Offshore centres are poised to benefit from the enormous growth forecast in Islamic finance over the next few years, according to Anthony Oakes, partner at law firm, Ogier.

The combination of increasing appetite for Islamic finance products, new variations on existing products and an increased interest in the role of offshore centres in Islamic finance point to a developing area with huge potential.

Research by the International Shariah Research Academy for Islamic Finance estimated the total value of global Islamic finance at around US$900 billion in 2009. That figure had reached US$2.4 trillion by 2015, with forecasts reaching US$3.4 trillion in 2018 and US$5 trillion by 2020. 

"The traditional market in the Middle East remains strong, but we are also seeing growth in Asia, Malaysia and Indonesia. At the same time, the industry is developing new products – we are seeing more Shariah compliant retail and corporate banking and trade finance products coming online. A further interesting development is happening in non-Islamic countries, where access to Islamic capital markets is being sought – a good example is the sukuks issued by the Hong Kong government in 2014 and 2015," Oakes says.

"Offshore centres, and particularly Cayman, are well-positioned to take advantage of this growing area because of their flexibility and efficiency, and because their underlying legal systems are based on the trusted, well-established and familiar English legal framework," he adds.