New Irish finance bill to facilitate sukuk transactions

Following the introduction of tax neutrality laws to facilitate the issuance of sukuk by the UK, France and Luxembourg in recent weeks, Ireland is the latest European Union (EU) country to join the club. Under the Finance Bill 2010, which came into effect in January 2010, the Irish Ministry of Finance has introduced significant amendments to facilitate Islamic finance transactions in Ireland, especially the origination and issuance of sukuk.

Ireland, like other EU countries, is warming to Islamic finance and Dublin has emerged as an Islamic investment fund domicile rival to the Channel Islands and Luxembourg. Indeed several Shariah-compliant funds are registered there including the Oasis Crescent Global Equity Fund and the recently-launched CIMB Global Islamic Equity Fund. The Irish government is also keen to promote the island as a more attractive location for international fund raising operations in addition to providing Irish companies with an alternative source of funding.

International market players in the Islamic finance space such as global auditing and advisory firm PriceWaterhouseCoopers (PWC) have welcomed the Irish legal initiative, stressing that the Finance Bill 2010 proposes new legislation that will facilitate sukuk transactions by extending to this form of financing the relieving (tax neutrality) provisions which currently apply to equivalent conventional financing (...)