IslamQA.org Logo

Shariah

Hanafi Fiqh

Investment Agent

Thank you muftisaab. So I have been trading stocks personally for a number of years, and always follow Islamic protocol. I am mindful of what industries I invest in, never going short on trades, mindful of debt ratios etc and alhamdulilah have had good success. This led me to wanting to grow my venture to open up the scalability of it and to start to do it on behalf of others. So I’ve approached friends and family initially, with the proposal that they invest their money with my limited business, and I trade on their behalf in a way that is similar to a fund, of course concentrating only on halal stocks. What I have offered to them is that they receive a X% return on their investment per annum, and If I manage to out perform X% on the market, whTever is in excess, is profit for myself as well, so that the arrangement is mutually beneficial. I have told them that if the year elapses and they request their money back, and the money is currently tied up in open investments in the market, I will honour their request from the pool of funds I have sitting on the side as liquidity, which remains untouched to underwrite any clients investment. I was wondering, mufti, whether this arrangement is permissible? And if it is not permissible, how I can adjust my business model in order to bring it into accordance to Islamic shariah. JazakAllah khair

Hanafi Fiqh

Long term workplace investment/pension

Assalamualaykum I have a investment scheme at my workplace which goes with my pension scheme called brass. Every month they take money from my salary and invest in various bonds stocks and shares. My question is would it be permissable for me to join this scheme. I have attached a copy of files which they show how they investment the money. Also if I was to request I want a more ethical investment which coincide with my religion can you advise me what kind of investment is impermissible according to shariah.
I do not want my money to be invested in haraam investment hence why I want to be sure before I join that I am not going to be getting haraam money.
Jazakallah

Hanafi Fiqh

Revoking gift before acceptance

Assalamualaikum

Under shariah law If you own an asset that is in possession of some person and in their absence in front of a witness you express your intention verbally that you have transferred ownership of your asset to the person who is in possession of your asset currently. However before the intended giftee comes to know about the offer it is revoked by the original owner so that asset remains his, as it was before and the witness is also told not to inform the third person. Will it be effective or ownership of asset has already been transferred ?

Hanafi Fiqh

Transferring property verbally

Assalamualaikum Brother
I have a question if you can please answer. Under shariah law is it true that if a man gives the file of his property to someone and verbally says to that person under oral hiba that by giving his file to him he has become owner of his property without signing the transfer papers is it true that in this case the one given the file to will become the owner of the property even though transfer ownership papers were not signed only file was handed over ?

Hanafi Fiqh

Life endowment insurance

Assalamu aleykum wa rahmetullahi wa beraketuhu.
The question is: let’s consider a person has a monthly gross salary of 1000 USD, and after deducting all mandatory government payments, he receives a monthly net salary of 750 USD. Now the government adopted a decree that allows a person to sign a life endowment contract with an insurance company that means a person agrees that every month 50% of his monthly gross salary (500 usd) will be transfered to the account of that insurance for the period of 36 months and only after 36 months is over, the insurance company pays back the total amount of the money collected in the account to that person (500 x 36 =18000 Usd). But the person cannot use that money for 36 months and during this period what the insurance company is doing with that money we do not know, Allahu Aleem. In addition, the insurance company pays additional 2% of the total amount at the end of 36 month period as a bonus (18000 + 2% = 18360.) but the person may refuse to take that 2% bonus if he does not want it, most people do not take that bonus becuase it is riba thus haram. If a person decides to stop the insurance contract before 36 months period end, let’s say a person paid 50% of his gross salary to the insurance company for 28 months then he wants to stop it) then all the government mandatory payment is deducted and the rest of the amount is given back to the person.
Is this type of insurance halal or haram from Shariah perspective?
Wassalamu aleykum.

Hanafi Fiqh

Help with Halal Investing

Assalamu Alaykum wa Rahmatullahee wa Barakahtuh,

Sheikh, would you please provide some advice on halal investing? I am interested in investing, but I want to be very cautious with navigating this in a halal manner, and I am not sure which investments would be halal, beyond a basic understanding.

