  The international expansion of Sukuk presupposes a higher degree of standardization, reliability in terms of Shari’ah compliance as well as robust accounting, legal, tax and regulatory frameworks. The adoption of best practice regulation and supervision requires sufficient differentiation among Sukuk types.
Challenges for the expanding market are posed by sector risk due to an overreliance on real estate and construction, the involvement of different laws and jurisdictions together with enforceability issues.   Luxembourg is the leading location for Shari’ah compliant investment funds in Europe.