I’m doing a business investment with a broker whereby I am investing the money on a capital guaranteed basis for 12 months. In profit we are 50/50 in loss the capital is guaranteed. Kindly advice if this is this Shariah compliant.

In the name of Allāh, Most Gracious, Most Merciful

Assalāmu ῾alaykum wa Rahmatullāhi Wabarakātuh

The underlined principle with regards to profit and loss in partnership and business investments is:

The profit is based on the agreement of the parties, but the loss will always be proportionate to the capital investment.

Hence, the condition that the capital is guaranteed at the time of loss is impermissible. If you have given 50% of the capital, you will be liable of 50% of the debt if the investment suffers a loss.

And Allāh Ta῾āla Knows Best

Wassalāmu ῾alaykum

Checked and Approved by:

Mufti Ebrahim Desai
Dārul Iftā