Jordan is a Middle Eastern country centrally located on desert plateaus in southwest Asia and strategically positioned to serve as a regional business platform. Since King Abdullah II’s 1999 ascension to the throne, Jordan has taken steps to encourage foreign investment and to develop an outward-oriented, market-based, and globally competitive economy. Jordan is also uniquely poised as a platform to host investments focused on the reconstruction of Iraq and projects in regional markets.
Jordan’s economy grew by two percent in 2018, despite ongoing domestic and regional challenges. Jordan’s economic growth has been slowed for several years by regional security concerns, the 2015 closure of Jordan’s borders with Iraq (reopened in August 2017) and Syria (partially re-opened in 2018), and an influx of Syrian refugees. During this time the government ran large annual budget deficits, but has been able to reduce its near-term financing gap with loans, foreign assistance, and savings from economic reform measures enacted as part of an International Monetary Fund (IMF) Extended Fund Facility program that began in August 2016. As a result of these factors, the investment outlook for Jordan began to decline, and by September 2018 foreign direct investment had dropped 60 percent from its level at the end of 2017.
International reports and metrics indicate that Jordan’s overall investment environment is improving. The Kingdom advanced 15 places from 118th to 103rd on the World Bank’s “Doing Business Report 2018” (sliding back one place in 2019 to 104th). Jordan advanced four points on the Global Innovation Index, maintained its rank at 49th place on the Global Entrepreneurship Index 2018, and improved one place on the Global Talent Competitiveness Index from 58 in 2018 to 57, up 13 points from 2017.
Table 1: Key Metrics and Rankings
|TI Corruption Perceptions Index||2018||58 of 175||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2019||104 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2018||79 of 126||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, stock positions)||2017||USD 232||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita||2017||USD 3980||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
The Jordanian Investment Law grants equal treatment to local and foreign investors and grants incentives for local and foreign investment in industry, agriculture, tourism, hospitals, transportation, energy, and water distribution. In 2017, Jordan passed amendments to the Companies’ Law and a law to regulate and unify monitoring and inspection of economic activities. The government implemented additional reforms in 2018, including the Insolvency Law, Movable Assets and Secured Lending Law and Bylaw, the Venture Capital bylaw, and a new Income Tax Law. The new tax law is dependent on a number of bylaws that the government is still developing.
In 2014, Jordan endorsed the Public Private Partnership Law and Investment Law to support the government’s commitment to broadening the utilization of the public-private sectors partnership, and allowing the private sector to have a larger role in overall economic activity.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct
Jordan is largely open to foreign investment, and the government is committed to supporting foreign investment. Foreign and local investors are treated equally under the law. The Jordan Investment Commission is the body responsible for implementing the 2014 Investment Law and promoting new and existing investment in Jordan, through a range of measures to incentivize and facilitate investment procedures. The Investment Council, established by the law, which is comprised of the Prime Minister, ministers with economic portfolios, and representatives from the private sector, oversees the management and development of the national investment policy, and is responsible for legislative and economic reforms to facilitate investment.
In 2017, the Jordanian government introduced a new ministerial portfolio for Investment Affairs, and assigned the Minister of State for Investment Affairs as the President of Jordan Investment Commission. Investment Law No. 30/2014 identifies the Commission as the key reference point for investors and grants additional authorities to the Investment Window to facilitate and accelerate investment registration. The President of the Commission and the administrative team supervise and centrally approve investment-related matters within the guidelines set by the Investment Council and approved by the government.
The Investment Commission can expedite the provision of government services and provide a number of investment incentives, tax, and customs exemptions. An investment-dedicated “ ” provides information and technical assistance to investors, with a mandate to simplify registration and licensing procedures for investment projects that benefit from the Investment Law. In 2018, the Commission launched a “Follow-Up and After Care” section with an aim to remove obstacles facing investors and find appropriate solutions as part of the investment process.
Limits on Foreign Control and Right to Private Ownership and Establishment
Investment and property laws allow domestic and foreign entities to establish businesses that engage in remunerative activities. Foreign companies may open regional and branch offices, branch offices may carry out full business activities, and regional offices may serve as liaisons between head offices and Jordanian or regional clients. The Ministry of Industry, Trade and Supply’s Companies Control Department implements the government’s policy on the establishment of regional and branch offices.
Foreign nationals and firms are permitted to own or lease property in Jordan for investment purposes and are allowed one residence for personal use, provided that their home country permits reciprocal property ownership rights for Jordanians. Depending on the size and location of the property, the Lands and Surveys Department, the Ministry of Finance, and/or the Cabinet may need to approve foreign ownership of land and property, which must then be developed within five years after the date of approval.
Regulations governing foreign ownership include the following exceptions:
- Foreigners are prohibited from wholly or partially owning investigation and security services, sports clubs (exception: health clubs), stone quarrying operations for construction purposes, customs clearance services, and bakeries of all kinds; and are prohibited from trading in weapons and fireworks. The Cabinet, however, may approve foreign ownership of projects in these sectors upon the recommendation of the Investment Council. To qualify for the exemption, projects must be categorized as being highly valuable to the national economy.
- Investors are limited to 50 percent ownership in certain businesses and services, including periodical publications, printing/publishing companies, aircraft or maritime vessel maintenance and repair services, land transportation services, and retail and wholesale trading.
- Foreign firms may not import goods without appointing an agent registered in Jordan; the agent may be a branch office or a wholly owned subsidiary of the foreign firm. The agent’s connection to the foreign company must be direct, without a sub-agent or intermediary. The Commercial Agents and Intermediaries Law No. 28/2001 governs contractual agreements between foreign firms and commercial agents. Private foreign entities, whether licensed under sole foreign ownership or as a joint venture, compete on an equal basis with local companies.
