Regulations, tax implications and jurisdictional guidelines

The merchant character and profit-sharing activities of Islamic banks mean that regulation and governance of these institutions and their deal structures differ from those of conventional banks. There are also tax-related issues in countries that have value added taxes, stamp duties and asset transfer taxes. In addition, regions and countries have taken vastly different approaches to authorizing and enabling Islamic banking and finance. As a result, the manager of a micro-enterprise or SME and his banker can face higher operational costs. In addition, the manager may not be able to access as many services from the Islamic bank as from a conventional bank.

Sustainable Development Goals:

Industry, Innovation and Infrastructure