Muslims Trading with Other Countries?

Question:
My question is regarding trade. As far as I know, in Islam it is allowed to do trade with Christians, Jews (Book Holders) Today most of the Muslim countries do their businesses with Japan, Korea and those countries which are neither Jewish or Christian. Is this right? Secondly, the goods that Muslim country buy from these countries is sold in local markets. Are Muslim masses allowed to buy these goods?

Answer:
All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad sallallaahu `alayhi wa sallam (may Allaah exalt his mention) is His slave and Messenger.

In principle, it is permissible for a Muslim to buy from Jews, Christians, polytheists, and all other non-Muslims or to sell them goods within the limits of the Shari’ah.

However, any involvement in Riba (interest and/or usury), selling pork and the like are forbidden. Therefore, there is no harm to purchase their food, drinks, garments, means of transport, etc. as long as they do not contain any prohibition of the Islamic Shari’ah.

Allaah Knows best.


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Zakat of Agricultural Products

Source: https://www.islamweb.net/emainpage/PrintFatwa.php?lang=E&Id=29066&lang=E&Id=29066

Question
I own two acres of land, one of which is my property and the other is rented out. What is the due zakat on each of them, given that I am growing banana trees and that costs a lot of money to cultivate?

Answer
All perfect praise be to Allah, The Lord of the worlds. I testify that there is none worthy of worship except Allah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and messenger.

Scholars have differed with regards to the due zakat on agricultural products. Imam Abu Hanifah, may Allah have mercy upon him, believed that zakat is obligatory on agricultural products, regardless of their amount. He believed that zakat should be paid on everything that comes out of the earth like grains; all crops and fruits; such as bananas, pomegranates, peaches and even vegetables, legume and flowers. He depended on the narration of Ibn ‘Umar, may Allah be pleased with them, who reported that the Prophet, sallallaahu ‘alayhi wa sallam, said: “On that which is watered by the heavens (i.e. rain), springs or its own roots, a tenth of the harvest is due and for what is watered by irrigation, half a tenth (i.e. twentieth) of the harvest.” [Al-Bukhari and others]

The other three Imams, may Allah have mercy upon them, believed that zakat is obligatory on edible agricultural products that can be measured by capacity (i.e. Saa‘: a measure that equals four double-handfuls of an average person’s hands) such as rice, wheat, dates and raisins. They relied on what the Prophet, sallallaahu ‘alayhi wa sallam, said: “No zakat is payable in less than five Wasqs (i.e. equals sixty Saa‘) of dates.” [Al-Bukhari and Muslim]

The same narration was reported as follows: “No zakat is payable in less than five Wasqs of dates or grain.” [Muslim and Ahmad]

This indicates that zakat is only due on edible agricultural products, provided the resulting crop is used as regular food which can be stored and planted, as stated above. As for vegetables, fresh fruits and legumes, they are not measured or stored, so no zakat is due on them.

The predominant opinion in this regard is that zakat is not obligatory on fruits and vegetables since vegetables were plentiful in Al-Madinah and fruits were abundant in the Arab markets in Taa’if. The Prophet, sallallaahu ‘alayhi wa sallam, and the Companions, may Allah be pleased with them, were never reported to have taken zakat on any of these crops.

Hence, there is no zakat on the bananas grown in this land. However, if the money that is earned from selling agricultural products reaches the due Nisab of zakat, whether by itself or when added to other money or trade goods, and the Hawl (i.e. lunar year) has passed, then zakat becomes due on that money.

Allah Knows best.


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Paying Zakat in Installments?

Question
As one year completed on my savings I had to pay Zakat on it but I didn’t have enough money to pay so I paid 1/3, and say as I get more money I will pay later. Before few days I had money so I put out remained Zakat which I had to pay, but here I didn’t find any one to give Zakat. I keep that money separate but I didn’t give to any one, now after few days I have had more savings so kindly tell me should I give Zakat on that new sabings or give when one year will have been passed?

Answer
All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger, may Allah exalt his mention as well as that of his family and all his companions.

Every savings that reaches the minimum amount liable for Zakat, which is 85 grams of gold, and if a whole lunar year elapses on it. In this case Zakat has to be paid on it immediately and it should not be delayed, except for a short period if one does not find a poor person to give it out to, or due to waiting for the return of a relative to give it to him and the like.