However, according to the Bilateral Investment Treaty with Jordan, U.S. investors are granted several exceptions and are accorded the same treatment as Jordanian nationals, allowing U.S. investors to maintain 100 percent ownership in some restricted businesses. The most up-to-date listing of limitations on investments is available in the FTA Annex 3.1 and may be found at http://www.ustr.gov/trade-agreements/free-trade-agreements/jordan-fta/final-text.
For national security purposes, foreign investors must undergo security screening through the Ministry of Interior, which can be finalized through the “One Window” located at the Investment Commission.
Other Investment Policy Reviews
In 2012, the United States and Jordan agreed to Statements of Principles for International Investment and for Information and Communication Technology Services, and a Trade and Investment Partnership Bilateral Action Plan, each of which is designed to increase transparency, openness, and governmental and private sector cooperation. The two parties also began discussions on a Customs Administration and Trade Facilitation Agreement. All current treaties and agreements in force between the United States and Jordan may be found here: https://www.state.gov/s/l/treaty/tif/.
In follow up on OECD’s Investment Policy Review of Jordan and Jordan’s adherence to the OECD Declaration on International Investment and Multinational Enterprises in 2013, the MENA-OECD competitiveness program issued a report in 2018 entitled “Enhancing the legal framework for sustainable investment: Lessons from Jordan” ( ).
Businesses in Jordan need to register with the Ministry of Industry, Trade, and Supply’s Companies Control Department, or the Chambers of Commerce or Industry depending on the type of business they conduct; open a bank account, obtain a tax identification number, and obtain a VAT number. They also need to obtain a vocational license from the municipality, receive a health inspection, and register with the Social Security Corporation. In November 2017, the government issued a decision to cancel all non-security related pre-approvals for registering a business and require all approvals before starting operations.
The “Investment Window” at the Jordan Investment Commission ( ) serves as a comprehensive investment center for investors. The window provides its services to both local and foreign investors, particularly those in the agricultural sector, medical, tourism, industrial, ICT-Business Process Outsourcing (BPO), and energy sectors. In 2018, the commission introduced a fast track for investors at Queen Alia International Airport.
In 2017, the Commission further streamlined procedures to register and license investment projects in development zones, introducing a Fast Track Investment Window, reducing the number of committee approvals from 23 to 13, and reducing registration procedures from 15 to five. These changes reduced the typical time period required to register in development zones from five days to one day. Additionally, the time period needed to grant or renew the investor card (an ID card for investors used to facilitate various transactions) has been reduced from five working days to two, the time period to grant exemptions under the investment law from two weeks to one, and the time period to grant exemptions under the decisions of the Prime Minister from seven days to one.
Jordan has also adopted a single security approval to replace the 11 approvals that were previously required for new investors. The new approval covers registering and licensing the company, obtaining driving licenses for investors, possessing immovable property for the establishment of investment projects in the industrial and developing zones, in addition to granting residence permits to non-Jordanian investors and their family members. The Companies Control Department has developed and launched a portal for online registration:
The commission has completed the first phase of automating its services. Sixteen services are now fully automated as of March 31, 2019, and a number of guides are now available online, including the investor guide ( ).
The World Bank Group in its Doing Business mapped out the registration requirements in Jordan and provided a detailed summary of procedures, time, cost, and legal requirements to incorporate and register a new firm in Jordan. The report compared regulations relevant to the life cycle of a small- to medium-sized domestic business in 188 economies. In the 2019 report, Jordan ranked 104 out of 190, with 12 days needed to complete registration (Link).
Jordan does not have a mechanism in place to specifically incentivize outward investment.
2. Bilateral Investment Agreements and Taxation Treaties
In addition to the United States, Jordan has signed bilateral investment treaties with 57 countries including the European Union, Singapore, and Canada. entered into effect in 2003 and provides reciprocal protection of Jordanian and U.S. individual and corporate investments.
The U.S. Congress enacted the initiative in 1996 to support the Middle East peace process. Goods produced in the 13 designated QIZs in Jordan can be imported into the United States tariff and quota free under the agreement if at least 35 percent of the product’s content comes from the QIZ, Israel, or West Bank/Gaza. Of that 35 percent, a minimum 11.7 percent of value must be added in the QIZ, eight percent in Israel, and 15.3 percent in a Jordanian QIZ, Israel, or the West Bank/Gaza. The QIZs have attracted over USD 1 billion dollars in capital investments, generated around USD 9.2 billion dollars in exports to the U.S. between 2006 and 2013, and currently employ more than 47,000 workers; about one-quarter of whom are Jordanians. The bulk of QIZ exports continue to be garments.
The which entered into force in 2001 and came into full effect in January 2010, does not supersede or eliminate the QIZ initiative. Nevertheless, exports under QIZ requirements considerably shrank as exporters took advantage of the FTA’s broader mandate. FTA rules of origin simply require 35 percent Jordanian content without other restrictions.
While the United States remains one of Jordan’s top trading partners and largest export market, Jordan maintains an active trade relationship with neighboring countries and has been actively pursuing enhanced trade arrangements globally. Jordan is a member of the Greater Arab Free Trade Area (GAFTA), which has been in force since 1998. The GAFTA reached full trade liberalization of goods in 2005 through full exemption of customs duties and charges for all 17 Arab member states, with the exception of gradual reductions for Sudan and Yemen. Jordan has also signed trade preference agreements and bilateral free trade agreements with various Arab neighbors, including Egypt, Syria, Morocco, Tunisia, the UAE, Algeria, Lebanon, the Palestinian Authority, Kuwait, Sudan, and Bahrain.
