When I first visited Dubai on business in early 1996, the only completed tower block on Sheikh Zayed Road was the World Trade Centre Tower and the road itself was little more than a dual carriageway!


These days, that tower is dwarfed by newer developments and Sheikh Zayed Road is a multi-lane superhighway. These physical manifestations of change are mirrored by the transformation in business volumes and practice across the GCC and this article will seek to summarise some of the key changes I have witnessed in a region that I regard as my second home.

My first experience of Islamic finance in 1995 was entirely accidental. VG was approached by Faisal Finance (Switzerland) SA, part of the Dar Al-Maal Al-Islami group of Saudi Arabia (and clients of VG since 1981) to establish a Shariah-compliant fund investing in US real estate. At that time, I was the Director responsible for VG’s funds and corporate clients, so by default I became the person responsible for leading the project. I knew nothing about the rules of Shariah Law relating to finance and very little about the history of Islam or the Middle East in general, but necessity is the mother of invention, and that one approach has developed into a core area of our business.

That fund structure was a first not just for VG, but also for Jersey, being the first Shariah-compliant fund structured using Jersey entities. Our work led to the creation of several similar real estate funds, as well as a number of Special Purpose Vehicles (SPVs) for individuals or small groups wishing to invest in the sector. This trend continues to this day with the establishment of structures to own UK commercial real estate on behalf of a number of Islamic Financial Institutions from across the GCC, as well as those established in the UK. Over this period there have been many changes to tax legislation in the UK, the availability of finance to support such transactions and the requirements of banks providing that finance. VG has actively engaged with lawyers, Scholars and other advisers to find solutions to the issues arising from these changes and it is somewhat gratifying to see these solutions adopted by our competitors as ‘industry best practice’.

A very early example arose following a meeting with one of the leading Scholars, Sheikh Nizam Yaquby, in 2000. We were discussing the capital structure of an equities fund we were working on which had been drafted with Ordinary Shares and Preference Shares. We had a wide ranging discussion on various concepts in Company Law and the application of Shariah principles within the context of that Law and in particular the fundamental principle of Islamic Law that ‘no man may have preference over another’. Following this we agreed to reclassify the Ordinary Shares as Management shares, in accordance with the role of a Mudarib in a Mudarabah contract, and the Preference Shares as Participating Shares to reflect the position of the underlying investors. This was the first Jersey company ever established with these categories of shares, something that has since become almost standard in Shariah-compliant corporate structures in Jersey and elsewhere.

Another first was the award winning “Caravan Sukuk” structure in 2004. Sukuk structures were a natural extension of our work in Islamic finance, also drawing on our expertise in structuring and administering conventional securitization projects. Asset-backed securities represent an ideal class of securities for Islamic investors, so long as the underlying assets are themselves acceptable and the cash-flows coming from them are generated and used in a Shariah-compliant manner. As well as being the first Sukuk issued by a Jersey company, Caravan is now widely regarded as the first such structure with a ‘true sale’ in which the securitised assets were physically located in the GCC. Sukuk structures somewhat fell out of favour following the financial crisis of 2008, (unless these were for quasi-government institutions) but there is evidence of renewed interest as conventional banks face increasing controls over liquidity positions and lending criteria.

Since 1996 our involvement in the region has expanded to cover the full range of services including “traditional” trusts and corporate structures for individuals and families. These structures can play an important role alongside Islamic equivalents in succession planning for regional families.

Our team travels to the region on a regular basis and we hold regular training sessions for our staff including client administrators, accounts staff and even our compliance team to ensure that they all understand the differences in the work we do for our clients from the region and, most importantly, the cultural perspective.

In September 2016, VG was named as winner of the award for Best Islamic Trust Formation Services at the Global Islamic Finance Awards, an award that we have retained in 2017. However we are not resting on our laurels. In the coming months we have plans for several trips to various destinations across the GCC to meet with clients and contacts, and anticipate following up on a trip to Malaysia by visiting other countries in that region.

To gain a true knowledge and understanding of the core principles of Islamic Finance, and their application to commercial transactions and private financial structures, is not something that can be learnt from a textbook. It can take many years of practical experience and the type of commitment that we have demonstrated over several decades.


Trevor Norman, Director

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We translate and meet the needs of ultra-high-net-worth individuals and their families globally. We enact bespoke solutions for family business succession strategies, estate planning, intergenerational wealth transfer and tax efficiency optimisation.

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26 November 2020

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Shariah-compliant finance was taking an ethical view of investing long before the rise of sustainable investment strategies in western financial markets. Now, as both Shariah-compliant and sustainable investments expand, investors and issuers are finding increasing...


“It makes us sleep well at night knowing that the assets we as a family have worked hard to accumulate are within VG’s stewardship."

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We offer a distinctly tailored and comprehensive services across all stages of the fund lifecycle, from inception through to liquidation, as well as providing full governance and administration services to regulated Fund Services Businesses. We administer stand alone funds, fund of funds and Shariah-compliant structures.

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