2023 Investment Climate Statements: Jordan

Policies Towards Foreign Direct Investment

The government supports and seeks foreign investment, though government policies and legislation restrict foreign investment in certain sectors. Some sectors and subsectors are only open to Jordanian investors, while other sectors are only open to foreigners up to 49 percent ownership. The full list of sectors is enclosed in the Investment Environment Bylaw No. 7 of 2023.

In 2021, a new, dedicated Ministry of Investment absorbed the responsibilities of the Jordan Investment Commission (JIC). Under Investment Environment Law No. 21 of 2022, the Ministry of Investment is responsible for attracting, encouraging, promoting investment, and ensuring the sustainability of an attractive investment climate.

The Ministry is the focal point for investors and can expedite government services and investment incentives. The Ministry supports services to the investors, including after-care services. It streamlines the procedures, and eliminates obstacles faced by the investors. The Ministry also supervises the work of the Public-Private Partnership Unit.

The Investment Council, comprised of the Prime Minister, ministers with economic portfolios, and representatives from the private sector, approves the investment policy and proposes legislative and economic reforms to develop the investment environment. Members of the Investment council can be found at ( https://www.moin.gov.jo/en/investment-council/ )

The Ministry will continue to support investors through the “Follow-Up and After Care” department established in 2018 and the investor grievance mechanism introduced in 2019 to address investor complaints, with the aim to resolve legal disputes outside of the formal court system.

In 2018, the government issued the “Code of Governance Practices of Policies and Legislative Instruments in Government Departments for the Year 2018.” It aims to increase legislative predictability and stability to ensure the confidence of citizens and the business sector. In 2022, the government developed and adopted guidelines for a Regulatory Impact Assessment (RIA) and established a dedicated RIA unit at the Prime Ministry to ensure proper implementation of the guidelines across all government entities.

Limits on Foreign Control and Right to Private Ownership and Establishment

Investment and property laws allow U.S. entities to establish businesses in many, but not all, sectors. 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.

Under the U.S.-Jordan Bilateral Investment Treaty, 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. In some sectors, including aerospace and defense, travel and tourism, transportation, and media and entertainment, there are limits to U.S. ownership and/or requirements for key positions to be filled by Jordanian nationals, among other restrictions. The most up-to-date listing of limitations on U.S. 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 

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 Land and Survey 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 of the date of approval.

The Investment Environment Bylaw No. 7 of 2023 expanded ownership percentage in some economic activities, while maintaining the following restrictions:

• Foreigners are prohibited from wholly or partially owning investigation and security services, stone quarrying operations for construction purposes, customs clearance services, and bakeries of all kinds; and are prohibited from trading in weapons and fireworks.

• Investors are limited to 50 percent ownership in certain businesses and services, including:

• Retail and wholesale trading, including distribution, importation, and exportation services, except for what is necessary for the purposes of performing the economic activity and exporting the product or commodities with the approval of the Minister.
• Services including engineering consultancy services, brokerage, except for brokerage and financial intermediation carried out by the banks and the financial services companies, services of commercial agents and middlemen and insurance brokers, food and beverage services, except for tourist restaurants and what is being served in hotels.
• Transportation services and clearance services including maritime services, air transport, and land transportation services, and related services with few exceptions.

• 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 regulation authorizes the Council of Ministers, upon the recommendation of the Minister of Investment, to lift or ease restrictions on ownership to non-Jordanian investors in restricted activities or add any of the restricted economic activities mentioned above to an existing project, based on certain criteria.

According to the Investment Environment Bylaw, restrictions relating to the ownership, participation or contribution in the economic activities shall not apply to projects established in accordance with the Public-Private Partnership Projects Law and/or public shareholding companies and economic activities that were registered before the effective date of this Regulation.

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.

For national security purposes, foreign investors must undergo security screening through the Ministry of Interior, which is handled as part of the registration process.

Other Investment Policy Reviews

Jordan has been a World Trade Organization (WTO) member since 2000. The WTO conducted Jordan’s second Trade Policy Review in 2015.

