VALLETTA – In a bid to attract business from Middle East firms, the government of Malta has established a national body to help drive the development of Islamic finance, Reuters reported on June 28.

This will couple with further plans for legislation to facilitate the sector as the Mediterranean country aims to position itself as a hub for Islamic finance firms.

“The Malta Islamic Finance Association would help coordinate efforts across national agencies, regulators and other standard setting bodies,” said Silvio Schembri, parliamentary secretary for financial services, digital economy and innovation.

“As a government we will be looking at drafting amendments to our legislation that will permit Islamic financial institutions to benefit from stronger links with EU member states, amongst other opportunities,” he continued.

Recently, Islamic finance started to attract non-Muslim firms and economic sectors in non-Muslim countries. Nowadays, Islamic finance is estimated to total more than $2 trillion of assets globally and is offered across a wide range of markets throughout the 66 countries of the Islamic World in Asia, Africa, and Europe.

Further Step

The system of Islamic finance is unique for prohibiting interest payments and pure monetary speculation.

The new Maltese step isn’t the country’s first decision towards Islamic finance as there have been previous efforts to attract Islamic finance into the island nation; including an Islamic equity index launched by the Malta Stock Exchange in 2016.

Malta’s financial regulator also issued a guidance note on Islamic investment funds in 2011, the first EU member country to do so.

The Islamic faith was first introduced to Malta in the 8th century during the Aghlabid era. According to a 2016 survey conducted by ‘MaltaToday Easter’, Muslims make nowadays about 2.6% of the total Maltese population.