Ibn Qudamah, may Allah have mercy on him, said: ‘If one delays paying the Zakat in order to give it to a relative who deserves it, or someone who is very much in need for it, it is permissible to wait for a short period, but it would not be permissible if one has to wait for a long period.”

As regards delaying the payment of Zakat on this savings because of the lack of cash money, then this is not a sound excuse, but it is an obligation to give a portion of this money to the people who are eligible for Zakat.

Allah knows best.

Source: https://www.islamweb.net/emainpage/PrintFatwa.php?lang=E&Id=89551


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Whether a Partner in Business Partnership is Entitled to Salary?

Source: https://www.islamweb.net/emainpage/PrintFatwa.php?lang=E&Id=335446

Question:
Assalaamu alaykum.
‘A’ brought a business concept and requested me to invest. Me and two friends agreed to invest. ‘A’ agreed to manage the business. ‘B’ is a finance professional and agreed to look after the finance management. ‘C’ is a marketing professional and agreed to support marketing.

  1. Who is the owner of the business?; only ‘A’, or all partners? Is ‘A’ allowed to take a monthly amount as salary;
  2. How do we consider the role of ‘B’ and ‘C’? Are they entitled to any payment?;
  3. How should their role be considered while sharing the profit?

I kindly accept your feedback. May Allah bless you.

Answer:
All perfect praise be to Allah, The Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger

Your question included several points, and we will answer them in the order in which you mentioned them:

The first question: Who is the owner of the business? Is it person (A) alone, or all partners? The answer is: the business is a joint venture (partnership) between the three if (A) will invest the money of (B) and (C) and will work with the money against a percentage from the profit that will be agreed upon in the contract. He does not have a salary. The partnership, in this case, will be called Mudhaarabah [as underlined in fatawa 5160 and 276166]: (A) with his effort and the two others, (B) and (C), with their money and their work.

However, if (A) will be given a specific salary for his effort and his investment of the money, then he is a hired person (employee) and not a partner; the business, in this case, is between (B) and (C), who are partners with their money and their work.

The second question: Is it permissible for the person (A) to take a sum of money each month as a monthly salary? The answer to this is that if (A) is a partner, then it is not valid that he will be given a specific salary; rather, he takes a percentage from the profit only, if there is any profit, in return for his work.

Ibn al-Munthir said, “All the scholars that we know of unanimously agreed upon the invalidity of profit-sharing if one or both parties stipulate a designated number of dirhams for themselves.”

However, if he only works and has nothing to do with the partnership, then he is given a known salary.

The third question: How do we consider the role of (B) and (C)? Are they entitled to any payment? How should their role be considered while sharing the profit? The answer is that (B) and (C) are partners in the business and the profit of each of them is according to what was agreed upon (between them) in the contract. If the company is a Mudhaarabah, in a way that (A) will work with them as a partner against a percentage from the profit, then the profit is divided between the three according to what was agreed upon in the contract. Since both (B) and (C) are participating with capital and they both work as well, then each of them is entitled to ask for a salary in return for his work or request an increase in their share from the profit. The author of Ar-Rawdh (a Hanbali book) wrote, “Or that one of them works with his money and he gets a profit more than the profit of.…his money [i.e. the profit he is entitled to according to his share from his money]”.

If the third (A) works as an employee with a salary, then the partnership is between (B) and (C) only and the profit is divided between them according to what they agree upon. If one of them works more than the other, then he may request an additional share from the profit in return for that. In any case, what should be taken into account depends on what they agree upon.

Al-Khiraqi said in his Mukhtasar, “If two persons have a partnership in their effort and the capital of one of them, or two persons in their effort and the money of others, or one person in his effort and the capital of another, or the capital of both of them and the effort of one of them, or the capital and effort of both of them – whether the capital is contributed equally or not – then all of this is permissible, and the profit is divided according to what is agreed upon between them.”

Allah knows best.


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Seeks Advice for Opening a New Business.

Source: https://www.islamweb.net/emainpage/PrintFatwa.php?lang=E&Id=84907

Question:
I am opening a new shop for electronics goods and I am new to this business. I want to know what are the things I need to do apart from being honest and not cheating so that Allah may bless my business with prosperity and let it flourish. What are the Dua’s or supplications or prayers I need to perform every day in the light of the Qur’an and Sunnah? What should I do when I first open the shop, i.e. are there any supplications or Salat I need to perform every day and what should I do when I close my shop?

