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Is it permissible to outsource work to other companies while employed by one?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
A) In my company we outsource a lot of work to other companies. Will it be OK, if I as an employee create a new company and take some of this outsourced work while at the same time I remain in employment with my company. I would like to point that me creating a new company will not effect my work with the company I am employed with as I shall hire people to do the outsourced work in the company I create and it will all together act as a seperate entity from myself? B) Would it be OK to outsource the work I take to some other companies further, even though they might have been my competitor in the bidding stages of getting the outsourced work from the company I am employed with? C) Another case that I am thinking of is instead of creating a new company, I bid/take the outsourced work under the banner of the company of my friend. However, my friend says that if I do decide to use his company’s name and office, then I have to pay him 15% of the profit I make and incase of a loss I dont pay him anything. Will it be halaal if I agree to this in exchange for using his office facilities and company name?


(Fatwa: 828/758=L/1429)

(a, b) If you do your employment with full responsibility and establish other company then you are allowed to do so as per the Shariah, there is no wrong in it.

(c) The 15% profit which you shall give to your friend as profit, if it is rent of the office then it is not correct; since it is necessary to have the rent fixed whether there is profit in the business or loss. Therefore, according to me, it is better to have a partnership with your friend i.e. establish the company by mutual money and do the work and decide the percent of the profit (e.g. 50% or 60%), and in case of loss both shall bear the brunt as per the partnership.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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