Shariah-compliant investing is an ethical investment approach governed by Islamic principles. It seeks to generate returns without compromising religious beliefs by avoiding industries and financial practices deemed haram (prohibited).

This form of investing follows guidelines derived from Shariah law, including a focus on fairness, social responsibility, and transparency. All investment products must be approved by a qualified Shariah committee, ensuring compliance with Islamic finance principles.

Key Principles of Shariah Investing

1. Prohibition of Riba (Interest)
   Earning or paying interest is strictly forbidden. Investments must be structured around asset ownership or profit-sharing models such as Mudarabah (trust-based partnerships) or Musharakah (joint ventures).
2. Avoidance of Haram Activities
   Shariah-compliant investments exclude businesses involved in gambling, alcohol, tobacco, pork, weapons, pornography, and conventional interest-based finance.
3. Transparency and Fairness (Avoidance of Gharar)
   Deals involving excessive uncertainty or speculation are not allowed. All terms must be clear, fair, and agreed upon by all parties.
4. Social Responsibility and Zakat
   Shariah finance promotes ethical conduct and supports the welfare of society. Giving back through charitable means, like zakat, is encouraged.
5. Asset-Backed and Risk-Sharing Structures
   Investments should be backed by tangible assets and involve shared risk and reward, fostering fairness between investors and recipients.

What Shariah Investing Avoids

• Interest-bearing financial products (e.g. conventional bonds)
• Companies involved in unethical or harmful industries
• Speculative trading, derivatives, or high-risk investments