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Investing in the USA - Muslimah - 06-23-2003
Assalamu alaikom,
1. What is the best way to invest your money in the western world without angering Allah?
2. And is paying mortgage for a home considered under the categories of ribah?
3 How do you buy a property in the States and not let your spouse get half of it fearing they put a loan on it..or anything of the like?
Answer to #1:
What is the attitude of Islam towards buying and selling shares as a profession? May Allaah reward you with good.
Answer:
Praise be to Allaah.
1 – Definition of shares.
A share is a defined portion of the total capital of a company.
A share is defined as being the share that the shareholder has in a company, or a portion of the total capital of a company, written on a certificate that has a nominal value, so that the shares in totality represent the capital of the company, and are all of equal value.
Based on that, the share is an independent document, given to the shareholder, that contains information specific to the company, such as the company name, the amount of its capital, its nationality, the location of its headquarters, the number and value of the share and the name of its holder if it is a nominal share, or the statement that the share belongs to the bearer.
2 – Ruling on shares
In principle there is nothing wrong with buying or selling shares, but there are some things that should be avoided, such as:
Buying and selling shares in companies in which it is haraam to hold shares because they sell things that are not permissible, or they help in spreading corruption and falsehood.
Buying and selling shares in riba-based banks.
Putting share money in riba-based banks, because that leads to the profits being mixed with riba money.
A – The Standing Committee was asked about holding shares in private companies that deal in charity work, agriculture, banks, insurance and petroleum. They replied:
It is permissible for a person to hold shares in these companies if they do not deal with riba. If they deal with riba then it is not permissible. That is because it is proven from the Qur’aan, Sunnah and scholarly consensus that dealing with riba is haraam.
Similarly it is not permissible for a person to hold shares in commercial insurance companies, because the insurance policies involve ambiguity, uncertainty and riba, which are all haraam according to Islamic sharee’ah.
Fataawa Islamiyyah, 2/43
B – There follows the text of a question and answer from the Fatwa Committee of the Kuwaiti Finance House (Bayt al-Tamweel al-Kuwaiti) concerning the third point.
Question:
Is it permissible to buy and sell shares in foreign companies such as General Motors, Phillips and Mercedes, knowing that these are industrial companies, but they do not refrain from lending and borrowing with interest?
Answer:
In principle, there is nothing wrong, from the point of view of sharee’ah, with holding shares in industrial, commercial or agricultural companies, because they are subject to profits and losses. It is akin to the kind of investment approved of in sharee’ah, subject to the condition that these companies keep away from riba-based transactions, whether they are paying or taking interest. From your question it is obvious that these companies deal in riba, paying or taking it, so on that basis holding shares in them is to be regarded as holding shares in a riba-based operation, which is what is forbidden in sharee’ah. And Allaah knows best.
Al-Fataawa al-Shar’iyyah fi’l-Masaa’il al-Iqtisaadiyyah al-Ajzaa’ Bayt al-Tamweel al-Kuwaiti, Fatwa no. 532.
And Allaah knows best.
Islam Q&A (www.islam-qa.com)
#2:
Question:
3 years ago we bought a house with a morgage with interests [riba] after we heard a fatwa.now we finished paying it [we payed a big part of it cash ] my questions are ;-
1- is it halal for us to live in this house.
2- can we rent it.
3- can we use it as a work place . [business,work from home].
Answer:
Praise be to Allaah.
Firstly:
You have to repent to Allaah for this interest-based loan, because interest (riba) is one of the worst of major sins. Allaah says (interpretation of the meaning):
“O you who believe! Fear Allaah and give up what remains (due to you) from Riba (from now onward) if you are (really) believers.
And if you do not do it, then take a notice of war from Allaah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums)”
[al-Baqarah 2:278-279]
Ibn Katheer (may Allaah have mercy on him) said in his Tafseer (2/657):
“This is a stern warning and a threat to those who persist in dealing in riba after having been warned. Ibn Jurayj said: Ibn ‘Abbaas said: ‘Take a notice of war’ means, be certain of war from Allaah and His Messenger… and it was narrated that Ibn ‘Abbaas said: It will be said on the Day of Resurrection to the one who consumed riba: ‘Take up your weapon for war.’ Then he recited (interpretation of the meaning):
‘And if you do not do it, then take a notice of war from Allaah and His Messenger’
[al-Baqarah 2:279].”
The Messenger of Allaah (peace and blessings of Allaah be upon him) cursed the one who consumes riba, the one who pays it, the one who records it and the two who witness it, and he said: “They are all the same.” (Narrated by Muslim, 1598).
With regard to living in this house, if you have repented to Allaah then there is nothing wrong with you living in it or renting it out or using it as a place of business.
The Standing Committee was asked about a man who took out an interest-based loan and built a house: should he knock down the house, or what should he do?
They replied:
If the situation is as you say, then what you have done by taking out this loan in this manner is haraam because it is riba. You have to repent and seek forgiveness for that, and regret what you have done, and resolve not to do such a thing again. With regard to the house that you built, do not knock it down, rather make use of it by living in it etc, and we hope that Allaah will forgive you for your careless action.
Fataawa al-Lajnah al-Daa’imah, 13/411.
We ask Allaah to accept our repentance and to help us to do that which He loves and which pleases Him.
And Allaah knows best.