IRELAND’S BURGEONING Islamic finance industry got a boost yesterday when financial behemoth Goldman Sachs was approved by the Central Bank to list a $2 billion “sukuk” bond on the Irish Stock Exchange, the Global Sukuk Company.
The bond, incorporated in the Cayman Islands, is compliant with Sharia, Islamic religious law, and will act as a trustee and seller of “murabaha” trust certificates. Murabaha is a contract whereby the seller must disclose its profit to the buyer.
Last year, changes were introduced to tax legislation to make Ireland more attractive to the Islamic finance sector, which is growing at a rate of about 15-20 per cent a year. Moreover, Ireland has double tax treaties in place with 62 countries including Turkey, the UAE, Bahrain and Kuwait. There has been limited activity in the sector to date.
Tom Woods, head of Islamic finance with KPMG in Dublin, welcomed the move, but said in terms of growing the business in Ireland, it would be preferable that the issuing company would also be set up as an Irish resident company.
