What is Islamic Finance law
Islamic Finance is one of the fastest growing areas of international finance. Lawyers are needed to structure transactions, albeit using principles based on Islamic law and precedent.
When it comes to financial matters, much Islamic law is based on the Qur'an, the Sunnah (religious precedents) and the Ijtihad (a method of decision making). Since one of the tenets of Islamic law is that the payment of interest is forbidden, lawyers are often involved in devising and implementing structures that avoid the payment of interest.
Other common aspects of international finance, such as excessive uncertainty in contracts (gharar), gambling and chance-based games (qimar), and transactions involving unethical goods and services, are also prohibited in Islam. Broadly speaking, the Islamic financial model works on the basis of risk sharing between the participating parties, individuals’ rights and duties, property rights and the sanctity of contracts.
Islamic Finance is used in private equity transactions such as the purchase of companies as well as real estate transactions such as the purchase and financing of commercial property across the world.