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. All current treaties and agreements in force between the United States and Jordan may be found here: https://www.state.gov/treaties-in-force/

The Jordan Strategy Forum (JSF), a leading think tank on economic development, regularly publishes an Investor Confidence Index and Investor Confidence Survey (in Arabic) on its website ( http://www.jsf.org ). In 2021, JSF published a policy paper on how to increase FDI inflows into Jordan:
https://jsf.org/sites/default/files/Opportunities%20to%20Attract%20Foreign%20Direct%20Investment.pdf 

The Organization for Economic Co-operation and Development (OECD) published the “FDI Qualities Review of Jordan” report in June 2022. The report illustrates the role of FDI in helping Jordan meet the UN Sustainable Development Goals in areas of productivity and innovation, job quality and skills, gender equality and de- carbonization. It offers a summary of Jordan’s institutional framework for investment and sustainable development. It also delves into the government’s policies to attract investment and lists areas for priority policy reforms. https://www.oecdilibrary.org/sites/736c77d2en/index.html?itemId=/content/publication/736c77d2-en 

Business Facilitation

Companies in Jordan need to register with the Ministry of Industry, Trade, and Supply, Companies Control Department, or the Chambers of Commerce or Industry depending on the type of business they conduct. Registration is required to open a bank account, obtain a tax identification number and obtain a VAT number. New businesses also need to obtain a vocational license from the municipality, receive a health inspection, and register with the Social Security Corporation.

Per the Investment Environment Law No. 21 of 2022, the Ministry of Investment will continue to serve as a comprehensive investment center for investors. It will facilitate registration and licensing. Applications to the Ministry of Investment can be submitted through an electronic platform or in person.

The law also stipulated that the registration of any company does not require prior approval from any entity other than the Ministry of Investment. Relevant government entities shall review and return the company’s registration application to the Comprehensive Investment Service within (15) working days from the date of receiving the application that meets the requirements, otherwise it will be considered an automatic approval to complete the transaction.

In 2022, Parliament endorsed a new law for licensing professions within the jurisdiction of the Greater Amman Municipality (GAM) to create a registration fast-track. More than 383 economic activities will be eligible to obtain their licenses within one day, or maximum seven days if the business is considered high-risk. The law also extended the validity of licenses from one to five years.

In 2018, the Companies Control Department developed and launched a portal for online registration: http://www.ccd.gov.jo /. Foreign investors can access it to register new companies. However, e-signatures have not been implemented, so investors must sign documents using notary services in their countries.

April 2023, The Ministry of Investment approved and published the “Licensing Guide”, which outlined the licensing procedures for economic activities, the national classification of economic activities JORSIC, and basic steps for starting a business (outside the development and free zones). The guide is currently available in Arabic on the Ministry’s website:
https://www.moin.gov.jo/wpcontent/uploads/2023/04/%D8%AF%D9%84%D9%8A%D9%84-%D8%A7%D9%84%D8%AA%D8%B1%D8%AE%D9%8A%D8%B5.pdf

The Investment Environment Law of 2022 outlined the digitization and automation of investment related services and procedures as a key principle to enhancing the business environment and achieving growth. May 2023, The Ministry of Investment announced activating the Comprehensive Investment Services Platform and the automation of 68 services.

In 2018, Jordan launched a National Single Window (NSW) for customs clearance. In 2020, all export and import custom declarations became electronic. In January 2022, the government adopted a simplified import tariff structure and reduced tariff rates. The Ministry of Finance reduced tariff brackets from eleven levels of taxation to four, ranging from zero to 25 percent. The maximum tariff rate (previously 40 percent) was reduced to 25 percent and will be reduced to 15 percent by 2023 ( https://services.customs.gov.jo/JCcits/sections.aspx ).

In 2022, the Ministry of Digital Economy and Entrepreneurship expanded the number of government transactions that can be completed online to reach 20 percent of all government services. Available e-services include those provided by the Greater Amman Municipality, Ministry of Investment, Tax Department, Ministry of Trade, and Jordan Customs.

Outward Investment

Jordan does not have a mechanism to specifically incentivize outward investment, nor does it restrict it.

Transparency of the Regulatory System

Legal, regulatory, and accounting policies, applicable to both domestic and foreign investors, are transparent.

The Jordanian Companies Law stipulates that all registered companies should maintain sound accounting records and present annual audited financial statements in accordance with internationally recognized accounting and auditing principles. According to the Jordanian Securities Commission (JSC) Law and Directives of disclosures, auditing, and accounting standards (1/1998), all entities subject to JSC’s supervision are required to apply International Financial Reporting Standards (IFRS).

In June 2022, the Government launched and circulated the updated Regulatory Impact Assessment (RIA) Guidelines among all Government of Jordan (GoJ) entities. Furthermore, a dedicated RIA unit has been established at the Prime Ministry to ensure proper implementation of the guidelines across all government entities, including consultation with the private sector.