An economic association agreement between Jordan and the European Union (EU) entered into force in 2002 to establish free trade over a twelve-year period. This agreement calls for the free movement of capital as well as cooperation on development and political issues. Jordan also signed a Free Trade Area Agreement in 2001 with the European Free Trade Association (EFTA) states (Iceland, Liechtenstein, Norway, and Switzerland); this agreement completed the transitional period in 2014. In 2016, Jordan and the European Union agreed on new rules of origin designed to facilitate Jordanian exports to the EU manufactured with set percentages of Syrian labor content. Jordan and the EU are discussing potential revisions to this agreement.
With respect to other agreements, Jordan signed a Free Trade Agreement with Singapore in 2004. In addition to enhancing bilateral trade ties, the agreement aimed to create new export opportunities for Jordanian products worldwide through the possibility of diagonal accumulation of origin with countries that have concluded free trade agreements with both Jordan and Singapore. That same year, Jordan completed the Agadir trade agreement with Egypt, Morocco, and Tunisia, and upgraded its trade agreement with Israel to take advantage of accumulation of content provisions in the European Union’s Pan Euro-Mediterranean trade rules of origin. Jordan signed a Free Trade Agreement with Canada in 2009 which came into effect in October 2012. The FTA with Canada eliminates all non-agricultural tariffs and most agricultural tariffs. A similar agreement with Turkey was also signed in November 2009 and entered into effect on March 1, 2011; in early 2018 Jordan announced its intention to suspend this agreement within six months. Jordan has also signed with Iraq a number of Memoranda of Understanding for bilateral cooperation in various sectors such as education, health, energy, transportation, and trade.
Jordan concluded double taxation avoidance agreements with 31 countries including the United Arab Emirates, Qatar, Bahrain, Egypt, Algeria, Tunisia, in addition to Canada, the United Kingdom, France, Turkey, UAE, and others. Jordan signed its first double taxation agreement in 1981 with Romania, and the latest with Saudi Arabia in 2018. The terms of each agreement vary to match the priorities of each signatory, but often include income tax, corporate tax, capital gain, social service tax, and gains generated by the alienation of movable and immovable property.
Jordan does not have a double taxation agreement with the United States.
3. Legal Regime
Transparency of the Regulatory System
Legal, regulatory and accounting policies, applicable to both domestic and foreign investors, are transparent and promote competition. However, historically red tape and bureaucratic procedures, particularly at the local government level, presented problems for foreign and domestic investors.
The government is gradually implementing policies to improve competition and foster transparency in implementation. These reforms aim to change an existing system influenced in the past by family affiliations and business ties. The Jordan Investment Commission (JIC), through its Fast Track Investment Window, introduced a number of measures to streamline the investment process. All laws and regulations are usually published on the website of the Legislative and Opinion Bureau for public commenting, in addition to executive branch consultations, with the legislative branch and key stakeholders.
Most economic regulations are available on the Jordan Investment Commission website ( ), or on the Ministry of Industry and Trade and Supply website (https://www.mit.gov.jo/Default). All regulations are published in the Official Gazette ( ) or the Legislative and Opinion Bureau ( ).
Jordan is committed to its fiscal transparency policy, therefore the Ministry of Finance (MoF) publishes a monthly “General Government Finance Bulletin” and that includes detailed information on government’s debt obligations. ( ).
For further details please contact:
Jordan Investment Commission
Telephone: +962 (6) 5608400/9 Ext: 120
Amman 11821 Jordan
International Regulatory Considerations
Jordan recognizes and accepts most U.S. standards and specifications. However, Jordan has occasionally required additional product standards for imports. Some of these measures have been viewed as barriers to trade, such as a 2014 restriction imposed on packaging sizes for poultry available for retail resale.
As a member country of the WTO, Jordan is obliged to notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).
Jordan is a signatory of the WTO Trade Facilitation Agreement. As of March, 2018, Jordan had implemented 81.5 percent of its commitments. Jordan submitted its notifications for Category A before the agreement came into force, and is currently in the final review for categories B and C.
Legal System and Judicial Independence
Jordan has a mixed legal system based on civil law, Sharia Law (Islamic Law), and customary law. The Constitution establishes the judiciary as one of three separate and independent branches of government. Jordanian commercial laws do not make a distinction between Jordanian and non-Jordanian investors. However, plaintiffs complain of judicial backlogs and subsequent delays in legal proceedings. Jordan has introduced economic judicial chambers, established under the Amman First Instance Court and Amman Appeal Court under the provisions of the Law of Formation of the amended Courts No. 30 of 2017. These chambers specialize in the adjudication of certain commercial and investment disputes mentioned in Article 4 of the Courts Formation Law.
Laws and Regulations on Foreign Direct Investment
Jordan’s Investment Law governs local and foreign investment. The law consolidated three entities – the Jordan Investment Board, the Jordanian Development Zones Commission, and the Free Zones Corporation – into the Jordan Investment Commission. The law incorporates a statement of investors’ rights and a legal framework for the newly established Investment Window, which is located at the Investment Commission’s headquarters.
The commission issued and published a services and licensing guides outlining processes and fees, in addition to the incentives guide ( ). Guides are currently available in Arabic. The commission is working to amend the bylaw that regulates non-Jordanian investments to increase investors’ confidence and attract more foreign investment.
In September 2017, Parliament passed the Monitoring and Inspection of Economic Activities Law No. 33 / 201, and amendments to Jordan’s Companies Law No. 34 /2017. This law governs the requirements to establish venture capital companies for the purpose of direct investment, or for creating funds, to contribute or invest in high-growth companies that are not listed in the stock market.
In 2018, Jordan passed the Insolvency Law, Movable Assets and Secured Lending Law and Bylaw, the Venture Capital Bylaw in addition to a new Income Tax Law, a number of related bylaws are in the pipeline.
