With Article 50 now triggered and the UK’s exit from the European Union looming, big businesses have been announcing plans to move jobs out of London’s Square Mile to other European cities.
Corporate apartment provider TheSqua.re released a report providing extensive insight into which cities are set to benefit the most. This study includes view points from a number of industry experts, as well as newly released liveability scores from the Economist Intelligence Unit (EIU). This reveals that Dublin, Frankfurt, Luxembourg and Paris are mostly likely to benefit from Brexit, should key trading negotiations go against the UK. Previous estimates have said that the UK will lose around 30,000 finance jobs as a result of Brexit, with around £1.6 trillion worth of business expected to move to cities that are remaining in the EU.
“We have been canvassing many of our key banking clients and what’s clear is that in many instances there is a programme of risk mitigation in place, whereby businesses are planning for a number of possible outcomes,” said TheSqua.re CEO Sid Narang, commenting on the findings.
Highlights from the report include:
- Ex-pats in Luxembourg are tax exempt for their first five years of work – and can expect higher average salaries than financiers in other EU cities
- The highest earning ex-pats receive tax breaks for their first eight years in Paris, the city with the biggest bond market in the EU
- While Dublin has natural ties with the UK, there are concerns about regulatory capacity and about the availability of local resources outside of a fund context
- London has the lowest liveability score of all 5 cities.
“Over the next 12 months, banks will be watching the Brexit process, elections across Europe and the ‘Trump effect’ to understand how geo-politics will impact their futures,” added KPMG Director Richard Bernau, who described Brexit as the “biggest change to UK banking and capital markers since the ‘Big Bang’ some 30 years ago.”
While plenty of uncertainty remains around the future of EU finance and about what Brexit itself really means, insights on the ground are proving invaluable when it comes to contingency planning.
“We’ve seen a huge increase in the number of businesses making enquiries for corporate accommodation in Dublin and Paris in recent months,” Narang continues. “It’s clear that there will be some movement – the scale of which is very much dependent on the Brexit negotiations that lay ahead."