Sukuk (plural of صك) are Islamic financial certificates that represent ownership in an underlying asset, project, or business. Instead of paying interest (riba, which is prohibited in Islamic law), sukuk pay a profit-sharing return derived from the performance or rental income of the underlying asset. Economically, the returns are similar to a bond, but the legal structure is asset-based rather than debt-based.
Sukuk must be structured so that the underlying asset and the profit mechanism are both Sharia-compliant. A Sharia supervisory board certifies the structure before issuance. Popular structures include Ijara (lease-based), Murabaha (cost-plus), and Musharaka (partnership).