• Income Tax reduction by 50% for ten years for economic activities established in the designated least developed regions.
• Sales Tax exemption on production inputs for certain economic activities.
• Sales Tax exemption on services necessary for certain economic activities.
• Customs duty exemption for the import of certain production inputs for certain industrial activities.
• Customs duty exemption on production requirements and fixed assets for certain industrial activities.
• Customs duty exemption on production requirements and the dual-use fixed assets necessary for certain industrial activities.

It should be mentioned that Jordan recently established an Export Development Fund which will support export activities and new programs will be announced.

• Mining: Jordan has phosphate and potash which are exported to many countries mainly Asian countries and are used in the fertilizers industry.
• Pharmaceuticals: Jordan houses the biggest pharmaceutical industry in the Arab region and has been steadily growing and serving the region.
• Medical Tourism: Jordan ranks as the 5th best destination for medical tourism and the first in the Middle East according the World Bank. This sector serves more than 220,000 foreign patients annually.
• Information and Communication Technology: this sector contributes around 14% to the GDP, and more than 70% of the Arabic web content, and serves the whole Arab region mainly the GCC countries.
• Higher Education: Jordan has 32 universities which are well known in Arab countries and receive over 30,000 foreign students in Jordan to pursue their studies mainly from Arab and Asian countries.
• Energy and Renewable Energy: The sector is witnessing a significant important with investments coming to Jordan to explore energy resources and renewable energy. Jordan is located within world solar belt; 300-320 days of full sunshine, with solar irradiation levels of 2600Kwh/m2. Furthermore, Jordan has 40 billion tons of oil shale, 14 billion tons of silica, and 2% of the world’s uranium reserves.
• Tourism: contributes around 14% of GDP and continuously growing as an important destination for tourism with historic, recreational, and religious sites.

Jordan is strategically situated in the heart of the Levant in the eastern Mediterranean. Jordan is strategically situated in the heart of the Levant in the eastern Mediterranean. With seven FTAs and 48 active BITs, no other country in the region is as tightly interconnected as Jordan, positioning the Kingdom as the epicenter for business and commerce at the crossroads of the MENA region, Europe, East Asia, and Sub-Saharan Africa. The Kingdom enjoys strong economic ties with the EU, US, and GCC as well as with international financial institutions, enhancing its position as a privileged strategic location. The competitiveness of Jordan’s strategic location is also driven by is qualitative and cost-effective logistics platform, which turns Jordan into the ideal regional gateway. The time and cost related to the logistical process of exporting and importing goods is tremendously low in comparison with its neighboring countries according to the Doing Business Report measurements.

In addition, the investment environment in Jordan is supported by the following:

• Jordan maintains skilled human capital supported by strong academic and vocational educational institutions.
• Jordan offers one of the region’s most vibrant environments for innovation, research, and development. This is mainly to the result of the high availability of venture capital and Jordan’s globalized, liberal, and forward-thinking society, providing access to state-of-the-art technologies and fresh ideas.
• The maturity of the financial ecosystem and its integration in the world economy is reflected by Jordan’s monetary freedom, which is ranked the highest in the MENA region and 4th highest worldwide.
• Moreover, Jordan’s currency is pegged to the USD (1 JOD = USD 1.411 and USD 1 = 0.709 JOD) making it a stable, predictable, and credible currency, which is further underpinned by a steady increase in the presence of foreign exchange reserves.
• Jordan’s strategic geographical location is complemented by its unparalleled network of air, sea, and land connectivity, and its state-of-the art infrastructure. Jordan’s main airport is Queen Alia International Airport near Amman, handling most passengers (over 4.6 million in 2021) into the Kingdom with routes to over 70 international destinations. two other airports serve downtown Amman and southern Aqaba.
• Political stability and rule of law: Jordan has a long and recognized legacy of political stability, which builds on the country’s strong adherence to the rule of law.
• Access to international markets: The seven FTAs that Jordan, which is a member of the World Trade Organization (WTO), signed and which are currently in force, provide direct access to nearly 1.5 billion consumers in some of the world’s largest and most rapidly expanding consumer markets. The seven countries or parties are: GAFTA, US, EU, EFTA, Singapore, Canada, the Agadir Agreement, and UK.