Please answer me in the light of the Qur’an and Sunnah and reply soon as my shop is starting this week. I am afraid as whatever I did I did not succeed and this time lots of hard-earned money of my father is being invested. As my father is growing old, day-by-day his strength is diminishing and I need to do something so that my father gets a rest. If I do not succeed my father will have to continue working. Please help me for the sake of Allah and pray to Allah so that my business flourishes and I can give my father the much-required rest.

Answer:
Praise be to Allah, the Lord of the World; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.

Dear inquirer!

We ask Allah, The Exalted, to grant you success Here and Hereafter, to shower you with His blessings and to bless your family and wealth. Know that success is based on the following:

1) Pay Zakat if your business meets the minimum requirements. Make sure to calculate your zakat (by referring to your assets) annually so that you know you need to pay zakat or not. Otherwise, performing charitable activities is recommended.

2) Seeking Allah’s help and supplicating Him since He is The Most Generous. It is proved in the Hadith recorded by al-Tirmizi and Abu Dawood and others that the Prophet (Sallallahu Alaihi wa Sallam) said: “Allah is Modest and Generous, so He does not turn down one’s raised hands (supplicating Him) with failure”.

3) Persevere in truth and sincerity and search for what is Halal, for the Prophetic Hadith: “The seller and the buyer have the right to keep or return goods as long as they have not parted or till they part; and if both the parties spoke the truth and described the defects and qualities of the goods, then they would be blessed in their transaction, and if they told lies or hid something, then the blessings of their transaction would be lost” [Reported by Imam Bukhari ].

4) Seeking the help of experts in the field that you are considering so that they can help you choose successful projects and their best useful means. In this concern, it is proved in the Sunnah that Umm Salamah (Radiya Allahu Anha) said: “Allah’s Messenger (Sallallahu Alaihi wa Sallam) used to say after performing the dawn prayer: ‘O Allah! I ask you for useful knowledge, abundant livelihood and acceptable actions” [Ahmad in al-Musnad].

As for bringing down Allah’s blessings, it is proved in the Sunnah as recorded in al-Musnad from Ali (Radiya Allahu Anhu) that Allah’s Messenger (Sallallahu Alaihi wa Sallam) said: “O Allah! Bless the mornings of my Ummah (people)”.

When you enter a marketing place, you are advised to pray with Allah’s Messenger’s Hadith: “Whoever enters a market place and says: ‘There is no God but Allah, He has not a partner, to Him belongs the authority, His is all Praise, He grants life and causes death, He is The Living One, He does not die, good is in His Hand and He has power over all things; Allah will write down one million good deeds for him (in his account with Him) and cancel one million bad deeds and promote his rank one million degrees more”. Another Hadith reads: “Whoever desires to be pleased with abundance in his provision or that his age be lengthed, should show favor to his blood relatives” [Reported by Imam Bukhari ].

The above-mentioned Hadith states that having good relations with relatives and treating them well brings about more livelihood.

Allah knows best.


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Paying Through Installments?

Source: https://www.islamweb.net/en/article/135440/paying-through-installments

What are installments?

Definition: It is a postponed payment executed in a fixed number of installments at determined times, with a price higher than the cash price.

Is such a sale allowed? Scholars have two opinions:

1-The first opinion: Many scholars of the Hanafi, Maaliki, Hanbali, and Shafi’i schools of jurisprudence rule that it is allowed. They present the following proofs:

A- This form of sale is an example of the sales that are allowed in the Quran where Allah Says (what means): “…Allah has permitted trade and has forbidden interest…” [Quran: 2:275] And also: “…Except when it is an immediate transaction which you conduct among yourselves…” [Quran 2:282]

B- Some prophetic narrations show the permissibility of the increase above the cash price. For example, the Prophet sallallaahu `alayhi wa sallam (may Allah exalt his mention) ordered ‘Amr bin Al-‘Aas, may Allah be pleased with him, to equip an army, so ‘Amr would buy a camel for the price of two due to the payment being in installments. [Al-Haakim & Bayhaqi]

C- In Islam, trades and transactions are generally allowed, provided they are conducted with mutual consent of the contractors unless the particular type of transaction is specifically forbidden by the Shari’ah (Islamic Law). Since there is no convincing proof that this type of sale is prohibited, it remains allowed. Whoever claims otherwise has to provide proof.

