Short answer
No. If you invest money in a business as a partner, you cannot be promised a fixed amount or a fixed percentage of your capital, such as 2% a month. That turns it into a loan with interest. Your return must be a share of the actual profit, and you must share in any loss.
In mudarabah and musharakah, stipulating a fixed sum or a percentage of capital for any partner invalidates the profit clause, and the return becomes riba. Profit must be a ratio of actual profit; loss falls by capital ratio. Fixed returns are lawful only from rent (ijarah) or a sale price agreed in advance (murabaha).
The four schools agree on this.
Explanation
This is one of the most common mistakes in community investing. A friend says, "Put $10,000 into my restaurant and I will pay you $300 a month," or a company offers "guaranteed 12% a year". If your capital is safe and your return is fixed, you have lent money for a profit, which is riba, whatever the deal is called.
What is allowed:
- A profit ratio: "You get 30% of the profit each quarter." If there is no profit, you get nothing that quarter.
- Expected profit: a manager may tell you the expected return, as long as it is not guaranteed.
- Loss sharing: if the business loses money, investors lose in proportion to their capital. The manager can be made to pay only for negligence or breaking the terms.
- Fixed rent: if you buy a machine, van or property and rent it to the business, the rent can be fixed, because you own the asset and bear its risk.
- A sale on credit: you may buy goods and sell them to the business at a fixed marked-up price, paid later.
A third party who is not a partner may volunteer to guarantee the capital, according to AAOIFI, but the manager himself may not. Be very wary of schemes promising high fixed returns; many are also frauds.
The Prophet ﷺ stopped a form of land rent where the owner took the crop of one fixed patch, because one side might get everything and the other nothing. Shares in a partnership must be of the whole result. See What is mudarabah? and What is musharakah? The four schools agree on this rule.
Ask a mufti about your own case. This answer explains the general ruling. When the details of your situation matter, as they do here, ask a qualified mufti and give them the full facts. Where to ask a scholar.
The evidence
Quran, Surah Al-Baqara 2:279
فَإِن لَّمْ تَفْعَلُوا۟ فَأْذَنُوا۟ بِحَرْبٍۢ مِّنَ ٱللَّهِ وَرَسُولِهِۦ ۖ وَإِن تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَٰلِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ ﴿٢٧٩﴾
And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.
A lender is entitled to his principal only; a guaranteed extra is riba.
Quran, Surah Al-Baqara 2:275
ٱلَّذِينَ يَأْكُلُونَ ٱلرِّبَوٰا۟ لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ ٱلَّذِى يَتَخَبَّطُهُ ٱلشَّيْطَٰنُ مِنَ ٱلْمَسِّ ۚ ذَٰلِكَ بِأَنَّهُمْ قَالُوٓا۟ إِنَّمَا ٱلْبَيْعُ مِثْلُ ٱلرِّبَوٰا۟ ۗ وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا۟ ۚ فَمَن جَآءَهُۥ مَوْعِظَةٌۭ مِّن رَّبِّهِۦ فَٱنتَهَىٰ فَلَهُۥ مَا سَلَفَ وَأَمْرُهُۥٓ إِلَى ٱللَّهِ ۖ وَمَنْ عَادَ فَأُو۟لَٰٓئِكَ أَصْحَٰبُ ٱلنَّارِ ۖ هُمْ فِيهَا خَٰلِدُونَ ﴿٢٧٥﴾
Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein.
Profit must come from trade and real risk.
Sahih Muslim 1547
Sahih... فربما أخرجت هذه ولم تخرج هذه فنهانا عن ذلك ...
"Sometimes this patch produced and that one did not, so he forbade us from it."
Fixing one side's return to a set portion, so one may gain while the other loses, is forbidden.
Jami' at-Tirmidhi 1285
Grading to be checked... قضى أن الخراج بالضمان ...
"He ruled that gain goes with liability."
Only one who bears risk is entitled to profit.
Where the ruling is recorded
- al-Hidaya, Kitab al-Mudaraba and Kitab al-Shirka. A fixed sum for one partner voids the profit-sharing.
- AAOIFI Shari'ah Standards, Standards on mudarabah and on sharikah. Prohibition of guaranteed capital and fixed returns, with the third-party guarantee exception.
This answer is pending review by the scholars on our team. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.