Liechtenstein wants to lure wealthy Muslims to its private banks as it seeks to revive an industry hurt by the loss of the nation’s status as a tax haven.
The principality of 37,000 people nestled between Switzerland and Austria will hold its first Islamic finance conference on Oct. 28 and is seeking to find out what rule changes are needed to develop Shariah-compliant products, said Urs Philipp Roth-Cuony, chairman of the country’s Financial Market Authority.
The nation’s lenders managed 120 billion Swiss francs ($126 billion) in 2013, down from 171 billion francs in 2007, according to Liechtenstein Bankers Association data.
Liechtenstein’s decision last year to enter exchange agreements with five European countries and sign a treaty with the U.S. were decisive steps in moving away from its tax-haven past, Simon Tribelhorn, director of the bankers association, said in June.
It follows other nations from beyond Islamic finance’s traditional strongholds, such as the U.K., South Africa and Luxembourg, in seeking to tap an industry whose assets are predicted by Bank Negara Malaysia to more than triple to $6.5 trillion by 2020.
The number of individuals in the Middle East with $30 million or more in wealth excluding private homes will increase by 35 percent to 9,498 through 2023, according to a March report by Knight Frank LLP.