A guide to Practical Law Finance's Islamic finance resources

A guide to PLC Finance's Islamic finance resources

Practical Law Finance
Contents

Introduction

This note acts as a guide to PLC Finance's resources on Islamic finance.

 

Islamic finance overview

 

Islamic capital markets

Sukuk (singular sakk) are financial instruments, such as certificates, which represent an undivided ownership share in an underlying asset or interest held by the issuer. This distinguishes them from both conventional bonds (which represent debt obligations of the issuer) and conventional equities (which represent ownership interests in the issuer itself). The basic principle is that an ownership share in the underlying asset entitles the sakk holder to a proportionate share of the returns generated by the asset. The overall economic effect is similar to a conventional bond.

 

Islamic derivatives

For an introduction to some of the issues surrounding the development of Islamic derivatives and an outline of some of the key structures, see Practice note, Islamic derivatives (www.practicallaw.com/8-501-6191).

 

Islamic real estate finance

For an overview of the key issues surrounding Sharia compliant financing of commercial real estate, considering both asset based and asset backed structures and how best to combine conventional and Sharia compliant financing, see Practice note, Sharia compliant financing of commercial real estate (www.practicallaw.com/1-525-4779)

 

Islamic project finance

For an overview of Islamic project finance from an international perspective, see Article, Islamic Project Finance (www.practicallaw.com/3-501-3312).

 

Islamic finance and the English courts

For an analysis of how the English courts will interpret requirements to act in accordance with the Sharia, see Practice note, Sharia and the English courts (www.practicallaw.com/0-507-2195).

 

Standard documents

For an introduction to standard documentation for Sharia-compliant transactions and links to online resources, see Practice note, Islamic finance: standard documents (www.practicallaw.com/6-500-6292).

 

Islamic microfinance

For an overview of the impact of Islamic finance on microfinance (www.practicallaw.com/5-386-3106) see Practice note, International investment in microfinance: overview: Islamic finance (www.practicallaw.com/8-385-9099).

 

Islamic finance deal structures

Bai salam

For an outline of the contractual structure used for a Sharia-compliant forward financing transaction, see Deal structure: Islamic finance - Bai salam (www.practicallaw.com/8-368-5018).

Ijara

For an outline of the contractual structure used for a Sharia-compliant product similar to a conventional finance lease, see Deal structure: Islamic finance - Ijara (www.practicallaw.com/6-368-5019).

Istisna'a

For an outline of the contractual structure used for a Sharia-compliant construction or manufacturing financing, see Deal structure: Islamic finance - Istisna'a (www.practicallaw.com/4-368-5020).

Mudaraba

For an outline of the contractual structure used for a Sharia-compliant profit sharing arrangement, see Deal structure: Islamic finance - Mudaraba (www.practicallaw.com/2-368-5021).

Murabaha

For an outline of the contractual structure used for a Sharia-compliant commodity trading arrangement, see Deal structure: Islamic finance - Murabaha (www.practicallaw.com/0-368-5022).

Reverse murabaha (tawarruq)

For an outline of the contractual structure used for another Sharia-compliant commodity trading arrangement, see Deal structure: Islamic finance - Reverse murabaha (tawarruq) (www.practicallaw.com/6-368-5024).

Musharaka

For an outline of the contractual structure used for a Sharia-compliant equity and venture capital financing, see Deal structure: Islamic finance - Musharaka (www.practicallaw.com/8-368-5023).

Sukuk al ijara

For an outline of the contractual structure used for a Sharia-compliant form of security similar to a bond in which the underlying lease generates the return, see Deal structure: Islamic finance - Sukuk al ijara (www.practicallaw.com/3-368-5025).

Sukuk al musharaka

For an outline of the contractual structure used for a Sharia-compliant form of security similar to a bond in which a Sharia-compliant joint venture generates the return, see Deal structure: Islamic finance - Sukuk al musharaka (www.practicallaw.com/1-368-5026).

Sukuk al mudaraba

For an outline of the contractual structure used for a Sharia-compliant form of security similar to a bond in which a Sharia-compliant contractual investment arrangement between an investor (Rab al Maal) and a managing trustee (Mudareb) and in which profits are shared provides the return. See Deal structure: Islamic finance - Sukuk al mudaraba. (www.practicallaw.com/8-501-7633)

Sukuk al murabaha

For an outline of the contractual structure used for a Sharia-compliant form of security similar to a bond in which a Sharia-compliant commodity trading arrangement structure provides the return. See Deal structure: Islamic finance - Sukuk al murabaha (www.practicallaw.com/8-502-0032).

Sukuk al salam

For an outline of the contractual structure used for a Sharia-compliant form of security similar to a bond in which a Sharia-compliant an underlying forward financing transaction (where the financial institution pays in advance for buying specified assets, which the seller will supply on a pre-agreed date) provides the return. See Deal structure: Islamic finance - Sukuk al salam (www.practicallaw.com/6-502-0033).

Sukuk al wakala

For an outline of the contractual structure used for a Sharia-compliant form of security similar to a bond in which a Sharia-compliant investment fund (in which the investment of the funds is undertaken by the investment agent) generates the return. See Deal structure: Islamic finance - Sukuk al wakala. (www.practicallaw.com/9-501-7637)

 

Tax

Sharia-compliant transactions tax

For an introduction to the UK's tax treatment of Islamic finance or, as it is referred to in UK tax legislation, "alternative finance", see PLC Tax, Practice note, Sharia-compliant transactions: tax (www.practicallaw.com/4-201-9755).

Sharia-compliant transactions VAT

For a consideration of the UK VAT treatment of certain sharia-compliant financing structures, see PLC Tax, Practice note, Sharia-compliant transactions: VAT (www.practicallaw.com/0-376-4477).

 

Links to PLC resources on Islamic finance

PLC Finance resources on Islamic finance

Links to PLC Finance resources on Islamic finance:

Related PLC resources

Links to PLC services covering key practice areas relevant to Islamic finance transactions:


Useful links

PLC search function

To conduct a search of all PLC materials, use the toolbar at the top of the PLC homepage. The PLC search function applies a faceted search, which means that you can tailor your search by filtering by topics, services, jurisdictions and/or resource types. For more information on searching, see How to search PLC resources (www.practicallaw.com/3-517-4630).

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