What is Company Registration in Jordan?
Jordan is classified as emerging market. It is an emerging knowledge economy. The main obstacles of Jordan Economy are scarce of water, high dependency on import of oil for energy and regional instability as well as country is home to a large number of refugees had further stress on the Government finance in recent years. Irrespective of problems, an area like agriculture, fishing and forestry, telecom, transport, media, services & tourism are well explored and contributing highest portion in economy of nation. But still the area required more on more technical and technological support to explore it well in proper & optimum utilization of resources. The country is classified as an upper middle-income country by World Bank. The Jordanian market is considered one of the most developed Arab Market outside the Persian Gulf States. The Judiciary is generally independent but the king is ultimate authority. For few of years it has been observed the Government of Jordan is facing the persistent bureaucratic obstacles and delays therefore the government has carried out in recent years has helped businessman for business formation and operation more efficient and dynamic. So it is advisable to do business/trade in Jordan.
Business Form & Structure in Jordan
Therein Jordan basically three forms of business is available, first sole proprietorship (or self-employed), partnership (two kinds i.e. general and limited) and registered a company. A company is a legal entity separate from its shareholders, having its own rights and commitments. The minimum requirement for company formation in Jordan is to draft Articles and Memorandum of Association (AOA & MOA), which contains details of company purpose and its shareholders. It has to be drawn up in order to get the company registered before it can start operating. In Jordan, all companies are governed by the Companies Control Directorate which administers the Companies Law and its 2006 amendments.
Company Registration Procedure in Jordan
To register a business, applicants have to contact the Companies Control Directorate (CCD).
Sole Proprietorship has to be registered with Ministry of Trade and Industry, Central Trade and Industrial Regulation Directorate. Prior to fill the form check and make sure that the trade name applicant want to register is not already taken
Company registration takes place at the CCD at the Ministry of Industry and Trade, and the process governed by the Companies Law. Procedure to register an operating company, most popular Limited Liability Company (LLC) is described as below:-
Step 1: Before application, check if any special licensing is required for business/ trade, as per applicable law. Then Application form filled and signed in front of the concerned official, notary public, or lawyer has to fill to CCD (both Online and offline facility available). Applicant can get a letter for the Bank.
Step 2: Open a bank account and deposit at least 50% of their capital contribution. To open a bank account along with letter from CCD, applicant has to submit ID card, Memorandum of Association (MOA) and Article of Association (AOA) and Power of Attorney (POA) only if the partners are not present. The capital contribution is 1 JD or more for an LLC company and not less than 50,000 JD for a shareholding company as per the governing law.
Step 3: Register the company at CCD with documentary support of ID card, Duly completed application for company registration, MOA & AOA (standard form given in CCD is often used) and proof of 50% capital deposit from bank. The applicable registration fee of 0.002 (2/1000) of the capital of the company or 250 JD, whichever is greater, is charged by department. Moreover stamp fees of 0.003 (3/1000) of the capital of the company and fee for publication in the official gazette is 15 JD will be charged to applicant. Further 20JD and 10JD is charges to applicant as filing fees and fees for registration certificate.
Step 4: After Registration certificate, applicant is required to obtain taxpayer identification number (TIN) and register for VAT (with Jordanian Income and Sales tax act).
Step 5: Register with Chamber of Commerce or Industry
After incorporation and registration with Direct and Indirect tax of country, applicant is required to get registration from Jordan chamber of commerce or industry. For this instances, the applicant has to produce Certificate of registration from Ministry of trade and commerce, MOA and AOA, original lease agreement of workplace premises, copy of ID of company’s authorized signatory and letter from general manager requesting registration. The registration fees charged by chamber of commerce and industry vary from function as well as capital of company.
Step 6: obtain a vocational license from the relevant municipality. Another obligation to be discharged from applicant end is to get licenses providing the documents to relevant authority like valid occupancy permit issued by Greater Amman Municipality (GAM), planning location map issued by GAM, company’s certificate of registration, Copy of property deed or lease agreement from the landlord and certificate of registration with either chamber of commerce and industry along with applicable fees (around 200 JD can vary depending on company type)
Step 7: After above registration, still applicant is left with one registration i.e. registration for social security at the social security office. To obtain registration, applicant should provide ID or POA, the company’s certificate of registration (from CCD), vocational license (from GAM) and employment contract.
Taxation in Jordan
The tax year in country in January to December (i.e. Calendar Year). Any person either individual, firm or corporate have to file income tax return based on their books and income calculated as per Income tax act applicable in country. Generally the corporate tax rate is 20% in Jordan. Talking concern on Indirect Tax, VAT at standard rate of 16% is applicable on sale/purchase transaction of company, ultimately collected from end users. However the rate can vary for luxurious item in Jordan.
The country perspective and improving government initiation and resources available in country, has tremendous opportunity for investment and its significant return. The people across the globe are positive on investment in this country as it has already stand a good trend of growth despite of several problems and limited access on resources. It is good to have corporate or other form of possible presence in Jordan for significant growth and return.