Luxembourg: A leading hub for international Sukuk

Luxembourg continues to strengthen its position as a global hub for Islamic finance. Drawing on decades of expertise, robust market infrastructure and an increasingly international investor base, the Grand Duchy serves as a strategic centre for sukuk issuance, listing and domiciliation. The new international Sukuk brochure provides an in‑depth overview of market trends, Luxembourg’s competitive advantages, and the evolving role of sukuk in global capital markets.

Islamic finance assets have experienced robust growth, recording a CAGR of 15.6% over the past six years, reaching nearly USD 6tn by the end of 2024. Sukuk were a key driver of this expansion, achieving a CAGR of 14%. Looking ahead, the total outstanding volume of Sukuk is projected to nearly double by 2029, exceeding USD 1.8tn and representing 18.5% of global Islamic finance assets.

Islamic finance assets (USD bn)

Global Sukuk issuance reached USD 250bn in 2024, marking an 18% increase compared to 2023.

The primary market demonstrated strong issuance momentum throughout the year, driven predominantly by a notable rise in issuances from GCC countries, particularly Saudi Arabia, amid mounting fiscal pressures. Looking ahead, several GCC economies are projected to continue running fiscal deficits, largely due to oil prices remaining below their breakeven thresholds. This, combined with the expectation of monetary policy easing through rate cuts, is likely to be a key catalyst for continued Sukuk issuance in the near term.

Sukuk historical issuance (USD bn)

Eurosukuk are predominantly domiciled in the Cayman Islands and Luxembourg, which collectively accounted for approximately 56% of total issuances in 2024. Notably, Luxembourg’s share increased from 23% in 2015 to over 28% in 2024, reflecting a growing preference among issuers for this jurisdiction.

Eurosukuk Issuance by Domicile (USD bn)