Starting a business


I’m an optometrist interested in opening my own practice and I’m saving up to open my own practice with a business partner. I’m saving to avoid taking any interest bearing loans, but as you’re aware the start up cost for starting an optician is in the region of 250,000-300,000.

Now I’ve advised my partner against getting a interest bearing loan, however if he does so it’ll be under his name.

My question put simply is would it be permissible for me to go into business with him if he gets a loan, with the alternative being that it’ll be almost impossible to open one without his experience and help.

Jzk in advance.


May Allah bless you.

If he takes out the loan on his name and the repayment of interest is his responsibility only, then you can enter into a partnership with him. However if the interest repayment will be made by you or the business in which you have shares, then it would not be permissible.
@ibrahimkhan can suggest some shariah compliant alternatives.

And Allah knows best!

Sadly right now there are not many sharia compliant business options. We have a partnership with Qardus which you can apply to here

However Qardus don’t help with business acquisition so that’s still one that isn’t straightforward to solve.

So by that logic, investing in companies with interest bearing loans is haram too right? That’s confusing.

Yes by default it is not permissible. The scholars from the Council of the Islamic Fiqh Academy in 1992, and AAOIFI in 2015, have both issued a resolution and a standard, stating that it is not permissible to invest in companies whose main purpose is prohibited, such as transaction with riba (usury).

However, because of the importance of the equity market, and due to the fact it would reduce the ability for Muslim investors to invest their money, the scholars made an exception for companies listed on the stock exchange. They devised a certain tolerance ratio to determine if a company is shariah compliant. The tolerance limit does not mean that the entire company’s fund becomes halal, hence of the need to purify the wealth earned.

This exception made by scholars (for company listed on a stock exchange), cannot be turned into a general rule for investment in every single company and business. Otherwise people will start to think that it is permissible for them to get an interest bearing loan from the bank as longer as it is less than 33% of their total assets.

See link too;