There is the arrival of spring in Paris, France. There are signs of economic improvement. The city is expanding. Still there are signs of wealth moving out of the city. Residents have plans either to move to Switzerland or to Dubai.
London too is experiencing migration of non-doms and banking exiles. In Paris, the taxes are rising. Once upon a time, there was run for Paris — it was a banking hub of choice. French financiers drawing seven-figure salaries doubled in four years. Today, the hiring plans have been called off.
There is a fight for global talent. Paris benefited on account of Brexit. J P Morgan expanded its manpower four-fold. However, these days private equity and hedge funds rush to Dubai and near-by Abu-Dhabi which are tax free. Madrid and Milan fare better but still cannot hold candle to the UAE. The UAE attracted 6700 millionaires in 2024 (Henley and Purners).
In the UAE, there was property binge in 2008. There were efforts at creating a financial center. Oil wealth and expanding tourism were diversified. Revolut’s CEO spends more time in the UAE. In Europe, there are regulatory and hiring obstacles. Young consultants prefer Abu Dhabi.
In France, high-income households (10 per cent) contribute 75 per cent of IT returns. In the UK, it is more than 60 per cent. The tax base is narrow and could be eroded further. There could be defensive responses like exit taxes.
The shine could come off the UAE if regional geopolitical tensions worsen. Paris has to reinvent itself beyond tourism, luxury and politically connected corporations. Europe is an option. France could be a financial hub if it plays its economic cards well. Paris must be made more liveable. Youngsters who want to start a family could find it attractive — child care and tax credits. Office property could be converted into residential property. There should be investment in infrastructure. Engineering manpower must be made available. There should be investment in education. Till then, the migration continues.
Leave a Reply