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Investment Incentives
Investment Incentives
The Investment Environment Law and Regulations established a number of enticing and business-enabling incentives for local, regional, and international investors, as part of efforts to promote wide-reaching economic growth and attract investments across the country
In addition to a variety of a basic and additional incentives, the government has established several Development and Free Zones that provide additional benefits to registered enterprises operating within these areas, including streamlined regulatory procedures. The Jordanian Ministry of Investment has taken numerous steps to create a business-friendly environment that encourages entrepreneurship, facilitates trade and growth in exports, and promotes a green economy.
- Whether operating within or outside the Development or Free Zones, investors are entitled to seek compensation for any losses incurred as a result of certain conditions or circumstances related to the local investment environment and framework. These conditions are enumerated in the Investment Environment Law No. 21 of 2022
- Any investment exceeding JOD5 million or involving the hiring of more than 250 Jordanian employees, whether inside or outside the country’s Development or Free Zones, may invoke the seven-year Stability Clause in the event of negative impacts resulting from amendments or changes to Jordan’s legislative or regulatory provisions
- Whether operating within or outside the Development and Free Zones, investors are permitted to employ 25% of their technical and managerial workforce as foreign labor, and they may increase this to 40%, subject to specific conditions
- Economic activities operating outside the Development and Free Zones will be granted a full custom duties exemption on all fixed assets, production requirements and inputs, and necessary spare parts for conducting their business according to specific conditions
- Economic activities operating outside the Development and Free Zones will benefit from a zero-sales tax rate on fixed assets, production requirements and inputs, and spare parts necessary for conducting their businesses. This exemption is based on a schedule issued by the Cabinet
Some economic activities and projects (as specified in the Regulating the Investment Environment No.7 for the Year 2023) that are located in a certain geographic area in addition to projects employing more than 250 Jordanian employees, enjoy a reduction or an exemption from income tax for 5 years (certain conditions apply)
- Investors operating outside the Development and Free Zones may be eligible for additional incentives provided that they meet certain criteria, such as those related to the employment of Jordanian workers, targeted exports, local added value, utilization of technology, investments in strategic projects or public-private partnership projects.
- The Cabinet of Ministers, upon the recommendations of the Incentives and Exemptions Committee, may grant one or more of the following six additional incentives, which has their own specific conditions related to operational time and hiring Jordanian labor
• Exemption of 50% to 75% on the sale of government-owned land.
• Exemption of 50% to 100% for 5 years on the lease of government-owned land
• Exemption of 50% to 100% on building and land tax for 5 to 10 years
• Exemption of 50% on land and real estate registration fees and real estate sales tax
• The costs of infrastructure services for economic activity can be deducted from the account receivables owed by the investor to the Official Entity within (5) years after the date of the actual operation
• Contributing in the cost of the electric energy bill or allowing it to be deducted from the receivables due on the Economic Activity towards the Official Entity at a percentage 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
• These incentives include exemptions on government-owned land sale or lease fees, reductions on building and land tax, land and real estate registration fees and real estate sales tax, infrastructure costs, and contribution to energy bills for a period of five years. Specific percentages and conditions apply for each incentive
To be considered a Strategic Economic Activity, an activity must meet both of the following conditions: (1) it must fulfill at least two criteria from Article 13(B) of the Investment Environment Law and (2) it must meet the minimum investment threshold for the specific activity; this threshold ranges between JOD10 million and JOD100 million, depending on the nature of the economic activity irrespective of any other laws.
The ministerial cabinet may provide “single approval” on any investment project or activity, permitting the investor to establish their project under the condition that it supports sustainable development and is considered a strategic economic activity
- Foreign investors in registered enterprises will be granted residence permits, along with their families, as well as all non-Jordanian board members/directors and employees holding administrative and technical roles
- Investors are permitted to employ 25% of their technical and managerial workforce as foreign labor, and they may increase this to 40%, subject to specific conditions
- There are no limits on the percentage of foreign capital ownership, and economic activity performance licenses for economic activities will be issued for a duration and validity of one to five years. All building and construction within the development zones is exempt from certain taxes and fees