Shmaisani-Hussaini Complex,
Shmaisani, Amman, Jordan
LEGAL FRAMEWORK OVERVIEW
Company Types:
The Companies Law No. 22 of 1997 provides various company structures for incorporation in Jordan, including Limited Liability Companies (LLCs), Private Shareholding Companies (PSCs), and Public Shareholding Companies (PLCs). Each company type is overseen by a board of directors, consisting of a chairman, a vice-chairman, and other board members, except LLCs which can opt for a general manager instead.
Limited Liability Companies (LLCs):
Owners of LLCs enjoy limited liability, governed by standard rules under the Companies Law. These rules offer little flexibility for inserting special provisions in the Articles of Association. The minimum share capital for an LLC is JD1 ($1.41), and LLC shares cannot be publicly traded. LLCs must have at least two shareholders, although approval can be sought for a sole shareholder. Registration requires at least 50% of the capital to be paid up front, with the rest due within two years. The registration process typically takes two days, with a fee of 0.2% of the registered capital (minimum JD250 or $353) and an additional stamp duty of 0.3%.
Private Shareholding Companies (PSCs):
PSCs offer greater flexibility, allowing for various share types and values, and can be tailored to specific investor requirements. Although PSC shares can be listed publicly, there is currently no mechanism for this. The minimum share capital is JD50,000 ($70,500), which must be fully paid upon registration. Registration can take one to two weeks, with fees of 0.2% of the capital (minimum JD1000 or $1410) and a 0.3% stamp duty.
Public Shareholding Companies (PLCs):
PLCs require at least two founders (or approval for one), with shares that can be publicly listed after two years. Shareholder liability is limited to their shareholding. The authorized capital must be at least JD500,000 ($705,000), with a minimum of JD100,000 ($141,000) or 20% of the authorized capital fully paid upon registration. Registration is complex, necessitating legal and financial intermediary assistance, with fees of 0.2% of the capital (minimum JD5000 or $7050) and a 0.3% stamp duty.
Foreign Companies / Offshore Companies:
Foreign entities can register branch or regional offices in Jordan. Branch offices can operate in Jordan under certain conditions, while regional offices serve as bases for regional operations and enjoy tax exemptions.
INVESTMENT LAW OVERVIEW
Investment Law:
The Investment Law No. 30 of 2014 promotes investment by unifying legislation and offering incentives for using local resources and employing Jordanians. It established the Investment Commission to streamline regulatory processes.
Incentives:
The Investment Law provides automatic incentives for specific projects, including exemptions from customs duties and sales tax for goods and services in sectors such as agriculture, healthcare, tourism, communication, and transportation. These incentives aim to attract investments to various regions and sectors within Jordan.
REAL ESTATE INVESTMENT
Ownership Rules:
Jordanian real estate laws differ for Arab and non-Arab nationals. Non-Jordanians need specific approvals to own property, with distinctions based on nationality and the type of property. Arab nationals can invest in agricultural or industrial land outside regulated boundaries with appropriate approvals. Corporate entities, regardless of nationality, must justify land purchases for business objectives and obtain relevant approvals based on the land area.
Consumer Protection Law:
The Consumer Protection Law No. 7 of 2017 ensures consumer rights by mandating fair trade practices and accurate information from suppliers. It applies to all consumers and suppliers, with specific obligations for suppliers to verify product quality, deliver on promises, and provide after-sales services. The law aims to balance commercial transactions and protect consumer rights effectively.
