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Profit or Interest ?


Friend, a businessman in a foreign country, doing business with clients in the US. The client has to be paid in USD for the product. My friend is requesting me to pay his client, he would pay me in a foreign country with a 10% profit.

Example: I pay his client $5000. He's willing to pay me in the foreign country $5500 - is this allowed? Or is this considered as interest?

He describes this transaction as if I am buying the product from his client for him, and marking it up 10% profit and selling it back to him. Though, there’s no exchange of products taking place between me & his client. I am simply paying his client for the product he’s purchasing, and he’s paying me back with a 10% profit. Answer: ﺑﺴﻢ اﷲ اﻟﺮﺣﻤﻦ اﻟﺮﺣﯿﻢ In the name of Allah, the Most Gracious, the Most Merciful

If you are merely paying his client for a product that he is purchasing, and then he reimburses you along with an extra amount, then this would constitute interest. A simple alternative would be to render the above-mentioned service for him, and in exchange for your service, charge him the 10% as a SERVICE FEE. Mukhtasar Al- Quduri: p. 336 (Maktaba Al-Bushra); Contemporary Fatawaa: p. 141 (Idara-e- Islamiat)

Only Allah knows best

Written by Maulana Mohammad Ahsan Osmani Checked and approved by Mufti Mohammed Tosir Miah Darul Ifta Birmingham

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