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Islamic Finance Opportunities in Ireland
September 2012
Islamic Finance Opportunities in Ireland
• Equivalent tax treatment of Islamic and Conventional Financial Transactions.
• Irish tax code ensures that a Sukuk return is treated as interest for Irish tax purposes.
• Amanie Advisors, a leading Shari’ah advisory firm specialising in Islamic Finance solutions, has established an office in Ireland.
• 14 promoters from the Middle East and North Africa have Islamic Funds or schemes domiciled or serviced in Ireland.
• A number of large fund promoters have set up Islamic Funds in Ireland. These include: Blackrock, BNP Paribas, Deutsche Bank and Russell.
• Listing services on the Irish Stock Exchange (ISE).
Why Ireland For Islamic Finance: Funds
Fund Administration and the Distribution of UCITS Funds
Ireland is the world’s leading centre for the administration of funds.
• 40% of global hedge fund assets are serviced in Ireland.
• Over USD $2.5 trillion in investor assets from 167 countries are serviced by Irish service providers.
• €1Billion AUM in Islamic Funds are serviced in Ireland (Lipper 2012).
• Ireland has attracted some 20% of Shari’ah compliant funds domiciled outside of the Middle East.
• Over 350 fund promoters from 50 countries have chosen Ireland as the location to establish and service their investment funds.
“This wealth of experience
has led to the attraction of
CIMB Principal Islamic Asset
Management to Ireland.
Ireland also hosts many other
Shari’ah compliant asset
management funds”.
UCITS FundsCIMB – Principal Islamic Asset Management• The newly established CIMB-Principal Islamic Asset Management (Ireland) Public Limited
Company is the first Malaysian-based international Islamic funds platform domiciled in Dublin. It will act as an investment manager of a Dublin-based Undertakings for Collective Investment in Transferable Securities (UCITS) for Islamic funds.
• Under the newly-launched platform, CIMB-Principal Islamic is registering three new UCITS-compliant equity funds:(1) the Islamic Global Emerging Markets Fund; (2) the Islamic Asia-Pacific ex-Japan Fund; and (3) the Islamic ASEAN Equity Fund.
• With this establishment, CIMB hopes to realise the Malaysian Islamic International Financial Centre’s aspiration for Malaysia to become an international hub for Islamic finance. This initiative will encourage large international funds to appoint Malaysian Islamic asset managers.
Malaysian based Shari’ah funds in Ireland
Aircraft Leasing Companies in
Ireland
Why Ireland For Islamic Finance: Aviation
Aviation Finance: Sukuk Ijarah
Ireland is the location of choice for many of the top Global Aircraft Lessors.
• Over 50% of the world’s commercial aircraft fleet is managed from Ireland ($83 Billion in assets).
• 12.5% corporate tax rate means significant planning opportunities.
• 8 year write off of capital spend for tax purposes compared with a typical 20 -25 year economic life.
• Network of double taxation treaties delivering a favourable withholding tax result for aircraft leasing lessors and their clients.
ACGAerCapAerCoAergo CapitalAerDragonAerVentureAirbus Financial ServicesAircastleAirplanes GroupAirspeedAldusAmentum Capital LimitedAlpstream AviationApollo Aviation GroupAvolonAWASBBAMBAE SystemsBank of America LeasingBjets
ICBC LeasingILFCInvestecKG Aircraft LeasingKorean AirKV AviationLease Corporation InternationalMacquarie AirFinanceMagellan AirMilestoneNEC LeasingNord LBNordic AviationOdyssey AviationORIX AviationRBS Aviation Capital (SMBC)Standard CharteredSumitomoTriton Aviation/ WorldstarVolito Goldman Sachs
Blade Engine SecuritisationBOC AviationBoeing Capital CorporationCDB LeasingCHC HelicoptersCIT AerospaceCMBDVBEADSEngine Lease Finance Corporation
FlyLeasingFuyo General Lease CompanyGAAMGalaxy AviationGECASGreenstoneGK AviationGuggenheimHannover LeasingHong Kong Aviation
Aviation Finance Companies in Ireland
Issuance of Sukuks and Corporate Treasury
Amanie Advisors
• Due to the current low volumes of Sukuk issuance, there is no centre for Sukuk issuance in Europe.
• Amanie Advisors Limited, a Shari’ah consultancy firm, have opened an office in Dublin and commenced trading on the 2nd of July 2012.