Source: Investor Guide[T1] 

https://www.moin.gov.jo/wp-content/uploads/2022/07/Investor-Guide-A4-Portrait_Final.pdf

Jordan’s Investment Law No. 30 of 2014 reorganized the previously investment-related entities (i.e. the Jordan Investment Board, Development and Free Zones Commission, and Export Promotion Department) into the MOIN. The MOIN is now the sole entity exclusively responsible for investment and trade promotion of the Kingdom.

The Law specifies several privileges, protections, and guarantees foreign investors enjoy, including:

• Equal treatment and non-discrimination of domestic and foreign investors.
• Foreigners can invest in almost all sectors of the Jordanian economy (with some exceptions).
• No restrictions on capital transfers and repatriation of profits.
• Foreign residents may open accounts in local and foreign currency and may repatriate capital in convertible currency.
• If investment disputes arise and cannot be resolved within a period of six months, parties may settle the dispute through arbitration in accordance with provisions of the Jordan Arbitration Law or refer the dispute to an international center for settlement of investment.
• A framework for incentives and benefits available for investors and investment projects, based on geographical locations.

The process required to establish a business in Jordan is straightforward, efficient, and transparent, particularly due to the streamlined procedures and hands-on support provided by the MOIN’s Investment Window. The Investment Window is in direct contact with (staff from) the mandated authorities, optimizing and harmonizing procedures, thereby enabling investors to make use of the fast track to get operational in Jordan. Business Licensing requires six steps: Business Licensing requires six steps:

1. Company Registration & Establishment.

2. Zoning & Regulatory Approvals.

3. Sectoral Approvals.

4. Construction License.

5. Occupancy Permit.

6. Vocational License.

Several of the registration procedures required for practicing economic activities run parallel with the business licensing steps. These include:

1. Registration with the ISTD.

2. Registration with the SSC.

3. Registration of the Commercial Name.

4. Registration of the Property Title.

5. Obtaining Residence Permits.

6. Obtaining Residence Cards.

7. Obtaining Work Permits.

Two laws, implemented by the Income and Sales tax Department, constitute the Jordanian tax framework: Income Tax Law No. 38 of 2018 and General Sales Tax Law No. 29 of 2009. These provide for a corporate tax rate varying from 20% to 35% depending on the sectors of activity concerned as well as a "General Sales Tax" (GST) (equivalent to VAT) of between 0 and 16% depending on the goods considered.

Exemptions for the legal person and taxation due on the taxable income (outside the developmental zone):

1.The first JOD 50.000 of a legal person’s net income generated from an agricultural activity within the Kingdom shall be exempted from tax.

2. Other sectors’ categories:

3. A reduction of 10% in 2022 and 5% in 2023 is implemented for industrial sectors.

4. National contribution:

In addition to the income tax collected by the department of income and sales tax, here under the calculation of national contribution with the aim to paying the public debt:

Both residents and non-resident individuals are taxed on income sourced from employment in Jordan. A progressive tax rate is levied on taxable income, ranging from 7% to 20%. A number of deductions and allowances are available. There is no personal taxation on capital gains, capital duty, capital acquisition, stamp duty, inheritance, estate, net worth, and net wealth.

Jordan has entered into income tax treaties with 37 countries to avoid double taxation.

To reach the taxable income the following amounts will be deducted from the resident, tax-payer, natural person:

 - JD (9,000) personal exemption for 2019, and JD (10,000) for the dependents irrespective of their number.

Exemptions will be given to the natural person and dependents in return for the costs of (treatment, education, interests and MURABAHA of housing loans) in as much as:

- JD (1,000) for each child with upper limit of JD (3,000) for (3) children for 2019 and the subsequent.

- JD (1,000) for the tax-payer and JD (1,000) for the tax-payer spouse for 2020 and the subsequent. Provided that the exemption will not exceed, in all cases, for the tax-payer and dependents, in as much as JD (23,000)

An amount of JD (2,000) will be exempted for every person with disability, permanent and continuous, in addition to the exemptions given for the natural person

Industrial and crafts sector investments located in less developed regions of the Kingdom are eligible to a 20-year reduction in CIT (according to Article 5 of the Investment Law). Regulation No. 44 of 2016 stipulates the CIT reduction rates for projects operating in four (4) categories of regions. Group (A) region benefits from a 100% reduction, group (B) region benefits from 80% reduction, group (C) benefits from a 60% reduction, and Group (D) benefits from a 40% reduction.

