Frequently Asked Questions About Halal Investing & Islamic Inheritance
HALAL INVESTING
What is halal investing?
Halal investing is the practice of growing your wealth in a way that aligns with Islamic principles. It involves considering both what you invest in and how the investment operates.
For example, Muslim investors generally avoid businesses involved in prohibited activities such as gambling, alcohol and conventional interest-based financial services. They also consider financial screening criteria and whether an investment involves excessive uncertainty or other prohibited elements.
Halal investing does not mean avoiding investment risk altogether. Investments can still rise or fall in value. The aim is to make informed financial decisions while staying aligned with your Islamic values.
How is halal investing different from conventional investing?
Both halal and conventional investing aim to grow wealth, but they may use different criteria to determine which investments are suitable.
Conventional investing generally focuses on factors such as financial performance, valuation, risk and expected returns. Halal investing also considers Shariah compliance, including business activities, financial structure and applicable screening standards.
This means a company that looks financially attractive may not necessarily qualify as a halal investment. Muslim investors need to consider both the investment's financial characteristics and its Shariah compliance.
What are the basic principles of halal investing?
Halal investing generally involves several important considerations:
Permissible business activities: Avoiding businesses that engage in activities prohibited under Islamic principles.
Financial screening: Assessing financial measures such as interest-related income and debt, according to the relevant Shariah screening methodology.
Avoiding prohibited elements: Considering issues such as riba (interest), excessive uncertainty (gharar) and gambling (maysir).
Ethical responsibility: Making investment decisions that are consistent with Islamic values.
Ongoing review: Recognising that a company's activities and financial position may change over time.
The exact screening criteria can differ between Shariah standards and providers. Investors should understand the methodology used rather than assuming every product labelled “Islamic” follows identical criteria.
Which investments can be halal?
Depending on their structure and the applicable Shariah screening criteria, halal investment options may include:
- Shares in Shariah-compliant companies.
- Shariah-screened exchange-traded funds (ETFs).
- Shariah-compliant unit trusts or mutual funds.
- Sukuk and other appropriately structured Islamic investment instruments.
- Certain property and real-asset investments.
An investment is not automatically halal simply because it is a share, fund, property or financial product. Its underlying activities, structure and relevant screening criteria need to be assessed.
Which investments should Muslim investors avoid?
Muslim investors generally avoid investments that involve prohibited business activities or financial arrangements.
Examples may include businesses primarily involved in alcohol, gambling or conventional interest-based financial services. Investments can also raise Shariah concerns because of their financing arrangements, contractual structure or other prohibited elements.
The assessment should not rely on an industry label alone. Investors should review the business activities, financial information and Shariah screening methodology relevant to the investment.
How can I check whether a stock is halal?
Start by understanding what the company does and how it earns its revenue. Then review whether the company meets the Shariah screening criteria used by a credible screening provider or methodology.
Depending on the standard, the assessment may consider prohibited business activities, financial ratios and non-permissible income.
Remember that a company's status may change as its business or financial position changes. A stock that qualified under a particular screening method in the past may not continue to qualify.
If you are unsure, seek guidance from a qualified Islamic finance professional or Shariah adviser. Do not rely solely on social media posts or an informal list of “halal stocks”
What is a halal ETF?
An exchange-traded fund (ETF) is an investment fund that trades on a stock exchange. It typically holds a collection of investments and allows investors to gain exposure to multiple assets through one product.
A halal ETF applies Shariah screening or other relevant criteria to determine which investments it can hold. Depending on the fund, it may track a Shariah-compliant index or follow a defined investment strategy.
Before investing, check the ETF's screening methodology, underlying holdings, fees, tracking approach, trading currency and risk disclosures. Not every ETF is Shariah-compliant, and a halal ETF can still lose value.
What is the difference between a halal ETF and a halal unit trust?
Both can provide access to a portfolio of investments, but they may differ in how they are structured, bought and sold, priced and managed.
An ETF is generally traded on an exchange during market hours, with a market price that can move throughout the trading day. A unit trust is generally bought or redeemed through a fund provider or platform at a price calculated according to the fund's dealing arrangements.
Halal ETFs and unit trusts apply their respective Shariah investment criteria. Compare the investment strategy, screening methodology, fees, minimum investment, liquidity and risks before choosing either option.
Are conventional bonds halal?
Traditional bonds generally involve lending money in exchange for interest payments, which raises riba concerns under Islamic principles.
