Company Registration in Jordan

Company Registration in Jordan- Overview

Jordan is officially known as the Hashemite Kingdom of Jordan which is present in the Arabic Peninsular. It is present in the Levant region of West Asia. It is considered as the smallest country in the Arab. The country is beside the Dead Sea and approximately more than 26 kilometres of coast line borders this sea. Jordan is officially located between Asia, Africa and Europe.

Jordan is considered as the second smallest market for different forms of resources in the Middle East. Hence the amount of resources in this country is quite scarce. Jordan has the fifth lowest annual purchasing power in the Arabian Peninsula after countries such as Iran, Yemen and Palestine.

Company registration in Jordan is quite straightforward, as a company can be opened with one director and one shareholder. The shareholder and director can be of any nationality. Hence from the above, it is seen that company incorporation in Jordan is a straightforward process.

Jordan has established prominent trading agreements with countries such as the USA. The USA-Jordan free trade agreement allows 100% free trade with USA. Businesses can be easily incorporated in Jordan with ease. Due to this free trade agreement, US multinationals are allowed to re-export their products to USA. Hence there are no forms of custom duties and tariffs imposed when these products are re-exported.

The corporate tax levied in Jordan is quite less when compared to other countries in the Middle East. An annual corporate tax of 14% is levied on companies present in Jordan. Under the Jordan Investment Promotion Act (Jordan Investment Promotion Law), industries which are involved in particular sectors such as Tourism and Agriculture have a reduced corporate tax at the rate of 3%. This corporate tax is for a period of 10 years.

Any company that is engaged in production and supply of renewable energy is exempt from paying corporate tax for a period of 10 years. Hence this would be beneficial for an investor going for company registration in Jordan to incorporate a company which deals with renewable energy.

There are more than ten free trade zones present in Jordan. Hence an investor going for company registration in Jordan can benefit from lesser corporate tax if the company is incorporated in this free trade zone. Corporate tax is levied at the rate of 5% and there is no form of VAT charged in this free trade zone.

Exporting products from Jordan is less when compared to neighbouring countries. Apart from this, Jordan has good connectivity through roads channels. Hence an importer can choose different types of transport when importing goods from Jordan.

Benefits of Company Registration in Jordan

The following are the benefits of company registration in Jordan:

• USA Jordan Free Trade Agreement

  Jordan has entered into different free trade agreements with different countries. One of the prominent free trade agreements is with USA. Due to this, US multinationals can re-export goods with minimum amount off tariffs. Investors can secure many benefits from this.

• Corporate Tax

  The corporate tax levied in Jordan is only 14%. This amount of tax is comparatively less when compared to other jurisdictions present in Arabic Peninsular. Under the Jordan Investment Promotion Act (Jordan Investment Promotion Law), industries which are involved in particular sectors such as Tourism and Agriculture have a reduced corporate tax at the rate of 3%. This corporate tax is for a period of 10 years.

• Renewable Energy Companies

  Companies that are engaged in the production and distribution of renewable energy are not taxed for the first 10 years.

• Free Trade Zones

  There are more than ten free trade zones present in Jordan. Hence an investor going for company registration in Jordan can benefit from lesser corporate tax if the company is incorporated in this free trade zone. Corporate tax is levied at the rate of 5% and there is no form of VAT charged in this free trade zone.

Eligible Business Structures for Company Registration in Jordan

The following are the eligible business structures for company registration in Jordan:

• Jordan LLC (WLL)

  A Jordan LLC can be incorporated with minimum one shareholder and one director. The minimum capital required for forming this form of entity is JD 30,000 which has to be divided into indivisible shares with a value of minimum JD 1. The liability of the shareholders and directors of this type of entity is limited to a particular extend. It is quite straightforward to form this type of entity.

• Jordan Public Limited Company

  A Jordan public limited company would be the same as a Joint Stock Company that lists its shares in a public stock exchange. To form this type of entity there is only one shareholder required. Apart from this, a prior agreement must be entered into with the company. The paid up capital for a Jordan Public Limited company must be more than USD 100,000. The liability of the shareholders and directors of this form of entity is limited to a particular extent.

