UAE sets $697 billion Islamic finance target as it scales Halal economy

The UAE is targeting $697 billion in domestic Islamic finance assets by 2031, as part of a broader strategy to strengthen its position as a global hub for Islamic finance and the Halal economy.

The target is set out in the UAE Islamic Finance and Halal Industry Strategy 2025–2031, approved by the UAE Cabinet in May 2025. Islamic finance assets currently stand at about $381.2 billion, while the UAE ranked third globally on the 2025 Islamic Finance Development Indicator and has 43 licensed Islamic financial institutions.

The strategy aims to expand the scale and international competitiveness of both sectors while supporting economic diversification. It seeks to develop an ecosystem for international Islamic financial transactions, investment and Halal trade, while increasing the production and re-export of higher-value Halal products.

The Central Bank of the UAE (CBUAE) is coordinating with federal and local entities to support implementation, including efforts to strengthen Islamic financial institutions, promote their international expansion and develop markets for sukuk, Islamic funds and Shariah-compliant money-market instruments.

The strategy also places greater emphasis on innovation and sustainable finance, including international cooperation on Islamic sustainable finance. In the Halal sector, the UAE plans to expand local production, introduce a Halal traceability system and create conditions for SMEs and technology startups to scale. Halal tourism, modest fashion and Islamic-themed media are also identified as areas for development.

The UAE is also strengthening its regulatory and Shariah framework for Islamic finance. The Commercial Transactions Law of 2022 established a legal framework for Islamic finance contracts, while the Central Bank Law of 2025 governs Islamic financial institutions and their supervisory frameworks.

The Higher Shariah Authority, established in 2018, has issued more than 280 standards and resolutions to standardize Islamic financial practices. The strategy also promotes Islamic philanthropy by increasing the use of waqf mechanisms and impact-monitoring tools, supporting the UAE’s broader efforts to expand the international reach of Islamic finance and the Halal economy.