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Shariah-Compliant Investments Include Portuguese Golden Visa
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The RIF Trust Take on Shariah-Compliant Investments Now Including the Portuguese Golden Visa
Our CEO is Mimoun A. Assraoui. “For practising Muslims,” explains Assraoui, “Islamic faith is the bedrock of everything they do in their life, including making Shariah-compliant investments.”
“Our clients are growing more and more interested in finding Residency and Citizenship by Investment programmes that follow Islamic laws,” he reveals.
“Their religious beliefs affect their investment activity,” continues Assraoui. “That makes it reassuring to see the Portuguese Golden Visa become a Shariah-compliant Residency by Investment.”
What Is Shariah-Compliant Investment?
An Investopedia guide first addresses what Sharia is. Writer Clay Halton begins his overview with the following: “The term “Sharia” refers to a set of Islamic religious laws that govern aspects of day-to-day life for Muslims in addition to religious rituals.”
Sharia law is all pervasive, according to Halton, as it “also provides religious followers with a set of principles and guidelines to help them make important decisions in their lives, such as finances and investments.”
When it comes to Shariah-compliant investments, investors look at the wider picture. It involves ethics and morality. As Good Finance put it, this type of investment “is known as socially responsible investing due to the specific requirement to access the fund that complies with Islamic principles.”
How Does Investing in Portuguese Residency Comply with Sharia Law?
One of our client’s preferred Portuguese Residency by Investment options is paying €500,000 into a private equity fund. Following consultation with Sharia scholars, this is now a Shariah-compliant investment with Class A1 shares based on the Sukuk al-ljarah principle. As in the offer of fixed returns for limited investment.
Allow Thomson Reuters to elaborate. Their Practical Law Glossary illustrates that “in a sukuk al-ijara transaction, the:
- Entity seeking capital (originator) sells assets to a special purpose vehicle (SPV).
- SPV finances the purchase of these assets with the proceeds of a sukuk issuance.
- SPV holds the assets in trust for the sukuk holders who each own a proportionate interest in the assets in accordance with the value of their investment.
- SPV then leases the purchased assets to the originator or an affiliate of the originator.
- SPV uses the lease payments to make payments to the sukuk holders.”
Meanwhile, Class A2 shares are based on the precept of Musharakah. This sees profits and losses shared after completing 5 years of the project.
Musharakah is a concept that is common in Islamic banking. The Institute of Islamic Banking and Insurance (IIBI) provide a telling definition. They describe it as “an agreement under which the Islamic bank provides funds which are mingled with the funds of the business enterprise and others.”
“All providers of capital are entitled to participate in the management but not necessarily required to do so. The profit is distributed among the partners in predetermined ratios, while the loss is borne by each partner in proportion to his contribution.”
How to Make a Portuguese Golden Visa Your Next Shariah-Compliant Investment
Investing in Portuguese Golden Visa is set to become one of the most sought-after Shariah-compliant investments. Benefits include travelling freely around the Schengen area and qualifying for a powerful Portuguese passport after 5 years of residence. So, contact us now and we’ll show you how to get your hands on a Portuguese Golden Visa.