As anyone who has purchased a home knows, it is a complicated process with mortgages and taxes and fees. Imagine how much more complicated such a financial transaction must be for Muslims who live their lives according to Shariah law.

According to The New York Times, Middle Easterners are flush with money these days, as rising oil prices have lined their pockets. The wealthy Muslims much prefer to invest their money abroad in such locations as the United States, rather than in their own homelands. Of course we can all understand that. With the Islamic reformation gaining ground around the Muslim world many of these investors are keen for deals that fundamentally conform to the rules of the Koran, which prohibits “riba”, or interest in financial transactions. Also, investments under Shariah law, must not be contaminated by the vices of Westerners such as bars, alchohol, tobacco, gambling, mortgage lenders, video stores and even restaurants that serve pork.

An American Shariah consultant who recently helped set up the Dow Jones Islamic Markets Index, said that this type of investing is just as profitable as conventionally structured investments and offers opportunities to invest in the securities market and still be a devout Muslim. When followers of Mohamed invest in hotels, they usually structure the deal so that any bars or casinos located inside, are separated out as individually owned condominiums. Everyone knows that an American hotel cannot be financially solvent without at least a bar, but this way the devout can sleep at night, knowing they are not the ones financing Koran-forbidden pleasures.

Last year, in Washington DC, the seven-story Transpoint Building along the Anacostia River, was sold in a Shariah-compliant real estate deal for $90.5 million to a Kuwaiti financial institution known as the Securities House. As is customary for Muslims in these types of financial transactions, the purchase of Transpoint Building was set up as an “ijarah” or lease. A company was created for the sole purpose of holding the title to the building and financing the mortgage. Another company was set up to be controlled by the Muslim investors to lease the building. The rental payments match the amount due for the mortgage and the leasing company is legally granted the right to pay off the mortgage at any time. Conveniently, leases and rents are not prohibited by the Koran.

What is particularly interesting in the Washington transaction, is that the Transpoint building houses the headquarters of the United States Coast Guard. Where there is military there are always guns, but that should be no problem to the Coast Guard’s Muslim landlords. Shariah law does not seem to condemn such armaments. However, do you suppose that the Coasties will still be able to order a hot dog or BLT for lunch?

Linked at Wizbang’s Carnival XXX, Trey Jackson and Mudville Gazette’s Open Post.