Islamic finance and the Luxembourg financial centre
The legal and regulatory framework governing the Luxembourg financial sector is designed to be able to host actors and products from diverse traditions and cultures.
There is therefore no need to introduce specific provisions to allow Islamic finance to flourish in Luxembourg's financial centre. At the most, the application of certain tax texts to the concepts used by Sharia-compliant transactions needed to be explained, which was done in a quick and practical manner.
Luxembourg authorities will closely follow the growth of Islamic finance activities in the centre, so as to be able to respond swiftly to clarification needs that could arise. To this end, a working group has been created within the Ministry of Finance, which examines, in general, Islamic finance related issues and requirements. This working group is composed of representatives of the Ministry of Finance, the Ministry of Foreign Affairs, the CSSF, the Luxembourg Bankers' Association (ABBL) and the Association of the Luxembourg Fund Industry (ALFI).
Luxembourg authorities are convinced that sustainable growth of Islamic finance in Luxembourg can only be achieved by fully complying with the values expressed in the Sharia. It is therefore not for the supervisory authority to express an opinion in this respect. The supervisory authority was thus able to assist the development, within the Luxembourg legal framework, of Sharia-compliant undertakings for collective investment and the issue of "sukuk" debt securities from Luxembourg.