Sukuk have emerged as financial instruments that represent ownership shares in assets or projects, with their origins rooted in Islamic legal literature and formal recognition occurring in the late twentieth century. The structuring of sukuk involves transferring assets to a Special Purpose Vehicle (SPV) for issuance, a process that faces challenges, including complex documentation and ensuring sharia compliance. Sukuk issuers span from governments to corporations, with Malaysia standing out as a key hub that attracts investors seeking diversification. There are different types of sukuk, including asset-backed and asset-based varieties, as well as green sukuk aimed at financing environmentally sustainable projects. Unlike conventional bonds, sukuk offer ownership stakes, enhance liquidity, and adhere to sharia principles, distinguishing them from traditional debt instruments. Despite their advantages, sukuk face several challenges, including default risks, pricing issues, and regulatory compliance. They continue to positively contribute to global economies, though empirical research on sukuk remains limited, and there are significant obstacles in data availability. Moreover, the secondary market for sukuk is hindered by sharia-compliant restrictions and supply constraints. Nevertheless, the literature highlights sukuk’s vital role in Islamic finance, while also emphasizing the complexities involved in their development and implementation.