Chapter 17LuxembourgThe European Hub for Cross-Border Finance, Sukuk Issuances, and Islamic Funds
Head, Dubai Representative Office, Arendt & Medernach
Partner, Arendt & Medernach
As a leading and highly diversified international financial centre, Luxembourg has always been open to the concept of Islamic finance. Due to the various advantages offered by the Luxembourg financial market, the Islamic finance industry discovered Luxembourg at a very early stage, and the country is among the first movers in that respect.
In 1978, the Islamic Banking System (later renamed Islamic Finance House Universal Holdings) was incorporated in Luxembourg as the first Islamic financial institution in a Western country. It was established with the purpose of servicing individuals of high net worth in a Shari'ah-compliant way.
In 1983, the Bahraini Solidarity Group established in Luxembourg the first Shari'ah-compliant insurance company in Europe. Following Solidarity's footpath in Luxembourg, the FWU Group then became a recognised provider of takaful products in the Middle East and engineered many of its Islamic finance products through its Luxembourg base and regulated subsidiaries: a life insurance company, an asset management company, and a mutual fund company. Other renowned Islamic finance institutions followed in 1990 with the incorporation of Faisal Finance (Luxembourg) and Faisal Holdings (Luxembourg).
In 2005, the Luxembourg stock exchange became the first ...
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