Romanian Arab Investments House Association
Asociația - Casa de investiții româno-arabă
Bridging Islamic Finance and European Regulation
The Shariah–Romanian Law Regulatory Compliance Platform is a pioneering initiative developed by the Romanian Arab Investments House (RAIH) to facilitate the implementation of Shariah-compliant financial and investment structures within the Romanian and European legal environment.
As cross-border investments between Europe and the Islamic world continue to grow, businesses increasingly require reliable guidance on how internationally recognised Islamic finance instruments may operate under Romanian legislation and European Union regulations. The Platform was created to meet this need by providing an independent legal and regulatory assessment of Shariah-compliant structures from a Romanian law perspective.
Rather than replacing either legal system, the Platform analyses how the principles governing Islamic finance can coexist with Romanian private law, commercial legislation, banking regulations, taxation rules and the broader EU regulatory framework. It serves as a bridge between two sophisticated legal traditions, helping investors structure transactions with greater legal certainty and commercial confidence.
VISION OF SOHAIL ZUBAIRI
ON INTRODUCING ISLAMIC FINANCE IN ROMANIA
In my view, the most important first step for Romania is to establish a shared understanding among relevant public authorities and market participants regarding the value Islamic finance can add to the market, e.g., FDI through Sukuk, and greater participation of Romanian and EU Muslims in the country’s economy by increasing the use of banking channels for Islamic deposits. This is common practice among EU Muslims, who often avoid conventional banks due to interest and prefer to keep their money domestically. Availing the financing facilities by Muslim traders once Islamic Window operation is allowed besides the asset and wealth management products with decent returns for the entire population.
Once the consensus is achieved that Islamic finance shall add overall value to the country’s economy, the next step shall be to assess as to which Islamic contracts can operate within Romania’s existing legal framework and applicable European Union requirements, i.e. aiming for an effortless start. These could be Mudarabah (fund management), Musharakah (JV) and Wakalah (investment agency) which in my opinion can be tried without making any changes. However, Polish banks will require regulatory approval to establish window operation within the banks to rollout Islamic financing products based on these contracts.
Next, once the above activity stabilizes, we will need to either amend the existing banking, commercial and tax regulations which I realize will be challenging or adopt an off-the-shelf law to be promulgated independently without touching the existing laws.
Such changes will be required to introduce sale-based contracts: Murabaha (cost+profit sale), Istisna (construction finance), Salam (finance for agri and fungible goods requiring preparation) and Ijara (leasing). The first 3 contracts invite VAT / GST whereas for the Ijara, the rent payment is taxed at EU, making it exorbitant proposition. Another drawback of Ijara is that while interest paid on conventional mortgages leads to an income tax rebate, the Ijara rental payments do not enjoy such benefits.
A practical starting point would be a focused working group bringing together financial regulators, the Ministry of Finance, local legal and tax specialists, financial institutions, and the credible Islamic finance advisers The group's initial task should be to assess market demand and identify how a small number of suitable financing structures could be accommodated under the existing rules, and where targeted changes may be necessary.
Particular attention should be given to the enforceability of contracts, neutral tax treatment, credible Shariah oversight, and investor protection. This would provide a sound basis for selecting an initial pilot transaction and developing local expertise around it.
The guiding objective should be to offer an additional financing choice that supports Romania’s real economy, attracts investment from within and outside Romania/EU, and operates with legal certainty, and public confidence. Your consultations and the platform you are developing could make a useful contribution to this foundational dialogue.
What We Do
Our multidisciplinary team analyses a broad range of Islamic finance products and investment structures, including:
-
Murabaha financing
-
Ijarah (leasing)
-
Musharakah and Mudarabah partnerships
-
Sukuk structures
-
Istisna and Salam contracts
-
Islamic investment funds
-
Real estate and infrastructure financing
-
Trade finance solutions
-
Hybrid and bespoke Shariah-compliant investment structures
Each assessment considers both the Shariah characteristics of the structure and its compatibility with Romanian civil, commercial, banking, tax and corporate legislation, while taking into account the applicable European regulatory framework.
Who benefits
The Platform is designed for:
-
International investors entering the Romanian market
-
Islamic financial institutions
-
Conventional banks exploring Islamic finance solutions
-
Investment funds and family offices
-
Corporations developing cross-border projects
-
Law firms and professional advisers
-
Public institutions and regulatory stakeholders
-
Entrepreneurs seeking Shariah-compliant financing alternatives
Our methodology
Every project is examined through a comprehensive multidisciplinary approach, combining:
-
Comparative legal analysis
-
Romanian legislation
-
European Union regulations
-
International Islamic finance standards
-
Commercial risk assessment
-
Practical implementation strategies
The objective is to identify legal compatibility, regulatory considerations, potential implementation challenges and commercially viable solutions for each proposed structure.
Why this Platform matters
Romania is increasingly attracting international investors from the Gulf Cooperation Council (GCC), Southeast Asia and other jurisdictions where Islamic finance plays an important role in commercial practice.
The Shariah–Romanian Law Regulatory Compliance Platform contributes to creating greater legal certainty for these investments by promoting dialogue between legal systems, supporting innovative financing models and encouraging responsible cross-border investment.
It reflects RAIH's broader mission of strengthening economic cooperation between Romania and the Arab world while fostering legal understanding, cultural awareness and sustainable international partnerships.
A First-of-Its-Kind initiative in Romania
Developed by the Romanian Arab Investments House, the Platform represents one of the first dedicated initiatives in Romania focused exclusively on the interaction between Islamic finance principles, Romanian law and the European Union regulatory framework.
By combining legal expertise, international business experience and specialised knowledge of Islamic finance, RAIH provides a unique point of reference for organisations seeking to navigate complex cross-border transactions with confidence.
Call to action
Explore the Future of Cross-Border Islamic Finance!
Whether you are an investor, financial institution, law firm or public authority, the Shariah–Romanian Law Regulatory Compliance Platform offers the expertise needed to assess, structure and implement Shariah-compliant transactions within the Romanian and European legal framework.
Contact our team to discuss your project or request a regulatory compatibility assessment.
Platform Lead: Casiana Dusa - President of RAIH
casiana.dusa@islamicbusinessromania.com
Murabahah financing under the Romanian law
Our work
NGO assessing Islamic finance structures for compatibility with
Romanian and EU law
Islamic Finance through the Romanian Law Lens: more than legal equivalence