Investment Incentives

Investment incentives

The Jordan Investment Commission (JIC) is the lead governmental agency promoting Jordan as an investment destination and providing export support. JIC provides support to investors and guides them through the nation’s legislative and institutional framework.

The JIC oversees the application of investment incentives in the Kingdom and regulates development zones and free zones.

Jordan Investment Commission (

AmCham-Jordan works closely with the JIC and can provide U.S. investors with local support and know-how to facilitate investments and creating lasting and beneficial partnerships.

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Incentives for investment in Jordan

The Jordanian Investment Law and the Investment Incentives Regulation provides a number of incentives for economic activities including:

-Customs duty exemptions on production inputs for manufacturing and vocational activities, as listed in Schedules (1/A) and (1/B).

-Tax Reimbursement on production inputs for manufacturing and vocational activities within (30) days, as listed in Schedule (1A) of the Regulation

-Customs duty exemptions and reduction to (0%) of the General Sales Tax on production requirements and fixed assets for manufacturing and vocational activities as listed in Schedule (1/C) of Regulation.

-Customs duty exemptions and reduction to (0%) of the General Sales Tax on fixed assets for manufacturing and vocational activities, as listed in Schedule (1/D) of the Regulation.

-Tax Reimbursement on services necessary for manufacturing and vocational activities within (30) days, as listed in Schedule (2) of the Regulation.

-Investments in certain regions of the Kingdom may enjoy an Income Tax reduction of no less than (30%).

Additionally, goods for the below sectors enjoy customs duties exemptions and (0% percent) general sales tax, as listed in Schedules (3) of the Regulation:

-Agriculture and livestock.

-Hospitals and specialized medical centers.

-Hotels and tourist facilities.

-Entertainment and tourist recreation cities.

-Communication centers.

-Scientific research centers and scientific laboratories.

-Artistic and media production.

-Conference and exhibition centers.

-Transport and/or distribution and/or extraction of water, gas and oil derivatives using pipelines.

-Air transport, sea transport and railways.

Selected sectors have been granted exemptions and investment incentives pursuant to Article 8/a of the Investment Law, these including:

Investment exemptions granted to service activities in information technology sectors:

Pursuant to a decision by the Council of Ministers issued in May 2016, specific investment incentives for selected activities within the information technology sector, these are:

-ISIC 4 Class 5820 (Software publishing) with exceptions

-ISIC 4 Class 6201 (Computer programming activities) with exceptions

-ISIC 4 Class 6209 (Other information technology and computer service activities) with exceptions

-ISIC 4 Class 6312 (Web portals) with exceptions

-ISIC 4 Class 6311 (Data processing, hosting and related activities) with exceptions

-ISIC 4 Class 6202 (Computer consultancy and computer facilities management activities) with exceptions

-ISIC 4 Class 8549 (Other education limited to IT education training) covering IT professional Training only and excluding ISIC 4 Classes 8510, 8521, 8522, 8530, 8542.

-ISIC 4 Class 4651 (Wholesale of computers, computer peripheral equipment and software) with exceptions

-Call Centers.

The investment incentive offered to Companies in these sub-sectors/economic activities are:

-5% income tax of income generated from the above listed IT activities.

-0% sales tax on services sold in the Kingdom.

-Exempt stipulated goods necessary for undertaking the above IT activities from custom duties (such as servers, printers and like electronic products).

-0% sales tax on stipulated goods necessary for undertaking the above IT activities (such as servers, printers and like electronic products).

-0% sales tax on stipulated services necessary for undertaking the above IT activities (such as legal, accounting services as well as HR and management consulting services, feasibility studies).

