welcome to the financial centre frankfurt€¦ · firms, 120 startups and 5 of the region’s...

WELCOME TO THE FINANCIAL CENTRE FRANKFURT

FRANKFURT

BREXIT – THE NEW CHALLENGE

MINISTRY OF ECONOMICS, ENERGY,

TRANSPORT AND REGIONAL DEVELOPMENT,

STATE OF HESSEN

I. UK EU-EXIT:

1. SOUND ASSUMPTIONS

MINISTRY OF ECONOMICS, ENERGY, TRANSPORT AND REGIONAL DEVELOPMENT, STATE OF HESSEN PAGE 5

NO EU-UK RELATIONSHIP AGREEMENT

(WTO AND GATS)

Third country access to EU

hard Brexit

worst case

I. UK EU-EXIT:

1. SOUND ASSUMPTIONS

WHAT WILL BE THE MOST PROBABLE FUTURE STATUS FOR THE UK REGARDING THE EU?

EUROPEAN ECONOMIC AREA

(EEA-MODEL)

Continued Single Market Access

less probable

EUROPEAN FREE TRADE ASSOCIATION

(SWISS MODEL)

Individual sector specific agreements

less probable

INDIVIDUAL EU-UK FREE TRADE AGREEMENT

(PARTIAL ACCESS TO EU INTERNAL MARKET)

Limited access to EU Financial Services Market

probable

XXX

XXX

I. UK EU-EXIT:

2. RESTRICTIONS FOR ACCESS TO EU INTERNAL

MARKET PROBABLE

I. UK EU-EXIT:

2. RESTRICTIONS FOR ACCESS TO EU INTERNAL MARKET PROBABLE

Even with EU-UK free trade agreement (FTA) very restricted access to EU Financial Services Market probable

All other EU FTA include only very limited access to Financial Services Internal Market

In case of no agreement the EU third country access rules apply

Financial service providers “hope for the best, prepare for the worst”

Negotiation of new EU-UK FTA has not begun

Transitory rules do not solve problem of uncertainty

Long term of economic and political uncertainty

WTO


XXX

XXX

I. UK EU-EXIT:

3. EXIT RISKS AND PROBLEMATIC ASPECTS


I. UK EU-EXIT:

3. EXIT RISKS AND PROBLEMATIC ASPECTS

CHANGES:

EU Passporting Rights

Euro Clearing

Extra Capital Requirements

Additional and costly regulatory environment UK vs. EU

AFFECTED BUSINESSES:

Investment Banking

Listing

Trading

Lending

Deposit taking

Payments

Regulatory and Risk Management

Legal

4. GENERAL ECONOMIC RISKSI. UK EU-EXIT:


I. UK EU-EXIT:

4. GENERAL ECONOMIC RISKS

Currency volatility of the Pound Sterling increases

High public debt with external creditors of UK government increases risk of rising taxes in UK, especially if devaluation of Pound Sterling continues

Brexit may decrease industrial and commercial basis of UK as companies consider reallocation to EU to benefit from the single European market

5. STRATEGIC REQUIREMENTSI. UK EU-EXIT:


I. UK EU-EXIT:

5. STRATEGIC REQUIREMENTS

Non-EU financial institutions need a new partner – Frankfurt is prepared to become the EU's gateway and leading international financial centre

12 POINTS IN FAVOUR OF FRANKFURT

II. FRANKFURT BEST SUITED:


1. INTERNATIONAL FINANCIAL CENTRE

Every major bank or financial services institution is already present

_ More than 155 foreign banks _ All major German banks

Financial capital market services with Frankfurts securities and derivatives exchanges

Broad range of related expert services (legal, consulting, analyst)


2. PROXIMITY TO REGULATORSII. FRANKFURT BEST SUITED:


2. PROXIMITY TO REGULATORS


Your regulators are also already present:

ECB

ESRB

EIOPA FMSA GLEIFGerman Federal Bank

BaFin

3. EFFICIENT REGULATIONII. FRANKFURT BEST SUITED:

YOU ARE WELCOME!


3. EFFICIENT REGULATION

BaFin offers single point of entry _ Predictable _ Reliable _ Professional

English-speaking contacts _ BaFin ([email protected]) _ Tax authorities (www.gofrankfurttax.com) _ International Chamber of Commerce at

the district court of Frankfurt (starting in 2018)


4. TAXESII. FRANKFURT BEST SUITED:


** The BAK Taxation Index shows the effective tax burden as a percentage of employment costs for a single employee without children and with a disposable income of EUR 100,000.

