Halal investing adheres to Islamic principles, ensuring that investment decisions align with religious guidelines. As a faith-based approach, halal investing is often viewed as a subset of ethical or socially responsible investing.
Islamic principles dictate that investors must share in both profit and loss, avoid earning interest (riba), and refrain from investing in businesses that are forbidden by Islamic law (sharia). Before investing, it's crucial to assess a company's business activities and financial statements to determine the sources of its primary revenue and the structure of its balance sheet.
A company that meets these specific criteria (outlined below) would be considered halal (permissible). If it does not meet the criteria, it would be deemed haram (not permissible).
