Investing In Jordan: Introduction & Opportunities

With economic growth set to double in the next five years, we explain why Jordan is increasingly attractive as a business and trade gateway between Europe and the Middle East

By Shrakat Advisory Consulting

Jordan is located in the heart of the Middle East with a population of approximately 10.5 million and a Gross Domestic Product (GDP) of $45.5 billion (2022). In recent years, Jordan has emerged as a prime destination for foreign investors looking for economic growth, stability, and sustainable development.

Thanks to its high human resources base, Jordan has been able to attract foreign investors seeking to benefit from its strong economic and strategic ties to the MENA region and the world. Furthermore, with a focus on renewable energy and clean technology, Jordan is at the forefront of sustainable development, making it an attractive investment opportunity for those seeking socio-economic growth.

According to Jordan’s Economic Strategy 2025, Jordan aims to double the country’s economic growth over the next few years. This is supported by a modern infrastructure, an investor-friendly environment, political stability, and security. As a result, the Jordanian economy offers foreign investors a highly skilled workforce, abundant employment opportunities, and lucrative investment incentives.

Moreover, Jordan is a major tourist destination in the Middle East, attracting visitors from all over the world with its medical, entertainment, and historical tourism. This diverse economy adds to the country’s appeal and makes it an excellent foreign investment opportunity. In line with its commitment to economic growth, Jordan’s Vision 2025 aims to gradually increase the country’s economic growth from 6.5% in 2021 to 7.5% in 2025. The government has taken bold steps to reduce red tape and bureaucracy, upgrade its economic legislation framework, and streamline economic judicial transactions. These efforts have made Jordan an attractive investment destination for those seeking to align with the country’s growth trajectory.

Maritime & Overland Access

Aqaba Port

Jordan’s main Sea Port is Aqaba, situated in southern Jordan on the north shore of the Gulf of Aqaba. It can accommodate ships handling a wide variety of cargo with a capacity of 20 million tons. The port also has a separate passenger terminal, which services cruise and passenger ships and is the second busiest in the Red Sea region.  To the south, Aqaba empties into the Red Sea and ultimately the Persian Gulf.

In terms of overland access, Jordan has one border crossing with Iraq, three with Israel, two with Syria and three with Saudi Arabia. All provide freight services.

Investment Incentives

Jordan’s Investment Law offers enticing incentives and benefits to foreign investors, including exemption from custom duties, general sales tax, and in some cases, reduction in income tax. Foreign investors also enjoy national treatment, free movement of capital, protection against expropriation, and options of resort for alternative dispute settlement mechanisms. This policy has made Jordan one of the most attractive destinations for foreign investment in the Middle East.

The Investment Window provides facilitated registration and licensing services, as well as support in obtaining visas and residency permits for investors, their families, and employees. This service makes it easy for investors to set up and operate in the country. Jordan also allows unrestricted capital transfers and repatriation of profits, making it an ideal investment destination for those seeking flexible investment options.

Jordan’s strong track record of economic stability and security, combined with its commitment to providing a business-friendly environment, make it a compelling choice for foreign investors seeking to expand their portfolios. With 117 nationalities owning companies in Jordan’s industrial and service sectors, and foreigners owning 5% of shares of publicly listed companies on the Amman Stock Exchange, foreign investment is thriving in the country.

Free Trade Agreements

Jordan has a Free Trade Agreement with the United States, which entered full implementation in January 2010.  Since the FTA’s inception, bilateral trade in goods and services has reached US$5.174 billion in 2021.

In addition to the United States, Jordan is also party to bilateral trade agreements with Canada and Singapore. In terms of Europe, Jordan is part of the European Free Trade Association, which includes Norway, Switzerland, and Liechtenstein.

Regional access is provided by the Greater Arab Free Trade Agreement (GAFTA), which includes Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, UAE, and Yemen.

Jordan is also a signatory to the Aghadir Agreement (Egypt, Morocco, Tunisia) which is connected to the EU Association Agreement.

Why Invest in Jordan?

Strategic Location

Jordan is located in the heart of the Middle East, providing easy access to the region’s major markets and transportation hubs.

Power fact: Jordan has free trade agreements with the US, Canada, the EU, and other countries, giving investors access to over 1.5 billion consumers.

Skilled Workforce

Jordan has a highly educated and skilled workforce, with over 40% of the population holding a bachelor’s degree or higher.

Power fact: Jordan ranks 3rd in the Arab region and 63rd globally in the World Economic Forum’s Human Capital Index 2020.

Economic Stability

Jordan has maintained a stable economic environment for decades, with a credit rating of B+ from Standard & Poor’s.

Power fact: Jordan’s economy grew by 2.7% in 2022, compared to 1.9% in 2019.

Investment Incentives

Jordan’s Investment Law offers a range of incentives and benefits to foreign investors, including tax exemptions and a streamlined registration process.

Power fact: Jordan is ranked 75th out of 190 economies in the World Bank’s Ease of Doing Business 2020 report.

