Is it permissible for a Muslim to invest in agricultural investment companies that offer profits as a percentage of total revenues or as a lump sum that increases annually?
It is permissible for the landowner and the investment company to agree on preparing, cultivating, harvesting, and selling the crop in exchange for a known percentage of the output or its price, even if the percentage is variable or the company undertakes everything. This is the view of Shaykh al-Islam Ibn Taymiyyah, who cited the action of the Prophet, peace and blessings be upon him, with the people of Khaybar. It is permissible to stipulate a sharecropping contract within a sales contract, whereby the company commits to cultivating the land. It is not permissible to agree on a fixed amount of profit for the landowner. However, the company can rent the land for a specified amount, and it will have full disposal of the crop. It is also permissible to sell the land with an undertaking to rent it from the buyer.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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