* BDI – Steuerbelastung Unternehmen / Fakten für die politische Diskussion 2015 / 16


4. TAXES

Overall tax levels are substantially lower than commonly presumed:

Effective tax rates for corporations in 2014 *:

Effective tax burden for highly qualified individuals (BAK Taxation Index**):

BUSINESS TAX

10 – 16 %

FRANCE

38.2 %

FRANCE

47.0 %

GERMANY

30.4 %

GERMANY

40.9 %

LUXEMBOURG

29.6 %

LUXEMBOURG

40.2 %

UNITED KINGDOM

27.9 %

UNITED KINGDOM

48.0 %

TOTAL

25 – 31 %

CORPORATE TAX

15 %

5. LABOUR LAWII. FRANKFURT BEST SUITED:


5. LABOUR LAW


Flexible, fair & effective Increasing flexibility in the near future

Coalition agreement between the governing parties in Germany comprises clear

commitments

_ “In the light of UK’s forthcoming withdrawal from the European Union,

we want to enhance Germany’s attractiveness for financial institutions”

No statutory severance payments, sole exceptions

_ Compulsory and ineffective redundancies

Fixed-term employment contracts possible

_ Maximum of 2 years regarding unjustified fixed-term contracts, justified fixed terms permitted after that period

_ Fixed term contracts end without severance payments _ Risk carriers in financial institutions

with a basic compensation of more than 234.000 € p.a. will in the future no

longer be treated as regular employees with dismissal protection

_ Draft bill has been drawn up by the Federal Ministry of Finance

6. GERMAN ECONOMYII. FRANKFURT BEST SUITED:


6. GERMAN ECONOMY

Stable German economy offers growing business opportunities

Banks will benefit from reliable clients

Political stability

Strong and broad industry base

Top rating from Single Resolution Mechanism

Highly ranked in ease-of-doing-business-index 2018 (# 20 worldwide)

_ Rankings of other continental European countries:

_ France (# 31) _ Netherlands (# 32) _ Luxembourg (# 63)


7. FRANKFURT RHEINMAIN AREA



7. FRANKFURT RHEINMAIN AREA

Highly international workforce + communities: english broadly spokenOne of the largest American communities in Europe

5.6 million inhabitants

High GDP: 216 Billion € + persistant growthNo. 2 in EU regarding the regional GDP per capita

Outstanding infrastructure (One of Europe’s largest airports)

Internet-Hub No. 1 in EU (plus IT-Cluster)

Germany’s leading FinTech Cluster

Frankfurt RheinMain & Neckar excellence:Europe’s Silicon Valley

Top universitiesStartups (360T, “Rhein-Main Startups”)

World market leaders (SAP, Software AG)


8. BEST BUSINESS ENVIRONMENT



8. BEST BUSINESS ENVIRONMENT

Low expenses for companies and employees

Adequate wages Excellent and affordable public schools and kindergartens

More than 10 international schools with internationally

recognized degrees and many multilingual schools within a

radius of 30 minutes: Frankfurt is the city of variety in education!

Health care affordable+ high quality


9. HIGHLY SKILLED AND EDUCATED TALENT




9. HIGHLY SKILLED AND EDUCATED TALENT


_ Today, over 100,000 people in the Frankfurt / Rhine-Main region work in the financial ser vices sector.

_ First-rate research centres such as the _ House of Finance at the Goethe

University Frankfurt, _ the Frankfurt School of Finance &

Manage ment,

_ the Center for Financial Studies

_ and the International Center for Insurance Regu lation

_ provide scientific expertise and offer

top-notch education to highly qualified young talent.

_ Within a 45-minute travel radius, over 26,000 students are currently working towards a degree in economics, and over 16,000 students are engaged in the study of law.

10. RISING FINTECH HUBII. FRANKFURT BEST SUITED:


TechQuartier

_ Innovation Hub serving as focal access point for local and international startups

_ Partnerships with 15 of the most important

financial service providers and consulting firms, 120 startups and 5 of the region’s leading universities

_ Named as Germany’s FinTech Hub through

the national de:hub initiative, along with neighboring Darmstadt as Cybersecurity Hub

Ecosystem

_ Clear focus on FinTech (50 percent of VC investments between 2012 and 2017)

_ B2B as the primary business model of Frankfurt startups. Deeply embedded in the corporate sector.