There is no systematic or legal discrimination against foreign participation with respect to ownership and participation in Jordan’s major economic sectors other than the restrictions outlined in the governing regulations. In fact, many Jordanian businesses actively seek engagement with foreign partners as a way to increase their competitiveness and access to other international markets. The government’s efforts have made Jordan’s official investment climate welcoming; however, some U.S. investors have reported hidden costs, citing bureaucratic red tape, vague regulations, and conflicting jurisdictions.
Competition and Anti-Trust Laws
The Jordanian parliament passed amendments to Competition Law No. 33/2004 in 2011 to strengthen the local economic environment and attract foreign investment by providing incentives to improve market competitiveness, protect small and medium enterprises from restrictive anticompetitive practices, and give consumers access to high quality products at competitive prices. The Competition Directorate at the Ministry of Industry, Trade, and Supply conducts market research, examines complaints, and reports violators to the judicial system.
Expropriation and Compensation
Article 11 of the Jordanian Constitution stipulates that expropriations are prohibited unless specifically deemed to be in the public interest. In cases of expropriation, the law mandates provision of fair compensation to the investor in convertible currency.
ICSD and New York Conventions
Since 1972, Jordan has been a contracting state to the International Centre for Settlement of Investment Disputes (ICSID Convention). Only a small number of cases between foreign investors and the Jordanian government have been brought before ICSID tribunals. Jordan is also a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York convention).
In January 2018, the Parliament passed amendments to Arbitration Law 2017, which aims to facilitate the use of arbitration as an alternative to dispute settlement procedures.
Investor-State Dispute Settlement
Under domestic law, foreign investors may seek third party arbitration as a means of settling disputes. Jordan abides by WTO dispute settlement mechanisms, and dispute settlement mechanisms under the U.S.-Jordan FTA are consistent with WTO commitments. Article IX of the United States-Jordan Bilateral Investment Treaty (BIT) establishes procedures for dispute settlements between Jordanians and U.S. persons.
Investment disputes are treated as any other commercial or civil dispute in the Jordanian judicial system. Investment agreements with the Jordanian government as a party generally contain a dispute resolution clause that would refer cases to arbitration in Jordan. On average, it takes three to four years for cases that go through the local court system to reach a verdict. Cases settled through arbitration take between 12 to 18 months. The main challenge regarding litigating cases is being able to conduct proper process of service upon all concerned parties. Another challenge is the lack of specialized investment and commercial courts, limiting judges’ capacity to adequately review cases.
International Commercial Arbitration and Foreign Courts
Rulings by U.S. courts or other international arbitration committees can be upheld through the filing of an Enforcement of Ruling motion in a Jordanian court.
The Commercial Code, Civil Code, and Companies Law collectively govern bankruptcy and insolvency proceedings. In December 2017, the cabinet endorsed a bankruptcy bylaw which stipulates procedures for optional and compulsory liquidation, along with the mechanism, liquidation plan, and required documentation and reporting. In 2018, Parliament passed the Insolvency Law, which allows individuals and companies to offset their financial position through a debt management plan. The law helps the insolvent entity to continue its economic activity, rather than directly resorting to bankruptcy.
4. Industrial Policies
Under Investment Law No. 30/2014, the Council of Ministers, upon the recommendation of the Investment Council, may offer investment incentives in accordance with the law and governing regulations for projects outside the Development and Free Zones. The Investment Council and Investment Commission can also offer certain exemptions for projects in the following sectors:
- Agriculture and Livestock
- Hospitals and specialized medical centers
- Hotel and touristic facilities
- Tourism-related entertainment and recreation
- Contact and communication centers
- Scientific research centers and medical laboratories
- Technical and media production
Such incentives include customs exemptions, refunding of the general tax for production inputs, and no sales tax. JIC can provide investors with further information on these exemptions ( ). Automatic exemptions are also granted for specific services whether purchased locally or imported. The Income and Sales Tax Department will refund the general tax levied within 30 days from submitting a written request in accordance with the terms and conditions determined by the Regulations Governing Investment Incentives (Number 33 of 2015).
A number of non-automatic exemptions are granted for production requirements and assets of economic, industrial, or handicrafts activities of dual-use. Such exemptions are subject to administrative procedures and approvals obtained from the Jordan Investment Commission Technical Committee and are governed by the previously referenced regulation.
Article 8-A of the 2014 Investment Law allows the cabinet to grant additional advantages, exemptions, or incentives to any economic activities in the Kingdom. Under this article, the cabinet granted additional incentives to the ICT, tourism, and transport sectors in 2016, as published in the Official Gazette.
Net profits generated from most exports were exempt from income tax until December 2018. The new Income Tax Law No. 38 (2018) imposed taxes on income generated from exports, in accordance with WTO agreements.
Foreign Trade Zones/Free Ports/Trade Facilitation
Investments in special economic zones and development zones receive a minimum 30 percent income tax waiver depending on the zone. Additional incentives are also provided for projects under the Industrial Estate Corporation and the Aqaba Special Economic Zone.
The country is divided into three development areas: Zones A, B, and C. Investments in Zone C, the least developed areas of Jordan, receive the highest level of incentives while those in Zone A receive the lowest level. All agricultural, maritime, transport and railway investments are classified as Zone C, irrespective of location. Hotel and tourism-related projects along the Dead Sea, leisure and recreational compounds, and convention and exhibition centers receive Zone A designations. Qualifying Industrial Zones (QIZs) are zoned according to their geographical location unless granted an exemption. The three-zone classification scheme does not apply to nature reserves and environmental protection areas.