2-The second opinion: This is that of Imams Zayn Al-‘Aabideen ‘Ali bin Al-Husayn and Al-Jassaas (may Allah have mercy upon them) from the Hanafi School of Jurisprudence, as well as others who stated that increasing the price in exchange for postponing a payment is similar to increasing the debt in exchange for postponing its fulfillment. Their proofs are:

A- The verse where Allah Says (what means): “…Allah has permitted trade and has forbidden interest…” [Quran 2:275] means that sales that include an increase of price in exchange for deferring payments are forbidden because they are examples of Riba (interest).

B- The Prophet sallallaahu `alayhi wa sallam (may Allah exalt his mention) has forbidden the addition of extraneous conditions to a sale, or to have two sales in one.

C- There is an analogy of this type of sale with the case where some of the debt is forgiven when the debtor pays before the due date. This would mean that time has compensation, and this is plainly Riba.

D- The increase of price because of the deferred payment is an increase in exchange for nothing in return, therefore it is a case of Riba, which, by definition, means to hike up the price in exchange for nothing.

The majority of the scholars have refuted the above proofs, presented by those who prohibit this sale, as follows:

A-To says that this type of sale is like Riba because of the increase in price is refuted. The Prophet, sallallaahu `alayhi wa sallam (may Allah exalt his mention) has determined the cases of Riba, and some scholars have limited themselves to these cases while others have added other cases they thought were considered Riba because they fulfill the same causes. These cases are, however, the object of disagreement between the scholars. But the matter that is disagreed about in this particular case is beyond what was mentioned by the Prophet sallallaahu `alayhi wa sallam (may Allah exalt his mention) and related cases, for it is about a sale in which the kind of merchandise and the evaluation of the price have differed.

B- To say that Riba means an increase in price is also refuted because almost every sale includes an increase in the price. The abovementioned verse [Quran: 2:275] mentions the unlawfulness of Riba in general, but the types of Riba were enumerated by the Prophet sallallaahu `alayhi wa sallam (may Allah exalt his mention) and they were six types. Sale by installments is not included in these six types of Riba, nor is it included in the types added to them by some scholars.

C- Taking as proof the Hadith (prophetic narration) that forbids two sales in one, or extraneous conditions in a sale, is refuted because the forbidden sales in that Hadith are in fact sales where either the price or the merchandise is not specified, which is not the case of the installment sale.

In conclusion, the most acceptable opinion is the one adopted by the majority of the scholars, which allows this type of sale, because of their strong proofs and because they convincingly addressed the proofs presented by the other side. Also, the common interest of all the Muslims requires that it be accepted due to the benefit for both the buyer and the seller.

Two Fatwas (Legal Rulings) Concerning Instalments:

Question 1: What is the Islamic Ruling concerning the increase in the price when there is a deferred payment executed in installments?

Answer: Payment by installments in sales contracts is allowed if it includes legitimate conditions and permissible if the monetary amount of the installments is defined and the times of payment are fixed; as Allah Says (what means): “O you who believe! When you contract a debt for a specified term, write it down…” [Quran 2:282] And also, due to the Hadith: “Whoever loaned something, let him lend it in a known measure, or a known weight, and for a fixed term.” In addition, we have the authentic story of Bareerah, may Allah be pleased with her, who emancipated herself from her masters in exchange for nine Ooqiyyaat (the plural of Ooqiyyah, one of which is equivalent to three hundred and sixty Dirhams), paying one Ooqyyah a year, and this was a payment in installments, and the Prophet sallallaahu `alayhi wa sallam (may Allah exalt his mention) did not condemn it; rather, he approved of it. [Shaykh Ibn Baaz]

This narration indicates that it is permissible to pay in installments.

Even though the texts state that it is permissible to delay payment, there is no text that explicitly states that it is permissible to increase the price in return for the delay.

Hence, the scholars differed concerning the ruling on this issue. Some scholars said that it is prohibited, on the grounds that it is the same as Riba. They stated that this was due to the increase in price in return for the deferment, which is Riba. On the other hand, the majority of scholars, including the four Imaams, were of the view that it is permissible. The comments of the scholars of the four schools of Fiqh (Islamic Jurisprudence) concerning this include the following:

  • The Hanafi School: “The price may be raised in return for delaying payment,” [Badaa’i’ Al-Sanaa’i’, 5/187]
  • The Maaliki School: “For more time some amount may be added to the price.” [Bidaayat Al-Mujtahid, 2/108]
  • The Shafi’i School: “Five in cash is equivalent to six in deferred payment.” [Al-Wajeez by Al-Ghazzaali, 1/85]
  • The Hanbali School: “Delay adds something to the price.” [Fataawa Ibn Taymiyyah, 29/499]

Question 2: A man living in the United States asks if installments used in car sales that include a fee for deferring payment is allowed. This fee increases when the buyer fails to pay on the agreed due dates.