In 2020, the Council of Ministers issued a “Legislation Data Memorandum,” which all government entities submitting new regulations are required to fill out. The memorandum provides information on the type and details of consultations conducted with the public and private sector. Laws and regulations are also published on the website of the Legislative and Opinion Bureau for public comment, in addition to executive branch consultations with the legislative branch and key stakeholders.
In March 2023, Jordan passed an amendment to the Competition Law to combat monopolistic practices, in addition to protecting and promoting fair competition in accordance with international best practices. The Law also increases penalties for anti-competitive practices. These reforms aim to change an existing system influenced by family affiliations, business ties, and other entrenched interests.

All investments, including public sector projects, are required to conduct environmental and social impact studies before receiving final approval. Jordan is committed to its fiscal transparency policy; the Ministry of Finance publishes a monthly “General Government Finance Bulletin” and that includes detailed information on government’s debt obligations. ( arbic_pdf_december2-2021.pdf (mof.gov.jo) )

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.  Jordan implemented 88.7 percent of its commitments.  Jordan submitted its notifications for Category A before the agreement came into force, is currently in the final review for categories B and C and must report completion by December 2023.

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 have complained about judicial backlogs and subsequent delays in legal proceedings.

In 2018, Jordan introduced economic judicial chambers. Jointly the Judicial Council in cooperation with the Ministry of Justice established a unit at the Amman First Instance Court and Amman Magistrate Court that included judges who are solely dedicated to commercial cases specialized in hearing commercial cases exclusively, in accordance with 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 Environment Law of 2022 governs local and foreign investment.  The law outlines the role of the Ministry of Investment as the main reference authority for investment in the country, incorporates articles clarifying investors’ rights, regulates incentive schemes for investors, either inside or outside Development and Free Zones, in addition to registration and licensing procedures. The law also touches on issues related to investor grievances and contractual disputes.
The Investment Environment Bylaw No. (7) 2023 details the articles of the Investment Environment Law.

The investment regulations list sectors restricted from foreign investment and clarify criteria for investment incentive decisions. The bylaw also regulates issues related to foreign labor.

In 2018, Jordan passed the Insolvency Law, Movable Assets and Secured Lending Law and Bylaw, the Venture Capital Bylaw, and the Income Tax Law, along with bylaws to ensure proper implementation.  The government has worked to train and certify insolvency practitioners. To date, no company has successfully used the insolvency law to re-structure operations and obligations.

In March 2023, Jordan endorsed an amended Social Security Law allowing the private sector to reduce Social Security Contributions for employees below the age of 30.

Since 2020, the GoJ has a Public Private Partnership (PPP) Unit to identify and study investment opportunities. The PPP Unit falls under the Ministry of Investment and has received technical assistance from the International Finance Corporation (IFC) and other donors.

In 2021, the Parliament approved further amendments to the Companies Law, to allow virtual General Assembly and Board of Directors meetings. The amendments also stipulated companies must keep a record that includes information about the beneficial owner of shares and further obliged companies to disclose to the Companies Control Department the actual beneficiary, in support on Anti-Money Laundering and Counter Terrorism Financing Law.

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 to increase their competitiveness and access to international markets.  The government’s efforts have made Jordan’s official investment climate welcoming; however, U.S. investors have reported hidden costs, bureaucratic red tape, vague regulations, and unclear or conflicting jurisdictions.

Most economic regulations are available on the Ministry of Industry and Trade and Supply website ( https://www.mit.gov.jo/Default/AR ).  All regulations are published in the Legislative and Opinion Bureau ( https://lob.gov.jo/ ).

Competition and Antitrust Laws

In March 2023, Parliament passed amendments to the Competition Law, revising provisions related to the prohibition of practices that hinder fair competition and the prevention of unfair practices by dominant institutions. The amendments address issues related to economic concentration, increase penalties for anti-competitive practices, and define the concept of the dominant institution and determine the factors according to which any institution is considered to have a dominant position.
The law expands the authority of the Competition Directorate at the Ministry of Industry, Trade and Supply, to ensure proper implementation of the law. It also mandates the Competition Directorate to issue an annual report on the competition situation and publish it on the ministry’s website.

The Competition Directorate at the Ministry of Industry, Trade, and Supply conducts market research, examines complaints, and reports violators to the judicial system.

The investor grievance unit established in 2019 at the Jordan Investment Commission, now part of the Ministry of Investment, can also investigate unfair competition cases filed by investors.

Expropriation and Compensation

Article 11 of the Jordanian Constitution stipulates those 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.

Article 6 of the Investment Environment Law stipulates that expropriating investment or any part thereof, is not allowed except unless it is required for a public, specific, and legitimate purpose and done in accordance with the law and in a non-discriminatory manner. Investors must be compensated at a fair market price.

