Islamic Finance in the Netherlands: Key Findings

Islamic Finance in the Netherlands is one of the sectors that is developing. The Netherlands, which has a Muslim population of about one million people, was also involved in this market, particularly in the years preceding the financial crisis. From 2004 to 2008, Islamic mortgage was the most topic of discussion within the Dutch government, at conferences, and in researches. Furthermore, at the turn of the twentieth century, the Netherlands Trading Society established banks in Jeddah, Saudi Arabia, that provided interest-free money exchange services to Indonesian pilgrims. It was among the first banks to venture into Islamic finance.

Islamic Finance in the Netherlands strives to provide a halal financing solution to Dutch people. They are Muslims and non-Muslims who wish to use Islamic financial products in the Netherlands in accordance with Shariah principles. In addition, the Netherlands has a sizable Muslim population that seeks access to halal financial products.

The Central Bank of the Netherlands recognized the need for local regulation and taxation. These regulations and taxation would allow the project of commercialization of Islamic finance in the Netherlands. Some Islamic banks in the Netherlands currently offer Halal financial products to Dutch Muslim customers. However, there has been little Islamic finance activity in the Netherlands since the 1990s, when modern-day Islamic finance first emerged.

Legislative and regulatory regime for Islamic Finance

In 2008, The Dutch central bank (DNB) and the Dutch financial services regulatory authority (AFM) conducted an Islamic finance study in the Netherlands. One of their conclusions was that they can apply the existing Dutch regulatory framework to Islamic finance. However, certain financial supervision-related matters may require amendments to specifically address Islamic finance products. These matters include market entry, the conduct of business, capital adequacy, and information provision. As a result, there is no legislative and regulatory regime that is solely focused on Islamic finance; rather, the existing legislative and regulatory regime that applied to conventional finance also applied to Islamic finance.


In the Netherlands, there is no separate taxation regime for Islamic finance products, and such products do not get special treatment under Dutch tax law. The Dutch tax system takes an economic approach to financial transactions. Because the economic effects of most Islamic finance products are similar to those of conventional finance products, Dutch tax law does not appear to pose significant challenges when structuring Islamic finance transactions.

Future Perspectives

Within the Netherlands, major Dutch banks such as Rabobank, ABN AMRO, ING, and de Volksbank have not yet entered the Islamic finance market. However, they have expressed an interest in doing so. These major Dutch banks have been active in the Islamic finance market outside of the Netherlands. In addition, various small organizations are currently assessing the possibility of offering the first shariah-compliant mortgage loans in the Netherlands. Possibly, with the cooperation of larger institutions.

Another intriguing development is that the number of Dutch multinational corporations are expanding globally and encountering Islamic finance. They are doing it as a source of funding for their operations in South East Asia and the Middle East. Given the continued expansion of these multinational corporations, one would anticipate an increase in their exposure to Islamic finance.

To summarize, the prospects for the development of Islamic finance in the Netherlands remain challenging. Despite the existence of a legislative framework and certain developments that may contribute to the development of the Islamic finance market, there are no significant incentives to structure financial products in a shariah-compliant manner.

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