 A total of 14 Development Zones exist across the Kingdom, each with its specific designation of sectors to suit the competitive advantages enjoyed by each region. These zones are managed by development companies under the supervision of the commission. The incentives available for investors in the Development Zones are automatically granted by simply registering at MOIN.

• Institutions registered in developmental zones arising from processing industries with local added-value of not less than (30%): The applied tax rate is 5%.

Institutions registered in developmental zones for the rest of projects and activities: The applied tax rate is 10%.

A general sales tax (GST) is levied on supplies of manufactures, importers, and suppliers of services. The standard rate of this sales tax equals 16%, while a higher rate is levied on luxury items. The remaining sales tax rates are:

• 8.0% on home Internet, building iron, reinforcement steel, and certain types of food.

• 4.0% for specified agricultural products, fruits, meat, vegetables, and live animals.

• Zero-rate for a list of specified products like energy-saving products and pharmaceutical industry inputs

Source: Investor guide

Ministry of investment https://www.moin.gov.jo/wp-content/uploads/2022/07/Investor-Guide-A4-Portrait_Final.pdf

Guarantees to investors and bilateral investment agreements

Law No. 30 of 2014 on Investment provides many advantages[T1] [AH2] [AH3]  and guarantees for foreign investors:

- Equal and non-discriminatory treatment of domestic and foreign investors

- Possibility for foreigners to invest in almost all sectors of the Jordanian economy (with some exceptions)

- No restrictions on capital transfers and profit repatriation

- Ability to open accounts in local currency and foreign currency

- Possibility of recourse to arbitration to settle possible commercial disputes

-Bilateral investment agreements signed by Jordan:

https://investmentpolicy.unctad.org/international-investment-agreements/countries/106/jordan

source :

https://www.moin.gov.jo/wp-content/uploads/2022/07/Investor-Guide-A4-Portrait_Final.pdf

Labour market regulation

- Probation Period : an employer may employ any worker on a trial basis to verify his competence and capacities for the work that is required of him, provided that the trial period shall not, in any case, exceed three months. 

The employer has the right to terminate the employment of a worker under probation without notice or indemnity during the trial period.

If a worker continues work after the end of his trial period, his contract of employment shall be considered of indefinite duration and the trial period shall be considered as part of the service period of the worker with the employer.

-The legal duration of working time: 48 hours per week. The employee is paid overtime at a minimum rate of 125% of his regular remuneration. If a worker works on his weekly rest day or on religious or official holidays, he shall be paid overtime at a minimum rate of 150% of his regular remuneration.

-The retirement age is 60 for men and 55 for women.

- Employment contracts: There are three types of employment contract, the contract of indefinite duration, the fixed-term contract and the apprenticeship contract.

- Annual leave: 14 days. This leave is extended to 21 days if the worker has been in the employment with the same employer for five consecutive years.

-Social contributions:  

1. The employer contributes 14.25% of an employee’s salary and the employee
   contributes 7.5%.
2. The minimum wage is JOD 260 whereas the maximum monthly salary subject to social security contributions is JOD 3,349.
3. The employer is required to withhold and report contributions on a monthly basis.

Social partners: There are 17 trade unions in Jordan, all affiliated to the General Federation of Jordanian Trade Unions (GFJTU), the only body recognised and subsidised by the State.

Sources :

1.  http://www.hammourilaw.com/Hammouri_Resorces/Articals/labor_law__2.pdf
2. www.ssc.gov.jo
3. https://www.ilo.org/ifpdial/information-resources/national-labour-law-profiles/WCMS_158905/lang--en/index.htm

FDI reached around 900 Million USD in 2021 compared to 760 Million USD in 2020.

In 2019 the number of FDIs coming into Jordan reached $916 Million, while the total FDI stock reached a record high of $36,203 Million. The two years prior also saw a high influx of FDIs, as 2017 saw a whopping $2,030 Million FDIs come to Jordanian shores, while in 2018 the number was $955 Million.

