Permissible and Forbidden Mudarabah

Question:
She says: If I have a certain amount of money, and I give it to a relative of mine to trade with, and he gives me a share of the profit, is this permissible?

Answer:
If the share is a common share, like a quarter or a fifth, there is no harm. You tell him: Work with it, and I have a quarter, or a fifth, or a sixth. There is no blame in that. This is called mudarabah (a profit-sharing partnership). However, if he gives you a specific amount, like five riyals every month or ten riyals every month, that is not permissible. That is riba (usury or interest). But if you say: You work with it, and the profit is between us in halves, or thirds, or I have a sixth or a fifth and you have the rest, all of that is fine. Yes.