Dr. Monzer Kahf, a prominent economist and counselor states: To go into the details investment really takes a lot of time, effort and patience on a beginner’s part. Let me give certain clues and I suggest that one should attend some of the training courses that are offered on this issue.

The basic principles are the following:

  1. Interest is prohibited in Islam, we should please refer to the Qur’an Verses 2:275-279 and several other verses too. This means that all government and corporate bonds are not permissible.
  2. It is also not permissible to be a partner in a company whose main line of business is not permitted in the Islamic religion. This includes stocks of banks, insurance companies, entertainment industry, military weapon industries, liquor breweries, tobacco companies and the like.
  3. In principle, it is also prohibited to be a partner in a company whose management make interest contracts or any other production or contracts that is not permitted in Islam because the management acts on behalf of shareholders, to their benefit and in their name. But since the application of this condition exclude most companies and leaves very small room for reasonable investment by people like you and me, the rule of Shari’ah is that whenever it is harsh or very difficult to abide by a prohibition and such a hardship applies to a large number of people, the prohibition is relaxed to the extent that make normal living activities reasonable done with no difficulty. This degree of tolerance is of course relative and the close we are to the ideal situation the better we would be.