Answer: If someone sells cars or other merchandise for a known fixed price that is payable by installments that are fixed both in time and amount, in such a way that the price does not change when the fixed time of payment changes (i.e., payment is delayed), then this sale is allowed, for Allah Says (what means): “O you who believe! When you contract a debt for a specified term, write it down…” [Quran 2:282] But if the price of the merchandise increases if an installment is paid after the due date, as it is understood in this question, then this is forbidden by consensus of the scholars because this is a case of Riba, which is mentioned (and explicitly forbidden) in the Quran.

[The General Committee for Religious Research, Fatawa, Da’wah, and Guidance]


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Neither Husband nor Wife Has to Pay Zakat Due on The Other

Source: https://www.islamweb.net/emainpage/PrintFatwa.php?lang=E&Id=102345

Question:
Assalaamualaikum, a sister from our forums is asking the following question. We hope that you will be to answer it: “If a person owns a small amount of jewelry (a couple hundred dollars worth), and the same person has thousands of dollars of debt (owed from before accepting Islam), and the person doesn’t have any wealth that has been sitting for 1 year, so, does the person have to pay zakat for the jewelry or not since he/she is drowning in debts?

Another question, If that person is married, but the debts are only under one person’s name (accrued by one of them only), but both feel responsible to pay it back, then does the other spouse need to pay zakat for his/her wealth/assets? I guess really my question is, Are the finances considered combined or separate for the purposes of calculating Zakat?” Jazak Allah khair

Answer:
All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

You did not clarify to us whether this gold is possessed for saving and trading, or for use as an adornment.

The predominant opinion is that of the majority of the scholars, may Allah have mercy upon them, who believe that there is no Zakat on gold if it is used for adornment. However, some of them believe that Zakat must be paid on it if it reaches the Nisab (i.e. the minimum amount liable for Zakat, equal value to 85 grams of gold or 195 grams of silver) and a whole lunar year elapses on it.

For more info, please refer to Fatwa no. 87362.

According to the view that Zakat must be paid on this gold, the majority of the scholars, may Allah have mercy upon them, are of the view that if one has debts he is not obliged to pay Zakat on items like gold, silver or cash money unless the debtor has other wealth on which one should pay Zakat, and is enough to cover the amount of debt. In this case, he must first pay the debt and then pay Zakat on the remaining money if it reaches the Nisaab.

Therefore, if the question is about a woman’s adornment, then according to the view that Zakat must be paid on the gold that is used as an adornment or saved for use, then she must pay her debts from the gold which she possesses. After this, if nothing remains of it, or what remains of it is less than the Nisab, she is not required to pay Zakat.

However, it cannot be imagined that the gold that a man possesses is for adornment and use, as he is religiously prohibited from wearing it. Hence, if the owner of this gold is a man, then he should repay his debts (from the gold) and then pay the Zakat on the remaining gold in any case if it reaches the Nisab since he possesses that gold.

Zakat must also be paid on the gold that is saved or used in trade (after paying the debts and provided it reaches the Nisab), whether the owner is a man or a woman.

For more info on the Zakat of an indebted person, please refer to Fataawa no. 82490 and no. 87557.

A husband is not obliged to pay the Zakat which is due to his wife; likewise, a wife is not obliged to pay the Zakat which is due to her husband. Moreover, the spouses are not obliged to add together the money that they possess in order to calculate the amount of Zakat due. Rather, each one of them is required to pay Zakat on his own money if it fulfills the conditions of Zakat. Each one of them has a separate monetary entity.

Allah Knows best.


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Zakat on Debit Card Deposit?

