Today's Edition
HOSSAM ABDELNABI (ABU DHABI)
The UAE Ministry of Finance has unveiled details of the recently announced “Retail Sukuk” initiative, enabling individuals to invest in high-quality assets.
The Ministry stated on its website that individual investors in Treasury Sukuk are exempt from any taxes on investment returns. Both the principal and the profits (coupons) are free from any taxes or deductions under applicable laws and regulations in the UAE.
Profits (coupons) will be distributed to investors semi-annually according to the profit payment schedule of the underlying Sukuk. Each investor will receive profits proportional to their ownership share and investment duration during the profit distribution period through the participating bank’s platform.
Regarding the maturity periods of each Treasury Sukuk, the Ministry said these are determined based on the specific issuance instrument (ISIN). Currently, new Sukuk are issued with maturities ranging between two and five years, which may be extended in future as part of the issuance strategy. Some instruments currently available on the platforms may have shorter maturities — including less than one year — depending on the tranche available at the time of investment.
The Ministry confirmed that participation in the investment is through the digital channels of banks participating in the “Retail Sukuk” initiative. Investors can open investment accounts digitally via the participating banks’ online platforms in accordance with each bank’s terms and conditions.
The Ministry of Finance has set the minimum individual investment in Treasury Sukuk at Dh4,000 per fractional unit purchased. Participating banks may set their own specific limits on the number of units or the total investment amount per transaction.
Transaction Fees
Concerning transaction fees and how they are applied, the Ministry explained that, in coordination with the participating banks, a preferential fee structure has been adopted for investing in federal Treasury Sukuk to encourage wider investor participation. The preferential fees for investing in fractional Sukuk via the digital platforms of participating banks are about 0.25% per purchase transaction and the same per sale transaction.
Additionally, periodic management fees of up to 0.30% annually (calculated monthly, quarterly, or as applicable) will be imposed on the total size of the investment portfolio.
The Ministry stated that fractional Sukuk cannot be transferred to other financial institutions or trading systems, as they are recorded exclusively within the digital platforms of the participating banks.
According to the Ministry of Finance, Islamic Treasury Sukuk are Sharia-compliant securities issued by the UAE federal government and sold in local markets in UAE dirhams. The Islamic Treasury Sukuk programme forms part of the UAE’s efforts to support local financial markets by helping build a dirham-denominated yield curve and providing safe, low-risk investment options aligned with Islamic finance principles.
The Ministry explained that investment in Sharia-compliant government Treasury Sukuk was previously limited to institutional investors. The new initiative will transform investment in government Sukuk into a simplified and inclusive digital experience. This marks a strategic step towards reinforcing financial inclusion and promoting a culture of long-term savings.
The Ministry also noted that the initiative aims to raise awareness of retail Sukuk investment opportunities among citizens and residents, encourage broader participation by individual investors, and build confidence by highlighting the ease of registration and full compliance with Sharia standards. It further seeks to promote long-term investment in UAE Treasury Sukuk as a safe and sustainable savings tool.
It added that the dirham-denominated Islamic Treasury Sukuk initially comprise tranches with maturities of two, three, and five years, followed later by a ten-year tranche. In general, Islamic Treasury Sukuk provide fixed returns through semi-annual payments (determined during the auction based on submitted bids). The issuance of dirham-denominated Islamic Treasury Sukuk aims to develop the local debt market, build a local-currency yield curve, and support the establishment of a domestic Islamic Sukuk market.
The Ministry of Finance stated that retail Sukuk are offered in dirhams and are linked to government Treasury Sukuk traded in the market and designated for institutional investors. This allows individual investors to benefit from the same high-quality, government-backed assets that were previously exclusive to large investors. The Ministry noted that it is implementing the initiative in cooperation with national banks across the UAE.