Dispute Settlement

ICSID Convention and New York Convention

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 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 in litigating cases is being able to conduct proper process of service upon all concerned parties. The Economic Chamber has an expedited route, and specialized courts are also established at the appeal and cassation court, thereby reducing litigation time for commercial cases.

A large foreign investor was negatively affected by the 2018 amendments to the Income and Sales Tax Law, which eliminated tax benefits inside the private free zones. The investor filed a case before the Tax Court of First Instance against the ISTD to challenge this and reserve its right to income tax exemption the government has agreed to. The Court appointed an expert to assess the validity of such instruction. The court ultimately decided in the investor’s favor.

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.

International Commercial Arbitration and Foreign Courts

In 2018, amendments to Arbitration Law No. 16 introduced changes to the procedural framework of arbitrators seated in Jordan, which can be traced in the United Nations Commission on International Trade Law (UNCITRAL) model law. The amended law gives more authority to the Arbitral Tribunal and limits the role of the Court of Appeal.

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 Ministry of Investment has an investor grievance mechanism in accordance with the Investor Grievance bylaw No. 163 of 2019, and Grievance Hearing regulation No. 1 of 2020. This mechanism allows investors to file complaints against government decisions outside of court system; complaints can be filed electronically through the ministry’s website.

Bankruptcy Regulations

The Insolvency Law, Civil Code, and Companies Law collectively govern bankruptcy and insolvency proceedings.   In 2018, Jordan endorsed the Insolvency Law, which allows individuals and companies to offset their financial position through a debt management plan.  The law canceled bankruptcy articles under the Commercial Law, as it was designed to help the insolvent entity continue its economic activity, rather than directly resorting to bankruptcy. The law regulates insolvency proceedings for foreign organizations according to international conventions ratified by Jordan.  As of 2022, judges had dismissed almost all petitions for insolvency on technical grounds and no company has yet used the insolvency law successfully. Voluntary liquidation continues to be governed by articles of the Companies Law.

Defaulting on loans or issuing checks without adequate available balances is a crime in Jordan and may subject the offender to imprisonment under Jordan’s penal system.  While Jordan is reexamining these laws, prison terms for debtors remains a legal practice in Jordan.  Investors should conduct thorough due diligence on potential partners and avail themselves of local legal counsel to understand best business practices in Jordan and conform with local laws.

In consideration of the financial and economic conditions attributed to the coronavirus pandemic, Jordan announced Defense Order  No. 28 of 2021, which delayed the enforcement of debtor’s imprisonment decisions under the Execution Law, provided that the amount owed does not exceed JD 100,000 ($140,000), the defense order was extended (until end of April 2023) with a new threshold of JD 20,000 ($28,000). The defense order also stopped the implementation of criminal rulings for crimes related to issuing a bounced check, as long as the amount does not exceed JD 20,000 ($28,000). On May 7, the Royal Court announced the termination of the state of emergency established during the COVID pandemic, terminating Defense Order No. 28 of 2021. Thus, the Execution Law would be reactivated. The Law was revised in August 2022, setting a JD 5,000 ($7,000) minimum for imprisonment for unpaid debt or passing bad checks. The new provision does not come into effect until 2025.

The U.S. Commercial Service Office of the Embassy of the United States in Amman can assist American businesses in these endeavors.

Investment Incentives

Under Investment Environment Law No. 21/2022, the government may provide incentives by exempting fixed assets, production requirements and inputs, and spare parts that are necessary for performing the economic activity from Customs duties and sales taxes.

In accordance with the Investment Environment Law and bylaw, income tax shall be exempted or reduced by no less than (30 percent) for projects in the least developed regions in the Kingdom or projects that employ at least (250) Jordanians, and for a period of maximum (5) years from the date of actual operation. Sectors that can benefit from tax exemptions are shown below:

1. Industry
2. Agriculture and livestock
3. Hospitals
4. Specialized medical centers
5. Hotel and tourist establishments
6. Cities of entertainment and recreation
7. Call centers
8. Information technology
9. Scientific research centers and scientific laboratories
10. Artistic and media production and film industry
11. Conference and exhibition centers
12. Transportation, distribution and extraction of water, gas and oil derivatives using pipelines
13. Air, sea and railway transport
14. Education

The Bylaw excludes the following sectors from tax exemption and reduction provisions: activities registered in the Development Zones and Free Zones; industries related to phosphate, potash, uranium, or derivatives of any of them; and any other natural resources determined by the Council of Ministers, with the exception of the cement industry and the fertilizer industry. Power generation projects are also excluded from exemptions, except for renewable energy projects.

