Free Online Course in International BusinessReligionIn the US, business and religion are interrelated since there is consideration of both secular and religious holidays in product offerings, sales and distribution. What we rarely experience in the US is a crossover between business law and religion. Such, however, is not the case all over the world.In countries where Islam is the predominant religion, Sharia law is the body of Islamic law which regulates the public and some private aspects of life. Islamic law prohibits usury, the collection and payment of interest, and prohibits trading in financial risk (which is considered a form of gambling). Islamic law also prohibits investing in businesses that are considered unlawful (businesses that sell alcohol or pork, or businesses that produce media such as gossip columns or pornography, which are contrary to Islamic values). These prohibitions may limit international business dealings with companies located in the countries that practice Sharia law. Ideas to overcome these issues could include: 1. utilizing a bank that does not charge interest on loans 2. removing statements on invoices that add interest to balances if payments are late 3. creating independent companies that do not deal in products forbidden by Islamic law 4. avoiding long term foreign exchange exposure which will eliminate the need for future or option contracts. Another example of religion affecting financial transactions can be found in Israel. During the Passover season businesses are not allowed to come in contact with or inventory any products that contain yeast, which means destroying the product or selling it prior to Passover. Unless previous arrangements are made, this situation could increase the cost of products, or lead to spoilage and loss of inventory.
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