Kuwait enacts law to regulate government sukuk issuances

Kuwait has enacted Decree Law No. 90 of 2026 to regulate the issuance of government sukuk (Islamic bonds). The new legislation provides a comprehensive framework allowing the state to issue sukuk in both Kuwaiti dinars and foreign currencies, targeting both local and international markets.

The law permits various Sharia-compliant structures, including Ijarah (leasing), Salam, Istisna, Mudaraba, and Musharaka, based on existing or future government assets and operational rights. To manage these issuances, a state-owned special purpose vehicle (SPV) will be established to structure the sukuk and manage assets, exempt from taxes and fees.

Finance Minister Dr. Yaqub Al-Rifai stated that the law enhances sovereign financing flexibility and diversifies funding sources by adding Sharia-compliant tools alongside traditional debt instruments. Faisal Al-Muzaini, Director of the Public Debt Management Department, noted that the law will help manage liquidity and refinancing risks while supporting the development of the local debt market and providing a sovereign yield curve benchmark.

Key regulatory requirements include obtaining written approval from the Central Bank of Kuwait for local dinar-denominated issuances. Additionally, a unified Fatwa and Sharia Supervisory Board will be established to ensure all government sukuk structures comply with Islamic law.