Bermuda is looking for investment from the oil-rich states of the Arabian Gulf in the Island’s infrastructure and hotels.Yesterday’s Throne Speech described Government’s intention to attract “business, capital and visitors” from the Gulf Cooperation Council (GCC) region.“The portfolio of economic infrastructure projects that could be of interest to GCC includes the redevelopment of the Hamilton waterfront, Bermuda’s international airport and hotel development,” the Throne Speech states.Last month Premier Paula Cox led a delegation of Government and business leaders to the Middle East, seeking to forge business relationships in Dubai, Abu Dhabi and Qatar. In July a Bermuda delegation travelled to London to meet with GCC leaders. Government’s intention is to establish Bermuda as an Islamic finance hub.Attorney Paul Homsy, a New York-based expert in the field of Islamic finance, believes Bermuda has a great opportunity to attract Middle Eastern business. Through his consulting firm Noonmark Capital LLC, he helps clients raise capital in the Middle East and he is also a co-founder of boutique investment bank ICT Oman.“The statistics are staggering,” Mr Homsy said. “If you look at Abu Dhabi, a tiny emirate with a population of about 200,000, it has a sovereign wealth fund of about $800 billion. That’s larger than China’s.”Sovereign wealth funds are state-sponsored vehicles that invest surplus cash around the world. The Abu Dhabi Investment Authority, for example, invests in a mixture of equities, bonds, real estate and infrastructure, among other things.Vast oil revenues pouring into small countries have given the GCC region a huge pool of excess liquidity, estimated at around $5 trillion in the hands of high net-worth individuals, sovereign wealth funds and financial institutions. There are currently in excess of $1 trillion of Sharia-compliant assets.The Throne Speech states that in a meeting with Premier Cox, the Prime Minister of Qatar said: “Qatar wishes to find win-win opportunities to partner with Bermuda.”Qatar Holding, that emirate’s sovereign wealth fund, has invested in infrastructure overseas. For example, in August this year, it agreed to buy a 20 percent stake in Heathrow airport for $1.4 billion. The Qatar Insurance Company, founded in the 1960s to insure the country’s energy risks, is also a significant investor in Bermuda-based reinsurance fund CatCo Investment Management Ltd.Mr Homsy said there are several reasons that position Bermuda well to attract business from the region, not only its favourable tax regime and its double taxation agreements with Qatar and Bahrain.“The ‘Arab Spring’ has brought a lot of instability and they are looking to invest elsewhere to get away from that instability,” Mr Homsy said.He added that while GCC investors were keen to invest in the US, visa restrictions applied to people travelling in from the region — particularly since the 9/11 terrorist attacks in 2001 — had added to the difficulties in entering the country. While several cities, including Dubai, Bahrain, Kuala Lumpur, Luxembourg, London, Paris and Singapore, have attracted Islamic finance business, Mr Homsy said there was need for a hub in the Western Hemisphere — and Bermuda was well placed to fill that role.“The Western Hemisphere has both the largest economy in the world, the US, and one of the fastest growing economies in the world in Brazil,” he said.“Bermuda is uniquely positioned to service both the North American and Latin American markets with its geographic proximity and close business ties in particular to the US.”He added that Bermuda also had the expertise to serve the Islamic insurance and reinsurance markets, which are expanding rapidly.The differences between Islamic and western finance include that, in order to be Sharia-compliant, investors cannot receive interest payments. Also, conventional insurance breaches Islamic restrictions on speculation and gambling. In the Islamic version of insurance, Takaful, a co-operative approach is taken, with policyholders pooling their resources.Should Bermuda meet Islamic finance needs, the benefits could be substantial, Mr Homsy said.“First it will grow the Bermuda financial services industry across the banking, reinsurance, and stock market sectors and will help diversify Bermuda’s economy and reach into one of the fastest growing financial sectors, namely Islamic banking and the emerging markets of the Arabian Gulf and wider Middle East, Southeast Asia — Malaysia primarily.“Bermuda can get ahead of the curve and be a hub for the development of innovative Islamic financial products and also a centre for issuing Sharia-compliant investment instruments such as Islamic bonds.”The capital market infrastructure provided by the Bermuda Stock Exchange could attract funds from the Arab world to be set up and this would benefit Bermuda banks, fund administrators, attorneys, accountants and other service providers, he added.