Jordan’s 2014 investment law merged the Development and Free Zones Commission (DFZC) into the newly formed Jordan Investment Commission, an independent governmental body responsible for creating, regulating, and monitoring Jordan’s free trade zones, industrial estates, and development zones. The development areas are the King Hussein Bin Talal Development Area (KHBTDA) in Mafraq, the Ma’an Development Area, the Irbid Development Area (IDA), the Dead Sea Development Zone, the Jabal Ajloun Development Zone, and the King Hussein Business Park Development Zone. The Investment Law assigns the Jordan Industrial Estates Corporation (JIEC) and the Development and Free Zones Corporation (DFZC) as main developers of industrial estates and development and free zones, under the supervision of the Investment Commission.
As part of Jordan’s efforts to foster economic development and enhance its investment climate, the government has created four industrial estates in Amman, Irbid, Karak, and Aqaba, in addition to several privately-run industrial parks, including al-Mushatta, al-Tajamouat, al-Dulayl, Cyber City, al-Qastal, Jordan Gateway, and al-Hallabat. These estates provide basic infrastructure for a wide variety of manufacturing activities, reducing the cost of utilities and providing cost-effective land and buildings. Investors in the estates continue to receive incentives until their contracts expire, and receive various additional exemptions, such as a two-year exemption on income and social services taxes, complete exemptions from building and land taxes, and exemptions or reductions on most municipalities’ fees.
Besides the six public free zones in Zarqa, Sahab, Karak, Karama, Mowaqaar, and Queen Alia Airport, Jordan has over 37 designated private free zones administered by private companies under the DFZC’s supervision. The free zones are outside of the jurisdiction of Jordan Customs and provide a duty and tax-free environment for the storage of goods transiting Jordan.
Jordan has announced plans for new specialized development zones in a number of governorates including two solar parks in Ma’an and Ajloun, and four new industrial parks in Salt, Madaba, Tafileh, and Jarash.
The Aqaba Special Economic Zone (ASEZ) is an independent economic zone not governed by the Investment Commission or the articles in the Investment Law governing investments in free zones or development zones. It offers special tax exemptions, a flat five percent income tax, and facilitates customs handling at Aqaba Port. In recent years, ASEZ has attracted projects, mainly in hotel and property development sectors, valued at over USD 8 billion. The government continues to implement development projects aimed at attracting commerce and tourism through the Port of Aqaba. The Aqaba New Port project, initiated in 2010, became operational November 2018 at 40 percent of its design capacity, and is expected to reach 60 percent of operational capacity by June 2019. The new port, 20 km south of the previous port, added four new terminals and expanded general ship berthing and marine services, in addition to adding dedicated terminals for liquefied natural gas, phosphates, and propane.
Investors, either foreign or domestic, face specific requirements in trade, services, and industrial projects in free zones. Industrial projects must be related to one of the following industries:
- New industries that depend on advanced technology;
- Industries that require locally available raw material and/or locally manufactured parts;
- Industries that complement domestic industries;
- Industries that enhance labor skills and promote technical know-how; or,
- Industries that provide consumer goods and that contribute to reducing market dependency on imported goods.
For further details, please visit:
- Jordan Investment Commission (http://www.jic.gov.jo/)
- Jordan Industrial Estate Corporation (http://www.jiec.com)
- Aqaba Special Economic Zone (http://www.aqabazone.com/)
Performance and Data Localization Requirements
Jordan has a well-educated and trained labor force of 2.5 million people, of which approximately 700,000 are registered foreign workers. Unofficial indicators speculate that unregistered foreign workers are nearly double this number. Most foreign laborers are employed in construction, agriculture, and domestic housekeeping sectors. Approximately 70,000 also work in the QIZs as textile workers.
The Ministry of Labor regulates foreign worker licensing, licensing fees, prohibited sectors, and employer liability. Along with the Ministry of Interior, the Ministry of Labor is responsible for approving the hiring of professional foreign workers by private businesses.
To date, Jordan has no forced localization policy, but does mandate local-employment quotas depending on the sector.
Jordan does not have requirements for foreign IT providers to turn over source code or provide access to surveillance.
5. Protection of Property Rights
The legal system reliably facilitates and protects the acquisition and disposition of property rights. Foreign ownership of land and assets is governed by The Leasing of Immovable Assets and Their Sale to Non-Jordanian and Judicial Persons Law No. 47/2006. Under Article 3 of the law, if the buyer’s country of residence has a reciprocal relationship with Jordan, foreign nationals are afforded the right of ownership of property within urban borders in Jordan for residential purposes. According to the law, foreign nationals may rent immovable assets for business or accommodation purposes, provided that the plot of land does not exceed 10 acres and the lease is for no more than three years in duration. Interest in real property is recognized and enforced once recorded in a legal registry.
A new Property law was passed by the lower house on March 5, 2019, and went to the Senate for final review and approval. The new law aims to consolidate 13 laws governing property ownership in one legislation, and addresses issues such as zoning, and the facilitation of ownership and leases for foreign investors.
All land plots in Jordan are titled and registered with the Jordanian Land and Survey Department; any land not titled as private property is considered government property.
According the Ease of Doing Business report of 2019, Jordan ranked 72 out of 190 countries in “Registering Property.”
Intellectual Property Rights
Jordan has passed several laws in compliance with international commitments to protect intellectual property rights (IPR). Laws consistent with Trade Related Aspects of Intellectual Property Rights (TRIPS) now protect trade secrets, plant varieties, and semiconductor chip designs. Copyrights are registered with The Ministry of Culture’s National Library Department, and patents are registered with the Registrar of Patents and Trademarks at the Ministry of Industry and Trade. Jordan is a signatory to the Patent Cooperation Treaty and the Madrid Protocol, and accordingly, amended its patent and trademark laws in 2007 to enable ratification of the agreements. Jordan is a signatory to World Intellectual Property Organization (WIPO) treaties on both copyrights and on performances and phonograms, and it has been developing updated laws for copyrights, trademark standards, and customs regulations to meet international standards. Jordanian firms are able to seek joint ventures and licensing agreements with multinational partners.
