Islamic Investment – Esfin (Islamic Finance Lawyers Company)

Islamic investment and its governing principles
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Investment is one of the most important economic issues without which production and development will not take shape and wealth will not be realized. Justice and the proper distribution of wealth mean when wealth is created. Wealth production occurs through investment, and cash capital is realized through savings, borrowing, and the participation of capital owners in production.
The financial system in Islam is based on the precepts of the Shari’a regarding economics and financial relations between individuals. One of the most important contracts that are considered as the principles of the Islamic financial system. Contracts of participation are Mudaraba, forgery and rent. In these contracts, the parties seek to make a financial profit from the place of their investments. In addition to these contracts, there are other mechanisms that are based on benevolence and charity to other believers, which are good loans and endowments in this category. Islamic financial experts consider the following principles, which are taken from the verses of the Qur’an, hadiths and the infallible tradition, as the principles of the Islamic financial system:

1- The principle of participation in profit and loss
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In interpersonal financial relationships, the agent who works with the investor’s capital is trustworthy and therefore does not guarantee the loss of capital unless he has gone to extremes. According to this principle, both the investor and the agent share in the profit or loss, in other words, if the capital principle is destroyed for reasons other than excess or excess, the agent is not the guarantor of the capital principle and The proportion they have already agreed on will contribute to the resulting loss.
Of course, this principle does not apply to all contracts. Explaining that some sharia contracts are fixed-yield contracts, such as installment sales contracts and the principle of profit and loss sharing, do not apply to such contracts, because in such contracts, the seller’s profit is known and future developments. The economic and financial conditions of the buyer and the amount of profit or loss are not related to the profit and claims of the seller.
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2- The principle of prohibition of usury
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In the text of the verses of the Qur’an and the authentic hadiths received from the infallibles (peace be upon them), receiving and paying usury is strictly forbidden, the concept of usury is expressed in various ways in the verses. According to these verses and hadiths, it is difficult to determine a certain interest on a loan, and therefore, many of the common financial transactions in the world cast doubt on usury.
The basic principle of Islamic tax is that all forms of interest are prohibited.
The Islamic tax model works on the basis of risk sharing. The customer and the risk bank share any investment with the agreed terms, and each shares a profit.
The principle of usury is one of the most important principles of the Islamic financial system, according to which instead of receiving and paying usury, emphasis is placed on profit and loss, and this system of profit and loss, as a way to withdraw from economic and capital activities. Financial investments are introduced.

3- The principle of Gharr boycott
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In Shari’a texts, the existence of arrogance in transactions is forbidden. There are various interpretations of complacency, such as doubt in the components of the transaction or uncertainty about the outcome of the transaction and the like, by examining the structure of some types of transactions and activities common in the financial markets, operations such as speculation due to Suspicions are forbidden in the transaction. According to some experts in Islamic economics, one of the reasons for imposing conditions such as the need to demand and accept the parties to the contract is to eliminate arrogance in the structure of the transaction.

4 – Making money from money is not correct

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Another principle of the Islamic financial system is that money is merely a medium of exchange and money is never the result and product of activities. For this reason, it is not right for anyone to expect to make a profit from the mere place of cash transactions. The principle of usury is also very close to this principle. Many of the criticisms leveled at proponents of purchasing power parity are also based on the premise that money is not a product. It is merely an intermediary of exchange.
According to Islamic principles, wealth should be obtained only through legitimate trade and investment in assets, and investing in companies involved in alcohol, gambling, tobacco and pornography is strictly prohibited.

Islamic sukuk or bonds
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Bonds are not enforced in Iran due to inconsistencies with Islamic banking law. Initially, Iran used participation bonds instead of bonds.
But in recent decades, Islamic bonds, or sukuk, have given way to partnership bonds. A sukuk is also a securities that buyers use to provide their financial resources to an institution or device to buy their assets.
So here it is not like partnership bonds that the bonds are used only to finance physical projects. But here, companies can use the funds at their disposal to buy the assets they need, and in a way, their hands are more open in operating costs.
In return, buyers will benefit from the ownership of this asset and the profits from it. However, in bonds, individuals received their interest without any risk and with complete certainty.

Problems of Muslim investors in the international arena

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Islamic Investment
Islamic Investment

The issue that may occupy the human mind is that the Islamic principles mentioned in the previous cases are easily applicable in Islamic countries and a Muslim person can invest in most Islamic countries without any problems or legal objections. But what if a Muslim wants to invest and trade in the international arena or wants to invest in non-Islamic countries where Islamic principles and rules are generally not implemented?
In this regard, some private companies and organizations have been formed that with their relatively solution-oriented solutions can form areas through which the Muslim person can proceed to international investment without any problems or legal objections. These companies primarily play the role of intermediaries, identifying international companies that are willing to do business in accordance with Islamic principles and linking them to the Muslim investor. Of course, the field of activity of these companies is not only related to this particular case, but these companies carry out extensive activities related to Islamic investment, which we will explain by mentioning an example of services and activities of these companies.

Isfin (Islamic Finance Lawyers)
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The company is a global platform for professional companies specializing in Islamic finance, investing in the Islamic world and the halal industry.
ISFin was founded in 2011 by Lauren Marillary and in less than 5 years has been named the world’s leading emerging markets consultant for Islamic economics (including Islamic assets and halal industry).
The company offers a wide range of services to companies wishing to enter these emerging markets and deals with specific products for consumers and Muslim companies around the world.
Isfin works closely with other companies, consultants specializing in a specific field, as well as legal and tax advice (in total to its partners in 75 countries) and marketing packages to companies wishing to produce halal-Islamic financial products. Its current and new markets are offers. Joint and international cooperation with the best financial advisors and institutions is a feature of this company.
Isfin’s partners are mostly involved in the issuance of sukuk (Islamic “bonds”) by their respective governments, such as Indonesia, Malaysia, Luxembourg, Togo and Senegal.
In 2015, ISFIN launched the first Islamic Finance Executive Headquarters at BENELUX at the Catholic University of Leuven (UCL, Belgium), the second oldest university in Europe.
The group also founded the islamica 500, an exclusive guide to 500 thoughtful leaders, executives, professionals and entrepreneurs from around the world active in Islamic economics. ISLAMICA 500 is the only independent source of information for communicating with global leaders in Islamic economics.
In 2012, Spin received the Financial Times FT ISFIN Innovation Awards for its most innovative corporate strategy.
The company uses the expertise of international business consultants to be able to offer investment solutions in accordance with Islamic principles.
It also helps companies, public institutions, investors and professional companies interested in growth markets to be able to do business in accordance with the rules and regulations of Islamic law.
Isfin also helps with emerging market investments in the West and Western investments in emerging countries.

Goals of the Isfin Institute
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Shari’a investments and conventional transactions are compatible with Shari’a
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One of the goals of Isfin Company is to help Islamic investors who invest in Western countries. This company provides services such as consulting on the tax structure of Western countries. It also helps Western governments regulate their tax regulations so that they can promote Islamic investment in their countries.
Each member of the team has expertise in a field that includes:
Conventional Islamic Marketing, International Trade, Finance Exports, Auditing, Islamic Halal Financial Industry Sharia Auditing, Business Intelligence

How to cooperate with Isfin Company
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isfin understands the many challenges you face when traveling abroad, uses its agile and solid structure to draw conclusions, and responds appropriately when it recognizes your needs.
The isfin international consulting team consists of senior consultants on strategy, business development, market intelligence, finance, investment and more.
The task of this company is to guide you as a leading player in emerging investment markets.
The lawyers of this organization use Islamic rules to present the principles and frameworks of healthy investment and trade.

30 January 2021
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