Source: https://www.islamweb.net/emainpage/PrintFatwa.php?lang=E&Id=333268

Question:
Assalaamu alaykum wa rahmatullaah. I would like to ask regarding paying zakat on the money that a person has deposited from his own money in an Islamic bank in order use to use their covered card service. For example, the bank, before offering the covered card (debit card), requires from the client to give them 10,000 in cash, and they will keep it with them in a separate account (separate from the savings or current account) in order to grant the person the covered card. Upon the 10,000 cash given to the bank, they will set the maximum card limit to 7,500 that can be used. The bank said that this is sharia complaint as the person is using his own money that he has deposited and the bank then deducts the owed money from the person’s main bank account. The 10,000 cannot be withdrawn by the person unless he cancels the covered card program and hands them back the card. However, he can withdraw 7,500 from that card, which the bank will deduct 100% from the person’s main bank account. I would like to ask: does the person have to pay zakat on that money even though it is not in his full possession? If yes, then how should he calculate it? And would he have to pay for the past years, during which he did not know that he had to pay the zakat on such financial agreements? May Allaah reward you.

Answer:
All perfect praise be to Allah, The Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallahu ‘alayhi wa sallam, is His slave and Messenger.

You must pay zakat on those ten thousand if they reach the Nisaab (minimum amount liable for zakat which is equal to 85 grams of gold or 595 grams of silver) by themselves or in addition to other money or gold or silver or tradable items. The amount of zakat is 2.5%.

If you have not paid zakat on it the previous years, then you should do so now, because zakat is not waived by the fact that its time has passed. Also, the fact that the amount is mortgaged with the bank does not prevent one from the obligation of paying it. Zakat must be paid on the money that is subject to zakat, even if such money is mortgaged. So you should pay zakat on the mortgaged money as long as you have other money to pay from.

Ibn Qudaamah, may Allah have mercy upon him, said, “If a person mortgages cattle and a whole lunar year elapses while it is in the hands of a mortgagee, then it is obligatory on the person who mortgaged the cattle to pay the zakat as he is the complete owner, so if he can pay the zakat from other things, then it is an obligation.”

Also, Ibn Hazm said in Al-Muhalla, “If a person mortgages cattle, gold, silver, land that he cultivated, or palm trees that yielded fruit, and a whole lunar year elapses, then zakat must be paid on all this … because it is property that resulted from his property, and the obligatory zakat is a must on it as long as his property is not transferred to someone else [i.e. as long as he is still its owner].

An-Nawawi said, “If a person mortgages cattle or other zakat funds and a whole lunar year elapses, then there are two views for this: the adopted view – which is the view authoritatively asserted by the majority of the scholars – is that zakat must be paid on it because of fully owning the property. It was also said that there is a difference of opinion regarding it, like that regarding the usurped property, as the person (in this case) is not able to dispose of his property.”

Allah knows best.


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The Ethical Framework for a Muslim Investor

Money, money, money. Doesn’t it make your head spin sometimes? Think of all the things you can do if you just had a little more…

Unfortunately, this compelling greed and need sometimes drives us to make financially unsound decisions, and worse still, even un-Islamic ones. The following article outlines various aspects of Islamic financial dealings, from paying the one you hire to what not to pay when you owe someone. There is so much evidence with regard to Islamic finance that they cannot and must not be ignored. If you ever intend to spend another money, you must read on.

The Hirer and the Laborer
Nothing bonds employees to their place of work more than the fulfillment of their contractual rights, including receiving their wages on time – such treatment fosters loyalty and a sense of belonging as well as financial security for themselves and their family. The Prophet SAW (may Allah exalt his mention) said: “Give the laborer his wages before his sweat dries away.” [Ibn Maajah]. He SAW (may Allah exalt his mention) gave a stern warning to those who do not meet their obligations by saying: “Allah Almighty Said (what means): ‘I will be an opponent to three types of people on the Day of Resurrection: one who makes a covenant in My name, but proves treacherous; one who sells a free person and eats his price and one who employs a laborer and takes full work from him, but does not pay him for his labor.’” [Al-Bukhari].

Our Wealth and Charity
However, the highest among the list of financial obligations is that of our obligation toward our Creator. The rich begin to fulfill this obligation by giving Zakah to the poor and they continue the fulfillment by giving charitable donations whenever needed. Fulfilling one’s obligation towards Allah purifies the capital from inadvertent errors and suspicion, as well as purifies the soul from stinginess and selfishness.

Zakah does not eat away capital, rather it increases it. On the other hand, withholding Zakah is a direct reason for bankruptcy. When people withhold Zakah, Allah withholds rain from them and if it were not for the sake of preserving cattle and wildlife, the rain would cease altogether. Evidence abounds on these issues from both the Quran and Sunnah.

