Luxembourg Government announces a series of supportive measures for Islamic finance in Luxembourg

1ec7c846dd45d2beAt the Islamic finance conference held in Luxembourg on 5 and 6 May, Fernand Grulms, CEO of Luxembourg for Finance, passed on four messages from the Government. Speaking to a maximum capacity audience that included Islamic scholars and Islamic finance experts from Europe, the Middle East and Asia, Mr Grulms identified Islamic finance as a concept that is not limited to the Arab world but which has values in common with the socially responsible investment principles that are gaining popularity in western countries. In the “dense fog” that surrounds the immediate future of the financial sector, ethical and moral standards for investing “will inspire our actions of today and tomorrow”.Mr Grulms passed on four messages from the Minister of the Treasury and Budget, Luc Frieden:

The Luxembourg Government is convinced of the interesting development opportunities presented by Islamic finance. For this reason, in April 2008, Minister Frieden set up a working group bringing together the main interested parties in Islamic finance. The task of this working group is to look at potential obstacles hindering the development of Islamic finance, and ways that Islamic finance can be further developed, in Luxembourg.

The Government has asked the tax authorities to look into the characteristics of Islamic finance deals and come up with proposals to ensure tax neutrality of these transactions compared to traditional banking and financial transactions.

The Government is also examining to what extent Islamic financial products, such as Sukuk, could be used for funding purposes of the Government or entities belonging to the Government.

The Government supports the application by the Luxembourg Central Bank to become the first “non regional” associate member of the Islamic Financial Services Board, the international regulator of Islamic financial markets.

Source: abbl


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