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Is it permissible to give a sum of money to a merchant who owns a factory for producing electrical wires, for him to use it in purchasing copper as raw material, then manufacturing it, on the condition that the sum be repaid with a fixed profit at the end of the year?

1 min readAlso available in العربية

It is not permissible to invest money through a company or Mudarabah (a partnership in profit) by entrusting money to someone to work with it, unless certain conditions are met. One of these conditions is that both parties agree on a shared, unspecified portion of the profit for each of them. It is not permissible to stipulate a fixed sum. If one of the partners stipulates for himself a known amount of money (in dirhams), the partnership becomes void. This is a matter of consensus among scholars. Therefore, Mudarabah is not valid if it stipulates that the merchant gives you a specific, predetermined amount.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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