Is it permissible to enter into a business partnership with a non-Muslim, where this partnership involves providing a fixed sum of money in exchange for predetermined profits?
The aforementioned transaction is a mugarabah (profit-sharing partnership) that is invalid, due to the condition of a specific amount of capital. The correct approach is for it to be based on a known percentage of the profit. Scholars have unanimously agreed that the worker may stipulate a known percentage of the profit from the capital owner, not a fixed sum.
It is disliked for a Muslim to partner with a non-Muslim in trade and to associate with them, based on the Prophet's (peace be upon him) saying: "Do not associate except with a believer, and let no one eat your food except a pious person," and "A man is upon the religion of his friend, so let each of you look at whom he befriends."
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/180876
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 180876
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy