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Buying Shares or Investing in Companies with Haram Products: OK?

24 June, 2022
Q I have a query that concerns investments. Is it haram for a Muslim to invest in Unit Trusts or to buy shares of companies, even if those companies are not dealing with things that are clearly haram such as alcohol? This has been on my mind quite a lot lately and I would really appreciate a clear reply so that I may put the matter to rest once and for all. Thank you.

Answer

In the Name of Allah, Most Gracious, Most Merciful. 

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.


In this fatwa:

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Different forms of investment in companies are permissible as long as the company doesn’t deal in haram products, and the investment itself does not contradict the Islamic law.


Responding to the question, the Islamic Religious Council of Singapore, states:

Thank you for your query. We commend your effort to seek the truth in the religion.

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Investment in any company, whether it be in the form of stocks, shares, unit trust, etc., is halal as long as the following conditions are met:

1- The company does not deal in haram matters, such as alcohol, porcine products, weaponries, music and entertainment, non-Islamic faith-based projects, and wanton destruction of flora and fauna.

2 The company does not involve in any oppression against humanity, especially Muslims.

3 The investment instrument itself does not contradict Islamic Law.

We would like to advise you to check the company thoroughly, or check market sectors you would like to invest in before making any commitment.

We hope that this reply answers your question. Please continue to seek religious knowledge at mosques or by reading authentic materials.

Almighty Allah knows best.

Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.