Principle of Waqf

The Shariah places the following four (4) pillars for purposes of establishing a waqf:

1. The waqif (a party who waqf the asset)

Refers to the donor of the waqf asset, i.e. the Unit Holder(s) of the Fund.

  1. The waqif can be a natural or legal person. If the waqif is a legal person, the waqf decision should be made by the members and/or shareholders and not the board of directors.
  2. The waqif must be legally entitled to dispose of his property.
  3. The decision of a person whose legal competence is restricted because of irrationality is invalid.
  4. The validity of waqf decision of a person whose legal competence is restricted because of indebtedness shall be subject to the confirmation by his creditors. When the creditors refuse or decline the waqf of the indebted person, the waqf becomes invalid.

2. Mauquf (waqf asset)

Refers to the waqf asset, i.e. the portion of annual income distribution of the Fund transferred by the Unit Holder(s) in the form of cash which is meant for waqf purposes.

  1. The waqf asset should fulfil the following conditions:
    1. it shall be a Shariah-accepted asset;
    2. it shall be known; and
  2. the waqif shall be the sole owner of the asset in which nobody else should have a right of disposition at the time of establishing the waqf; Waqf asset can also be in the form of money. The income generated from utilisation of the money will be distributed to identified beneficiaries, while retaining the principal amount.

3. Mauquf a'laih (beneficiaries)

  1. The waqf should not be made for any impermissible purpose.
  2. It is permissible to make waqf for the benefit of non-muslims, provided that the cause to be served does not involve activities which are contrary to Shariah. It is also permissible to make waqf for the benefit of the rich.

4. Sighah (the form of the waqf)

  1. Formation of waqf can take place verbally, in writing, or in any form of disposition which is normally considered as indicating it.
  2. Waqf can be declared as effective starting from a future date, such as when the donor declares his property to become waqf starting from next year.