• Branch office

  A branch office which is formed in Jordan is an extension of the foreign parent company. The liability of the branch office comes under the purview of the parent company. A branch office in Jordan is allowed to carry out profit making activities. Annual reports would have to be submitted by this form of company. The foreign parent company must appoint a Jordan representative for forming this type of company. Apart from this, the foreign parent company must also prove that local operations would be carried out in Jordan. Audited financial statements must be filed with the Companies Registrar.

• Jordan Offshore Company

  A Jordan offshore company would only be formed to carry out work related to signing contracts with companies present outside Jordan. To form this type of entity only a basic lease agreement is required. These companies would not have to pay corporate tax and payroll tax. However, such companies have to still file annual financial statements. An investor can go for company registration in Jordan if he wants to form an offshore entity.

• Representative Office

  A representative office which is formed in Jordan is an extension of the foreign parent company. The liability of the representative office comes under the purview of the parent company. A representative office is not allowed to carry out any profit making activities. Only marketing and promotional activities of the foreign parent company can be carried out by the representative office.

Minimum Eligibility Criteria for Company Registration in Jordan

The following eligibility criterion is required for company registration in Jordan:

• Minimum Shareholders

  An applicant going for company registration in Jordan has to appoint minimum number of shareholders. For example, an LLC in Jordan can be formed only with one shareholder. Hence the applicant has to satisfy the requirement for minimum shareholders.

• Minimum Directors

  An applicant must also satisfy the requirements related to directors of a company. An LLC in Jordan would require to have one director. This is the minimum statutory requirement which is required for company registration in Jordan

• Representative

  A foreign parent company would have to appoint a representative to incorporate a branch office or representative office in Jordan. The foreign company must show that the company carries out domestic operations.

• Comply with The Companies Law No. 22 of 1997

  Compliance with respect to’ The Companies Law No.22 of 1997’ must be carried out by an applicant wishing to incorporate a company in Jordan.

Procedure for Company Registration in Jordan

The applicant for company registration in Jordan has to follow the below procedure:

• Name Approval

  First and foremost, the name of the company must be reserved. The name of the company must be in accordance with the companies’ act of Jordan.

• Minimum Capital

  After securing the name of the company, the applicant has to satisfy the minimum capital requirements. This would be stated in the MOA and AOA.

• Deposit Money in Bank

  If the company is opened by a foreign shareholder, then the amount of minimum capital must be deposited. There are specific companies that deposit bonds, such companies have certain amount of exemptions.

• Secure Approvals from the Ministry of Trade and Industry Directorates

  After this step is complete, all necessary approvals must be secured from the Ministry of Trade and Industry Directorate.

• File Application

  Once the application is completed; it must be filed with the respective Documents. After this the ministry would look into the Paper works and if everything is fine they would grant the certificate of incorporation to the applicant.

Compliances for Company Registration in Jordan

The following compliances have to be carried out for company registration in Jordan:

• Shareholders Meeting

  Shareholders meeting must be held at least once a year. All the copies of the shareholders meeting must be filed with the Companies Registrar. This must be carried out within 10 days of having this meeting.

• Agreements

  All agreements such as Joint Venture Agreements have to be registered with the Ministry of Trade and Industry.

• Financial Statements

  All the companies’ records and financial statements have to be filed with the Ministry of Finance.

• Corporate Tax

  Companies established in Jordan would have to file corporate tax at the rate of 14%. However, there are several exemptions for certain companies. For example companies in the renewable sector do not need to pay tax for 10 years.

• Lease Agreement

  As per the laws of Jordan, all companies require to have a lease agreement. This agreement must be valid for a period of 12 months.

• Articles of Association

  As per Jordanian Regulation, the articles of association of the company must be available for public viewing. Information on the shareholders and directors must be present.

Documents Required

The following Documents are required for company registration in Jordan:

• Application Form- Fully Filled:

  • Information on the company

  • Information on the promoters and directors of the company

  • Capital information of the company

  • Any other relevant information pertaining the company.

• Draft Memorandum of Association
• Draft Articles of Association
• Information on shareholders
• Lease Agreement
• Foreign Directors and Shareholders Passport and Visa
• Information on Appointment of Representative.

How Enterslice will help you

Fill The Form

Get a Callback

Submit Document

Track Progress

Get Deliverables