Navigating Foreign Ownership in Jordan: What Investors Should Know

Jordan is increasingly positioning itself as a regional hub for business and investment. With a liberalized economy, strategic location in the Middle East, and a strong legal framework, Jordan attracts entrepreneurs and corporations from across the globe. However, foreign ownership in Jordan is subject to certain regulations and sector-specific restrictions that investors must carefully navigate.

Whether you’re a startup founder, SME operator, or multinational corporation, understanding the rules surrounding company registration in Jordan is essential for a smooth market entry. This blog will walk you through what you need to know before you register a company in Jordan, including ownership rules, legal structures, licensing, and best practices.

Why Jordan?

Before diving into foreign ownership rules, it’s worth considering why Jordan is an appealing destination for foreign investors:

• Strategic location: Jordan acts as a gateway between Europe, Asia, and Africa.

• Skilled workforce: High literacy rates and a young, educated population.

• Free trade agreements: Access to over 1 billion consumers through FTAs with the US, EU, and Arab countries.

• Stable legal and financial system: A business environment based on the rule of law and an independent judiciary.

Despite these benefits, the regulatory environment for foreign investors is nuanced, especially when it comes to ownership thresholds and sector-specific rules.

Foreign Ownership Rules in Jordan

In Jordan, foreign investors can own companies either fully or partially, depending on the business sector. The Investment Law No. 30 of 2014 governs the terms and conditions under which foreigners can operate businesses.

Full Ownership Permitted

Foreigners are allowed to own 100% of a company in Jordan in many sectors, including:

• Industrial and manufacturing activities

• Information technology

• Hospitals and healthcare services

• Education and research institutions

• Certain financial services

These sectors are considered high priority by the government and are often accompanied by investment incentives such as tax breaks or exemptions from customs duties.

Ownership Restrictions

There are sectors where foreign ownership is restricted or prohibited entirely. In some cases, foreigners can only own a minority stake. Examples include:

• Retail and wholesale trade

• Engineering services

• Transportation services

• Real estate brokerage

Typically, these sectors require a Jordanian partner, and foreign ownership may be capped at 49% or 50%. A detailed list of restricted sectors is published by the Jordan Investment Commission (JIC) and is updated regularly.

Minimum Capital Requirements

For most foreign-owned companies, Jordan imposes a minimum capital requirement of 50,000 JD (around USD 70,000). This amount must be deposited before the company is officially registered. In restricted sectors or in certain development zones, higher capital requirements may apply.

Company Structures Available for Foreigners

When opening company in Jordan, foreign investors can choose from several legal entities. The most common options include:

1. Limited Liability Company (LLC)

• Most popular structure for small and medium businesses

• Requires at least two shareholders (individuals or entities)

• Liability is limited to the amount of capital contributed

• Requires minimum capital of 1 JD for Jordanians and 50,000 JD for foreigners

2. Private Shareholding Company

• Suitable for larger enterprises or joint ventures

• Minimum of three shareholders

• Can issue shares but not traded on the stock exchange

3. Branch Office

• A foreign company may open a branch in Jordan

• Requires pre-approval from the Ministry of Industry and Trade

• Must appoint a Jordanian representative

Each structure has its own legal, tax, and administrative implications. Choosing the right form depends on the business activity, ownership structure, and long-term plans.

Also Read: Types of Structures for Business Setup in Spain

Steps to Register a Company in Jordan

To register a company in Jordan, especially one with foreign ownership, the following steps are typically required:

1. Reserve Company Name

Apply to the Companies Control Department to reserve a unique company name.

2. Draft Memorandum and Articles of Association

This outlines the company’s purpose, shareholder details, capital structure, and governance rules.

3. Submit Application to the Ministry of Industry, Trade and Supply

You’ll need to submit notarized copies of passports, proof of residence, and bank statements to support the capital requirement.

4. Obtain Sector-Specific Licenses

Some industries require additional licensing from regulatory authorities (e.g., telecommunications, healthcare, education).

5. Register with Tax Authorities and Social Security

All companies must register with the Income and Sales Tax Department and the Social Security Corporation if they plan to hire employees.

6. Open a Corporate Bank Account

Foreign investors will need to open a bank account in Jordan to deposit the required capital and manage business operations.

Special Economic Zones and Incentives

Jordan offers multiple Development and Free Zones, such as the Aqaba Special Economic Zone (ASEZ), where foreign ownership rules are more relaxed. In these zones, investors can benefit from:

• 0% income tax on exports

• Reduced customs and duties

• 100% foreign ownership across many sectors

• No restrictions on profit repatriation

Investing in these zones can be a strategic option for businesses focused on manufacturing, logistics, and international trade.

Also Read: Documents Required for Business Setup in Barbados

Common Challenges for Foreign Investors

While Jordan is open to foreign investment, international entrepreneurs may encounter challenges such as:

• Navigating bureaucracy and obtaining sector-specific licenses

• Language barriers when dealing with official documentation

• Delays in bank account opening due to AML compliance

• Understanding the nuances of labor and employment laws

To overcome these issues, it is advisable to engage a local legal or business advisory firm to support the company registration process.

Compliance and Reporting Obligations

After establishing a company in Jordan, ongoing compliance is essential:

• Submit annual financial statements

• Maintain proper accounting records

• Renew sector licenses as required

• File tax returns and pay applicable VAT and income taxes

Failure to comply can result in fines, penalties, or even suspension of business activity.

FAQs

1. Can a foreigner fully own a company in Jordan?

Yes, full foreign ownership is allowed in many sectors such as industry, IT, education, and healthcare. However, some sectors require a Jordanian partner or have ownership caps.

2. How long does it take to register a company in Jordan?

Company registration in Jordan typically takes 2 to 4 weeks, depending on the business activity and whether special licenses are needed.

3. Do I need to be physically present in Jordan to open a company?

Physical presence is not strictly required, but having a local legal representative or agent is highly recommended to manage documentation and communicate with authorities.

Jordan remains a promising destination for foreign investors seeking to access Middle Eastern markets while benefiting from political stability and strategic trade agreements. By understanding the rules around foreign ownership, choosing the right structure, and ensuring compliance, investors can unlock significant opportunities in the Jordanian economy.