Hong Kong has what it takes to be an Islamic finance hub

South China Morning Post

21-07-2025

With its multicultural environment and financial expertise, Hong Kong is well-placed to become an Islamic finance hub. In embracing this opportunity, Hong Kong can diversify its financial services sector while promoting ethical finance principles globally.
Hong Kong should pursue strategic reform to capitalise on this market. Introducing a dedicated Takaful ordinance would provide clarity on capital and governance requirements. Partnerships with leading Islamic finance centres such as Malaysia and Qatar could accelerate product innovation, particularly fintech solutions. Establishing a Hong Kong-Qatar task force on Takaful would build on recent agreements , while an annual Islamic finance summit would raise Hong Kong's profile.
Although challenges remain, Hong Kong's regulatory framework has progressed in accommodating Islamic finance. The Hong Kong Monetary Authority's framework allows Islamic banking windows, while tax neutrality for Islamic bonds (Sukuk) since 2013 has encouraged issuance. However, the lack of stand-alone Islamic banking licences and low local awareness limit growth potential.
Takaful, or Islamic insurance, operates on principles of cooperation (Ta'awun) and charitable donation (Tabarru), with participants contributing to a shared pool to protect against risks. Unlike conventional insurance, Takaful avoids interest (Riba) and speculative uncertainty (Gharar), redistributing surpluses to participants. This ethical model covers family protection, general insurance and reinsurance solutions that comply with Islamic law.
Global Islamic finance assets, projected to reach US$7.5 trillion by 2028, present a significant opportunity for Hong Kong. With its robust financial infrastructure and connectivity to mainland China, Hong Kong is uniquely positioned to become a gateway to sharia-compliant finance in Asia.
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Ahmed Ashfaq, Tsim Sha Tsui
Legal principles must be applied consistently
The Flywin principle – established by the Court of Final Appeal in Flywin Co Ltd vs Strong & Associates Ltd (2002) – dictates that parties cannot introduce new legal arguments at the appellate level if they failed to raise them in lower courts. This rule upholds procedural fairness and consistency in the legal process.
In 2022, the Hong Kong government invoked new arguments in its bid to bar British barrister Tim Owen from representing Jimmy Lai. These arguments had not been raised in lower courts. The Court of Final Appeal,
applying Flywin , rejected the government's application.
Then came the
2023 same-sex partnership case brought by Jimmy Sham. In a split 3–2 decision, the Court of Final Appeal ruled in Sham's favour. Notably, Mr Justice Patrick Keane said Sham's counsel 'did not press the argument made before the Court of Appeal that [Article 14 of the Hong Kong Bill of Rights] was violated by reason of the absence of a legislated regime for same-sex partnerships as an alternative to marriage... Rather, the argument presented for the appellant in this Court was that [Article 14] was violated by reason of the absence of any legal recognition of same-sex unions … This was an adroit piece of advocacy on the appellant's behalf.'
In effect, the overseas judge was lauding Sham's counsel for abandoning the previous argument for an equivalent to marriage in favour of a new claim for institutional recognition. In other words, a legal pivot occurred at the highest level – precisely the sort of manoeuvre the Flywin principle forbids.
What changed? How was a government barred from raising fresh arguments in 2022, yet an appellant lauded for doing the same in 2023? Perhaps the overseas judge was unaware of Flywin's local pedigree. Perhaps the government, despite its earlier bitter experience, failed to object.
Or perhaps – more troublingly – legal principles are being applied selectively. Flywin isn't just about technicalities; it's about fairness, foresight and holding all parties to the same standards.
Lai Shing-kin, Quarry Bay
Comparison with Singapore's English standards is unfair
I refer to
the letter , 'HK must keep up English standards among the young' (July 11), which cited the EF English Proficiency Index as evidence of our declining English standards.
The index has long been criticised for not being representative as it draws on the results of self-selected individuals. The average test scores are not representative of the population's English fluency for the same reason. The comparison with Singapore is also inappropriate, as English is the first language of many Singaporeans but only a second language, if not a foreign language, to Hongkongers. By the same token, it would be unfair to compare Singaporeans' Chinese proficiency with that of Hongkongers, who use the language on a daily basis.
Generally, Hongkongers still possess a satisfactory command of English. We would expect our lawyers, accountants and bankers to speak and write English professionally, and they still seem to. We would expect those who work in department stores, amusement parks and tourist attractions to speak some English, and they also seem to, albeit not perfectly.
It would be unreasonable to expect a random person you run into to be able to effortlessly communicate in fluent English. After all, we are in Hong Kong, where the mainstream language is Cantonese.
I fully agree that English is an important language for the city. It's just that the situation is not as bad as it seems.
Anson Chan, Guangzhou
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