Sharia-compliant investments in Poland require careful selection of financial instruments to ensure compliance with Sharia Law, which prohibits earning income from interest and engaging in speculative activities. The instruments that meet these requirements include:
Shares in limited liability companies
Limited liability companies (sp. z o.o.) are one of the primary forms of business activity in Poland. Shareholders, by contributing share capital, acquire shares in the company, giving them the right to participate in the company’s profits in the form of dividends, in accordance with the resolution of the Shareholders’ Meeting. Shares do not generate interest on the invested capital, which aligns with the principles of Sharia. The value of shares may increase as the company grows, allowing investors to achieve profit upon selling their shares.
Shares in joint-stock companies
Joint-stock companies are another form of capital company in Poland. Shares grant their holders the right to participate in the company’s profits in the form of dividends, determined by the General Meeting of Shareholders. Similar to shares in limited liability companies, shares do not generate interest, making them suitable for investors adhering to Sharia principles. Additionally, the increase in the company’s value can lead to an appreciation in the value of shares, enabling profit upon their sale.
Zero-coupon bonds
Zero-coupon bonds are debt securities issued at a discount, meaning they are sold at a price lower than their nominal value. Investors do not receive regular interest; the profit is realized when the bonds are redeemed at their nominal value. This mechanism ensures that zero-coupon bonds comply with Sharia principles, as they do not involve earning income from interest.
Sharia-compliant Closed-End Investment Funds
The proposed collaboration involves establishing a Closed-End Investment Fund (FIZ) that will invest exclusively in financial instruments compliant with Sharia Law, such as shares in limited liability companies, shares in joint-stock companies, and zero-coupon bonds. The activities of such a fund will focus on avoiding investments in sectors that do not comply with Sharia principles and striving to achieve profits in an ethical and responsible manner.