I have a sum of money and I want to invest it with a pharmaceutical trader, and this trader refused to make me a partner, but he will combine my money with his and work with it.

The questioner : I have a sum of money and I want to invest it or put it to work with a pharmaceutical trader. This trader refused to be my partner in the business with the amount I contributed, and this amount is large. However, he will combine my money with his and work with it, on the condition that he gives me a percentage of the profits monthly or every three months, according to our agreement. O honorable Shaykh, is this percentage considered lawful profit and permissible earnings, or is it like bank interest?

The Shaykh : This transaction is valid, and it is a form of mudarabah. Mudarabah is when a person gives money to another person and says to him, “Trade with it, and you will have such and such a share of the profit,” meaning you will have half, a quarter, a third, or less or more of the profit. It is permissible. But if he says, “Give me a hundred from the profit every month” or something similar, that is not permissible, because his share of the profit must be a shared portion so that they share in the gain and the loss. There is no difference between the worker who is given the money trading with it alone, or combining it with his own money and trading with both.

The questioner : May Allah reward you all with good.