What are the Halal ways of investment?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

One may invest his money to earn profits primarily through the following modes of investment:

1. Musharakah - A joint commercial enterprise enacted by mutual agreement wherein two or more partners invest some of their capital or undertake to render some services to customers in which all the partners share the profit or loss of the joint venture on an agreed ratio.
2. Mudharabah – A partnership wherein one partner provides capital to another for commercial investment with only the second partner being responsible for management and work. Profits and losses are shared at an agreed ratio.

The above is a brief explanation on the two modes of investment. For further details on these, you may refer to the book ‘Islamic Finance’ by Hadhrat Mufti Taqi Uthmani Sahib Mudda Zilluhu. It is available at the following link:

http://daruliftaa.net/index.php/resources/publications/finish/27-publications/279-an-introduction-to-islamic-finance-mufti-taqi-usmani

And Allah Ta’āla Knows Best

Nabeel Valli

Student Darul Iftaa
Zambia

Checked and Approved by,
Mufti Ebrahim Desai.