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Ethicaai will source funding on an ethical model based on equity, fairness and economic justice. Core funding streams will be through private investors and other Consortiums, ethical/sharia compliant banks and internal Ethicaai directors.
A transaction is Shari’ah based if it conforms to the guidelines of the Shari’ah which requires the following conditions:
• There is no Riba (usury) involved.
• There is no gharar (uncertainty) in what is being transacted.
• Both transacting parties share the risks and rewards so that it is equitable on both sides.
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The directors of Ethicaai have over 20 years of property investment. Unlike the estate agents, Ethicaai protects its interests and that of their partners by carrying out all the paper work and due diligence.
Your investment capital is secured through a Special Purpose Vehicle (SPV), giving you peace of mind and control over your investment. An SPV is a legal entity created to fulfil a specific set of objectives and shielding the project from outside financial risk.
Investors become shareholders of this legal entity and their share in the company is based on the amount of investment.
The shareholders of the SPV will be the primary owner of the property/asset. Ethicaai will have a separate contract with the SPV for project management and will charge a profit share for the service.
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Ethicaai’s role is to acquire the best possible deal by carrying out extensive due diligence prior to the acquisition of the property. Ethicaai will manage and deliver the project efficiently on budget and on time. Investment funds are ring fenced for the project.
All decisions relating to the investment are made through the board of directors. Any significant changes or a decision outside of the agreed project proposal requires shareholder approval. The SPV appoints Ethicaai through a comprehensive management agreement, to undertake the planning, construction, management and sale of the project.
1. You will be legally covered. Any property you invest with Ethicaai, you will be part owner of the property.
2. Ethicaai is not simply an agent, all the directors of Ethicaai will also invest in the property
Why this model is appealing to people?
Apart from the above reasons:
1. It is practically impossible to buy a pure halal (and ethical) investment, you require a big cash deposit which most people do not have individually.
2. Investing through a company structure is safer and more tax efficient
3. You can start with as little as 10k
4. It is better to invest in a safe and secure model, as with this case, rather than holding it in your bank account. Every year, you have to pay zakat on it which reduces you capital. The Prophet (saw) taught us to invest and allow our wealth to benefit us and others.
5. Usually, even if the property is doing well it is very hard to sell and restructure the equity. This model makes it easier and more profitable.
6. You do not need to spend all of your money in one property. By making small investments in each property you spread any risk.
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1. Investors source the money
2. Ethicaai sources the property and invests 30% of the total value
3. Ethicaai and investors open legal company under the project name with the stated percentage on a trust deed.
4. The property is purchased
5. 10% Management fee is taken by Ethicaai
6. Dividend paid to shareholders after corporation tax paid.
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