Law Decree on Government Sukuk: 35 Articles to Regulate Issuance and Trading

- Special assets owned primarily by the state for sukuk

- A single-purpose company wholly owned by the state

- Issuance of salam, istisna, musharakah, and mudarabah sukuk

- Three months to issue the executive regulations

Decree-Law No. 90 of 2026 concerning government sukuk was issued and published in the newspaper Al-Kuwait Al-Yawm. The decree comprises 35 articles regulating the issuance of sukuk in Kuwaiti dinars and foreign currencies, their offering through public or private placements, and their management and trading both domestically and internationally. It also links these provisions to the rules set forth in Decree-Law No. 60 of 2025 concerning sovereign financing.

The decree permits the issuance of sukuk backed by special assets owned by the state, as designated by the Council of Ministers. These assets must not be allocated for public benefit, nor derived from natural resources and their revenues or public utilities. The decree allows for the full or partial replacement of these assets during the sukuk’s term, provided that the value equivalent to the issued sukuk is maintained.

The company shall take the form of a single-person company. Its capital shall be funded by the state, represented by the General Reserve Fund. There is no requirement for the company’s capital to be proportional to the total value of the issued sukuk or the value of its assets.

With the approval of the Minister of Finance, the company may appoint a custodian and an investment manager. It may also delegate one or more entities to handle the issuance, offering, and management of sukuk denominated in Kuwaiti dinars or foreign currencies, whether within Kuwait or abroad.

The decree requires prior written approval from the Central Bank of Kuwait for the issuance of sukuk within the country if they are denominated in Kuwaiti dinars. Issuance within the country in foreign currencies requires coordination with the Central Bank and other relevant authorities.

Natural and legal persons are permitted to subscribe to and hold sukuk. Certain issuances may be restricted to Kuwaiti nationals, as specified in the prospectus.

The decree authorizes the issuance of sukuk of all types in accordance with the principles of Islamic Sharia, including sukuk representing ownership of leased assets, sukuk representing ownership of the benefits and operational rights of assets, and salam, istisna, musharakah, and mudarabah sukuk. It also permits the issuance of multiple types within the same issuance, subject to the approval of the Sharia Supervisory and Fatwa Authority.

Sukuk shall be issued with a single face value per issuance, payable in full upon subscription. They may be covered through public or private placements, and the size of the issuance may be increased during the offering period with the minister’s approval, provided that the total issuance does not exceed the value of the sukuk’s underlying assets.

After the subscription period closes, the sukuk are allocated, and the single-purpose company commences its operations, the government sukuk may, with the minister’s approval, be listed and traded on local capital markets or on foreign capital markets, in accordance with the rules prevailing in those markets, the terms of the prospectus, and the rulings of the Sharia Supervisory and Fatwa Authority.

The Minister of Finance shall appoint a single Sharia Supervisory and Fatwa Authority for all single-purpose companies. This authority must consist of at least three members who are Sharia scholars specializing in Islamic financial transactions jurisprudence, with at least one member being a member of the Supreme Sharia Supervisory Authority at the Central Bank of Kuwait.

The decree exempts the single-purpose company from all taxes and fees of any kind, as well as from fees related to the transfer of sukuk assets to the company, provided such activities are complementary, necessary, or related to the company’s purposes in accordance with the Decree-Law. The company is also exempt from paying judicial fees, deposits, and guarantees in advance, as stipulated in the decree.

The decree obliges the Council of Ministers, upon the recommendation of the Minister of Finance, to issue the executive regulations and necessary decisions to implement its provisions within three months of its publication in the Official Gazette.

It also stipulates that the provisions of Law No. 7 of 2010 concerning the establishment of the Capital Markets Authority and the regulation of securities activities, along with its executive regulations, shall not apply to the issuance, offering, and management of sukuk issued in accordance with the provisions of the Decree-Law. The Decree-Law shall enter into force from the date of its publication in the Official Gazette.