Sukuk are often described as Islamic alternatives to conventional bonds, but their structures and contractual arrangements can differ. They should not be assumed to be Shariah-compliant based on the name alone.
If you are considering a fixed-income product, review its structure, documentation and Shariah assessment before investing.
What is the difference between sukuk and conventional bonds?
Conventional bonds typically represent debt obligations under which the issuer pays interest according to agreed terms.
Sukuk are structured using arrangements intended to comply with Islamic principles. Depending on the structure, they may relate to assets, usufruct, projects or other Shariah-compliant arrangements.
Their risks also differ according to the issuer, structure, market conditions and other factors. Investors should read the product documents and understand the relevant risks instead of assuming sukuk and conventional bonds are interchangeable.
Can I invest in halal funds if I am a beginner?
Yes. Some halal funds can provide beginners with access to a diversified portfolio without requiring them to select every individual stock themselves.
However, a fund is not automatically suitable just because it is halal. You should also consider your financial goals, investment timeframe, ability to tolerate losses, fees, liquidity needs and understanding of the product.
Take time to learn how the fund works before investing. If you need personalised advice, consult an appropriately qualified financial adviser.
Does halal investing guarantee that I will not lose money?
No. Shariah compliance does not eliminate investment risk or guarantee returns.
The value of stocks, ETFs, unit trusts, sukuk and other investments can fall. Market conditions, business performance, currency movements, interest-rate changes, liquidity and other factors can affect returns.
Halal investing is about aligning investment decisions with Islamic principles, not removing the uncertainty inherent in investing. Always understand the risks and avoid investing money you cannot afford to put at risk.
How much money do I need to start halal investing?
The amount depends on the investment product, platform, minimum purchase requirements and your own financial situation.
Some investments allow relatively small starting amounts, while others require a larger commitment. You should also account for transaction costs, fund fees, currency conversion charges and the need to maintain an emergency fund.
Rather than starting with a particular amount simply because someone recommends it, understand your financial obligations and goals first. Begin only when you have a clear plan and understand the product you are buying.
Do I need to monitor my halal investments?
Yes. It is sensible to review your investments periodically, even if you invest through a diversified fund.
You may need to review your portfolio when your financial goals change, your circumstances change, an investment's risk profile changes or its Shariah screening status is updated.
Frequent trading is not necessarily required. A consistent review process can help you understand whether your portfolio remains suitable and aligned with your objectives.
Do halal investors need to pay zakat on their investments?
Zakat obligations depend on the nature of the assets, ownership, relevant conditions and the applicable religious guidance.
Different investment types may require different calculations. Do not assume that every investment is treated in exactly the same way, or that the full market value is always the amount used for a calculation.
Review the relevant guidance and seek qualified religious advice if you are unsure how zakat applies to your portfolio.
Does Modern Muslim Finance offer halal investing education?
Yes. Modern Muslim Finance provides Islamic finance education to help Muslims understand halal investing and make more informed financial decisions.
Our educational resources cover concepts and investment approaches that can help you understand Shariah-compliant investing. Depending on your learning needs, you can explore our Guide to Halal Investing and the Halal Investor Masterclass.
Education can help you understand your options, but it does not remove investment risk or guarantee a particular financial outcome.
How do I get started with Modern Muslim Finance?
Start by identifying what you want to learn, whether that is the fundamentals of halal investing, understanding investment products or developing a more structured approach to your financial future.
Explore our educational resources or contact the MMF team through our contact page if you have questions about the programmes available.
ISLAMIC INHERITANCE AND LEGACY PLANNING
What is Islamic inheritance?
Islamic inheritance refers to the principles governing how a Muslim's estate is distributed after death. In Singapore, Faraid is the Islamic law of inheritance that determines the eligible heirs and their prescribed shares, based on the relevant family circumstances.
Islamic legacy planning involves more than understanding who inherits. It can also involve preparing a Wasiat, making CPF and insurance nominations, reviewing property ownership, considering charitable giving and organising important information for loved ones.
Planning ahead can help families understand their responsibilities and navigate the administrative process after a death.
What is Faraid?
Faraid is the Islamic law of inheritance that determines which eligible heirs are entitled to inherit and the shares allocated to them under Islamic principles.
The distribution depends on the circumstances of the deceased, including the family members who survive them. The outcome may differ from one family to another.
In Singapore, the Syariah Court may issue an Inheritance Certificate stating the eligible Faraid beneficiaries and their respective shares based on the facts provided in the application.
