Is it permissible to invest in a real estate company that guarantees monthly profits at a predetermined rate and provides a check for the capital that can only be cashed after one year, knowing that the contract does not stipulate a guarantee of the principal?
(profit-sharing partnership) is permissible. Contributing to a Mudarabah company is permissible if the funds are invested in non-prohibited activities, and provided that the capital is not guaranteed. The company issuing a check to the participant may imply a guarantee of capital, which is impermissible. Furthermore, there is a difference of opinion regarding setting a fixed term for Mudarabah, with the preponderant view being permissibility. As for distributing profits at a fixed monthly percentage, this is known as constructive liquidation (al-tanḍīd al-ḥukmī) and is permissible. Therefore, there is no objection to subscribing to the aforementioned company if the check is replaced with an official document, and the company fulfills the mentioned conditions.
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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