Luxembourg recently confirmed that it will dispatch two ministers to Britain to drum up business for the Grand Duchy.
Economy Minister Etienne Schneider and Finance Minister Pierre Gramegna will visit London and Bristol between July 25 and 27 to promote Luxembourg as a “good alternative” to the UK, post-Brexit.
Schneider stressed the “political stability of Luxembourg, its pro-European character, its accessible administration and the international outlook of its economy”.
British Prime Minister David Cameron once gleefully offered to “roll out the red carpet” for French executives wanting to escape staggering wealth taxes.
Now, with London’s red carpet fraying after the Brexit vote to leave the European Union, Paris is stepping in to welcome bankers and investors who may want to flee the uncertainty hanging over the City’s role as a global finance hub.
“In this new environment which is taking shape, we want France to be attractive,” Prime Minister Manuel Valls said Wednesday as he unveiled measures to boost the allure of Paris.
Britain’s vote to leave the European Union “created shockwaves for all European citizens but also… many businesses settled in the United Kingdom,” 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.
Paris also plans to put in place a system to help companies and their foreign workers settle in France — where red tape can traditionally be a nightmare to navigate.
However Luxembourg and France are not the only European capitals clamouring to take London’s spot as a major finance centre and gateway to the EU market.
Stephane Garelli, an expert in world competitiveness at Switzerland’s IMD business school, said that among the contenders, Dublin appeared best-placed to take over from London, and has been “flooded by requests from UK companies”.
“It is also a financial centre, it speaks English, it is just next door,” he said.
Another attractive country was the Netherlands, although calls there for a similar referendum may put businesses off.
According to ratings agency Standard and Poor’s, a fifth of all global banking activity takes place in London.
The city — which voted to stay in the EU while the rest of the country chose to leave — is the gateway for US and Asian businesses into Europe’s vast single market.
Garelli said that while Britain was likely to negotiate some kind of access to the EU market, this could be a long process and “business will not wait”.