Faraid is not simply a fixed percentage that can be applied without knowing the family circumstances. For a specific case, the relevant facts and applicable guidance need to be considered.
What is a Wasiat?
A Wasiat is a Muslim Will. It is a legal document that can identify an executor, set out certain bequests and record instructions for loved ones.
Under the guidance provided by MUIS, a Wasiat can generally be used to make bequests of up to one-third of the relevant assets to people or organisations who would not inherit through Faraid, subject to applicable requirements.
A Wasiat does not give a person unlimited freedom to redistribute the estate contrary to Islamic inheritance principles. It should be prepared with attention to the applicable legal requirements and the person's circumstances.
Read the official MUIS guidance on Wasiat.
What is the difference between Wasiat and Faraid?
Wasiat and Faraid serve different purposes in Islamic legacy planning.
Faraid determines the eligible Islamic heirs and their prescribed inheritance shares.
Wasiat is a document that can appoint an executor, provide for permitted bequests and record instructions for the administration of the estate.
They are not interchangeable. A Wasiat should be prepared with an understanding of Faraid and the applicable requirements, rather than treating the two as competing ways to distribute everything freely.
Is a Wasiat the same as a conventional Will in Singapore?
A Wasiat (Islamic Will) is commonly described as a Muslim Will. It serves some similar practical purposes to a conventional Will, such as appointing an executor and recording certain instructions.
However, a Wasiat for a Muslim must take account of the relevant Islamic inheritance principles and Singapore's applicable legal requirements. The permitted bequests and the treatment of the estate should not be assumed to be identical to those under every conventional estate-planning arrangement.
If you already have a Will or have complex family or asset arrangements, seek appropriate professional advice before deciding whether you need a new document or changes to an existing one.
Can I distribute all my assets however I want through a Wasiat?
Not generally. Under MUIS guidance, a Wasiat may provide for bequests of up to one-third of the relevant assets to beneficiaries who do not inherit through Faraid, subject to the applicable requirements.
The remainder of the estate is dealt with according to the relevant inheritance rules and circumstances. A Wasiat should not be treated as permission to freely replace the prescribed Faraid shares.
If you want to provide for a particular person, make charitable bequests or address a complicated family situation, get qualified advice on the options available to you.
Who can make a Wasiat in Singapore?
MUIS states that a person making a Wasiat must be Muslim, at least 21 years old, of sound mind and acting voluntarily.
The document must also meet the applicable requirements to be legally valid. If your situation involves overseas assets, business interests, dependants who need care, multiple marriages or other complex arrangements, seek professional advice before preparing the document.
You can read the official requirements in the MUIS Wasiat guide.
Is a Wasiat only for men or people who are wealthy?
No. Islamic legacy planning is relevant to both men and women, and it is not limited to wealthy families.
If you have assets, dependants, responsibilities or specific wishes for your loved ones, it is worth understanding how those matters may be handled after your death.
You do not need to wait until retirement or until you own a large portfolio to start planning. Your needs may change over time, so your arrangements should be reviewed when your circumstances change.
What happens if a Muslim dies without a Wasiat in Singapore?
The estate still needs to be administered and distributed according to the applicable rules. For Muslims, the distribution follows the relevant Muslim inheritance process, including Faraid.
Without a Wasiat, the family may not have a named executor under that document. They may need to apply for Letters of Administration and complete the necessary legal and administrative steps before the estate can be managed and distributed.
The process depends on the circumstances and assets involved. Preparing a Wasiat can help clarify certain instructions and identify an executor, but it does not eliminate every step of estate administration.
Does a Wasiat override Faraid?
A Wasiat (Islamic Will) should not be treated as a way to override the prescribed Faraid shares at will.
Under the relevant guidance, a Wasiat can generally provide for permitted bequests of up to one-third of the relevant assets to people or organisations who are not Faraid beneficiaries, subject to the applicable requirements.
The remaining estate is dealt with according to the relevant inheritance rules. If you want to make arrangements that may affect the usual distribution, obtain qualified advice about what is permissible and legally effective in your circumstances.
Does a Wasiat cover my CPF savings?
No. MUIS explains that CPF savings are not covered by a Will or Wasiat because they do not form part of the estate distributed through the Will.
If you want to specify who receives your CPF savings, you should understand and make the appropriate CPF nomination. A Wasiat and CPF nomination serve different purposes, and having one does not automatically replace the other.
Review your nomination when your circumstances change and make sure the people you intend to benefit are reflected in the relevant arrangement.
