Musharakah

UAE Laws and Islamic Finance

Rome at Night

Thoughts from Iraj Toutounchian’s Islamic Money & Banking, Integrating Money in Capital Theory

This contract in its general form is the pillar of Islamic finance in that it is primarily based on profit-and-loss sharing (PLS).  It has the flexibility that enables it to be used for a wide variety of economic activities, from industry (as equity participation), to construction (as civil partnerships and installment sales), to farming (as Mozara’ah), to plantation (as Mosa’qaat), and finally to trade (as Mudarabah).

Equity Participation

In this contract, the Islamic bank supplies part of the capital required to establish a new joint-stock company or to purchase shares in an existing company…

The project has to be both economically and socially justified and in accordance with the country’s general economic priorities.  The bank’s participation will be contingent on its receiving satisfactory results from its initial studies of the proposed…

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