April, 05, 2010

The signing in Alkhobar of a strategic cooperation and alliance agreement between Saudi Arabia's Mohammed Hamad Al-Soaib Law Firm and the Luxembourg-based Lux Global Trust Services and Theisen Advocates recently is set to increase the use of the Duchy as a trust and tax domicile for Saudi investment products; investment vehicles such as special purpose vehicles (SPVs) used in the issuance of sukuk for instance; and the registration of investment funds, especially for UCITs (Undertakings for Collective Investment Trusts) of which Luxembourg is the world leader.

The agreement specifically alludes to cooperation in the Islamic finance space and products, especially investment funds and sukuk, in addition to capitalizing on the Duchy's tax regime for international transactions. Luxembourg is also marketing itself as the location of choice for sukuk and investment fund listings on the Luxembourg Stock Exchange (LSE). According to Luxembourg for Finance (LFF), to date there are 15 sukuk with a combined value of $5.5 billion listed at the LSE, including the $600 million Malaysia Global Sukuk, the first international sovereign sukuk to be issued in 2002, the Dubai Global Sukuk, the Pakistan International Sukuk, the Qatar Global Sukuk, and the Petronas EMAS Sukuk.

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