For official information, read the MUIS guidance on CPF and other nominations.
If I already have a CPF nomination, do I still need a Wasiat?
A CPF nomination and a Wasiat deal with different matters.
A CPF nomination specifies who receives your CPF savings and the respective proportions. A Wasiat can address other aspects of legacy planning, such as appointing an executor, making permitted bequests and recording instructions for your loved ones.
Whether you need a Wasiat depends on your assets, family circumstances and planning objectives. Do not assume that a CPF nomination covers your entire estate or replaces all other planning documents.
Does a Wasiat cover my insurance policies?
Insurance proceeds are subject to the applicable policy terms and nomination arrangements. They should not automatically be assumed to be distributed through a Wasiat.
Review your insurance policies and understand whether a nomination is available, what type of nomination applies and how the proceeds would be paid.
A complete legacy-planning review should consider your Wasiat, CPF nomination, insurance arrangements and other assets together, rather than looking at each document in isolation.
What is an executor, and why is one important?
An executor is the person named in a Wasiat to carry out the responsibilities set out in the document and help administer the estate.
Depending on the circumstances, this can involve locating assets, arranging for debts and expenses to be addressed, dealing with the relevant legal process and carrying out valid bequests.
Choose someone who is trustworthy, responsible and capable of handling the role. MUIS also sets out requirements for an executor, including being at least 21 years old, of sound mind and not bankrupt.
Discuss the role with your proposed executor so they understand what may be required.
Do I need a Wasiat if I am young, single or have no children?
Your circumstances matter, but being young or unmarried does not automatically make legacy planning irrelevant.
You may already have savings, investments, insurance, property interests or other assets. You may also have parents or other family members you wish to consider as part of your planning.
The right approach is to understand who may inherit under Faraid, identify the assets and arrangements you have, and determine whether a Wasiat or other planning tools are appropriate for your circumstances.
Can I change my Wasiat after writing it?
Yes, a Wasiat can be reviewed and updated, but the changes should be made in a way that meets the applicable requirements.
MUIS recommends reviewing a Wasiat at least every five years and after major life changes. These may include marriage, separation or divorce, having a child, moving house, or the death of a named executor or beneficiary.
MUIS also states that marriage cancels a Wasiat made before the marriage. If substantial changes are needed, preparing a new Wasiat may be appropriate. Check the official guidance or seek professional advice before making changes.
Who can witness a Wasiat in Singapore?
The witnessing requirements are important to the validity of a Wasiat.
MUIS guidance specifies two Muslim male witnesses who are at least 21 years old. They must not be Faraid beneficiaries or their spouses, and must not be beneficiaries under the Wasiat or their spouses. The person making the Wasiat must also sign it in person in the presence of the witnesses, who sign in that person's presence.
Because witnessing requirements are a legal validity issue, check the current official requirements before signing your document.
What happens if I lose my original Wasiat?
Losing the original document can create practical difficulties for the people who need to administer your estate. MUIS explains that an executor will generally need the original Wasiat to apply for a Grant of Probate.
Store your document securely and tell your executor or trusted family members where it is kept and how it can be accessed. You may also consider using relevant official services to record information about where your Wasiat is stored.
If the original is missing or damaged, do not assume a photocopy or digital copy will automatically be sufficient. Seek professional guidance on the steps available in your circumstances.
What is the difference between Wasiat, CPF nomination and Lasting Power of Attorney (LPA)?
These tools serve different purposes.
Wasiat: A Muslim Will that can appoint an executor, make permitted bequests and record instructions for after death.
CPF nomination: Specifies who receives your CPF savings and the proportions they receive.
Lasting Power of Attorney (LPA): Allows you to appoint one or more donees to make decisions on your behalf if you lose mental capacity, within the authority granted under the LPA.
An LPA is about decision-making during your lifetime if you lose mental capacity. A Wasiat concerns matters after death. A CPF nomination deals specifically with CPF savings.
One document does not automatically replace the others. Consider which tools are relevant to your needs.
What is the difference between Wasiat and Hibah?
Wasiat and Hibah are different planning concepts.
A Wasiat is a Muslim Will that can record permitted bequests and appoint an executor. Hibah generally refers to a gift made during a person's lifetime, subject to the relevant requirements and arrangement.
They should not be treated as interchangeable or assumed to produce the same legal or inheritance outcomes. Whether Hibah is appropriate depends on the asset, the intended recipient, the structure of the arrangement and the applicable legal and religious requirements.
