Islamic Finance Services at Deloitte

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Islamic Finance Services at Deloitte

How can Deloitte help you?

Why Deloitte?

First, what sets Deloitte apart is the fact that we are the only big four firm that offers the market a holistic proposition by having a Sharia'a scholar within our network enabling us to provide Sharia'a compliant solutions to our clients. Deloitte has enabled this by appointing Mufti Hassaan Kaleem, a pupil of the industry renowned Sheikh Mohammed Taqi Usmani.

Apart from this, Deloitte Luxembourg participates in various working groups of the Luxembourg Fund Association (ALFI). ALFI created a new working group in the Middle East to represent the Luxembourg fund industry in the region. Mr. Aly El Azhary (audit partner of Deloitte Saudi Arabia) is a member of that working group and is participating actively as a local bridgehead to reinforce the relations with the Middle Eastern market.

Secondly, our global Islamic finance practice comprises a dedicated group of experienced Islamic finance professionals, backed by a global network of industry specialists drawn from our consulting, tax and financial advisory services dedicated to the seamless delivery of services.

Additionally,Deloitte has established an Islamic Finance Knowledge Center in Bahrain. Thanks to its research function (survey, publication and library compiling) and strong connections established with a wide range of Islamic finance markets (forum, seminar, webcast, workshop), our practitioners associated to this centre of excellence may provide technical support and practical expertise relating to the Islamic finance industry. This ensures that we are acutely aware of the challenges that Islamic finance actors are facing around the world and are able to respond to their needs effectively.

With services encompassing financial advisory on sukuk issuances and financing transactions, tax and accounting advice on cross-border transactions, as well as Islamic finance conversions and compliance through our consulting practice, Deloitte’s international capabilities provide a one-stop solution for clients seeking to undertake Islamic finance transactions by offering specialised solutions tailored to the needs of our clients.

Islamic finance at Deloitte - No interest... but plenty of attention

Audit services

Deloitte’s audit approach is partner-led, especially in the planning phase when significant audit strategy decisions are made. The extent of our industry experience allows us to design and implement an effective audit plan. This enables us to accomplish our audit objectives efficiently while maximising our contribution to the clients’ business through our audit, Islamic finance and asset management teams.

It is our aim to continue to enhance the value of our audit services. As a result we have developed and integrated numerous innovative tools and techniques to perform value-added audits. We have developed accounting policies, accounting guidance and audit procedures for Islamic finance investment products.

Consulting and financial advisory

Risk Advisory

Identifying opportunities, avoiding risks, dealing with threats and developing a strong core business are all important in achieving business objectives along with considering Sharia'a compliance. Deloitte’s risk professionals help clients to identify, analyze and control risk. Global leader enterprise risk management, our service offering covers the areas of strategy, operations, reporting and compliance across an entire business including people, process, technology and data.

 

Investment management services

This department includes, among others, the following relevant services lines to Sharia'a investment funds:

  • Fund engineering & fund registration
    This service line is involved in the launch of new investment products, and is to be considered as  anefficient guide for new comers to the Luxembourg jurisdiction. We assist with the prospectus definition and team up as a partner throughout the fund set-up phase. Thanks to our integrated fund registration service, we are able to assist the registration of UCITS as well as non-UCITS funds in foreign jurisdictions from the beginning of the procedure until the maintenance of the fund registration in target markets. This service has been of great support to fund promoters distributing their products on a pan-European basis.
  • Investment compliance, business compliance & regulatory issues
    Through cold testing processes of investment objectives and the investment universe of the funds, we can assist Sharia'a boards and fund directors in their ongoing monitoring of the investment portfolio. We may also provide resources to assist with the processing of the income purification calculations.
  • Fund service providers selection (custodian and fund administrator)
    This service line evaluates the custody and fund administration service providers from both a qualitative and quantitative perspective. We provide you with analysis and evaluation through scoring grids and analysis of pricing proposals to provide the fund sponsors with the necessary aids and market insights to identify appropriate service providers.

Corporate services

Our in-house corporate-legal experts, familiar with the Islamic finance principles, provide strategic solutions regarding the implementation of investment vehicles in Luxembourg, including financial instrument issuance, drafting of prospectus, co-ordination and representation in front of the Luxembourg financial supervisory authority.

Accounting services

Deloitte offers accounting consultancy and compliance services to Luxembourg Islamic finance investment vehicles, from initial thoughts over implementation of Sharia'a compliant structures to the day-to-day management of these entities. This includes mainly:

  • Accounting assistance when setting up the structure
  • Accounting compliance and reporting for regulated and unregulated vehicles under Lux GAAP and IFRS (in accordance with CSSF and financial sector regulations for regulated vehicles if applicable)
  • Consolidation under Lux GAAP and IFRS
  • Specific assistance such as providing:
    • Financial analysis at group level for management or Sharia'a board purposes
    • Highly skilled Luxembourg chartered accountants to help temporarily with clients’ organisation
    • Training sessions and hotlines on Lux GAAP and IFRS matters

Such accounting services are monitored by one key contact person who provides the entity with a cross practice support, follow up of its day-to-day operations and ensures compliance with Luxembourg requirements at all stages of its lifecycle.

Tax Services

Within the Deloitte Luxembourg international tax department, we have dedicated tax specialists who are also familiar with the principles of Islamic finance and services required. The Luxembourg international tax department therefore is very well placed to provide tax advice on Islamic finance products and Sharia'a investment funds.

Our tax specialists, familiar with the principles of Islamic finance can provide:

  • Tax structuring advice for Islamic finance products and Sharia'a investment funds, both from a direct tax and indirect tax viewpoint
  • Assistance regarding tax due diligence work
  • Ongoing tax assistance regarding tax compliance (direct tax compliance and VAT)
  • Assistance regarding the review or drafting of the tax sections of legal documents such as private placement memoranda or prospectuses

Our unique combination of knowledge in Islamic finance and the international tax area ensures that the Sharia'a compliant products or vehicles set up through Luxembourg will be structured in the most tax efficient way, whether these structures are unregulated (Soparfi) or regulated vehicles (such as UCITS, specialised investment funds, SICAR and securitisation vehicles).

Sharia'a compliance review

Deloitte Sharia'a review team will help you to maintain ongoing Sharia'a compliance and increase market credibility. Our solution is to design, implement and test the Sharia’a review controls and substantive testing to assess the compliance with Sharia’a principles.

Our work program will include:

  • Examining the operational framework of the fund from a Sharia'a perspective
  • Evaluating the management controls and risk management
  • Testing the controls used for screening process
  • Reviewing the purification process
  • Reviewing the Zakat calculation

Our deliverables will be the assurance that the fund manager is complying with the Sharia'a standards, highlighting the risks.

This flyer is also available in German.

Sharia'a compliance review

Contact

Marco Lichtfous

Marco Lichtfous

Partner | Capital Markets/Financial Risk

Marco is a partner within the advisory and consulting department and has over 20 years of professional experience. He is specialised in risk management, turnaround management, M&A, corporate finance, ... More