Setting Up a Company in Jordan as a Non-Jordanian Investor: Ownership Limits, Restricted Activities and Investor Rights

The firm regularly receives the same questions from Arab and foreign investors: can I own the company outright, do I need a Jordanian partner, and which company form suits me? The answer depends on the economic activity, so the first step is always to define the activity precisely and check it against the statutory restrictions.

The general rule: equality and freedom to own

Jordan's investment policy rests on equality between Jordanian and non-Jordanian investors (Article 3(a), Investment Environment Law). An investor may invest through full ownership, partnership or shareholding in any economic activity except those restricted by regulation (Article 5(a)). Banking, money exchange and regulated professions fall outside the Law's definition of economic activity and have their own rules (Article 2).

Activities capped below 50% foreign ownership

Non-Jordanians and entities registered abroad may hold less than 50% in specified activities (Article 11, Investment Environment Regulation), including retail and wholesale trade (with a ministerial exception for the investor's own products), engineering services, construction contracting, brokerage, commercial agency, food and beverage services (except tourist restaurants and hotels), several maritime and air transport services, and road transport services including passenger and goods transport. The Cabinet may ease these limits on a reasoned recommendation of the Minister (Article 12).

Activities closed to foreign ownership

Non-Jordanians may not own any share in activities such as stone sawing, investigation, security and private guarding services, customs clearance, firearms and ammunition trade, private shooting ranges, fireworks and bakeries, as well as crafts specified by instructions (Article 13).

Where the limits do not apply

• Project companies under the Public-Private Partnership Law, public shareholding companies, and activities registered before the Regulation took effect (Article 10).
• A foreign-registered company at least 50% owned or controlled by Jordanian individuals may set up a Jordanian company owning the project in any proportion, unless other legislation restricts it, subject to annual disclosure to the Companies Controller (Article 12 bis).

Investor rights

• Currency conversion and transfer of funds in and out of Jordan without delay, in accordance with applicable law (Article 5(b)–(c)).
• Employing non-Jordanians in specialised administrative and technical roles up to 25% of staff, rising to 40% where Jordanian labour is unavailable (Article 5(e)).
• Protection from expropriation except by law, for a public purpose and against fair market-value compensation (Article 6).
• Incentives including customs exemption for fixed assets and production inputs (Article 9) and income-tax exemption or reduction for projects in less-developed areas or employing at least 250 Jordanians (Article 10).

Choosing a company form

The Companies Law provides for general partnerships, limited partnerships, limited liability companies, venture capital companies, public shareholding and private shareholding companies (Article 6, Companies Law). The limited liability company is the usual choice for small and medium projects: it has separate assets, partners are liable only to the extent of their shares, a single-member LLC may be registered with the Controller's approval (Article 53), and the minimum capital is set by regulation (Article 54).

Practical steps before incorporation

• Define the activity precisely and check whether it is capped, closed or fully open.
• If capped, document the relationship with the Jordanian partner in a clear shareholders' agreement covering management, profits and exit.
• Check the sector regulator's licensing (for example, the Land Transport Regulatory Commission for transport); company registration does not replace it.
• Prepare duly legalised documents for foreign shareholders.

This is general information based on the texts in force at publication; confirming a specific activity and its licensing requires a review of the case.

This content is general information and does not replace advice on your circumstances.

← All articles and guides