Bermuda as a centre for Islamic Finance?

By added on 08/10/2010

Business Bermuda CEO Cheryl Packwood along with representatives from its member companies PriceWaterhouseCoopers, Apex Fund Services and Conyers Dill & Pearman attended the fourth Annual Fund Forum Middle East Conference in Bahrain this week, Kansas reports.

During the conference, Ms. Packwood participated as the Chair of a round table on offshore financial centres, making the case for Bermuda’s leadership on global regulation and tax issues as well as the strength of its underlying economy, which is particularly attractive for international business and Islamic finance.

On Tuesday, Fawaz Elmalki, Associate with Conyers Dill & Pearman delivered a presentation entitled, “Developments In Offshore Financial Centres For Investment Funds With Bermuda As A Case Study,” which enabled the jurisdiction to highlight its double taxation agreement with Bahrain and its leadership in the development of Islamic finance products, particularly in the area of global infrastructure funds and Sukuks.

Commenting on Mr. Elmalki’s presentation and the marketing efforts of Bermuda in the region, Ms. Packwood said, “It is clear, based on our discussions in the market and the reception to Fawaz’s presentation, that Bermuda is head and shoulders above other international financial centers in terms of understanding the market and providing products and services that meet the needs of Islamic investors. We have a well-regulated, economically secure and safe environment and strong relationship between the Government of Bermuda and Kingdom of Bahrain. This provides us with incredible momentum and a real opportunity to develop this market.”

Ms. Packwood and others are conducting additional marketing meetings in the region with leading advisors and government officials in Bahrain, Kuwait, Oman, Dubai and Qatar. Ms. Packwood and others met with Dr. Michael W. Taylor, Adviser to the Governor of the Central Bank. The meeting built on the work of Bermuda’s Ministry of Finance and the double taxation agreement signed between Bermuda and Bahrain in July 2010. During the meeting, Bermuda was positioned as an ideal platform for Shari’ah finance, in particular insurance and reinsurance (retakaful), Islamic bonds (sukuk) and Shari’ah compliant funds.

Ms. Packwood added, “Bermuda is a common law jurisdiction which makes us more able to adapt to facilitate the needs of Shari’ah compliant financial structures. Bermuda's tax neutrality is a competitive advantage to attract such business over onshore jurisdictions. We are hopeful that we can build on this work and continue the dialogue with Dr. Taylor and others that will lead to additional business for Bermuda in the Gulf region.”

More than 300 leading lawyers, accountants, investors and their advisors are in attendance at the conference. H.E. Sheikh Mohammed Bin Essa Khalifa, Chief Executive of the Economic Development Board in Bahrain gave the guest opening address and highlighted the six GCC states with their combined economies having more than US$1 trillion in GDP. He suggested that Bahrain is the gateway to this shared wealth with their GDP up three per cent in 2009 and expected to increase by 4.5 per cent again this year. The GCC is forecasting growth of US$2 trillion in the next decade. Bahrain’s success has been driven by their ability to avoid the temptation of taking on too much risk, according to H.E. Sheikh Mohammed Bin Essa Khalifa. Dr. Philippa Malmgren, President and CEO of Canonbury Group gave the Guest Economic Address and highlighted the condition of the US economy and the risks associated with its debt burden.