What is even more interesting is the number of Greenfield investments coming into Jordan. Greenfield projects are FDIs that are characterized by a mother company that starts a new venture in a foreign country and constructs its operational facilities from the ground up. Greenfield projects offer greater economic benefit as foreign companies utilize the resources of the foreign country to set up their facilities and operations.

The number of Greenfield projects that came to Jordan in 2017 was 21, followed by 13 in 2018 and finally 26 in 2019. The total value of Greenfield projects in each of those years was 728 million, 396 million, and 2,290 million USD respectively.

FDI in Jordan is diversified with notable FDIs in the manufacturing, real estate, and service sectors. The Jordanian government’s approach to PPPs also attracts FDIs into other areas such as infrastructure which produces large-scale projects such as transportation and water infrastructure projects.

• Socio-economic and political situation

Jordan has begun its recovery from the COVID‑19 shock — real GDP grew by 2.2% in 2021 following a 1.6% contraction in 2020. However, the COVID‑19 crisis has exacerbated Jordan’s jobs challenge: Unemployment stood at 23.3% in Q4‑2021, youth unemployment reached nearly 50% and the women’s labor force participation rate is 14%, one of the lowest in the world. At end‑2021, Jordan’s public and publicly guaranteed gross debt stood at 113.8% of GDP[1] (and debt net of SSIF[2] debt holdings at 92% of GDP) respectively. High unemployment rates, widening external imbalances, elevated debt levels and weak investment highlight sizable challenges to a robust recovery.

Jordan also faces several climate‑related hazards including significant temperature increases, precipitation decreases and increased incidents of drought. Jordan is heavily dependent on fossil‑fuel imports, with limited natural resources. It is among the most water-poor countries in the world. Jordan’s fiscal situation demands that it finds private sector solutions to climate challenges and that it incentivizes these solutions from a climate lens as part of its development model.

Read more

• Waste Management situation

Millions of metric tons of MSW are generated in Jordan from agricultural, municipal and industrial sources every year. The growing industrialization and high population growth rate due to the recent forced migration has led to a rapid increase in solid waste generation in the country which has, in turn, put increasing pressure on the existing waste management infrastructure. The current Solid Waste Management (SWM) services within the local municipalities are no longer of the same standard as that prior to the massive influx of refugees and the daily generation rate of MSW has dramatically increased. 350 tons of waste is currently being generated daily in Irbid and Mafraq; which should be collected and hauled away by the municipalities to the relevant final landfill “disposal sites”. CURRENTLY THERE ARE 100 local municipalities and 21 JSCs in Jordan. However, 18 official disposal sites are currently operating in Jordan: • 4 of the said landfills operate in the Northern Region. • 5 in the Central Region. • 9 in the Southern Region of Jordan. Solid Waste Situation in Jordan The SWM sector in Jordan is one of the most complex sectors due to the wide variety of SW types and compositions.

Read more

• Main Actors

• Infrastructure

18. official disposal sites are currently operating in Jordan:

- 1 large final disposal site (FDS) operated by GAM: the only engineered sanitary landfill

- 17 FDS operated by JCSs

CURRENTLY THERE ARE 100 local municipalities and 21 JSCs in Jordan. However, 18 official disposal sites are currently operating in Jordan: • 4 of the said landfills operate in the Northern Region. • 5 in the Central Region. • 9 in the Southern Region of Jordan.

• Regulatory Framework

the National Energy Efficiency Action Plan (NEEAP) : one of the key frameworks impacting the circular economy in Jordan

SCP National Strategy and Action Plan 2016-2025 (three selected priority areas : Agriculture/Food production, Transport and Waste Management) developed by Ministry of Environment

Green Growth National Action Plan 2021-2025 (GG-NAP) developed by the Ministry of Environment with the support of GGGI (Global Green Growth Institute)

National Strategy for MSWM (2015) to enhance the overall MSWM system including short, mid and long term planning frameworks and implementation actions, infrastructure and investments, as well as the institutional setting at the national level.

• WM initiatives and programs

-  Sanad, The Next Society, Arabnet , Endeavor SWITCHMED

 

Ref (Roadmap for scaling up Green Entrepreneurship) – Jordan, Switchmed