Australia Begins Talks on Islamic Finance as Industry Nears $1 Trillion
Australia’s Assistant Treasurer Nick Sherry said he is leading a trade delegation to the Middle East as the South-Pacific nation seeks to attract Islamic finance investment.
Sherry will hold four days of talks with officials, regulators and bankers in the United Arab Emirates, Qatar and Bahrain, according to an e-mailed statement today.
“My message is that in Australia we have what the wholesale Islamic finance market is calling out for,” Sherry said in the statement. “I will be focused very heavily on high- level talks on Australia’s tax treatment, regulation, promotion and export of Islamic finance, banking and insurance.”
The Islamic finance industry’s assets will keep expanding globally and may grow to at least $5 trillion from its current $950 billion, Moody’s Investors Service said this month. An Australian government report last year found that removing regulatory barriers to the development of Islamic finance products would provide the nation with better access to a “major source of offshore capital.”
Interest payments are banned under Islam’s Shariah law, which instead promotes profit-sharing agreements or structures that resemble rentals. Such deals are typically backed by physical assets, including natural resources like Australia’s.
Zaid Ibrahim & Co., Malaysia’s largest law firm, said in December that it would open overseas offices in Sydney and Melbourne due to increased demand for Islamic finance advisory services.
Westpac Banking Corp. plans to offer a Shariah-compliant commodity-trading service targeting Islamic institutions, the Sydney Morning Herald reported in February.
To contact the reporter on this story: Sarah McDonald in Sydney at firstname.lastname@example.org.