Islamic Financing in the Republic of Ireland

Those seeking to open a company in the EU should definitely train their sights on the Irish Republic. Being a member of the EU and OECD, it attracts foreign investors due to small or zero taxation of profits resulting from using properly structured SPVs. Irish tax payers can also benefit from double tax agreements, 74 of which have already been signed by the country.

If you’re interested in carrying out financial activities in the EU in accordance with Sharia law, you should keep in mind that innovative products, such as gold-backed sukuk, have demonstrated their extraordinary adaptability in tumultuous times. Thanks to them, Turkey has been able to attract investments in the wholesale & retail sectors & increase its gold reserves to nearly 30 tons.

Brexit Implications

Though Great Britain officially withdrew from the EU, EU financial regulations will continue to apply in Great Britain during the transition period. Once this transition period is over, British financial establishments may lose their ability to furnish their services in the EU until a new legal framework for cooperation between the EU & Great Britain is put in place & approved.

All these developments have put Ireland at the forefront of European business, making it extremely attractive to debt issuers. 

If you are interested in Islamic finance regulation in Great Britain, you should definitely spend some time reading the information below.

Green Finance

Recent years have seen $300 billion worth of green bonds being launched in the Irish Republic. Of those, the value of green Islamic bonds amounted to nearly $8 billion. Euronext Green Bonds, an innovative online platform launched by the Irish stock exchange, has already been joined by nearly 60 issuers.

Regulation of Islamic Financing in the Republic of Ireland

Ireland owes its growing attractiveness to investors to the recent amendments to its taxation legislation. Due to the ‘specific financial deals” concept introduced into Irish legislation, Islamic financial instruments, such as Takaful, Ijara & products of Islamic investment funds, have been granted equivalence.

This has led to sukuk-related interest payments in the Irish Republic being exempt from taxation & the first batch of sukuk bonds being issued in the Republic of Ireland.

Later on, Irish financial regulators came up with guidelines on taxation of deals involving Islamic financial instruments. The guidelines cleared away legal confusion regarding regulation of Islamic financial transactions in the Republic of Ireland & established a proper regulatory framework.

Listing in Ireland

There are now 2 markets in the Irish Republic where securities can be listed, namely:

• Euronext;
• GEM.