Is it permissible in Islamic law to establish an open-ended real estate company under the following conditions: deducting 2% of the capital and 10% of the income for company management, administrative accounting without a physical office, annual appraisal of assets and adding or deducting the difference from shareholders' accounts without actual sale, considering all shareholders involved in the investment regardless of the value of their equity compared to the value of the properties, with the possibility for shareholders to withdraw at any time and settle their rights by selling a property when needed?
Source: FtawySummarized from the full answer at Ftawy · reviewed Sep 2, 2026
There is no objection to establishing the company, but the condition that the workers receive a percentage of the profit in exchange for management leads to an unknown wage, because in contracting for services, the wage must be known. The majority of scholars hold this view, while some scholars differ. As for the condition of taking 2% of the capital from each new shareholder, there is no objection to it, and it is considered part of the management fee.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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