Ruling on investing money in return for a share of the profit
Question: 147438
I have some money that I gave to an investment company to invest, and it made some profit, but there was no agreement on a set percentage. Is this riba or not?.
Praise be to Allah, and peace and blessings be upon the Messenger of Allah and his family.
If you agreed on that, there is nothing wrong with it. If
the company invested the money in return for half of the profit, or
one-third, or one-quarter, there is nothing wrong with it. But if they
give you a set amount (based on your capital), three or four or five per
cent, this is not permissible. But if you have a share of the profit in
return for giving them the money to use in buying and selling, or other
kinds of business, and you have half of the profit, or one-quarter or
one-fifth, that is fine. This is called mudaarabah.
But if they take the money from you and give you a set
amount, such as five percent, or one percent, this is riba and is not
permissible. End quote.
Shaykh ‘Abd al-‘Azeez ibn Baaz (may Allah have mercy on him)
Source:
Islam Q&A
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