Guideline for

Description of the Product A Mudarabah is a partnership agreement between a financier and another party (Mudarib), whereby the financier provides the funding for the partnership project, while the Mudarib contributes the work and manages the workforce. The funding may be restricted (with limited authority for the Mudarib on how to use the funds) or unrestricted (with unlimited authority for the Mudarib on how to use the funds), and it may be in the form of assets, but it is usually provided in cash. The partners agree in advance on the division of the profits generated by the partnership project, provided that the partner contributing to the work or labor (the Mudarib) does not receive any compensation from the financier for his contribution of effort or time, unless it is explicitly stated that he is entitled to a fee or compensation for a separate service, such as management or operating fees. In this case, this is considered a separate activity from the partnership agreement and must be treated separately for the purposes of VAT. It is also possible that the financier requests the financee to provide (limited) funds to the partnership enterprise in addition to providing labor. The profit allocated to the financier is a remuneration for its willingness to provide funding. The financier is also responsible for any loss in the partnership enterprise (unless in the case of proven misconduct of the other participant). The party contributing to the financing of the partnership project may also issue investment certificates (Sukuk) to other investors to collect the funding provided to the Partnership enterprise. Simplified, this structure can be depicted as follows: Funds + Profit Partnership enterprise Financing recipient Financing Provider Profit Funds