The Cayman Islands could stand to benefit from the rapid growth of growth forecast in Islamic finance in the coming years, according to Anthony Oakes, who leads the banking and finance team at Ogier’s BVI and Cayman-focused Hong Kong office.
He said that the combination of increasing appetite for Islamic finance products, new variations on existing products and an increased interest in the role of offshore centres in Islamic finance point to a developing area with huge potential.
Research by the International Shar'iah Research Academy for Islamic Finance estimated the total value of global Islamic finance at around $900 billion in 2009 – that figure had reached $2.4 trillion by 2015, with forecasts reaching $3.4 trillion in 2018 and $5 trillion by 2020.
Anthony said: "The traditional market in the Middle East remains strong, but we are also seeing growth in Asia, Malaysia and Indonesia.
"At the same time, the industry is developing new products – we are seeing more Shariah compliant retail and corporate banking and trade finance products coming online.
"A further interesting development is happening in non-Islamic countries, where access to Islamic capital markets is being sought – a good example is the sukuks issued by the Hong Kong government in 2014 and 2015.
"Offshore centres, and particularly Cayman, are well-positioned to take advantage of this growing area because of their flexibility and efficiency, and because their underlying legal systems are based on the trusted, well-established and familiar English legal framework."
The Cayman Islands recently published draft legislation to introduce the limited liability partnership (LLP) as a new partnership vehicle in the Cayman Islands. The new LLP is expected to be popular with professional services firms in the Cayman Islands as well as the private equity industry and is a welcome addition to the existing range of vehicles available in the Cayman Islands.
Ogier, Cayman Islands, Anthony Oakes, Islamic finance