The Council of Ministers, upon the recommendation of the Investment Council, may offer investors a wide range of incentives and exceptions including exemptions and incentives. These include pricing on the sale or rent consideration for lands owned by the public treasury; subsidized energy and water costs and supporting renewable energy projects; tax deductions for infrastructure construction if the project is operational within a certain period of time; and/or tax or customs exemptions or reductions for employing a minimum number of Jordanian labor-force. Exemptions, deduction rates and validity differ based on certain criteria, including:

1. Employing Jordanian females of not less than (50 percent) of the total number of its employees, provided that the number is not less than (50) Jordanian female employees.
2. Activities with local added value, at a rate of not less than (50 percent.
3. Activity transfers knowledge, technology, and digital transformation
4. Strategic Economic Activities
5. Public-Private Partnership Projects
6. Activities in impoverished areas contributing to the development of and services for the local community

If investors meet more than one criterion according to the criteria specified in the law, then the volume of incentives, exemptions and additional benefits granted will increase by 10 percent of the size of the investment for each additional criterion.

Further incentives will be granted to activities that use recycling or are considered small and medium-sized enterprises or intended to protect the environment or supports transition to a green economy. The volume of incentives, exemptions and additional benefits granted would increase by a percentage of 5 percent of the size of the investment.

Jordanian law and regulation promote and incentivizes water efficiency, waste management, and green building in commercial property development. For example, since 2015 the Jordan National Building Codes have required energy efficient practices in new construction.

Starting April 2022, the government implemented a new electricity tariff structure, which reduced production costs for several vital economic sectors including health, tourism, commercial, agricultural, and industrial sectors.

Foreign Trade Zones/Free Ports/Trade Facilitation

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 Investment Environment Law No. 21 of 2022 governs and regulates investments within Development and Free Zones Commission (DFZC),Supervises Development and Free Zones and organizes their work. 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 government also created nine industrial estates in Amman, Irbid, Karak, Mafraq, Madaba, Tafileh, Salt, 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 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.

The Investment Environment Law No. 21 of 2022 regulates the establishment of Development and Free Zones, and stipulates the roles, responsibilities, and rights of developers.

Under Income Tax Law No. 38, industrial activities with a local value-added of at least 30 percent are subject to 5 percent income tax rate, while other projects and activities are subject to 10 percent.

Establishments registered in the free zones enjoy zero percent tax on any activity conducted within the borders of the free zones, the export of goods and services outside the Kingdom, and associated transit trade.  They also are subject to zero percent on for imports duties, national contribution tax, and dividends tax. Profits earned on activities pertaining to the sale, disposal, or importation of goods and services within the borders of the free zones are subject to tax based on the normal income tax rates applicable to each entity, depending on its status (corporation or individual).

The Aqaba Special Economic Zone (ASEZA) 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, ASEZA has attracted projects, mainly in hotel and property development sectors, valued at over $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 became operational in 2018 and reached design capacity in 2019.  The new port, 20 kilometers south of the previous port, added four new terminals and expanded general ship berthing and marine services, in addition to adding dedicated terminals for grain silos, liquefied natural gas, phosphates, and propane.
Investors, 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.

In 2021, the government passed tax legislation to address gaps and loopholes to prevent tax leakages and ensure transparency and fairness. This included legislation on economic substance and transfer pricing and brought ASEZA under the national control for tax and customs administration.
For further details, please visit:

• Jordan Ministry of Investment ( home new – Moin )
• Jordan Industrial Estate Corporation ( http://www.jiec.com )
• Aqaba Special Economic Zone ( Home Page  – Aseza)

Performance and Data Localization Requirements

Jordan does not follow “forced localization.” However, some investment incentives are tied to deployment of local content at certain percentages.

Jordan does not have requirements for foreign IT providers to turn over source code or provide access to surveillance.

Jordan does not have a modern data protection law. In 2020, the Ministry of Digital Economy and Entrepreneurship submitted a draft for the personal Data Protection Law, which supports Jordan’s digitization efforts. The Council of Ministers approved the law and sent it to the Legislative and Opinion Bureau for review, as of March 2023, the draft law is with the Lower House for review. Criminal Law, Cybercrime Law, and Telecommunication Law offer partial protection of personal data.

Real Property

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.

Jordan approved an investment program that grants citizenship or permanent residency of non-Jordanians in 2018. This program includes permanent residency for non-Jordanians who purchase properties worth a minimum of JOD 200,000 ($282,100) and hold the properties for 10 years.

