Jordan

Investing

FDI in figures

The Jordanian economy has benefitted from massive investment by the Gulf countries. It went from 74 million USD in 2002 to 3.1 billion USD in 2006. This investment is mainly concentrated in the field of residential and commercial real estate and in large tourist projects (hotels on the Dead Sea, marinas and hotels at Aqaba). It is also important in the field of finanancial services and services in general.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	651	1,532	3,121
FDI inward stock (millions USD)	n.c.	n.c.	16,349.0
Performance Index*, world ranking	51	19	8
Potential Index**, world ranking	61	59	n.c.
Number of Greenfield investments	11	23	31
FDI inwards (in % of GFCF)	23.0	51.3	99.1
FDI stock (in % of GDP)	n.c.	n.c.	114.2

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Jordan

Strong points: For several years the country has registered substantial growth, around 7%. The market is opening up little by little. The government for its part has taken serious measures to attract foreign investors. Special economic areas with lower taxation have been set up. In addition, the government has made a praiseworthy effort regarding controlling public spending, and according to the IMF this puts Jordan among the most dynamic countries in the Middle East. Jordan has also backed the human factor and Jordanian workers are among the most well-trained in the Arab world.
Weak points: At the political level, Jordan is located in an unstable region being near Iraq, Syria and Israel. On the domestic front, the massive influx of Iraqi refugees, added to a considerable number of Palestinian refugees, may be a factor of risk. In addition, Jordan does not have many natural resources and remains a modest market in comparison with Egypt or its Gulf neighbours. The country registers a substantial structural trade deficit linked to its lack of natural resources and food products. It is very dependent on foreign aid.
Government measures to motivate or restrict FDI: The government has taken several initiatives to attract foreign investors. Firstly, it has liberalized its market and undertaken many privatizations open to foreign operators. Then, it has simplified the procedures for setting up and registering companies. So now there is just one office at the Department of Industry and Trade which is competent for the administrative procedures of setting up and registering a company. In addition, the government has set up a special economic area in the port of Aqaba where companies benefit from advantageous tax regimes with many exemptions. The government has also set up QIZs (Qualifying Industrial Zones) and special economic areas in the rest of the country where the tax regime is attractive.

Administrative procedures relative to foreign investment

Freedom of establishment: It is guaranteed except in some sectors which are considered to be sensitive such as publishing, publication, aeronautics, architecture or engineering. Some sectors are totally forbidden to foreign companies such as security services and the maintenance of law and order, sports clubs or passenger transport. The US State Department gives a complete list of the limitations.
Acquisition of holdings: A majority holding interest in the capital of a local company is legal in Jordan, except in certain sectors where foreign interest cannot exceed 49%.
Obligation to declare: The Agency for the promotion of foreign investment in the country provides information about the necessary authorizations for setting up business.
Competent organization for the declaration: The website of the Amman Stock Exchange listing the restrictions on foreign investment.
Jordan's Securities Commission
Requests for specific authorizations: There is no obligation to declare in Jordan. However, in some sectors such as commercial activities, engineering, transport services... foreign capital invested in the company may not be more than 50% of the total capital. In other sectors such as freight or postal services, this share is reduced to 49%.