Jordan’s record on IPR enforcement has improved in recent years, but more effective enforcement mechanisms and legal procedures are still needed. In particular, a large portion of pirated videos and software remain in the marketplace. Enforcement action against audio/video and software piracy is more frequent and enforcement capability is improving. Since 2000, 6,011 violations of Jordan’s current copyright law have been referred to the judiciary, including 218 cases in 2018 and 174 cases in 2017. Trademark violations have also been problematic.
The U.S. Patent and Trademark Office has an Intellectual Property Attaché for the Middle East and North Africa region based in the U.S. Embassy in Kuwait City, Kuwait. Please see: for contact information.
6. Financial Sector
Capital Markets and Portfolio Investment
There are three key capital market institutions: the regulator, Jordan Securities Commission (JSC); the Amman Stock Exchange (ASE); and the custodian for all transaction contracts, clearings, and settlements, Securities Depository Center (SDC). The ASE launched an Internet Trading Service in 2010, providing an opportunity for investors to engage in securities trading regardless of geographic location.
Jordan’s market is among the most open among its regional competitors, as there are no caps in place for foreign ownership. At the end of 2018, non-Jordanian ownership in companies listed on the ASE represented 51.7 percent of the total market value (37.3 percent Arab investors and 14.4 percent for non-Arab investors); Jordanian ownership in the financial sector was 56.5 percent, 18.3 percent in the services sector, and 61.4 percent in the industrial sector. Investors, both foreign and domestic, are permitted to open margin accounts and to engage in short selling (commercial banks hold securities for their clients in a sub-account format).
In spite of recent reforms and technological advances, the ASE suffers from intermittent liquidity problems and low trading activity. The ASE’s market capitalization has grown and shrunk rapidly and repeatedly since 2003. Jordan’s financial market reached its height in 2007-2008, where average trading volumes topped USD 118 million daily. Following the global economic downturn, the market declined precipitously, with market capitalization falling from USD 41 billion in 2007 to USD 22.7 billion as of Dec 31, 2018.
By the end of 2018, the ASE price index had dropped 1908.8 points (10 percent) compared to its level at the end of 2017. In 2018, trading volume totaled USD 3.3 billion, a decline of 21 percent over 2017, with only 1.4 billion shares traded compared to 1.7 billion in 2017. The number of listed companies stood at 195 at the end of 2018 compared to 224 at the end of 2016.
At the same time, the net profits of 193 out of the 195 companies listed in the First and the Second Markets increased by USD 509.8 million in 2018 (according to preliminary financial statements provided to the ASE) reaching USD 1.153 billion, an increase of 44.7 percent over 2017.
Money and Banking System
Jordan has 25 banks, including commercial banks, Islamic banks, and foreign bank branches. Jordan does not distinguish between investment banks and commercial banks. Due to strict regulations on lending, particularly mortgage lending, and limited integration with global financial markets, the banking sector’s indicators remain strong. Banks continue to be profitable and well capitalized with deposits being the primary funding base. Liquidity ratios and provisioning remain high, while non-performing loan ratios modestly decreased over the past couple of years. Jordan’s rate of non-performing loans, as a percentage of all bank loans, was 4.2 percent in 2017, and reached 4.6 percent in the first half of 2018.
The banking law also does not discriminate between local and foreign banks. However, the minimum capital requirements differ with JD 50 million (USD 70.6 million) required for foreign banks and JD 100 million (USD 141 million) for local banks.
Banking Law No.28 / 2000 protects depositors’ interests, diminishes money market risk, guards against the concentration of lending, and includes articles on electronic banking practices and money laundering. The CBJ set up an independent Deposit Insurance Corporation (DIC) in 2000 that insures deposits up to JOD 50,000 (USD 71,000). The DIC also acts as the liquidator of banks as directed by the CBJ.
In January 2017, the CBJ and the 25 banks operating in the kingdom agreed to establish the “Jordan Payments and Clearing Company”, a private shareholding company based in Amman. The company began operations in 2018, with an aim to establish and develop digital retail and micro payments along with the investment in the innovative technology and digital financial services.
There is no legal impediment to applying block-chain technologies in banking transactions. The Central Bank actively supports the technology and is running two pilot projects deploying block-chain technologies: the Mobile Payment System (JoMoPay), and another for the verification of bank documents.
Foreign Exchange and Remittances
The Central Bank of Jordan (CBJ) supervises and licenses all currency exchange businesses. These entities are exempt from paying commissions on exchange transactions and therefore enjoy a competitive edge over banks.
The Jordanian Dinar (JD or JOD) is fully convertible for all commercial and capital transactions. Since 1995, the JD has been pegged to the U.S. dollar at an exchange rate of JD 1 to USD 1.41.
Other notable foreign exchange regulations include:
- Non-residents are allowed to open bank accounts in foreign currencies. These accounts are exempted from all transfer-related commission fees charged by the CBJ.
- Banks are permitted to purchase unlimited amounts of foreign currency from their clients in exchange for JODs on a forward basis. Banks are permitted to sell foreign currencies in exchange for JODs on a forward basis for the purpose of covering the value of imports.
- There is no restriction on the amount of foreign currency that residents may hold in bank accounts, and there is no ceiling on the amount residents may transfer abroad. Banks do not require prior CBJ approval for a transfer of funds, including investment-related transfers.
Jordanian law entitles foreigners to remit abroad all returns, profits, and proceeds arising from the liquidation of investment projects. Non-Jordanian workers are permitted to transfer their salaries and compensation abroad.
Sovereign Wealth Funds
Jordan does not have a sovereign wealth fund.
