Hong Kong is increasingly recognized as a strategic gateway for Middle Eastern capital into mainland China, with the city’s growing financial infrastructure and regulatory readiness creating opportunities for Islamic finance instruments, including sukuk bonds.

Bankers and experts highlight a rising interest among international corporations to explore sharia-compliant financing in Hong Kong. David Yim Sau-king, Head of Debt Capital Markets for Greater China and North Asia at Standard Chartered, noted that the number of inquiries regarding sukuk issuance has increased significantly, reflecting growing recognition of Hong Kong’s potential to channel Islamic capital into the Greater Bay Area.

Hong Kong possesses well-developed capital markets, robust legal frameworks, and experience in cross-border issuance. The city issued over US$3 billion in sukuk a decade ago, establishing precedent for sovereign and corporate sharia-compliant bonds. Recently, Asia’s first ETF tracking major Saudi companies was listed in Hong Kong, alongside sukuk government bond ETFs, signaling both investor interest and market readiness.

Industry experts see substantial growth potential. The global Islamic finance sector, currently estimated at US$4.93 trillion in assets (2024), is projected to reach US$7.53 trillion by 2028, driven by a global Muslim population exceeding 2 billion, representing roughly 25% of the world’s population. HSBC Asia-Pacific Deputy Chairman David Eldon highlighted that the Asia-Pacific region, including Hong Kong, hosts a significant Muslim population, creating both a customer base and a bridge to Middle Eastern markets.

Challenges remain, including regional competition and limited local Muslim population. Innovative measures in other financial centers, such as fintech sandboxes in the UK, illustrate ways to encourage product development and adoption. Experts suggest Hong Kong could attract non-Muslim investors to Islamic finance products, as seen in Malaysia, where over half of Islamic bank customers are non-Muslim.

Hong Kong’s strategic role in connecting international capital and the Chinese mainland positions it as an attractive platform for Middle Eastern companies seeking regional headquarters, cross-border investment, and local partnerships. For global investors and corporates, the city offers regulatory clarity, market access, and sophisticated financial infrastructure to engage with the rapidly expanding Islamic finance market in North Asia.