I understand the basic tenets of halal investing, such as the company itself should be halal and sell halal products, the company should not engage in riba, etc.

What I don’t understand is whether it is permissible to assign thresholds to those tenets, such as saying that investing in a halal company is permissible as long as total interest/debt is less than 5% of the total makeup of the company, for example. And if such a case is permissible, then is purification of that wealth a requirement (for example, giving away 5% of the wealth earned as a charity)?

Also, would you provide insight on Wahed Invest, AAOIFI, and the Shariyah Review Bureau? I’ve seen these entities promote halal investing but I am not sure whether to trust them or not and I want to be very cautious with this.

I’ve tried to find some feedback from scholars on this topic, but I can’t find much on it, so any advice on this would be much appreciated.

Hanafi Fiqh

Stock market and ownership

Assalamo Aleykom Wa Rahmatullahi Wa Barakatho

In Norway there is a broker named “Nordnet”. They offer different types of accounts when buying stocks. One of them is called “Investeringskonto Zero”. When i read about this account, it says for example:

“General Meetings: Nordnet formally owns the shares you have in an investment account. You therefore do not have the right to vote at general meetings. We do not attend general meetings or exercise our shareholder role.”

According to the first sentence where it says that i don’t own the shares formally and it is the broker who owns it. Will this type of account be permissible for me to use when buying and selling shares, with the information given above?

Hanafi Fiqh

Home Purchase ‘ Options

Asalaamualaikum wa rahmatullah

I am a Muslim married Male with three young daughters under 7, living in a rented two bedroom property, The property has a number of issues including mould, which I am constantly fighting against, so we will need to move, and with 3 children ideally to a larger property. I have never owned a property and have been renting for the last 25 years. Rents in London are significantly higher for 3 bedroom properties, and would be challenging. I work full time, I am not likely to receive government housing, and waiting lists for affordable housing can take decades in this area. A relative owns a 3 bedroom property with their two sisters each owning a third. This property was inherited from their relative. The property value is approximately £800,000 and it is currently rented out.

One of the owners wishes to sell their 1/3 share of the Property, and would give us the option first before it goes on the open market. My relative would gift her 1/3 of the property for free. The final third would be rented from the other . If we were to acquire the property we would live exclusively in the property, just us. With regards to funding the costs of the 1/3 that I would have to pay for. I have viewed conventional mortgages and compared them with the “Islamic finance” models – GateHouse, Al Rayan etc.. purely from a cost comparison point of view. The difficulty is that the cost difference between the two means the Islamic finance option would put me from a monthly budgeting perspective at a considerable stretch, with the rent of the additional 3rd on top taking it out of my budget.

1. I am trying to understand if there are recommended organisations for such home purchases, and whether they are shariah compliant? They seem to have a model which leads to around £60,000 extra paid over the same time period.

2. I’m trying to understand if I am missing any valid individual dispensation for other options, based on circumstances for usually unacceptable finance (conventional mortgage)?

3. I’m looking for advice on any other options I have been making frequent dua for our circumstances to change and to have a place of security for my family. It seems to be an amazing opportunity to remain in London, where employment opportunities for my work are centred. If I’ve missed a question which may be relevant please feel free to answer it. Happy to provide further detail.

May Allah reward you well

Hanafi Fiqh

Buying with unlawful money

As-Salamu-alaikum
If a car and house are bought from interest money and profits earned from under invoicing activities in business, and the owner is in complete possession of these assets now. Are these halal assets for the person, so that he can legally use them as per shariah?

Hanafi Fiqh

Irregular bleeding due to the Coil (IUD)

Question:

A woman has a coil fitted five days into her clean days. She has been told that she will experience bleeding due to this. It has now been 12 days since the coil was fitted and she is still bleeding. This makes it 17 days since purity. Her usual purity is 21days and 7 days haiz.
In this situation does she wait till 21 days and continue as istihaza for now, or regard this bleeding to be haiz as it is more than 15 days?