Spain seeks to lure London financial firms 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.

Spain seeks to lure London financial firms post-Brexit
Can Madrid lure firms after Brexit?

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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Brits in Europe won right to vote for life in UK but questions remain

After years of campaigns and promises British citizens living abroad finally won the lifelong right to vote in UK general elections in April 2022. But campaigners say more needs to be done to allow all those Britons abroad to be able cast their votes easily.

Brits in Europe won right to vote for life in UK but questions remain

What’s in the law?

The Elections Act 2022 introduced several changes to the current legislation on electoral participation. Among these, it removed the rule by which British citizens lose their voting rights in the UK if they have lived abroad for more than 15 years

The new rules also abolished the requirement to have been previously registered in the UK electoral roll to become an overseas voter. In addition, the registration in the electoral roll will now last up to three years instead of only one year.

It is estimated that these changes could increase the number of overseas voter registrations by some 3 million. But the way new measures will be applied in practice is still to be defined.

READ ALSO: ‘Mixed feelings’ – British citizens in Europe finally get right to vote for life

Defining the practicalities

Under the new law, Britons living abroad will have to register to vote in the last place they were registered in the UK. This means that people who have never lived in the UK will be ineligible to vote, regardless of how long they have been overseas, while those who left when they were children will be able to use a parent or guardian’s address.

But given that the UK does not require residents to register with local councils, how to prove previous UK residence? “Typical documents accepted as a proof of residence are Council tax or utilities bills, but not everyone will have them or will have kept them in an international move,” says Fiona Godfrey, co-founder of the British in Europe coalition.

Ballot papers are pictured in stacks in a count centre as part of the 2019 UK general election. (Photo by ANDY BUCHANAN / AFP)

Other questions concern how people will effectively cast their ballot. UK citizens overseas will be able to vote by post or by proxy or in person at their polling station if they are in the UK at the time of the election. However, few people are likely to travel to the UK for an election and in the past there have problems and delays with postal voting.

The Electoral Commission has recommended that overseas electors appoint a proxy to vote on their behalf. But who could that be for people who have been away from their constituency for a long time?

New secondary legislation will have to answer these questions, defining how to be included in the electoral roll and how to exercise the voting right in practice.

According to British in Europe, the government should present draft legislation in the first half of the year so that the parliament can adopt it before summer and registrations of overseas voters can start in the autumn.

British in Europe survey

British in Europe are currently running a survey to understand the difficulties UK citizens abroad may face in the registration and voting process, as well as their intention to participate in elections.

The survey asks for instance which documents people can access to prove their previous residence in the UK, what problems they had voting in the past, and if and how they plan to vote in the future.

“We need to get an up-to-date picture of British citizens living around the world and have information to make recommendations to the government, as it prepares secondary legislation,” Godfrey said. “If millions of people will exercise their voting rights, there will be consequences for council registration offices, post office and authorities that will manage the process, among other things” she argued.

The right to vote concerns only UK parliamentary elections and national referendums, not elections in the devolved administrations of Scotland, Wales and Northern Ireland, or at local level.

The survey is open to UK citizens living anywhere in the world and is available at this link.