UAE Emerges as Global Hub for Islamic Finance & Halal

Photo: WAM

The UAE is becoming a global leader in Islamic finance and the halal industry, with a clear vision to grow its economy and improve its competitiveness worldwide.

Thanks to progressive government policies, modern regulations, and state-of-the-art infrastructure, both sectors are rapidly growing. The UAE is investing in a future built on knowledge and innovation, with Islamic finance and halal products playing a crucial part in this transformation.

In May, the UAE introduced a national strategy to develop the Islamic finance and halal industry. This plan aims to create a fully integrated system for Islamic finance activities, including banking, Islamic insurance (Takaful), Islamic bonds (Sukuk), and other financial services, all aligned with international standards.

As of February, Islamic banks in the UAE make up about 18% of the country’s total banking assets and 22.8% of all credit in the banking sector.

The Sukuk market has seen significant growth, especially with the launch of the dirham-denominated Islamic Treasury Sukuk (T-Sukuk) in 2023. This move has marked a new phase for the sector.

The UAE is now one of the biggest Sukuk listing centres in the world. As of May, Sukuk listed on Nasdaq Dubai had exceeded US$95.7 billion, further strengthening the UAE’s position in the global market for Sharia-compliant financial products.

In 2023, the UAE was ranked fourth globally in Islamic finance by assets, according to the Islamic Finance Development Indicator.

Jamal Saleh, Director-General of the UAE Banks Federation, explained that the new strategy aims to elevate the role of the Islamic economy both within the UAE and internationally. He highlighted the progress made in Islamic banking, Sukuk issuance, and other Sharia-compliant finance areas.

The Islamic banking sector is experiencing impressive growth. By February 2025, total credit provided by Islamic banks had reached AED503.5 billion, a 16% increase from the previous year. Private sector credit alone reached AED350.4 billion, growing by 13.2%. Deposits in Islamic banks also grew by 16.9%, reaching AED595.3 billion.

Along with these financial successes, the UAE is becoming a major player in the global halal industry. The country aims to increase halal exports from AED74 billion to AED315 billion by 2031, taking advantage of its strategic location and world-class infrastructure.

Saleh Lootah, Chairman of the UAE Food and Beverage Manufacturers Group, believes that the national strategy will help the UAE become a global hub for halal production. He noted that local manufacturers are eager to enter this growing sector, as the global demand for halal products continues to rise.

A report by Bonafide Research predicts that the halal food and beverage market in the UAE will surpass $31.27 billion by 2029, driven by increasing global demand for halal-certified products.

The UAE's central location as a trade and tourism hub further supports its growth in the halal industry. This strategic position boosts the country’s attractiveness to both local and international consumers who seek trusted halal-certified products, helping the UAE maintain its reputation as a leading centre for halal trade.