Ireland could capture up to €40bn in Islamic finance business if the government further opens up financial regulation and tax law to sharia compliance, according to experts in the sector who met last week for an Islamic finance seminar sponsored by the Irish Banking Federation.

IFSC firms are in a position to take a 5% share of the €800bn global market for funds and other financial products that meet the standards of Islamic law, according to Enda Faughnan, tax partner at PwC in Dublin, who spoke at the conference.

"We've only just got into this game," said Faughnan. "The penetration is so low, there is a lot of room for high growth. Ireland could get a big slice of the European business."

He said Ireland should leverage its strong positions in funds administration, debt issuance and aircraft leasing to satisfy growing demand among European banks for sharia-compliant products.

The IDA has been making a push to get Dublin to become the leading European centre for the business.

Ireland now has double tax agreements with the United Arab Emirates, Kuwait and Saudi Arabia.