• Amanie Advisors Limited are actively engaged with a number of entities to encourage the first issuance of a Sukuk in Ireland as part of their pan - European objectives.
• Amanie have a global footprint and can use their considerable experience to find Shari’ah compliant solutions for the funding needs for Shari’ah complaint Irish and European based companies and projects.
Why Ireland For Islamic Finance: Shari’ah Advisory
Double Taxation Treaty Network
Ireland has a Double Taxation Treaty network with countries that practice Islamic Finance. Countries that are of interest to IDA Ireland in the Islamic Finance space are as follows: • Singapore: Treaty in force.• Bahrain: Treaty in force.• United Arab Emirates: Treaty in force.• Egypt: (signed on 9 April 2012 - not yet in effect)• Qatar: (signed on 21st of June 2012 – not yet in effect)
• Malaysia, Kuwait and Saudi ArabiaIreland has completed the ratification procedures with the above countries to bring double taxation agreements into force. When ratification procedures are also completed by these countries, the agreements will enter into force.
Source: http://www.revenue.ie/en/practitioner/law/tax-treaties.html
Why Ireland? Progress to Date
Government Strategy Document• “Strategy for the International Financial Services Industry in Ireland 2011 -2016” • Published by the Irish Government in 2011.• Commitment to develop Islamic Finance in Ireland.
Education - CIMAChartered Institute of Management Accountants (CIMA) now have a Diploma & Advanced Diploma in Islamic Finance. 25 graduates in the diploma program to date in 2012. Developing a core of qualified professionals in the legal, accountancy, funds and aviation space that have a thorough understanding of Islamic Finance.
Sukuk Market Establishment – Amanie AdvisorsAmanie Advisors Limited are actively engaged with a number of entities including IDA Ireland and CIMA to encourage the first issuance of a Sukuk in Ireland as part of their pan-European objectives.
Why Ireland? Progress to Date
Irish Stock Exchange (ISE)• Islamic Finance team in place to support the listing of Islamic Finance
products.• 4 Shari’ah compliant Funds listed on ISE
International Financial Services Centre• IFSC created an Islamic Finance Task Force to engage stakeholders.
The Revenue Commissioners• Guidance notes issued by the Revenue Commissioners on the tax treatment of
Islamic Financial Transactions (October 2010).• Extensive and growing network of double taxation treaties between Ireland
the GCC and Far East e.g. Malaysia and Singapore.
Why Ireland? Progress to Date
Department of Finance• Islamic Finance in Ireland Information Note issued by the Department of
Finance March 2010.• Section 39 of the Finance Act 2010 & Section 36 of the Finance Act 2012
which created tax equivalence between conventional finance and Islamic Finance.
• Creation of the concept of a “specified financial transaction”.
IDA Ireland• Trade mission by IDA Ireland to the Middle East in January 2009 and
promotional work with Ireland’s funds industry, legal and accountancy firms and the Irish Stock Exchange.
• IDA Ireland along with others are currently identifying suitable companies to issue the first corporate Sukuk in Ireland.
Summary: Why Ireland for Islamic Finance?
• Track record creating the International Financial Services Centre (IFSC).
• Strong Government support in developing the next stage of growth for the IFSC using Islamic Finance as a driver.
• New investment opportunities in Ireland and Europe utilising Islamic Finance – diversification of your portfolio.
• Equality of tax treatment between Conventional and Islamic Financial Transactions.
• Renowned Shari’ah advisory firm using Dublin as its European headquarters.
• Shari’ah compliant funds serviced in the jurisdiction.
• Listing services of the Irish Stock Exchange.
• English speaking, common law jurisdiction.
• Best practice in legal, accounting and regulatory framework.
IDA Ireland – A ‘One Stop Shop’
IDA Ireland can support an interested company to establish a business in Ireland via a range of financial and non-financial mechanisms:
Information & advice on potential locations, recruitment and property solutions in Ireland.
Introductory meetings with key Government and Industry Stakeholders.
Providing access to key existing technology and financial services groups, universities, Multinational Companies and Small & Medium Enterprises.
On-going Project Management support.
Employment Permits and Visas.
Cash grants for employment creation, staff training, technology development and research & development.
Thank You For further information contact:
The International Financial Services DivisionIDA IrelandTel: +353 (0)1 603 4223
Dermot O’ReillyBusiness Development ExecutiveEmail: dermot.o’[email protected]: +35316034203
Micheál SmithDirector – ASEANEmail: [email protected]: 00659815421
www.idaireland.com
