Musharakah Sukuk
Partnership-based sukuk for infrastructure financing
Musharakah sukuk representing proportionate co-ownership in a joint venture or project are among the most Shariah-sound structures, as investors genuinely share in profit and loss.
Full Ruling
Musharakah sukuk are permissible and represent true Islamic finance principles of risk and return sharing. Under this structure: (1) Each sukuk certificate represents a proportionate ownership share in the underlying project or business. (2) Profits are distributed according to pre-agreed ratios. (3) Losses are borne in proportion to capital contribution. (4) No party may guarantee the principal. (5) Sukuk manager may manage the joint venture as mudarib (silent partner manager) or wakil (agent).
Rationale & Reasoning
Musharakah is rooted in pre-Islamic Arabian trade practices and is explicitly endorsed in the Quran. Profit and loss sharing instruments align with Islamic finance's objective of equitable wealth distribution.
Rule Basis (Daleel)
- 01Quran 4:12 on partnership shares
- 02Validity of musharakah
- 03AAOIFI SS-17
Citations & Sources
AAOIFI Shariah Standard No. 17 – Investment Sukuk
AAOIFI · 2003
Ref: SS-17