If you are considering Hibah to address a particular inheritance-planning concern, seek qualified advice before proceeding.
What if I own a property in Singapore?
Property ownership is an important part of Islamic legacy planning, but the outcome depends on how the property is held and the applicable legal arrangements.
For example, the implications may differ depending on whether a property is held under joint tenancy or tenancy-in-common. Other factors, including outstanding financing, ownership documents and the surviving family members, may also be relevant.
Do not assume that a Wasiat alone determines what happens to every property interest. Review the ownership arrangement and seek appropriate professional advice for your particular property.
What if I have assets outside Singapore?
Overseas assets can make estate planning more complicated because different countries may have different laws, procedures and requirements for recognising or administering a Will.
You may need to consider where the asset is located, how it is owned, whether local documentation is required and how the relevant legal processes interact.
MUIS specifically identifies overseas assets as a situation where professional legal advice may be appropriate. If you own property, investments or other assets overseas, raise this early when discussing your legacy plan.
What is an Inheritance Certificate from the Syariah Court?
An Inheritance Certificate identifies the eligible Faraid beneficiaries and their respective shares based on the facts provided in the application.
The Syariah Court may issue the certificate to facilitate the distribution of a deceased Muslim's estate. It may be required for relevant estate-administration procedures, including applications for a Grant of Letters of Administration or a Grant of Probate.
The certificate does not replace every other step in estate administration. The next steps depend on the assets, circumstances and applicable legal process.
For official information, see the Syariah Court's overview of inheritance.
What is the difference between a Grant of Probate and Letters of Administration?
These are legal grants used in the administration of an estate.
A Grant of Probate is generally applied for when the deceased left a valid Will and an executor is seeking authority to administer the estate. Letters of Administration are generally relevant when there is no valid Will appointing an executor who can act.
The appropriate process depends on the circumstances, including the documents available and the estate involved. Muslim inheritance matters may also require an Inheritance Certificate from the Syariah Court as part of the relevant process.
For an actual estate, seek guidance from the relevant court or a qualified legal professional.
What is Islamic legacy planning?
Islamic legacy planning is the process of preparing for how your assets, responsibilities and wishes will be handled in accordance with relevant Islamic principles and applicable Singapore requirements.
It may involve understanding Faraid, preparing a Wasiat, reviewing CPF and insurance nominations, considering property ownership, arranging an LPA and organising important information for your loved ones.
The goal is not simply to prepare one document. It is to understand how the different arrangements work together and make sure your family knows where to find the relevant information when it is needed
Does Modern Muslim Finance help with Wasiat and Faraid planning?
Modern Muslim Finance provides Islamic legacy-planning education and offers a Wasiat Writing Service for Muslims in Singapore.
Our services and educational programmes are intended to help people understand important concepts such as Wasiat, Faraid and the practical steps involved in planning their legacy.
The appropriate support depends on your circumstances and needs. For details about our Wasiat Writing Service, visit wasiat.modernmuslim.finance. You can also explore our Wasiat and Faraid Planning class.
What is included in MMF's Wasiat Writing Service?
The service packages may include a consultation, preparation of a Wasiat, professional witnessing arrangements, an asset schedule, an executor guide and supporting documents.
Depending on the package, additional options or resources may be available. These can include a Letter of Wishes, a critical contacts list, guidance on nominations and other legacy-planning considerations.
The exact inclusions, fees and terms depend on the selected package. Review the current service page or contact MMF to confirm what is included before making a decision.
Visit the Wasiat Writing Service page for current details.
How can I learn more about Wasiat and Faraid before making a decision?
A good starting point is to understand the difference between Faraid, Wasiat and other legacy-planning tools.
You can read the official resources published by MUIS and the Syariah Court, then consider how the concepts apply to your family circumstances and assets.
If you prefer a guided learning experience, MMF offers a Wasiat and Faraid Planning class to help participants better understand Islamic legacy planning and the practical questions to consider.
Explore the Wasiat and Faraid Planning class for programme details and upcoming sessions.
How do I contact Modern Muslim Finance?
If you have questions about MMF's programmes or services, you can contact the team through our contact page.
You can also reach MMF on WhatsApp at +65 8952 8511.
Important note
The information on this page is for general educational purposes only. It is not personalised financial, legal or religious advice, and it does not guarantee investment returns or a particular legal outcome. Laws, official guidance, financial products and Shariah screening methodologies may change. Please refer to the relevant official sources and qualified professionals when making decisions about your investments or Islamic legacy plan.