IsDB Institute, IE University Launch Shari’ah-Compliant Risk-Sharing Finance for Startups

Independent Report
Jeddah, January 22, 2026:
The Islamic Development Bank Institute (IsDBI) and Spain’s IE University have launched a joint initiative to develop Shari’ah-compliant, risk-sharing financial instruments for startups operating in civil law jurisdictions.
The project focuses on adapting commonly used startup financing tools—such as convertible notes, SAFE agreements, and convertible preferred shares—to ensure compatibility with Islamic finance principles and European legal frameworks. These instruments are widely used in common law countries but require legal restructuring to function effectively under civil law systems.
Through comparative legal research and contract design, the initiative will assess regulatory feasibility within Spanish and European Union law and develop enforceable, efficient models suitable for early-stage ventures. The proposed frameworks are expected to be applicable across EU member states and adaptable for use in regions including North Africa and the Gulf.
IsDBI officials said the initiative aims to promote ethical, inclusive, and innovation-driven economic growth by improving access to appropriate financing solutions for startups.