| COUNTRY PERSPECTIVES
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JORDAN |
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How to invest in Jordan? |
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The Jordanian government has eliminated legal barriers to foreign investment and ownership in most sectors. The three investment laws of 2003 (replacing 1995 legislation) provide for equal treatment of Jordanian and foreign investors. Moreover, the privatisation programme and special-status industrial zones are essential assets for boosting the country’s attractiveness. |
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How to invest in Jordan? |
These laws offer incentives and exemptions, especially for investment in industry, agriculture, hotels, hospitals, maritime transport, railways, leisure and recreational compounds, (7) convention and exhibition facilities, oil and gas production. Foreign investors can hold total ownership in projects, minimum required investment being approximately 63,000 Euros. However, foreign ownership cannot exceed 50 percent for construction and commercial services.
A new legal form for companies was created in 2002: the private shareholding company. This is the equivalent of a limited company, but with more flexible methods of creation and management that are more suitable to foreign establishments.
The government can grant additional incentives to other sectors, such as flying schools and the ICT sector.
Furthermore, the Investment Promotion Agency (Jordan Investment Board - JIB) offers a 10-year tax exemption, depending on the geographical location of the investment. The investment law divides the country into three development areas: zones A, B and C.
Investments in the latter, the least developed areas of Jordan, receive the highest level of exemptions. All agricultural, maritime transport and railway investments are also classified as zone C investments, irrespective of their location. Qualifying Industrial Zones (QIZs) are treated as zone B projects unless they are located in zone C.
Investment incentives in Jordan include exemption from customs duty for a wide range of imported goods and exemption from income tax for a ten-year period, depending on the location of the project: exemption of 25 percent for investments in zone A, 50 percent in zone B and 75 percent in zone C. The normal income tax rate for the majority of sectors is 15 percent and net profits from exports are fully exempt from income tax.
Jordan joined the World Trade Organisation in 2000, signed the Association Agreement with the European Union effective May 2002, and concluded a free trade agreement with the United States. The FTA targets progressive dismantling of tariff and non-tariff barriers between the two countries. This agreement covers the Qualifying Industrial Zones (QIZ), in operation since 1996. The QIZs offer duty-free and quota-free access for all products and services produced there, whereas in FTAs, customs duty is gradually reduced but still exist and a minimum of 35 percent of production must be of Jordanian origin.
These zones are of particular interest to textile and apparel industries, which are confronted with very high tariff barriers and import quotas in the United States. 13 public or private QIZs have been created.
More information is available on the QIZ website at: http://www.jiec.com.
Export oriented companies can also set up business in the country’s special economic zones. Four free trade zones have been set up in Zarqa, Sahab, Queen Alia International Airport, and Kerak. In addition, legislation allows companies not located in free trade zones to benefit from the same incentives at the 23 “free zone points”, currently in operation in Jordan. Investment in free trade zones increased by 4 percent from 2002 to 2003, reaching US$ 721.9 million according to Free Zones Corporation (FZC) figures.
More detailed information on Jordan’s free trade zones is available on: www.free-zones.gov.jo. |
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