7. State-Owned Enterprises
A number of state-owned enterprises (SOEs) exist in Jordan. Currently, 17 SOEs of different sizes and mandates are fully owned by the government, five of which were established in 2016 and are not yet operational. Assets of wholly-owned SOEs exceed USD 11 billion in 2018, and the SOEs employ around 3,000 individuals.
Most of the operational SOEs are small in terms of the size of operations, assets, number of employees, and income. The largest SOEs are: National Electrical Power Company (NEPCO), Samra Electric Power Company, the Yarmouk Water Company, and Aqaba Development Corporation (ADC).
Jordan’s economy is private sector led, accounting for 71 percent of GDP and 75 percent of net cumulative investment. SOEs in Jordan exercise delegated governmental powers and operating in fields that are not yet open for investment, such as managing the transmission and distribution of electrical power and water. Other activities include logistics, mining, storage and inventory management of strategic products, in addition to economic development activities. The government supports these companies as necessary, for example, the government has issued and guaranteed Treasury bonds for NEPCO since 2011 to ensure continuous power supply for the country.
SOEs generally compete on largely equal terms with private enterprises with respect to access to markets, credit, and other business operations. The law does not provide preferential treatment to SOEs, and they are held accountable by their Board of Directors, typically chaired by the sector-relevant Minister and the Audit Bureau.
The government, enterprises and NGOs are progressively taking initiatives to incorporate Responsible Business Conduct into their practices.
Jordan is not a party to the Government Procurement Agreement.
Over the last fifteen years, the Jordanian government has engaged in a wide-scale privatization program, including in the telecom, energy, and transportation sectors. The few remaining government assets not privatized, including Jordan Silos and Supply Company, have elicited little private sector interest.
Government is following a Public Private Partnership (PPP) model for new projects rather that full privatization. Currently the PPP law is under review to make it easier for local and foreign investors to participate in bids.
8. Responsible Business Conduct
There is general awareness of responsible business conduct among both manufacturers and consumers in Jordan, with many local and multinational companies voluntarily developing and adopting corporate social responsibility (CSR) programs. CSR efforts predominantly focus on improving infrastructure in adjoining communities or providing better access to educational opportunities.
The amended companies’ law regulates the work of companies through applying the rules of company governance and enhancing the monitoring authorities of shareholders at public liability companies.
The American Chamber of Commerce published in 2016 a framework code of conduct for the private sector, Jordan Integrity and Anti-Corruption Commission (JIACC) approved and embedded as part of the governance chapter in the amended companies’ law. In addition, there have been programs released and revised by the Jordanian government such as the Golden List Program. The Customs Department released and revised a Golden List Program, which encourages good corporate citizenship amongst trading companies and international best practice for trade across borders.
Jordan was the first Middle-Eastern country to sign and ratify the United Nations Convention against Corruption (UNCAC) in 2005 and has initiated several reforms in similar spirit over the last two decades; including a code of conduct for the public sector in 2006. Furthermore, the government drafted an action plan to address corruption with Jordan’s National Integrity System (NIS), developed in 2012.
Jordanian Anti-Corruption law defines corruption as any act that violates official duties, all acts related to favoritism and nepotism that could deprive others from their legitimate rights, economic crimes, and misuse of power. However, the use of family, business, and other personal connections to advance personal business interests is endemic and regarded by many Jordanians as part of the culture. In 2006, Parliament approved an Illicit Gains Law, which officially required public office holders and specified government officials to declare their assets. The 2018 amendments to the Illicit Gain Law expanded the employees subject to the financial disclosure requirement to include heads and members of ad hoc municipal councils, executive directors of municipalities and heads and members of governorate councils. The Law necessitates the prime minister, Cabinet members and senior employees to provide their own financial disclosures and those of their spouses and minor children.
In 2006, Parliament also enacted an Anti-Corruption Law that created the Anti-Corruption Commission (ACC) to investigate allegations of corruption. In 2016, the Integrity and Anti-Corruption Commission (“IACC”) came into force by Law No. 13/2016 (“IACC Law”). Two Authorities were merged into one, cancelling of the Bureau of Ombudsman Law No. 11 of 2008 and the Anti-Corruption Law No. 62/2006.
The IACC received 790 new investigation files on corruption in 2018, of which 173 cases were referred to the Public Prosecutor in the commission, 342 files were saved because neither corruption offenses were found and therefore no administrative action required to correct / rectify the situation, and 275 files still are under investigation.
In 2018, the government issued the Code of Governance Practices of Policies and Legislative Instruments in Government Departments, to improve the predictability of legal and regulatory framework governing the business environment.
A new Audit Bureau Law was enacted in October 2018 to strengthen the Bureau performance, capacity and independence in line with INTOSAI standards.
Other related laws include the Penal/Criminal Code, Anti-Money Laundering Law, Right to Access Information Law, and the Economic Crimes Law.
Jordan is not a party to the OECD Convention on Combatting Bribery.
Resources to Report Corruption
H.E. Mohannad Hijazi
Jordan Integrity and Anti-Corruption Commission (JIACC)
P.O. Box 5000, Amman, 11953, Jordan
+962 6 550 3150
Contact at “watchdog” organization:
+962 079 905 2555
P.O. Box 582662, Amman, 111585, Jordan
+962 5 585 2528
10. Political and Security Environment
While politically motivated violence is rare in Jordan, the threat of terrorism remains high. Terrorist organizations, including the self-proclaimed Islamic State of Iraq and Syria (ISIS), its affiliates, and sympathizers, have successfully conducted attacks in Jordan and continue to plot assaults in the country. Jordan’s prominent role in the Defeat-ISIS Coalition and its shared borders with Iraq and Syria maintains potential for future terrorist incidents. Within the last year, Jordanian authorities have disrupted terrorist plots. Visitors should consult current State Department public announcements at www.travel.state.gov before traveling to Jordan.
