Doing Business in Jordan

Do you want to expand your business into Jordan or hire employees there? Here are some key things you need to know about a Jordan expansion.

Jordan Economy Overview

Currency

Jordanian Dinar (JOD)

Working hours

48 hours/week

Public/bank holidays

8 public holidays

Capital

Amman

Languages

Arabic

Population

11.3 million

Minimum hourly salary

Around JOD 260 (depending on the number of hours worked)

Tax year

1st Jan – 31st Dec

Date format

DD/MM/YYYY

Misclassification penalties

Employers must correctly classify employees, and misclassification can lead to penalties, including back taxes, fines, and other legal consequences.

Fun fact

Jordan is home to Petra, an ancient city famous for its rock-cut architecture and water conduit system, recognized as one of the New Seven Wonders of the World.

The Hashemite Kingdom of Jordan is a Middle-Eastern country bordered by Syria, Iraq, Saudi Arabia, Israel, and the West Bank of Palestine. Its capital is Amman, and its official language is Arabic. Its area was historically part of the Assyrian, Babylonian, Roman, Byzantine, Umayyad, and Ottoman Empires, and it became a British protectorate in 1921. In 1946, it gained its independence and began developing into a modern state. Its population in 2024 reached 11.385 million people, largely due to the influx of refugees from Syria.

The country’s economy has been growing steadily since 1990 and reached over $50 billion in GDP in 2023. Jordan instigated a ten-year economic modernization agenda in 2021 with goals of increasing female representation in the labor market, increasing per capita income by 3%, and making the country one of the most competitive in the world. This has encouraged growth, and Jordan’s GDP is expected to increase by 2.6% in 2024. It looks like a very good time to enter into the Jordanian market and if you’re thinking of hiring Jordanians or setting up a business, there are a lot of options to help you realize these goals.

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Overview of Jordan's Economy

Jordan uses the Jordanian dinar (JOD), which is pegged to the US dollar at a rate of 1 USD = 1.41 JOD. This currency has been stable largely thanks to strong international trade, including a free trade agreement with the US.

The economy of Jordan is one of the smallest in the region, and the country is still considered a low-middle-income country by the World Bank. Relative to its neighbors, Jordan does not enjoy great wealth in hydrocarbon or water resources. Instead, its economy is highly diversified, which gives it a level of stability and protection against fluctuations in global energy prices.

Economic Sectors and Trade
Services sector dominates (60.4% of GDP), particularly in financial services, communications technology, and transportation
Industrial sector contributes 23.9% to Jordan’s economy, dominated by mining, quarrying, and food processing; limited manufacturing focused on textiles
Agricultural sector contributes just 4.8% of GDP, focused on wheat, barley, and fruit and vegetable cultivation
Major trading partners: US, China, Saudi Arabia, India, and the United Arab Emirates

Jordan’s workforce is one of the most skilled and highly educated in the region, and it exports many workers to its neighbors. However, employing Jordanians is still very affordable for most foreign-based firms. The minimum wage in Jordan is mandated at 260 JOD/month (roughly 366 USD). Middle-class, skilled workers will make salaries in the range of 400-600 JOD/month (565-845 USD/month). Even though employers pay 14.25% contributions to social security, employees here are still very affordable.

Taxes

Employer tax: 14.25%

Social Security

14.25% of the gross salary

Employee tax: 7.5%

Social Security

7.5% of the gross salary

Income tax

Jordan uses a progressive income tax system:

Income Bracket (JOD)

Up to 5,000
5,001 to 10,000
10,001 to 15,000
15,001 to 20,000
20,001 to 1,000,000
Over 1,000,000

Progressive tax rate

Business Regulation in Jordan

Every country has its own regulations that may present challenges for incoming businesses. The following regulations in Jordan will give you a good understanding of how business is done in the country and help you make an informed decision on whether to start doing business there.

Registration and Compliance

Starting a new business in Jordan can be somewhat challenging. However, it can take a well-prepared business only 7 days to register a new limited liability company (LLC). This can take an extra day if a woman is registering the business as women need to obtain permission from their husbands to leave the home.

The necessary steps for setting up an LLC include:

opening a bank account and depositing half of the business’s startup capital
registering a name with the Ministry of Industry and Trade
obtaining a tax ID number and registering for VAT
registering with the Chamber of Industry or the Chamber of Commerce
choosing an address and obtaining a vocational license from a municipality
receiving a Civil Defense inspection of the premises
registering with the Social Security Office

Taxes and Investments

The corporate tax rate (CIT) in Jordan is 20% and 24% for mining, electricity, finance, insurance, and telecom companies, and national contribution taxes range from 1-7%, depending on the industry. There is a general sales tax on goods and services of 16%. Withholding taxes are 10% for dividends, interest, and royalties. Social security contributions for employers total 14.25%.

However, companies can set up in Free Zones where they pay just 5% CIT, or Development Zones where they pay 10% CIT and another 7% in sales tax.

Employment Laws

Employees in Jordan work eight hours a day and 48 hours per week and must be paid at least 125% for overtime hours. They should receive an annual paid leave of at least 14 working days per year. Jordanians receive 16 paid public holidays per year.

Maternity leave is granted for ten weeks and is paid by social security. Paternity leave is three days. Workers should be given 30 days’ notice of termination.

Intellectual Property

Copyrights must be registered with the National Library, Ministry of Culture, and last for the creator’s life plus 50 years. Patents must be registered with the Registrar of Patents and Trademarks at the Ministry of Industry, Trade and Supply and last for 20 years. Trademarks can be registered for ten years and renewed for ten-year periods.

