of the Exchequer, George Osborne, and leaders of international investment banks released on 7 July 2016 to attempt to calm the markets that some operations would remain in London. See below:

Britain’s decision to leave the EU clearly presents economic challenges which we are determined to work together to meet.

We will also work together to identify the new opportunities that may now become available so that Britain remains one of the most attractive places in the world to do business.

One of Britain’s key economic strengths is that it is a world leading financial [center].

It has one of the most stable legal systems in the world, a brilliant workforce and deep, liquid capital markets unmatched anywhere else in Europe, all of which are underpinned by world class regulators.

In recent years it has established itself as a global hub for renminbi, rupee, Islamic finance and green finance, as well as leading in new markets such as FinTech.

Today we met and agreed that we would work together to build on all this with a common aim to help London retain its position as the leading international financial [center].

William Byrnes

William H. Byrnes has achieved authoritative prominence with more than 20 books, treatise chapters and book supplements, 1,000 media articles, and the monthly subscriber Tax Facts Intelligence. Titles include: Lexis® Guide to FATCA Compliance, Foreign Tax and Trade Briefs, Practical Guide to U.S. Transfer Pricing, and Money Laundering, Asset Forfeiture; Recovery, and Compliance (a Global Guide). He is a principal author of the Tax Facts series. He was a Senior Manager, then Associate Director of international tax for Coopers and Lybrand, and practiced in Southern Africa, Western Europe, South East Asia, the Indian sub-continent, and the Caribbean. He has been commissioned by a number of governments on tax policy. Obtained the title of tenured law professor in 2005 at St. Thomas in Miami, and in 2008 the level of Associate Dean at Thomas Jefferson. William Byrnes pioneered online legal education in 1995, thereafter creating the first online LL.M. offered by an ABA accredited law school (International Taxation and Financial Services graduate program).