A new Property law passed in 2019 consolidated 13 laws governing property ownership in one legislation and addressed 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.

Intellectual Property Rights

Jordan has a legal structure to protect intellectual property rights (IPR) and has passed several laws in recent years to comply with its international commitments. Jordan was not included in USTR’s 2023 Special 301 report but was referenced in the first section of the Report for piracy and formalities for filing documents.

Laws consistent with Trade Related Aspects of Intellectual Property Rights (TRIPS) now protect trade secrets, plant varieties, and semiconductor chip designs. Jordan’s record on IPR enforcement continues to improve, and the Jordanian government has demonstrated an increased determination to increase the effectiveness of its enforcement mechanisms. Nevertheless, improvements in legal procedures and enforcement mechanisms are still needed to address those cases of infringement and theft that persist.

Copyrights are registered with the Ministry of Culture’s National Library Department, and patents and trademarks are registered with the Registrar of Patents and Trademarks at the Ministry of Industry and Trade. Registration of patents and trademarks can be done electronically at https://ippd-eservice.mit.gov.jo/.

Jordan ratified the Patent Cooperation Treaty and the Madrid Protocol in 2007. 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 may seek joint ventures and licensing agreements with multinational partners. Pirated videos, software, and television content are still significant challenges in IPR enforcement.

During the 2022 FIFA World Cup, the Jordanian government undertook a campaign of inspections and enforcement in cooperation with the National Library, a multinational network of sports channels providers, and local enforcement authorities against providers of pirated broadcast/cable signals. Enforcement authorities raided many branches and seized illegal IPTV equipment being offered for sale. In addition, the Jordan Media Commission blocked 77 websites and issued official instructions in 2022 to all media outlets in Jordan, warning against providing any content related to the FIFA World Cup Qatar 2022 without a license. The IP Directorate of Jordan Customs, using a risk-based approach, undertook intensified efforts in 2022 to target shipments from countries where IPR violations occur.

Capital Markets and Portfolio Investment

There are three key capital market institutions: the Jordan Securities Commission (JSC), the Amman Stock Exchange (ASE), and the Securities Depository Center (SDC). The ASE launched an Internet Trading Service in 2010, providing an opportunity for investors to engage in securities trading independent of geographic location.

Jordan’s stock market is one of the most open among its regional competitors, with no cap on foreign ownership.  As of end of February 2023, non-Jordanian ownership in companies listed on the ASE represented 48 percent of the total market value, of which 37 percent for institutional investors including companies, institutions, and funds. Non-Jordanian ownership in the financial sector was 51.5 percent, 20.7 percent in the services sector and 53.7 percent in the industrial sector.

Despite recent reforms and technological advances, the ASE suffers from intermittent liquidity problems and low trading activity. No new listings have been added since 2008. Market Capitalization reached $27.5 billion at end of February 2023. ASE updates market capitalization data on a monthly basis; the market capitalization averaged $24.8 billion between January 2000 to February 2023.

The government respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions.

Credit is allocated on market terms. The private sector has access to a limited variety of credit instruments relative to countries with more developed capital markets.

Money and Banking System

Jordan has 23 banks, including commercial banks, Islamic banks, and foreign bank branches.  Jordan does not distinguish between investment banks and commercial banks.  Concentration in the banking sector has decreased over the past decade, the assets of the largest five banks accounted for 64 percent of licensed banks’ total assets at the end of 2021.  The banking system is capably supervised by the Central Bank of Jordan (CBJ), which publishes an annual Financial Stability Report. JFSR 2021  (https://www.cbj.gov.jo/EchoBusv3.0/SystemAssets/PDFs/2022/JFSR2021.pdf)

Banks continue to be profitable and well-capitalized with deposits being the primary funding base.  Liquidity and capital adequacy indicators remain strong largely due to the banks’ conservative and risk averse approach, and due to strict regulations on lending, particularly mortgage lending.  The non-performing loan ratio reached 5 percent at the end of 2021 and dropped to 4.6 percent by September 2022.

Jordan has historically had low banking penetration, which the CBJ has worked to improve through its 2018 Financial Inclusion Strategy. As of end of 2020, 50 percent of people and 29 percent of women in Jordan above the age of 15 had bank accounts.

