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Doing Business in Jordan

The Middle East is a region of diverse opportunities, with each country presenting its unique business environment. Among these, Jordan stands out as a promising hub for international enterprises. This article aims to provide an in-depth overview of the economic landscape in Jordan and essential considerations for businesses looking to expand in this vibrant market.

Understanding the Jordan Economy

Jordan’s economy is characterized by its limited natural resources, but its strategic geographical location has allowed it to develop as a key trade and transportation hub. The nation has been focusing on sectors such as tourism, ICT, pharmaceuticals, and finance to boost its economic prospects. While it deals with challenges like unemployment and public debt, the government is taking initiatives to promote foreign investment, making it an appealing destination for businesses.

Why Do Business in Jordan?

There are several reasons why Jordan is an attractive destination for global businesses.

  1. Strategic Location. Sitting at the crossroads of Asia, Africa, and Europe, Jordan provides companies with access to various markets.
  2. Skilled Workforce. With a focus on education and training, Jordan boasts a highly educated and trained workforce.
  3. Investment Initiatives. The Jordanian government has set up special economic zones and offers incentives to attract foreign investors.
  4. Stable Political Climate. Unlike some of its neighbors, Jordan enjoys relative political stability, providing a safer environment for businesses.

Business Structures in Jordan

Foreign businesses have various options when it comes to setting up in Jordan:

  1. Limited Liability Company (LLC). This is the most common form, suitable for most businesses. It requires a minimum of two shareholders.
  2. Private Shareholding Company. Suitable for larger businesses, this structure requires a minimum capital investment and at least two shareholders.
  3. Foreign Branch Office. International companies can set up a branch office in Jordan, but it’s essential to meet specific regulatory requirements.
  4. Representative Office. This is for businesses that wish to conduct market research or promote their parent company but not engage in active business operations.

Alternative: Jordan Employer of Record (EOR)

An Employer of Record serves as a third-party entity that hires local staff on behalf of foreign businesses. This setup allows companies to bypass many of the complexities tied to setting up a traditional business entity in Jordan, particularly when they are still testing the waters or planning short-term projects. A Jordan EOR means:

  1. Simplified Market Entry. Using an EOR means businesses can begin their Jordanian operations almost immediately, without waiting for the time-consuming process of entity setup.
  2. Local Compliance. The EOR takes responsibility for ensuring all local labor laws, tax codes, and employment regulations are adhered to, mitigating risks associated with non-compliance.
  3. Payroll and Benefits. The EOR manages the payroll of the employees, ensuring timely and accurate salary disbursements. They also oversee the provision of locally compliant benefits.
  4. Flexibility. Companies can scale up or down easily without the direct burden of hiring or laying off employees. This can be especially beneficial for project-based engagements.

While the EOR setup offers undeniable benefits, companies should also consider their long-term goals in Jordan. If the aim is a more permanent and significant presence, setting up a traditional business entity might be more beneficial. 

Navigating Work Visas in Jordan

For foreign nationals wishing to work in Jordan, obtaining a work visa is crucial. The process typically involves:

  1. Job Offer. The individual must first secure a job offer from a Jordanian company.
  2. Work Permit Application. The employer applies for a work permit from the Ministry of Labor on behalf of the employee.
  3. Medical Examination. Foreign workers are required to undergo a medical exam.
  4. Visa Issuance. Once the work permit is approved, the individual can apply for a visa at the Jordanian embassy or consulate in their home country.

Tapping into the Jordan Talent Pool

One of Jordan’s significant assets is its skilled and diverse workforce. The nation has a high literacy rate, and many Jordanians are bilingual, speaking both Arabic and English. With several universities and training institutes, sectors like IT, finance, and healthcare benefit from a steady stream of qualified professionals. To harness this talent, companies should consider local recruitment agencies, job fairs, and partnerships with educational institutions.

Taxation in Jordan

Jordan has a progressive taxation system. Here’s a brief overview:

  1. Corporate Tax. Rates vary depending on the business sector, ranging from 14% to 24%.
  2. Sales Tax. A general sales tax is levied on goods and services, with certain exemptions in place.
  3. Personal Income Tax. Progressive rates apply based on income, with non-residents taxed only on their Jordanian-sourced income.
  4. Withholding Tax. Applicable to certain types of income like dividends, royalties, and interest earned by non-residents.

Do Business in Jordan – the Right Way

Jordan presents a dynamic mix of opportunities and challenges for foreign businesses. Its strategic location, skilled workforce, and investor-friendly policies make it an enticing option for global expansion. However, like any market, it’s essential to understand its nuances, from business structures to taxation. With thorough research and the right local partnerships, companies can successfully navigate the Jordanian business landscape and achieve long-term success.