_ Rapidly growing ecosystem with inten-sifying collaboration between universities, corporates and policy leaders. Common goal of making Frankfurt a startup hot spot backed by a €20m, 5-year masterplan an-nounced in February 2018


10. RISING FINTECH HUB

11. HIGH QUALITY OF LIFEII. FRANKFURT BEST SUITED:

Pristine recreational areas:

_ Taunus Forest _ Rheingau Rhine Valley Vineyards _ Accessible nature reserves

and parks

Excellent work-life-balance

World heritage sites

Short distances and commuting times

Broad and highly efficient public transport network

World’s largest company run (J.P. Morgan Corporate Challenge)

Fascinating museums and art galleries

Vivid cultural scene

Price-winning opera “Oper Frankfurt” (2014 & 2015)

Largest English theatre on the continent

Vibrant nightlife

Multicultural and award-winning restaurant scene


11. HIGH QUALITY OF LIFE


12. FRANKFURT PLACE TO GOII. FRANKFURT BEST SUITED:

24 %Ireland

29 %Spain

30 %France

44 %Germany

26 %Netherlands


12. FRANKFURT PLACE TO GO


44 % of professionals and executives prefer Frankfurt as place of work (StepStone Study 07 / 2016)

Frankfurt best choice with regard to economic and political stability, high qualified employees and taxes (BCG-Study 06 / 2016)

Frankfurt ranks first in “German Cities of the Future” (fDi, German Cities of the Future, 2016)

The “Economist” ranked Frankfurt as the twelfth most liveable city in Europe (Paris #19, Dublin #41, London #48) (Economist, Global Liveability Ranking 2018)

In “Mercer’s”cost of living ranking is Frankfurt in 68th place worldwide (Paris #34, Dublin #32, London #19) (Mercer, Quality of Living City, 2018)

Germany is the top destination in case of reallocations regarding Brexit (EY, European Attractiveness Survey / Plan B... for Brexit, 2017)

Frankfurt ranks among the top 10 global financial centres and is the only financial centre in continental Europe among the top 20 (Global Financial Centre Index 2018)

FRANKFURT PLACE TO BE

FRANKFURT PLACE TO BE


International financial centre

Proximity to regulators

Efficient regulation

Moderate taxes

Flexible labour law

Stable German economy

Attractive Frankfurt RheinMain area

Best business environment

High quality of life

Frankfurt the place to go

Rising FinTech Hub

Highly skilled and educated talent

WELCOME TO FRANKFURT PAGE 40

Ministry of Economics, Energy, Transport and Regional Development,State of Hessen

[email protected]://wirtschaft.hessen.de/

Hessen Trade & Invest GmbH

[email protected]

Page 1: Frankfurt am Main late summer evening © davis — Fotolia.com / Page 4: London scenery at Westminster bridge with Big Ben and blurred red bus, UK © Patryk Kosmider — Fotolia.com / Page 6: Big Ben and Westminster Bridge in London at dusk, UK © Patryk Kosmider — Fotolia.com / Page 8: View of london skyline © Frédéric Prochasson — Fotolia.com / Page 10: Business office building in London, England, UK © alice_photo — Fotolia.com / Page 12: Tower Bridge in London, UK © f11photo — Fotolia.com / Page 14:

Frankfurt am Main © djama — Fotolia.com / Page 16: EZB Skyline Frankfurt © Petrus Bodenstaff — Fotolia.com / Page 18: Frankfurt Eiserner Steg © city-pix — Fotolia.com / Page 20: Westhafen Frankfurt © pure-life-pictures — Fotolia.com / Page 22: Blurred people using a skywalk / staircase © davis — Fotolia.com / Page 24: Cutting of metal. Sparks fly from laser © Wisky — Fotolia.com / Page 26: Frankfurt Skyline © David — Fotolia.com / Page 28: View on the financial district with Main river and park during the sunset in Frankfurt city,

Germany © rh2010 — Fotolia.com / Page 30: © Uni Campus Westend © Uwe Dettmar, Goethe-Universität / Frankfurt School of Finance & Management, Campus Image / Page 32: © FinTech Community Frankfurt GmbH /Page 34: J.P. Morgan Corporate Challenge Frankfurt / Page 36: Mainufer © Tourismus+Congress GmbH Frankfurt am Main, Photo: Holger Ullmann / Page 38: School Children Cheerful Variation Concept © Rawpixel.com — Fotolia.com

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PUBLISHED BY

Ministry of Economics, Energy, Transport and Regional Development, State of Hessen

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PERSON RESPONSIBLE FOR CONTENT PURSUANT TO SECTION 55 OF THE GERMAN BROADCAST SERVICES STATE TREATY (RSTV)

Marco Kreuter

This publication forms part of the Hessen state govern-ment’s public relations activities. Political parties, election campaign workers are not permitted to use it for election campaigning. This applies to elections at national, regional and local level. In particular, the publication must not be distributed at parties’ information stands or campaign events, nor may party-political information and campaign materials be inserted into, printed on, or attached to the publication. Furthermore, the publication must not be

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PRINTING Haus der Medien GmbH I November 2018

welcome to the financial centre frankfurt€¦ · firms, 120 startups and 5 of the region’s...

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