Banking Law No. 28 of 2000 does not discriminate between local and foreign banks, however capital requirements differ. The minimum capital requirements for foreign banks are JD 50 million ($70.6 million), and JD 100 million ($141 million) for local banks, although the CBJ has the authority to amend and increase the minimum capital requirement.  The law also protects depositors’ interests, diminishes money market risk, guards against the concentration of lending, and includes articles on electronic banking practices and anti-money laundering. The CBJ set up an independent Deposit Insurance Corporation (DIC) in 2000 that insures deposits up to JOD 50,000 ($71,000). The DIC also acts as the liquidator of banks as directed by the CBJ.

Foreigners are allowed to open bank accounts with a valid passport and a Jordanian residence permit.

In 2017, the CBJ established the Jordan Payments and Clearing Company JOPACC, with an aim to establish and develop digital retail and micro payments along with the investment in innovative technology and digital financial services.  The CBJ actively supports technology and is running JoMoPay, a mobile payment system and provides regulatory support to a privately-operated electronic bill payment service eFAWATEER.com. In 2022, JOPACC in partnership with the CBJ and commercial banks launched JOIN Fincubator (The Jordan Innovation Fintech Incubator).

In 2021, the CBJ started a process of soliciting comments from local banks over the potential introduction and licensing of digital banks, which aims to automate all front-end, back-end and middle-end operations. Jordanian banks started to introduce Neobanks as an alternative option. The CBJ is also exploring the possibility of launching the central bank digital currency (CBDC) would be linked to the Jordanian dinar and have legal standing. Full adoption and implementation could take five years.

Foreign Exchange and Remittances

Foreign Exchange

The 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.

Remittance Policies

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. However, the new Investment Environment Law and Bylaw regulated the establishment of sovereign funds, as a first step to establish a Public Investment Fund.

Privatization Program

In 2012, Jordan completed a multi-year privatization program, in the telecom, energy, and transportation sectors. The government has no further plans for additional privatizations.

In 2020, Jordan also adopted a new Public Private Partnership Law (PPP) to support the government’s commitment to broadening the utilization of public-private sector partnerships (PPPs) and encouraging the private sector to play a larger role in the economy.  The law does not limit PPPs to certain sectors or nationalities.
A PPP unit housed at the Ministry of Investment supports the government in identifying and prioritizing projects, provides funding resources to cover pre-feasibility and feasibility studies, and oversees tendering processes. The PPP unit interacts with private sector and potential investors through promotional activities, market sounding exercises, and to discuss proposals. Communication during the bidding phase is strictly governed by the PPPs bylaw in line with international best practices.

Once a contract is awarded, line ministries or entities will take over as main POCs for projects and their implementation. The PPP Higher Council will handle investors’ grievances throughout the project’s lifecycle. The unit has already identified a list of potential PPP projects in several sectors: water, energy, transport, tourism, education, health, environment, and Information and Communication Technology. PPPs related regulations and current investment opportunities are listed on the Ministry of Investment website https://www.pppu.gov.jo/EN/List/Projects_

Climate Issues

Jordan revised its Nationally Determined Contributions (NDC) and National Adaptation Plan (NAP) in 2022. The NAP focused on five key sectors:  energy, transport, agriculture, water, and health.  The NDC Action Plan seeks to scale up renewables and energy efficiency measures; adapt the water, agricultural, and health sectors to climate change impacts; and strengthen the resilience of disadvantaged groups and vulnerable ecosystems.

In 2021, the GoJ updated its Climate Change Policy (CCP) to require government departments to reflect climate change considerations in all government policies, strategies, and action plans. The goal of the policy is to build a low-carbon and climate resilient society, while supporting the implementation of United Nations Framework Convention on Climate Change provisions.

In 2021, Jordan also raised its NDC greenhouse gas (GHG) emission reduction target included from 14 percent to 31 percent compared to the baseline scenario.  The reduction target is divided into conditional and unconditional:  26 percent conditional on donor funding, 5 percent unconditional. The new GHG emission reduction target is based on a combination of national policies, programs, and actions as well as international support and finance.  The total estimated cost of the proposed mitigation actions listed in the updated NDC submission is $7.54 billion.

To support its targets and meet NDC goals, the Ministry of Environment identified pilot measures to increase energy efficiency and the use of renewable energy in the energy and water sectors.  The government deployed a Monitoring, Reporting and Verification (MRV) system to track and transact reductions in global GHG emissions, allowing Jordan the opportunity to profit from future emissions and carbon trading. The Ministry of Energy and Mineral Resources established Jordan’s Renewable Energy and Energy Efficiency Fund to reduce operational costs and enhance the competitiveness by providing funding for adopting energy efficiency and renewable energy. Several investments in renewables in the water sector increased renewable energy consumption from 25-29 percent.