Investment exemptions granted to hotel and tourism facilities, restaurants, and tourist cities entertainment and leisure tourism and convention centers:

- Sales tax rate of (7%)

-Income tax rate of (5%) for a period of (10) years (taking into account that it may enjoy a lower rate pursuant to other legislations)

-Exemption from customs duties and other fees and taxes, excluding service charges

-Reduction in the general sales tax rate to zero for materials, machinery and equipment, spare parts and accessories production and construction materials within the building and construction and equipping and furnishing of these activities

Provided the following activities are in the following regions of the Kingdom:

• Tafila
• Karak
• Balqa Governorate
• Jerash
• Madaba Governorate
• Ajloun
• Irbid Governorate except Central City Irbid
• Mafraq Governorate
• Ma’an Governorate
• Zarqa Governorate areas of Rusaifa, Hashemite, Perrin, Dhlail, and Azraq
• Capital Governorate areas of Giza, Moqar, Qweismeh, Marca, Naour and Sahad

Other benefiting activities include:

• Investment complexes in most areas.
• Specialized tourist transportation services.
• Road freight transportation.
• Touristic restaurants, hotels and convention centers in most regions of the kingdom.
• Production branches in less developed regions of the Kingdom.

Foreign Investment in Jordan

• Foreign investments enjoy incentives and benefits offered by the Investment Law, including exemption from custom duties, general sales tax and in some cases reduction on income tax.
• No restrictions on foreign ownership except in a limited number of economic activities where a Jordanian partner is required.
• Foreign Companies owned by Jordanians with 50% or more equity shareholding may be exempt from the ownership restrictions placed on certain economic activities.
• Investments in the Development Zones and the Free Zones can be wholly owned by foreign investors.
• Foreign investors enjoy privileges and guarantees, including national treatment, free movement of capital, protection against expropriation and the options to resort to alternative dispute settlement mechanisms.
• Foreign Investments enjoy facilitated registration and licensing services provided by the JIC Investment Window. In addition to support in obtaining visas and permits for Investor, their families and employees as well as other services.

Basic information on Corporate Tax

•Income Tax( as of September 2017)

-A 14% income tax is levied from manufacturing sector companies.

-A 20% income tax is levied form services sector companies.

-A 35% income tax is levied from Banks.

-A 24% income tax is levied on major telecom companies, electricity distribution and generation companies, mining companies, insurance and re-insurance companies, brokerage, legal persons who practice financial leasing.

Companies are subject to income tax on all its sources of income wherever arising, except from exports.

Income generated from export of goods manufactured in the Kingdom are exempt from income tax up to the year 2018.

Income generated from export of services (provided they are developed/done in the Kingdom) are exempt from income tax up to the year 2025.

Non-operating Foreign Companies are exempt from income tax, provided the income is incurred from activities undertaken outside the Kingdom.

The Jordanian Tax year is a calendar year starting on 1 January until the 31 December of each year. This can be modified in line with the company’s business year.

Income Tax reduction in developing areas

With a view to attracting economic growth within certain regions in the Kingdom, addition income tax exemption starting from 40% up to 95% is offered to certain economic activates operating in developing areas/poverty pockets in the Kingdom for a duration up to 20 years.

Withholding Tax

• A 10% withholding tax is levied on services fees, management fees, royalties, or interest paid directly or indirectly to non-residence. The amount is considered a final tax.
• A 5% withholding tax is levied on services fees paid to a residence, paid to the account of the local provider and subject to offsetting.
• The rates may be reduced under treaty. There is no double taxation treaty between Jordan and the U.S.

Sales Tax

Sales Tax / Value Add Tax (VAT) is levied at general rate of 16% on the sale of goods and services. The VAT is collected at each stage of the Jordan supply chain and the tax burden falls on the ultimate consumer.

Jordan has no exchange control rules. Investors are free to transfer revenues and profits outside of Jordan, in a convertible currency.

Investment incentives in the Development Zones and Free zones

There are a number of special economic zones, distributed in various locations in the Kingdom, that are overseen by the Jordan Investment Commission.

These zones are designated for various types of businesses and industries and are equipped to serve the needs of the investor with quality infrastructure in addition to providing support services.

Each zone is managed by a Master Developer Company that is charged with facilitating and organizing investment activities.

The aim of Development Zones is to distribute gains of economic development to all regions within the Kingdom and to create jobs through encouraging development of competitive advantage in these locations that is based on specialization and the provision of an integrated system of services to investors to support enterprise growth and development.

Free Zones facilitate transit of goods, stimulate economic activity and play an important role in contributing to strengthening Jordan’s position as a center for trade.

