The first issuance, in June, had a two-year term and paid 4.30% a year: it opened with a target of AED 50 million and drew orders for AED 445 million (about USD 121 million). It is the easiest dirham-denominated government security for UAE residents to buy, and for that reason it is also the one most likely to end up in a portfolio before anyone has checked the subscriber's tax residence.
What happened
On 17 September 2026 the UAE Ministry of Finance announced the second issuance under the Sovereign Retail T-Sukuk Programme, through which the federal government sells dirham-denominated debt securities directly to individuals. Sukuk are the Islamic-finance equivalent of bonds: the subscriber receives a periodic profit distribution rather than interest, which from the investor's side works in the same way. This second issuance has a five-year term, a minimum subscription of AED 1,000 (about USD 272), and is guaranteed by the federal government. The profit rate will be announced on 22 September. Subscription is open to UAE citizens and residents through the Dubai Financial Market (DFM) eIPO platform, the iVestor app, the DFM app, and the digital channels of the placing banks: Emirates NBD as lead, then Emirates Islamic, ADIB, Ajman Bank, Mashreq, ADCB and FAB. After allocation the securities are listed on Nasdaq Dubai, so they can be sold before maturity. The first issuance, opened in June, had a two-year term, paid 4.30% a year with a semi-annual distribution and was listed on 2 July: it opened with a target of AED 50 million (about USD 13.6 million), drew orders for AED 445 million, and the Ministry doubled the size to AED 100 million.
What changes in practice
A UAE resident holding idle dirham liquidity in a personal account now has access to a government security with a low minimum ticket, a long term and a secondary market. Until June, federal T-Sukuk were available only in institutional sizes, out of reach for an individual; the first retail issuance, at two years, dates from June. The point the announcement does not address is tax. The UAE levies no personal income tax, so the distribution is received gross. Whether it is taxable elsewhere is not decided by the security: it is decided by the tax residence of the subscriber in the year the distribution is paid. Most jurisdictions treat the return on a foreign government security as investment income and require foreign-held securities to be reported, and someone who has recently relocated to the UAE may still be tax resident in their previous country for the current year.
Who it applies to
Individuals resident in the UAE with dirham liquidity in a personal account that is not needed over the next five years. Subscription is reserved for natural persons who are citizens or residents: someone who owns a UAE company but lives elsewhere is not among the subscribers admitted by the programme. It concerns in particular anyone who has relocated recently: a person who moved to the UAE in the second half of the year, or who has not yet completed the formalities to end tax residence in their previous country, may still be treated as tax resident there for the whole of 2026, and would report this distribution accordingly.
The exposure
The exposure does not lie in the security, which is a debt of the federal government. It lies in subscribing on the assumption that nothing is due anywhere while still being tax resident in another country. In that case the distribution received in the UAE is unreported income at home, and the security itself may be an unreported foreign asset: two distinct breaches, each with its own penalty, on an investment that may be worth a few thousand dollars. The second exposure is the order of events: someone who is in the process of moving their tax residence and subscribes in 2026 believing they are already out of their previous jurisdiction, but only meets the conditions from 2027, carries a distribution that must be reported for the year in which they were still resident.
What to do now
Three checks before opening the banking app on 22 September. First: establish in which country you are tax resident for 2026, which means counting the days spent in your previous country since 1 January and checking the status of any deregistration or exit formalities; most jurisdictions apply a 183-day test, and some also look at registered address or family ties. Second: if you remain tax resident elsewhere, estimate in advance what is left of the distribution after home-country tax and note that the security must be reported from subscription, not at maturity. Third, for those who are UAE tax resident in every respect: compare the rate announced on 22 September with the term-deposit rates of your own bank, which may have been adjusted after the base-rate rise to 3.90% on 17 September, bearing in mind that a deposit is released at maturity while a Sukuk is sold on the market at the price of the day.
Sources
- https://www.wam.ae/en/article/c2ajejd-ministry-finance-announces-second-issuance-under
- https://mof.gov.ae/en/public-finance/public-debt/retail-t-sukuk/
- https://gulfnews.com/business/banking/uae-residents-get-a-new-five-year-investment-option-after-strong-first-sukuk-1.500677762
Published 18 September 2026 on the basis of public sources and official United Arab Emirates instruments. This is not legal or tax advice. Verify your position with a qualified professional before acting.