Innovative Sukuk Structures Based on Beneficial Ownership and Usufruct: Sharīʿah Perspectives, Case Studies, and Strategic Potential for Developing Economies

Abstract

Sukuk, as Sharīʿah-compliant financial instruments, have emerged as crucial mechanisms for mobilizing resources, promoting infrastructure development, and offering ethical alternatives to conventional debt-based bonds. Distinct from interest-bearing securities, sukuk represent ownership in tangible assets, usufructs, or services. Yet, in many jurisdictions, practical and regulatory constraints prevent the full legal transfer of assets to investors, giving rise to questions about the legitimacy and application of beneficial ownership (tamalluk ḥukmī) and ḥaqq al-intifāʿ (usufruct) as foundational principles for sukuk issuance. This study investigates whether beneficial ownership and usufruct satisfy the Sharīʿah requirements for asset-backing in sukuk, assessing their legal and fiqhī (jurisprudential) validity within the evolving Islamic financial framework. Employing a qualitative, case-based methodology, the paper analyzes three innovative sukuk models from Pakistan—Jinnah Airport Ijārah Sukuk, Meezan Bank Airtime Sukuk, and K-Electric Mushārakah Sukuk—each representing a distinct application of ownership and usufruct principles. Through comparative analysis and fiqh-based reasoning, the research demonstrates that these models align with Sharīʿah objectives (maqāṣid al-Sharīʿah) by ensuring risk-sharing, lawful asset linkage, and economic productivity while addressing regulatory and infrastructural challenges faced by developing economies. The findings underline that beneficial ownership and usufruct-based sukuk offer strategic pathways for resource mobilization in public and corporate sectors, particularly where tangible asset transfer is impractical. The paper concludes with policy recommendations for expanding the use of these structures to promote inclusive, sustainable, and Sharīʿah-compliant economic development.