Access to Finance

Jordan has a well-developed financial system with access to various sources of financing, including venture capital and private equity.

Power fact: Jordan has a well-developed banking system, with over 26 banks operating in the country, including several international banks. In addition, the Central Bank of Jordan has established a credit guarantee scheme to support small and medium-sized enterprises (SMEs) in accessing financing.

Infrastructure

Jordan has a modern infrastructure, including a world-class transportation network, state-of-the-art telecommunications systems, and a reliable electricity supply.

Power fact: Jordan has invested over $1 billion in renewable energy projects, making it a leader in the region’s transition to clean energy.

Industry Clusters

Jordan has developed industry clusters in key sectors such as ICT, pharmaceuticals, and tourism, providing investors with a supportive ecosystem.

Power fact: The Kingdom now ranks 49th on the Global Entrepreneurship Index (GEI) and has more than 25 business incubators, accelerators, and creative centers. It is estimated that 98 percent of ICT companies in Jordan are SMEs.

Free Trade Zones

Jordan has established several Free Trade Zones, providing investors with duty-free access to regional and global markets.

Power fact: Jordan currently has more than 30 Free Zones throughout the country, each offering a range of investment incentives and benefits to local and foreign investors.

Natural Resources

Jordan has abundant natural resources, including minerals and water, providing investors with lucrative investment opportunities.

Power fact: Jordan is the world’s second-largest producer of potash, with over 20% of global reserves.

Quality of life

Jordan offers a high quality of life, with a rich history, diverse culture, and stunning natural scenery.

Power fact: Jordan has a relatively low crime rate compared to other countries in the region, making it one of the safest countries in the Middle East.

Sectoral Investment Opportunities

Amman City

Below are the top potential sectors for investments that have a great potential for international investors:

Renewable Energy

Jordan has set a target to generate 20% of its energy from renewable sources by 2025, making it an attractive destination for renewable energy investments. The country offers a supportive regulatory framework and an abundance of natural resources, such as wind and solar power. With the development of large-scale renewable energy projects and incentives for investment, the sector offers opportunities for investors to enter the market and contribute to Jordan’s sustainable development. International companies investing in this sector in Jordan include Masdar, Enviromena; and AES Jordan.

Healthcare

Jordan has a well-established healthcare system, with a highly skilled workforce and modern medical facilities. The country offers an attractive environment for healthcare investments, with a growing demand for private healthcare services and a supportive regulatory framework. The healthcare sector in Jordan presents investment opportunities in various areas, including pharmaceuticals, medical devices, and healthcare services.

International companies investing in this sector in Jordan include Novartis, Sanofi, and Philips.

Information and Communications Technology (ICT)

Jordan has a highly skilled and educated workforce, making it an attractive destination for ICT investments. The country offers a supportive regulatory framework, a growing demand for digital solutions, and a strategic location at the crossroads of Asia, Europe, and Africa. The ICT sector in Jordan offers investment opportunities in various areas, including software development, outsourcing, and cloud computing.

International companies investing in this sector in Jordan include Microsoft, Cisco, and Orange.

Education

Jordan has a well-developed education system, with a growing demand for private education services. The country offers an attractive environment for education investments, with a supportive regulatory framework and a growing market for vocational training and language services. The education sector in Jordan presents investment opportunities in various areas, including private schools, universities, and vocational training centers.

International companies investing in this sector in Jordan include Laureate International Universities, GEMS Education, and K12 Inc.

Tourism

Jordan is a popular tourist destination, with a rich cultural heritage, diverse natural landscapes, and modern tourism infrastructure. The country offers an attractive environment for tourism investments, with a growing demand for adventure and ecotourism activities, and a supportive regulatory framework. The tourism sector in Jordan presents investment opportunities in various areas, including hotels and resorts, transportation infrastructure, and tourist services.

International companies investing in this sector in Jordan include Hilton Hotels, Marriott International, and Royal Caribbean International.

Main Import & Export Items 

Jordan’s import and export trade is diverse, however according to the OEC, Jordan’s main imports include Automotive, Petroleum Products, Gold, and Broadcasting Equipment from China, Saudi Arabia, the United Arab Emirates, United States and Turkey. Jordan’s increasing energy imports are fueling a manufacturing boom into other sectoral areas.

Jordans top exports are Potassic Fertilizers, Knitted Garments, Calcium Phosphates, Phosphoric Acid and Packaged Medicaments, exporting mostly to United States, India, Saudi Arabia, Iraq,  and China.

In 2021, Jordan was the world’s biggest exporter of Phenol Derivatives. Phenol and its chemical derivatives are essential for production of polycarbonates, epoxies, Bakelite, nylon, detergents, herbicides such as phenoxy herbicides, and numerous pharmaceutical drugs.

We are grateful to Shrakat Advisory Consulting (SAC) for this article.

For trade investment research, legal, tax and operational establishment, and business advisory services in Jordan please contact them at info@shrakatconsulting.com or visit them at www.shrakatconsulting.com

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