Benefits of Doing Business in Jordan

The advantages of doing business in Jordan include:

Strategic location
Highly affordable labor
Economic stability and steady growth
English is widely used in urban centers
100% foreign ownership of entities is possible
Free Zones and Development zones offering tax breaks and other incentives are available

Downsides of Doing Business in Jordan

The disadvantages of doing business in Jordan include:

Slow bureaucracy with a lack of transparency
Regional instability in neighboring countries (Israel, Syria, Iraq)
Small domestic market
High taxes for the region

Business Expansion Options in Jordan

If you’re looking to expand your business in Jordan, you have several options to help you succeed, including:

Jordan Employer of Record (EOR)

A Jordan Employer of Record operates much like a Jordan PEO, except the HR provider becomes the legal employer of your Jordan-based workforce. They take responsibility for hiring, onboarding and payroll and assume legal liability for employment compliance.

As a matter of practice, the terms Jordan PEO and Jordan EOR are often used interchangeably.

Learn more about EOR in Jordan

Recruitment Agencies

A Jordanian recruitment agency can help you source employees in Jordan quickly and cost-effectively. Jordanian recruiters often work in tandem with Professional Employer Organizations or Employers of Record to ensure that your Jordan team is hired and paid in full compliance with local laws.

Learn more about Recruitment Agencies in Jordan

Jordan Professional Employer Organization (PEO)

Foreign-based businesses also have the option of hiring Jordanian workers to work for them remotely, either to simply bring talent to their teams or to gain a foothold in the Jordanian market. They can legally do so by working with a Professional Employment Organization (PEO). Through these service providers, they can hire workers without having to set up entities in Jordan.

Partnering with a professional employer organization (PEO) allows companies to employ local staff in Jordan without the need to establish a legal entity. This approach is quicker and less expensive, making it ideal for businesses testing the Jordan market or those with limited operations. PEOs handle administrative tasks and ensure that companies comply with Jordan regulations, reducing the complexity and risk associated with hiring local employees.

Learn more about PEO in Jordan

Subsidiary Incorporation

Many foreign companies choose to set up subsidiaries in Jordan as their way of accessing local markets. Limited liability companies (LLCs) and public limited companies (PLCs) are the most common subsidiary structures selected.

An LLC is the preferred entity for most small and medium enterprises. These can be set up with only a single shareholder of any nationality and one director of any nationality or place of residence. However, foreign founders need to make a minimum share capital contribution of 70,650 USD. If they invest in restricted sectors, they will need to form joint ventures with Jordanian partners.

Larger companies looking for public investment typically choose to incorporate as PLCs. Registering a PLC requires a minimum of just one shareholder who can be of any nationality. Unlisted companies can register with just 100,000 USD of share capital. Listed companies need to increase their share capital to 700,000 USD and appoint a board of at least three directors.

Branch Registration

Foreign companies must prove that a branch office is necessary to execute a contract with a Jordanian customer and that the branch won’t conduct activities in restricted sectors. A branch office in Jordan needs to appoint a representative (resident director) and publicly publish its audited financial statements before filing with the Companies Registrar. A branch is not considered separate from its foreign parent company, which has full liability for its activities.

Business Opportunities in Jordan

Jordan is a small but dynamic country with a lot of potential and a diversified economy that is showing steady growth. Its workforce is skilled and well-educated, and salaries are low, making hiring Jordanians an attractive choice.

The country’s efforts to diversify its economy, coupled with its strong trade relationships and favorable investment policies, make it an attractive destination for investors and entrepreneurs seeking to establish a presence in the Middle East and North Africa (MENA) region.

Business Opportunities	Reasons
Information and Communication Technology (ICT)	Jordan has a thriving ICT sector, with a strong focus on software development, IT services, and outsourcing. The country’s highly educated and tech-savvy workforce, competitive labor costs, and supportive government policies, such as tax incentives and dedicated ICT zones, create an attractive environment for businesses in this field. The growing demand for digital solutions in the MENA region further enhances the potential of this sector.
Renewable Energy	Jordan has set ambitious targets to increase the share of renewable energy in its power mix, presenting significant opportunities in solar, wind, and energy efficiency projects. The country’s abundant solar resources, coupled with government incentives and a supportive regulatory framework, make it an attractive market for businesses involved in the development and deployment of renewable energy technologies.
Tourism and Hospitality	Jordan’s rich cultural heritage, ancient archaeological sites, and stunning natural landscapes make it a popular tourist destination. The country’s efforts to promote tourism, including infrastructure development and marketing campaigns, present opportunities in the construction of hotels, resorts, and other tourism-related facilities. Additionally, businesses can capitalize on the growing demand for eco-tourism and adventure tourism experiences.
Healthcare and Life Sciences	Jordan has a well-developed healthcare system and a growing pharmaceutical industry. The country’s strategic location, coupled with its skilled medical professionals and competitive costs, make it an attractive hub for medical tourism and healthcare services. Opportunities exist in the establishment of specialized clinics, medical device manufacturing, and the production of generic pharmaceuticals.
Manufacturing and Logistics	Jordan’s strategic location at the crossroads of Europe, Asia, and Africa, combined with its well-developed transportation infrastructure and free trade agreements, presents opportunities in the manufacturing and logistics sectors. The country’s proximity to major markets, along with its competitive labor costs and business-friendly environment, make it an ideal location for businesses involved in the production and distribution of goods.

These sectors, along with others, present substantial opportunities for businesses aiming to enter Jordan’s expanding and dynamic market. The government’s initiatives to simplify business regulations, offer investment incentives, and foster a welcoming environment for foreign investors further amplify the appeal of these prospects.