What projects are JIB currently working on?
We have a number of initiatives that seek to enhance the country’s attractiveness to investors by creating the right business environment, making information available and ensuring that investors are aware of the possibilities. For example, the National Investment Strategy (NIS) is a comprehensive strategy with the goal of transforming Jordan into a regional hub for business and investment by promoting domestic and international investment in Jordan, building linkages amongst Jordan’s different regions, private and public organizations and investors, and opening all economic sectors to FDI.
The Investment Map Project is a comprehensive country analysis of all Jordan’s regions with sectoral market assessment. Pre-feasibility studies have been conducted and will be promoted as investment opportunities. Information is also made available through the Investment Intelligence project, which entails developing market and country-specific intelligence packs based on a study that identified primary target markets for JIB promotion strategy.
The Branding Project aims to maximize exposure to the market through market research, advertising, direct mail, online marketing, events, seminars, conferences and opening of representative offices in different countries.
What incentives are available to investors in Jordan and do these differ for foreign and local investors?
Under the investment promotion law a number of incentives are offered. These include income tax breaks for 10 years, the percentage of which depends on the location of the facility; customs duties and sales tax exemptions on all fixed assets; and capital and production goods are exempted from customs duties and sales tax. The investment promotion law also guarantees national treatment to foreign investors.
There are however some restrictions on foreign ownership in some sectors. For example, the law allows 100% foreign ownership in industry and restricts foreign ownership to 50% or 49% in a number of commercial, services and transport activities. However exemptions can be granted based on national interest.
How do these incentives serve to make Jordan more competitive?
These incentives provide facilities to investors in terms of guaranteed rights and reduced government procedures, but most importantly they reduce the cost of doing business, thus contributing to making Jordan an attractive investment destination, particularly in comparison to other countries in the region.
How does the new Investment Law draft, introduced in 2006, serve to enhance the investment environment in Jordan and encourage foreign direct investment?
The 2006 new Investment Law draft includes a number of issues that had not been addressed in any of the previous relevant legislations. It places JIB as the comprehensive reference point for investors, and one that follows up on all matters pertaining to investment, from promoting Jordan to obtaining necessary licenses and permission. The new law also offers a more harmonized scheme of fiscal incentives, and lays the legislative foundation for the ‘One Stop Shop’ service.
The law also gives the Council of Ministers authority to determine the sectors and economic activities that will benefit from incentives and exemptions according to regulation and economic development needs. It expands the definition of fixed assets to include all that is necessary for an investment project to exercise its activity, and gives a clear definition of fixed assets. This is just a glimpse of what the new law stipulates.
Are investment policies export-oriented or focused on import replacement?
They are particularly export-oriented in order to take advantage of Jordan’s many trade agreements, particularly for the purpose of catering to the needs of the region in products and services.
What is the effect of local investment policies on job creation?
The Investment Promotion Law promotes sectors that are crucial to Jordan’s economic development, particularly in terms of job creation. In addition, the law gives the possibility of granting additional incentives to projects that particularly contribute to the creation of job opportunities.
What sectors is investment promotion focused on?
The Investment Promotion Law grants exemptions to a number of sectors, namely to industry; agriculture; hotels; hospitals; maritime transport and railways; leisure and recreational compounds; convention and exhibition centers; transporting and distributing water, gas and oil; call and contact centers; and research and development.
What challenges is Jordan facing in encouraging foreign investment?
The unrest in the region remains the biggest challenge to Jordan in its efforts to attract investment.
Are any measures being put in place to encourage investment among small and medium businesses?
If so, what are these? Yes, the JIB supports small and medium enterprises (SMEs) through a number of programs. The Investment Promotion Unit (IPU) was established in 1999 within the JIB as part of the UNIDO Integrated Program for Jordan, to identify business opportunities, promote direct interaction between Jordan and foreign entrepreneurs and build the capacity of JIB with respect to attracting investment. The IPU provides many services to SMEs, which include identification of their needs at the company level, formulating project portfolios of investment opportunities and promoting selected investment opportunities through the UNIDO network. It also offers training on marketing and quality production, facilitates exposure to international markets, and provides assistance in negotiations of industrial cooperation agreements with foreign partners.
Also, through the MENA-OECD Investment Programme Jordan, along with other MENA countries, works with the OECD (Organization for Economic Cooperation and Development) to support SMEs, particularly through promoting policies for financial sector and enterprise development in support of diversification and the Enterprise Financing Network. JIB has four representative offices outside Jordan: UAE, Qatar, Kuwait and China. Other international offices will follow.