It’s a tad ironic, perhaps, that a nation with one of the proportionately largest Roman Catholic populations in the world is turning to Islamic finance for new opportunities. Are Ireland’s ambitions realistic, and what jobs are likely to be created if it succeeds?
Any new jobs are still a way off, but the Irish government has recently made some regulatory and tax changes designed to attract more business from Islamic finance institutions. Understandably, considering the small Muslim population, the focus is initially going to be on wholesale rather than retail financial services.
This will be a challenge, suggests Saftar Sarwar, board member of the Islamic Finance Council in the UK: “In Europe, London has a firm grasp on the wholesale Islamic finance market, due to the proliferation of front office expertise and I think Ireland will struggle to wrestle that away.”
There’s also the fact that while the industry as a whole continues to grow, the wholesale market has struggled to really take off in the current muted deal market, suggests Sarwar.
“Because of the back and middle office expertise already in Ireland, the real opportunity is for it to capitalise on this in an Islamic finance sense,” he adds. “It would be a natural progression to adapt these skills for the Islamic market.”
As well as the fund servicing opportunities, there’s also the chance for professional services companies like accountancy and law firms capitalise. However, there’s still work to be done in terms of skilling up for this market.
“Ireland is now well placed to benefit from the anticipated growth in the Islamic finance market. Accounting for such complex transactions can be a challenge though and what is need is a framework which is readily comparable with conventional finance,” says Enda Faughnan, tax partner at PricewaterhouseCoopers in Ireland.