Hong Kong moves forward with Islamic bond market

On 29 October 2012, the Financial Services and the Treasury Bureau issued 'Consultation Conclusions on Proposed Amendments to the Inland Revenue Ordinance and the Stamp Duty Ordinance to Facilitate Developments of an Islamic Bond Market in Hong Kong'.

The current lack of an Islamic bond-friendly legal environment in Hong Kong has hindered the creation of a sukuk market in the territory. Hong Kong may be seen as being a late entrant to the Islamic finance field, with many Asian jurisdictions having already amended their tax laws to keep track with this expanding market.

This white paper sets out some of the key proposals brought about by the Consultation Conclusions and discuss what this means for the development of the sukuk market in Hong Kong.