Question:

I wanted to know if investing with Uinvest is Halal ?

UInvest is an international online crowd funding platform that connects private investors with businesses.

Uinvest has a variety of businesses, ranging from factories, manufacturing facilities to utilities, and commercial properties. Each company has shares, enabling investors to be a part of a business.
Each share is a way to make money, provided company itself is already profitable.

Uinvest service fee – 10% of income that shareholder makes monthly (deducted from the shareholder’s investment account after they start getting the earnings)…

You can read more about Uinvest here :
https://support.uinvest.com.ua/index.php?/Knowledgebase/List

Main Website :
https://uinvest.com.ua

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

In principle, an investment scheme will have essential three parts which must be shari’ah compliant for the entire scheme to be acceptable in shari’ah.

1. Concept
2. Contracts
3. Implementation of the contracts.

In most of the queries we attend to, we can only judge the concept of the scheme. There are two possibilities for the concept behind Uinvest.

It could be a Shirkah Model. Shirkah model means that when a person invests a particular amount in some company, he effectively becomes a partner in that company. The company declares profit every month, and the investor gets a %age of that profit. Once the investor decides to terminate, he may sell his part of the company at the market price. Although we would require further analysis but this concept is essentially acceptable in Shariah.

It could be a Loan Model. If the scheme is not designed as we have outlined above, i.e It does not give the partnership in that particular company, rather a right to receive %age return from the Uinvest, or individually from every company, then this would mean that money is being merely lent as a loan and a profit is being paid out thereof. This would be flagrant riba’. This concept is completely unacceptable in Shariah.

Once we have established which model is being utilized by the scheme, we will need to see the contract which the investor signs to ascertain its Shariah Compliancy. Finally, a review of how that contract is carried out will help us determine the permissible or impermissible nature of the entire scheme.

At present, with the information available, it seems that the Uinvest is running on the Loan model. Their website state :

“Our certificates state your legal right to claim your money from UInvest. Whatever happens with our company, you will be treated as a creditor. If the company goes bankrupt its property and all assets will be distributed among creditors accordingly to the amount of debt. Thus, the certificates issued and signed by UInvest, with your name on them, make you able to  get your investments back.”¹

Moreover, we contacted the Uinvest to ask them directly for clarification as well.

Q: If the investment contracts with the company being invested in are confidential, then am I correct in saying that essentially I m lending the money to Uinvest, to give me a %profit return. This way I would not be directly dealing with the companies being invested in, rather Uinvest does the investing with my money?

A: Yes. Uinvest is an intermediate in face of crowd funding plat for[m] who is taking care of all the processes between you and businesses here, simple- just invest and gain %

So, from what we have gathered from their website, it seems that it is indeed a Loan Model.

Hence it will not be permissible to use this facility as it is a direct loan with an anticipated profit return which is Riba (interest).

And Allah Ta’āla Knows Best

Mufti Faisal bin Abdul Hameed al-Mahmudi
Darul Iftaa wal Irshaad, Montreal
www.fatwa.ca

Concurred by
Mufti Luqman Hansrot
www.efiqh.com

Concurred by
Mufti Faraz ibn Adam
www.darulfiqh.com