Allah Says (what means): “… And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment. The Day when it (the gold and silver whose Zakah was not paid) will be heated in the Hellfire and seared therewith will be their foreheads, their flanks, and their backs, (it will be said), ‘This is what you hoarded for yourselves, so taste what you used to hoard.’”[Quran, surah at-Taubah: verse 34-35].

Allah also Says (what means): “And those within whose wealth is a known right (Zakah). For the petitioner and the deprived.” [Quran 70:24-24].

And in another verse, Allah Says (what means): “Take, (O Muhammad), from their wealth a charity by which you purify them and cause them increase, and invoke (Allah’s blessings) upon them. Indeed, your invocations are reassurance for them. And Allah is Hearing and Knowing.” [Quran, surah at-Taubah: verse 103].

The Prophet SAW (may Allah exalt his mention) said: “No owner of treasure who does not pay Zakah (would be spared) but (his hoard) would be heated in the Hellfire. These would be made into plates and with these, his sides and his forehead would be cauterized till Allah pronounces judgment among His servants during a Day, the extent of which would be fifty thousand years. He would then see his path, leading either to Paradise or to Hellfire…” [Muslim].

One has only to regard the effect that Zakah has on society to recognize its importance. The money is paid by the rich in order to fulfill their obligation towards Allah, and then used by the poor to relieve their suffering. In a society where giving and receiving are carried out in good faith, the poor live peacefully with the rich in flourishing and stable solidarity. The Prophet SAW (may Allah exalt his mention) gave an example of this society by saying: “When the Ash’arites run short of provisions in the campaigns or run short of food for their children in Al-Madeenah, they collect whatever is with them in a cloth and then partake equally from one vessel. They are from me and I am from them.” [Al-Bukhari].

Avoiding Ribaa (Interest)
A careful analysis of the history of civilizations reveals a common root to all turmoil and political unrest – and that root is usury. This is the reason why Islam took an extremely firm stand on the issue of interest.

Muslim investors should be extremely careful to avoid engaging in transactions involving interest or in any transaction involving interest masquerading as a seemingly lawful transaction.

Allah forbade interest and threatened those who take it with severe punishment, when He Says (what means):

“Those who consume interest cannot stand (on the Day of Resurrection) except as one stand who is being beaten by Satan into insanity. That is because they say: ‘Trade is (just) like interest.’ But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns (to dealing in interest or usury) – those are the companions of the Fire; they will abide eternally therein. Allah destroys interest and gives an increase in charities. And Allah does not like every sinning disbeliever.” [Quran, surah al-Baqarah: verse 275-276].

Allah Almighty declared war against those who take interest and encouraged lenders to be patient with borrowers to the point of absolving them from all, or part, of the loan in the following verse, when He Says (what means):

“O you who have believed, fear Allah and give up what remains (due to you) of interest if you should be believers. And if you do not, then be informed of a war (against you) from Allah and His Messenger. But if you repent, you may have your capital – (thus) you do no wrong, nor are you wronged. And if someone is in hardship, then (let there be) postponement until (a time of) ease. But if you give (from your right as) charity, then it is better for you, if you only knew.” [Quran, surah al-Baqarah: verse 278-281]

Islam’s ruling on taking interest is very straightforward and severe. It is considered to be one of the seven mortal sins. The Prophet SAW (may Allah exalt his mention) said: “Avoid the seven great destructive sins.” The people inquired: ‘O Allah’s Messenger! What are they?’ He said: ‘To join others in worship along with Allah, to practice sorcery, to take the life which Allah has forbidden except for a just cause (according to Islamic law), to eat up Ribaa (usury), to eat up an orphan’s wealth, to show one’s back to the enemy and fleeing from the battlefield at the time of fighting; and to accuse chaste women, who do not have any unchaste thoughts and are good believers.’”[Al-Bukhari].

The Prophet SAW (may Allah exalt his mention) went on to curse the taker of interest, its payer and also the one who records it, including the two witnesses. He SAW (may Allah exalt his mention) said: “They are all equal.” [Muslim].

The Prophet SAW (may Allah exalt his mention) further said: “This night I dreamt that two men came and took me to a holy land whence we proceeded on till we reached a river of blood, where a man was standing, and on its bank was standing another man with stones in his hands. The man in the middle of the river tried to come out, but the other threw a stone in his mouth and forced him to go back to his original place. So, whenever he tried to come out, the other man would throw a stone in his mouth and force him to go back to his former place. I asked: ‘Who is this?’ I was told: ‘The person in the river used to eat Ribaa.’” [Al-Bukhari].


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