Bermuda to be first Western centre for Islamic finance in favourable tax domicile

By Marina Mello

Bermuda is set to become the first Western centre for Islamic finance in a favourable tax domicile, according to Bermuda executives in an article yesterday by Euromoney.

Executives from the Island have been actively wooing clients in Asia and the Middle East while working on reviewing existing laws to launch a Shariah-compliant platform for investors.

Apex Fund Services group director Peter Hughes told Euromoney: “We are looking at the Shariah side of Bermuda’s legislation to become the first Western centre for Islamic finance.

“We are looking to launch a Shariah platform that will allow us to have Shariah vehicles and products that would enable us to become the first one of its kind. We have made a real push into this niche area.”

Business Bermuda CEO Cheryl Packwood added: “We now have strong links in Bahrain and there is a commonality of wanting to create a niche jurisdiction for Shariah compliancy, that is closer to the US timezone,” she says. “We are also focusing on Kuala Lumpur in Malaysia, as it has an enormous sukuk market. The process for getting this off the ground may be slow but we have the Bermuda Monetary Authority and the Bermuda Stock Exchange behind us.”

Last November, Ms Packwood and Mr Hughes led a group at the 18th World Islamic Banking Conference in Bahrain to show the Island was open for their business and could handle Shariah-compliant financial structures.

Shariah law is the moral and religious code of Islam, within which financial industries in those markets must operate. It’s an emerging market that is being pursued by offshore jurisdictions all over the world.

Global Islamic banking assets with commercial banks will hit $1.1 trillion in 2012, a jump of 33 percent from their 2010 level of $826 billion, according to Ernst & Young’s inaugural World Islamic Banking Competitiveness Report 2011.

source : royal