Peaceful protests occur frequently, but are usually limited to a few hundred (and often only a few dozen) participants. Most demonstrations focus on frustration with perceived economic inequality and corruption or on the Israeli-Palestinian conflict and the status of Jerusalem. Protests in June 2018 led to the dismissal of the prime minister and his cabinet. Protestors state they will continue to gather periodically until the government takes concrete action on their concerns.
11. Labor Policies and Practices
According to the Department of Statistics annual report for 2018, the total population of Jordan is 10.3 million, of which 69 percent are Jordanians (6.6 million) and approximately 30 percent are non-Jordanians, including 1.3 million Syrian refugees. UNHCR has registered 659,063 Syrian refugees in Jordan.
Approximately 70 percent of the population is estimated to be under the age of 30. Literacy rates are 95.4 percent for men and 91.1 percent for women. Jordan has a generally well-educated labor force of about 1.8 million Jordanians. According to the Department of Statistics, official unemployment in 2018 reached 18.7percent.
Certain types of work are restricted to Jordanians only. However, employers may request the Ministry of Labor to review applications for foreign workers in restricted sectors if local expertise cannot be found; these requests have generally been approved. Local labor requirement in development and free zones varies based on the type of economic activity.
Labor unions serve primarily as intermediaries between workers and the Ministry of Labor (MOL) and may engage in collective bargaining on behalf of workers. The 17 recognized unions are all members of the General Federation of Jordanian Trade Unions. Estimates put union membership at less than 10 percent of the labor force. Additionally, there are 40 active professional associations, including many that have mandatory membership, in addition to 15 Independent Unions covering the rest of the professions and trades. According to official figures, about 30 percent of the total labor force, including government workers, belongs to either a union or a professional association. There is a labor mechanism in place for labor dispute resolution beginning with labor inspector mediation. If mediation fails, the Minister of Labor reviews the case, followed by the Conciliation Council, then finally by the Labor Court under the Magistrate and Penalty Court to resolve the case within seven days.
The labor law does not require employers to include retirement plans in employment packages. However, if the employer agreed to provide retirement benefits when the worker was contracted, the employer must fulfill that commitment. The law addresses layoffs to include require ministerial notification and guarantee of legitimate and entitled benefits and severance, but also allows firing without prior notice on certain conditions. Companies with the appropriate justification may obtain permission from the Ministry of Labor (MOL) to reduce their staff as a result of business restructuring. The social security system provides up to six months of unemployment benefits.
In 2017, Jordan introduced amendments to the labor law regarding flexible work hours and the provision of daycare; the amendments were passed by the lower house in March 2019, and are currently pending Senate approval. The amendments establish flexible work hour as agreements to be negotiated between employers and employees, but does not mandate them as an employee right. The current law governing daycare requires a businesses with at least 20 female employees with children between the age of one day and four years, to make daycare services available to the employees. The proposed amendments will require employers with employees, regardless of gender, that cumulatively have 15 or more children under the age of five years, to provide a suitable child care facility for them.
The government has been reforming and strengthening its legal framework and labor inspections since 2006. In 2010, Jordan fully implemented its Free Trade Agreement (FTA) with the United States, which requires Jordan to continuing making improvements on labor rights issues.
The Better Work Jordan program (BWJ), funded by the U.S. Department of Labor (USDOL), was launched in 2008 as a joint project between the Ministry of Labor, the International Labor Organization (ILO), and the International Finance Corporation to improve garment sector labor standards and conditions, and raise compliance levels through public reporting and technical assistance. In 2016, USDOL removed the Jordanian garment industry from its “List of Goods Produced by Child Labor or Forced Labor.” As of December 2018, 86 garment factories were enrolled in the BWJ program. Following its successes, BWJ is expanding its mandate to cover manufacturing and industrial sectors in order to facilitate their obligations to the European Union’s under newly relaxed rules-of-origin trade agreement requirements. At the end of 2018, 12 companies qualified to benefit from the simplified rules-of-origin initiative.
12. OPIC and Other Investment Insurance Programs
Investments in Jordan are eligible for Overseas Private Investment Corporation (OPIC) insurance and private financing. Projects require a minimum of 25 percent U.S. equity in order to qualify. Over the past several years, OPIC backed significant investments in Jordanian private equity ventures and in mortgage financing, with over USD 1 billion in investments in Jordan. OPIC is also active in financing projects in Jordan’s burgeoning renewable energy sector. In 2011, OPIC signed a USD 250 million loan guarantee program and established, the Jordan Loan Guarantee Facility (JLGF) in partnership with USAID, as an inclusive finance activity aimed at improving access to finance for small and medium sized enterprises in Jordan. OPIC previously extended a USD 250 million loan to support the USD 1 billion Disi water project to bring water to Amman from the Disi aquifer in the south.
Jordan is a member of the Multilateral Investment Guarantee Agency (MIGA), a World Bank agency which guarantees investment against non-commercial risks such as civil war, nationalization, and policy changes. The program covers investments in Jordan irrespective of the investor’s nationality in addition to Jordanian investments abroad.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
* Source for Host Country Data: Central Bank of Jordan, data published Q2 2018.
Table 3: Sources and Destination of FDI
Data not available.
Table 4: Sources of Portfolio Investment
|Portfolio Investment Assets|
|Top Five Partners (Millions, US Dollars)|
|Total||Equity Securities||Total Debt Securities|
|All Countries||Amount||100%||All Countries||Amount||100%||All Countries||Amount||100%|
|West Bank||976||13%||USA||152||22%||West Bank||751||12%|
14. Contact for More Information
Senior Economic Specialist
Al Umawyeen Street-Amman
+962 (6) 590-6317