"Sukuk" are certificates declare an equal ownership for its holders on certain assets. It is Islamic finance's alternative to conventional bonds. Bond is simply a loan from bond holder to issuer, and receives periodic interests. "Sukuk" holder, on the other hand, is a shareholder in the asset. All the returns from "Sukuk" are either profit from the investment or rental returns from issuer's properties. There are many forms from Skuk, some of which are the following:
"Sukuk" holder purchase, via Special Purpose Vehicle “SPV” rental generating assets, such as real estates, then re-rent it to the issuer to gain returns on the "Sukuk". The "Sukuk" holder promises to resell it to the owner at the end of the "Sukuk" period.
Holder, in this type of "Sukuk", hires the issuer as "Mudharib" to manage the invested capital. While both parties agree on the criteria of the investment, it is also possible to determine profit rate it shall yield. This type is referred to as restricted "Mudharaba". Parties share the profits in ratio they both agree upon.
Since "Mudharaba Sukuk" doesn't guarantee neither the capital nor the returns, it is often covered with "Takaful" insurance provided by third party. The lack of guarantee makes this type less preferable to investors for the favor of "Wakalah Sukuk".
"Sukuk" holder, via Special Purpose Vehicle SPV, appoints the issuer as the agent ”Wakeel” to manage capital in an investment that guarantees the minimum profit rate mentioned in the agreement between the two parties. The issuer may receive the rest of the returns ad incentive for the well management of the investment. The issuer of "Sukuk" guarantees the capital and the minimum profit rate.