Profits stipulated in proportion to the investment
Question
There is an online company which invests in shares and money exchange. They ask us to deposit some amount in their account. They will purchase shares with it and will return to us 3.4% of our amount on a daily basis for 100 days. They will not return to us our principal amount. If I deposit $10, I will be getting $0.34 per day for 100 days. Is this business halaal or not?
Answer
In Islam, it is not permissible to stipulate the profits in proportion to the capital investment. Hence, if 3.4% of the capital is stipulated as profit for a hundred days, it will not be permissible. Furthermore, to place a condition at the beginning that one will not receive his capital amount (at all nor with the profits nor at the end of the term) is also an invalid condition in Shari’ah. Hence, investing one’s money in such an investment is impermissible.
And Allah Ta'ala knows best.
References (Arabic / Urdu sources)
(و لا يجوز الشركة إذا شرط لأحدهما دراهم مسماة من الربح) لأنه شرط يوجب انقطاع الشركة فعساه لا يخرج الا قدر المسمى لأحدهما (هداية 2/632)
- Answered by
- Mufti Zakaria Makada
- Checked & approved by
- Mufti Ebrahim Salejee (Isipingo Beach)
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