JIC Investment Window provides simple and fast registration and licensing services to companies operating in Development Zones and in Free Zones.

Investments in Development Zones enjoy:

• 5% income tax for income generated from all economic activities undertaken in the zones.
• 5% income tax for income generated from all manufacturing activities.
• Enjoy export tax exemptions offered in the Kingdom on goods and services
• Reduction to (0%) on sales tax for goods and services used by the enterprise for business purposes within the zone with no guarantee.
• 7% sales tax on specific services offered by registered establishments in the zone when offered therein
• Customs duties exemption except on certain goods

All investments enjoy these privileges except for income generated by banks and telecommunications companies that have individual licenses, as well as the financial brokerage companies, and financial companies including companies that exercise exchange, financing or financial leasing business, consultation, financial and tax audit companies, transport companies (sea transport, railways, road freight transport), insurance and reinsurance companies, basic mining and extraction industries, generation and distribution of electricity, and transport and/or distribution and/or extraction of water, gas, and oil derivatives using pipelines.

Investments in Free Zones enjoy:

• Exemptions from customs duties.
• Income tax exemptions on profits generated from certain economic activities.
• Exemptions from land and building taxes as well as service charges for street paving, planning and improvements.
• 0% sales tax on services offered by registered establishments in the zone when offered therein.
• 0% sales tax on goods consumed by registered establishments in the zone for business purposes.
• Income tax exemption on foreign workers’ remunerations.

Foreign Investment in Development Zones and Free Zones enjoy:

• 100% foreign ownership of the investment allowed in all sectors.
• Facilitated visa and residency permits for investors and workers, and their families including for business persons.
• Repatriation of capital and profits in a convertible currency.

List of Development Zones

• King Hussein Bin Talal Development Zone
• Irbid Development Zone
• Ma’an Development Zone
• Solar Collector Developmental Zone
• Muhammadiyah Development Zone
• Dead Sea Development Zone
• Ajloun Development Zone (tourism developmental corridor)
• Business Park Development Zone
• King Abdullah II Development Zone
• Hassan Industrial Zone
• Hussein bin Abdullah II Development Zone
• Distinguished Development Zone
• Tafileh Development Zone
• Madaba Development Zone
• Salt Development Zone
• Jerash Development Zone
• Thuraya Development Zone

There are (42) free zone (public and private) distributed throughout the Kingdom.

Aqaba Special Economic Zone

Aqaba is the only coastal city in Jordan, strategically situated at the northeastern tip of theRed Seabetween the continents of Asia and Africa.

The Aqaba Port is one of the region’s most important logistical and transportation hubs.

In 2000, Aqaba was declared a special economic Zones ASEZ (The Aqaba Special Economic Zone).

The zone is overseen by the Aqaba Special Economic Zone Authority (ASEZA) which is the financially and administratively autonomous institution responsible for the management, regulation, and the development of the Aqaba Special Economic Zone.

ASEZA

Today it is a world class business and leisure destination for global investors, supported by the city's geographic advantage along one of the world's busiest shipping lanes is supported by Jordan's access to 1.6 billion customers, enabled by numerous free trade agreements that have been instrumental to Aqaba's business magnetism.

Today, investment attracted to the Aqaba region has reached about $20 billion, far surpassing the $6 billion initially targeted for 2020. ASEZ enhances Jordan’s economic capacity through attracting investments by creating a world class competitive environment, improving the quality life and prosperity for the community and insuring continuous development based on transparency, efficient utilization of resources and achieving best results.

Benefits of investing in ASEZ:

• Benefits of doing Business in the ASEZ for Registered Enterprises:
• Duty-free import of goods from the national customs territory and overseas (except automobiles and petroleum)
• 5% income tax on net profit generated from activities inside ASEZ or outside Jordan except for banking, insurance and land transport services.
• Exemption form sales tax on final consumption of selected goods and services.
• Exemption from social service tax.
• Exemption from annual land and building taxes on utilized property.
• Exemption from taxes on distribution of dividends and profits on activities in the ASEZ and outside Jordan.
• Preferential market access through free trade arrangements with the EU, US, Singapore, Canada, Turkey and the Arab countries.