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Q&A: Investing in a Company that Violates the Sabbath

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This is an English translation (via GPT-5.4). Read the original Hebrew version.

Investing in a Company that Violates the Sabbath

Question

Hello Rabbi,
Is there any prohibition on investing in an Israeli company that violates the Sabbath?
Assuming I do not influence the decision-making, and much of the Sabbath profits are not generated through Sabbath violation, but the company does violate the Sabbath.
 
Another assumption: the company’s business is not Sabbath violation itself—for example, a pharmaceutical company that manufactures some of its medicines on the Sabbath.

Answer

There is definitely room to be lenient, at least when you do not have controlling shares.

Discussion on Answer

The Questioner (2025-08-17)

Thank you, Rabbi, for the answer.
Does this also apply if most of the workers and owners are Jews?
What if the Jewish company pays interest but I do not hold the company’s bonds?
Is it permitted to hold the company’s bonds in a case where it pays interest?

Michi (2025-08-17)

Yes. I didn’t understand the last two questions.

The Questioner (2025-08-17)

Thank you for the previous response. I would now like to sharpen the first two questions with a few additional points:
Previously I asked from the angle of Sabbath violation; now I am asking from the angle of interest.
1) Shareholder in a company that pays interest
If I hold shares in an Israeli company that issues bonds and pays interest, is there a halakhic problem in merely holding the share, even though I do not hold the bonds?
2) Purchasing bonds without a heter iska
Is it permitted to purchase bonds of an Israeli company that does not have a heter iska, assuming it is a limited liability company?

An additional question:
3) Investing in an index / ETF of internet companies (more than 50% of profit from the internet)
Suppose there is a fund that tracks an index investing in companies of which more than 50% of their profits come from internet activity; most of the companies have beneficial activity, but one of the components is a pornographic website:
• Is it permitted to buy the fund when the prohibited component is a negligible minority?
• Must the investor check, with each purchase/holding, the full list of companies in the index (which changes frequently), and if so, what is the scope of that obligation to check?

Michi (2025-08-17)

I don’t understand this well enough to answer. Ask someone more knowledgeable about it.

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