Investment climate in Jordan

Jordan stands out as an oasis of political and economic stability in the Middle East, making it an outstanding location for investment and business.

Why Jordan

1. Strategic Location

Jordan is strategically located in the heart of the Middle East, with easy access throughout the region. It also has direct links to over 45 destinations, including the United States and Canada. It is politically secure and economically stable. Its location provides important advantages for business development in the region.

2. Government Incentives

The government offers financial assistance to companies making investments through economic incentives. Incentives include tax breaks, tax revenue sharing, grants, infrastructure assistance, zero or low interest rates, free land, and other financial resources.

3. Young, Highly Skilled Workforce

Jordan is home to a young, digitally savvy talent pool: 52.4% of the population is under 24 years old and speaks both English and Arabic fluently. 65,000 students graduate from universities each year, 35% of whom major in business, accounting, economics, engineering and computer science.

4. A Land of Innovation and Progress

Jordan has ranked first in the Arab world for its contribution to renewable energy, reflecting Jordan’s leadership in this field. The ICT infrastructure is also among the best in the region, offering an unrivaled network coverage of 99% and an internet penetration rate of over 80%.

5. Entrepreneurial Spirit and Exceptional Work Ethic

Jordan is home to a well-established start-up culture; 27 of the top 100 startups in the region are from Jordan. The country's workforce is incredibly hard-working, which has been proven time and again on the international stage. For example, 75% of Arabic internet content was created in Jordan's ICT sector.

Investment Law

The Jordanian Investment Law regulates local and foreign investment. The law merged three entities - the Jordan Investment Board, the Jordan Development Zones Commission, and the Free Zones Corporation - into the Jordan Investment Commission. The law includes a statement of investor rights and the legal basis for the newly created Investment Window, which is located at the Investment Commission's headquarters.

Jordan is 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 (JIC) is the body responsible for implementing the Investment Law 2014 and promoting new and existing investments in Jordan through a series of measures to stimulate and simplify investment procedures.

The Investment Law established the Investment Council, composed of the Prime Minister, ministers with economic portfolios and representatives of the private sector, to oversee the management and development of national investment policies and propose legislative and economic reforms to facilitate investment.

The legal, regulatory and accounting policies applicable to both domestic and foreign investors are transparent and pro-competitive. The Jordanian Company Law stipulates that all registered companies must maintain sound accounting records and submit annual audited financial statements in accordance with internationally accepted accounting and auditing principles. According to the Jordan Securities Commission (JSC) Law and the Disclosure, Auditing and Accounting Standards Directives (1/1998), all entities subject to the supervision of the JSC are required to apply International Financial Reporting Standards (IFRS).

Investment Incentives

The Investment Environment Law and Regulations have established a number of attractive and pro-business incentives for local, regional and international investors in an effort to promote broad-based economic growth and investment throughout the country.

In addition to the various core and additional incentives, the government has established several development zones and free zones that provide additional benefits to registered businesses operating in these areas, including simplified regulatory procedures.

The Jordanian Ministry of Investment has taken numerous steps to create a business-friendly environment that encourages entrepreneurship, promotes trade and export growth, and promotes the development of a green economy.

• Regardless of whether they operate within or outside development zones or free zones, investors have the right to claim compensation for any losses incurred as a result of certain conditions or circumstances related to the local investment environment and structure. These conditions are listed in the Investment Environment Law No. 21 of 2022.
• Any investment exceeding JD 5 million or involving the employment of more than 250 Jordanian employees, both in and outside the development zones, may be subject to a seven-year stability clause in the event of negative impacts arising from amendments or changes in Jordanian laws or regulations.
• Regardless of whether they operate in or outside the development zones and free zones, investors are allowed to employ 25% of their technical and managerial staff as foreign workers, and they can increase this number to 40% if certain conditions are met.
• Economic activities carried out outside the development zones and free zones will be granted a complete exemption from customs duties on all fixed assets, production needs and resources, and necessary spare parts for running a business in subject to certain conditions.
• Economic activities carried out outside the development zones and free zones will enjoy a zero sales tax rate on fixed assets, production needs and resources, and spare parts necessary for running their business. This exemption is based on a schedule issued by the Cabinet.

The Cabinet, on the recommendation of the Exemptions and Exemptions Committee, may grant one or more of the following six additional exemptions:

• 50% tax exemption on the sale of state land (the project must be commissioned within three years)
• 100% exemption from rent on state land for five years
• 100% exemption from construction and land tax (the enterprise must employ at least 25 Jordanian employees)
• 50% exemption from land and real estate registration fees and real estate sales tax (the enterprise must employ at least 25 Jordanian employees)
• Expenditures on infrastructure services for economic activities may be deducted from the investor's receivables to the official entity for a period of (5) years from the date of actual operation
• Participation in the payment of the electricity bill or permission to deduct this amount from the receivables from the business activity to the official entity in the amount of (50%) for a period of (5) years from the date of the decision, provided that the Council of Ministers, upon the recommendation of the Incentives and Exemptions Committee, determines the entity that will bear this contribution

Public-Private Partnerships (PPP)

Jordan has embarked on an ambitious national Public-Private Partnership (PPP) program with the broad objective of creating an engine for economic growth and employment through clearly defined partnerships in infrastructure, utilities and other services.

The country's government has committed to improving the efficiency of public investments and prioritizing the strengthening of national infrastructure. The goal of these efforts is to ensure that projects that are bankable, economically and socially viable are selected as priority investments. The vision for economic modernization is based on attracting private investment and financing infrastructure through public-private partnerships (PPPs) across a wide range of sectors.

As a result, over the next 10 years, several PPP projects worth US$42 billion will be implemented, including water desalination, school construction, clean energy, green hydrogen, transportation improvements and highways.