Ireland is bidding to become a global Islamic finance hub as its funds industry surpasses the €1 trillion (Dh4.73tn) mark for the first time.
Enda Kenny, the Irish leader, told fund managers in Dublin yesterday the country was aiming to capture a bigger slice of the booming Sharia-compliant sector.
"The Irish funds industry recently attracted its first fund promoted from Malaysia, which further strengthens our position as the leading regulated centre for Islamic finance outside the Middle East and we intend to build on that progress and that platform," said Mr Kenny.
The Irish funds industry has overcome the country's deepening economic malaise through a favourable tax regime and growing pool of fund administration expertise that has helped to build its assets under administration to €2tn - half of which comes from locally domiciled funds.
Global financial centres are competing for a bigger slice of the US$1.3 trillion (Dh4.77tn) Islamic finance industry as many conventional capital markets struggle to overcome liquidity problems and deliver attractive returns to investors.
The performance of the Irish funds industry contrasts sharply with its waning economic fortunes since the onset of the global financial crisis in 2008.
A stagnant housing market, ballooning public debt and unemployment running at more than 14 per cent have become the legacy of the so-called Celtic Tiger years, during which unfettered bank lending encouraged profligate public and private sector spending.
But Dublin's fund industry has proved resilient to the headwinds facing the rest of the economy.
It is already the largest hedge fund administration centre in the world and also has the largest number of stock exchange-listed investment funds.
Now it wants to develop its Islamic finance offering amid growing global appetite for Sharia-compliant financial instruments.
Ireland's central bank has established a team to approve Islamic funds while its stock exchange also has a unit to support the listing of Sharia-compliant products.
PricewaterhouseCoopers estimates some €2.5bn of Sharia-compliant funds are already serviced out of the country.
Malaysia's CIMB-Principal Islamic Asset Management started to promote its funds from Dublin last month.
"Ireland is right for us as we believe it will provide global flavour to our products," said Noripah Kamso, the chief executive of the asset manager.
Ireland will return to international debt markets this week to auction €500 million in securities as finance ministers are due to meet in Cyprus in the latest gathering aimed at tackling the euro-zone crisis.