Islamic finance transaction structures

Islamic finance transaction structures guidance:

Key elements of bai salam As discussed in more detail in the Practice Note: The structure and required elements of a bai salam transaction, in particular with regard to...

Practice Note

Murabaha agreements may be employed to provide working capital or acquisition financing. A murabaha arrangement entered into for such purposes is known as a commodities...

Practice Note

Some commentators have noted that the interplay of form and substance for UK tax purposes parallels the relationship of form and substance for Shari’ah purposes. From a...

Practice Note

In the Name of Allah, the Most Beneficent, the Most Merciful The evolution of Islamic finance The requirement for financing is an essential requirement of business and...

Practice Note

Murabaha contracts typically provide that the laws of England and Wales will govern agreements performed in the UK. A number of factors favour this practice: • most of...

Practice Note

A basic murabaha and a commodity murabaha arrangement can both be structured to facilitate a single transaction, or to operate on a revolving basis so that several...

Practice Note

Introduction—transactional Islamic finance There are a number of different opinions and principles iterated by Shari’ah board members when interpreting Shari’ah law in...

Practice Note

A Shari’ah compliant leasing agreement takes the form of an ijarah which can either be akin to an operating lease, whereby the asset is returned to the lessor at the end...

Practice Note

Key features • A Customer does not obtain a physical asset for their own use, but to engage in a series of purchase and sales transactions that result in them obtaining...

Practice Note

Key features • This is a form of investment management. Two parties form a commercial partnership with the Islamic Financial Institution (IFI) or group of investors...

Practice Note

Key features • Murabaha is one of the most controversial, but commonly used Islamic finance techniques. It is used particularly in the Middle East for short and...

Practice Note

Key features • This is a form of commercial partnership where two or more parties both provide capital (and real assets) as well as time and effort, commonly used in...

Practice Note

Key features • This is the equivalent of leasing in an Islamic finance structure and is a contract under which the owner (lessor) purchases an asset and then transfers...

Practice Note

Key features • This is a form of project finance used to fund the manufacturing of goods or assets that are not yet in existence. It is most commonly used for the...

Practice Note

This Practice Note provides an overview of the key considerations that an Obligor should take into account in selecting an appropriate structure for the issuance of...

Practice Note

Shari’a-compliant financing arrangements (also known as Islamic financing arrangements) can take a number of forms. The UK has introduced specific provisions known as the...

Practice Note

Takaful is a means of providing risk-cover conducted in line with the principles of Islam. To understand the mechanics of takaful and its documentation, it is critical to...

Practice Note

Like their conventional counterparts, takaful operators (ie Islamic insurance providers) have a number of ways to distribute their Shari’ah compliant life insurance...

Practice Note

Takaful is the provision of risk-cover conducted in line with the principles of Islamic law (Shari’ah). It offers a unique and important alternative to conventional...

Practice Note

Introduction to musharaka—a profit and loss sharing instrument of Islamic finance A fundamental principle of Islamic finance is that of ‘no profit without risk’, ie the...

Practice Note

This Practice Note sets out the key differences between conventional bonds and sukuk, or trust certificates as they are otherwise known, (the Sukuk). The Practice Note...

Practice Note

Terminology Given the historic origins of Shari'ah principles and jurisprudence in general and those underlying the development of bai salam, much of the terminology...

Practice Note

Murabaha is both one of the most widely used and controversial Islamic finance techniques. Murabaha (often referred to as ‘cost plus profit financing’) involves a minimum...

Practice Note

Introduction—a pure theory, a dead practice? For a number of years, Islamic financing has been offered by both Islamic financial institutions (IFIs), as well as...

Practice Note

BREXIT: The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For guidance, see...

Practice Note

When the murabaha structure was being developed for use in the UK, practitioners understood that the structure's novelty would produce a degree of uncertainty. As a...

Practice Note