Jordan’s Ministry of Environment issued Green Bond Guidelines in December 2021. A Jordanian company issued Jordan’s first green bond in March 2023, with International Finance Corporation (IFC) support. The proceeds of the issuance will be directed toward the development of energy-efficient buildings, renewable energy plants, and electric vehicle projects in the country.

Jordanian law and regulation promote and incentivizes water efficiency, waste management, and green building in commercial property development.

The Ministry of Environment adopted two regulations in 2005 to protect biodiversity.  Article 4 Environmental Impact Assessment (EIA) Regulation No. 37 of 2005 ensures any project will need to assess its impact on the environment including biodiversity.  Regulation No. 29 of 2005 on natural protected areas and national parks gave the authority of creating protected areas to a Technical Committee led by the Ministry of Environment, and management authority to the Royal Society for the Conservation of Nature (RSCN), a unique model for the region and globally.  Since that time, RSCN has gone on to establish seven protected areas throughout Jordan, covering over 1200 square kilometers.

All agricultural, industrial, commercial, housing, and tourism projects, including public sector projects, are required to obtain environmental approval from the Ministry of Environment (Article 4 Environmental Impact Assessment (EIA) Regulation No. 37 of 2005).  The process begins with a screening phase led by the Ministry of Environment and an initial EIA, to determine whether the project has a significant impact on the environment. Depending on the result, the Ministry of Environment may require a comprehensive EIA.

In 2020 Jordan established its first Marine Protected Area in the Gulf of Aqaba, governed and managed by the Aqaba Special Economic Zone Authority under its laws and regulations.  That same year new provisions were added to the Agricultural Law of 13 of 2015 updating the fishing regulations, including an annex with endangered marine species.

Since the passage of the 2003 Environmental Law the GoJ introduced a series of laws and regulations to strengthen environmental enforcement. In 2017 the GoJ updated the law and introduced various legal and regulatory changes including a Waste Management Framework Law which included increasing fines, obligating polluters to pay for waste handling and disposal, and encouraging privatization of the waste sector. In 2021 the Government introduced new regulations for the disposal of electronic waste and amended the Agricultural Law to address gaps in the implementation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

Jordan has a small forest cover of about 86,000 hectares, representing about one percent of the total area of the country.  The forestry sector was found to be a net emitter not a sink for GHGs, and accordingly the GoJ directed its national efforts to increase forests areas and to protect existing forests through higher law enforcement, increased penalties for illegal logging, increasing urban tree plantations, adopting climate smart agriculture, and focusing on rangeland restoration.  The GoJ also developed a national plan for mitigating forests fires incidents including the identification of hazards, training, resources allocation, awareness and knowledge raising and engagement of civil society organizations.

12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs

DFC has a current exposure of $470.9 million in Jordan from investments made between 2007-2019. Most of these are investments made by the DFC’s predecessor agency, the Overseas Private Investment Corporation (OPIC), for large energy and water infrastructure projects, as well as the Jordan Loan Guarantee Facility, established in partnership with USAID, to expand access to finance for small and medium sized enterprises. These projects have been completed but the loan repayment/guarantee periods will continue for several years.

In 2021, DFC issued a $10 million loan to the Near East Foundation (NEF) UK to enable the NEF to provide micro-enterprise training for refugees and host populations in Jordan and Lebanon, primarily women and youth. This is the first Development Impact Bond to specifically target refugees and will seek to mobilize private sector investment to enable vulnerable refugee populations to participate in the economy and become more prosperous alongside their host communities. At least 65 percent of the beneficiaries of this project will be women.

In 2022, DFC issued a $14 million loan to the Aqaba Digital Hub a modern data center in Jordan. The Aqaba Digital Hub will serve as a critical connection point for an internet cable system connecting Europe and Asia, while bolstering broadband speeds and reducing costs within Jordan. The additional capacity will enhance internet access for existing businesses and enable larger corporations with data-intensive operations in the country to expand operations. The cable system will provide a critical alternative to overloaded cable networks that handle an outsized portion of global internet traffic.

The U.S. Embassy continues to coordinate closely with the PPP Unit in the Ministry of Investment and others to identify other potential opportunities for DFC participation.

OPIC and Jordan signed the 2007 Investment Incentive Agreement, which serves as the legal framework for all OPIC and DFC agreements. The Ministry of Finance has drafted a Cabinet Resolution clarifying that DFC is the successor agency to OPIC and therefore entitled to the stipulated tax exemptions included in the 2007 agreement. As of April 2023, this Cabinet Resolution is still pending.