Spain seeks to lure London financial firms post-Brexit

spain financial uk post brexit
Spain said Tuesday it has set up a commission charged with drawing up incentives to attract London-based financial firms looking to relocate after Britain’s vote to leave the European Union.

The goal is to draw banks and other financial firms based in the City of London seeking a new home should Britain-based firms lose their right to sell financial services across Europe when the country quits the bloc, Economy Minister Luis de Guindos said.

“I think there won’t be a stampede but there will be relocations. Many financial firms based in London know that the risk of losing the financial passport is very high and they are making their plans,” de Guindos told a meeting with the foreign press.

The Spanish capital offers solid transport infrastructure, good quality of life, abundant office space, a low corporate tax rate of 25 percent and a competitive income tax rate for foreigners, he added.

“Madrid has good chances,” de Guindos said.

But the minister said Spain needs to boost “the means, availability and efficiency” of stock market regulator CNMV to attract City of London financial firms.

To do this the government has put together a task force comprising members of the Bank of Spain, CNMV and the economy ministry, he added.

Some 5,500 financial firms based in Britain use their right to sell financial services across the EU, making London a global financial hub.

Rivalry among leading European cities to attract businesses from London is intensifying since Britons voted in June in a referendum to leave the EU.

French officials have promoted Paris as a financial capital for Europe that could take over from London while Ireland’s foreign investment agency has written to businesses with offers to help them relocate to Dublin.

Amsterdam, Frankfurt and Berlin have also made overtures. To be competitive with these cities Madrid needs a sound regulatory framework, said Carlos Fernandez, a market analyst at XTB Broker.

“The rules for financial operations, customers, liquidity, all those aspects need to be clear,” he told AFP.

So far hedge funds and large investment funds have been absent from the Spanish market in part because of the lack of clarity, he added.

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