Khaberni - A US report confirmed that the investment environment in Jordan has seen a "notable improvement" during the past two years despite the regional disturbances that have impacted trade and investor confidence. The kingdom has maintained its investment appeal and continued its economic growth, supported by structural reforms and government policies aimed at enhancing the business environment.
According to the "Investment Climate in Jordan for 2025" report issued by the US Department of State, Jordan attracted $1.6 billion in foreign direct investment flows in 2024 and achieved a 2.5% growth rate in gross domestic product.
The International Monetary Fund praised the resilience of the Jordanian economy, and both "Moody's" and "Standard & Poor's" upgraded the economic outlook based on fiscal discipline, diversification efforts, and the continued flow of investments.
The report confirms that these indicators reflect Jordan's ability to overcome regional challenges and maintain its position as an attractive investment destination in the region.
Jordan's economic transformation is based on the "Economic Modernization Vision," which serves as a comprehensive framework for improving the business and investment environment. It is a royal plan targeting to attract $60 billion in investments and create one million job opportunities over ten years, directing investment compass towards established sectors and promising new ones including film industry, high-value industries, information and communication technology, healthcare, tourism, apparel industry, real estate, mining, chemicals, agriculture, and logistics services.
The diversity of free trade agreements Jordan has signed, notably the US-Jordan Free Trade Agreement, gives a competitive edge to manufacturers aiming to enter markets with lower duties. Meanwhile, the well-educated Jordanian workforce proficient in English, especially in engineering and information technology, adds another layer of attraction for investments in technology and professional services.
Since Jaafar Hassan's appointment as Prime Minister in September 2024, the government has adopted a more effective approach to accelerating investment and pursuing major projects, including the national water carrier project, the Aqaba-Shidiya railway, the renewal of the Aqaba container terminal operating concession, the "Marsa Zayed" project, and the establishment of a new phosphoric acid plant.
Amman is betting on streamlining procedures, easing restrictions, and expanding the participation of the private sector in infrastructure, energy, water, and transportation sectors. However, challenges such as bureaucracy, high energy costs, and water scarcity still affect investor confidence, although ongoing reforms aim to mitigate their impacts.
On the level of openness and restrictions, the report acknowledges that public policy supports foreign investment and treats it almost similarly to domestic investments, with restrictions in place to protect national security and support certain local activities.
The legal framework allows American investors to retain full ownership in most sectors under the bilateral investment treaty and the trade agreement, with exceptions in sectors such as aviation, defense, tourism, transportation, media, and entertainment.
The law permits ownership or leasing of property by foreigners for investment purposes and one residential unit for personal use, based on the principle of reciprocal treatment and approvals from competent authorities, with a requirement to develop the land within five years.
In February 2025, the government eased residency requirements for investors by abolishing the requirement to deposit 10,000 dinars for property owners residing for more than two years.
The Ministry of Investment serves as the "comprehensive single window" for providing investor services, accelerating registration and licensing, solving constraints, and addressing grievances through an electronic complaint mechanism.
The law obliges official bodies to decide on registration transactions within 15 working days; otherwise, approval is considered automatic. Note that the practical average in 2023 was seven days with variations between cases.
In 2024, the government launched a simplification package including incentives, exemptions, automation of registration, and linking the ministry's procedures with the Customs Department and the Department of Income and Sales Tax to streamline procedures, and launched the interactive platform "Invest in Jordan" to display opportunities, with a phased plan for broader simplification initially set to start in May 2025.
In Aqaba, the Special Economic Zone Authority implemented amendments in January 2025 to enhance investment and sustainability, including land use policy amendments to support green hydrogen projects and regulations for a fuel station on the south coast to improve logistics services.
Internationally, Jordan relies on a broad network of agreements: bilateral investment treaties with 57 countries or entities, including the European Union, Singapore, and Canada, and trade agreements with the United States and "GAFTA," agreements with "EFTA," Singapore, and Canada, alongside an economic negotiating framework with Turkey after the suspension of the free trade agreement in 2018.
The report highlights investment incentives as a key tool in enhancing the investment environment. The law provides customs and tax exemptions on fixed assets, production inputs, and spare parts, as well as exemptions or reductions in income tax for projects in less developed areas or for projects that employ 250 Jordanians or more for up to five years, with the possibility of granting special incentives by a decision from the Council of Ministers, including preferential pricing of Treasury lands, support for energy and water costs, tax discounts for infrastructure within specific operational deadlines, and incentives conditional on employment targets, local content, and knowledge transfer.
In the information technology and communications sector, Jordan has adopted a targeted incentive package that includes income exemption from service exports until 2033, a 5% income tax for local activities, sales, and customs exemptions on main goods and services, and capital gains profits exemption for startups.
The categorization of development areas (A/B/C) offers varying levels of incentives in favor of less developed areas, and the existing nine industrial cities and special cities provide extensive infrastructure and wide-ranging reductions from construction and land exemptions to municipal fees.
The state manages six general free zones and more than 37 special free zones outside customs jurisdiction with an exempt environment for transit and storage, while the special area of Aqaba retains reduced taxes (income 5%) and customs facilities under a unified tax administration since 2021.
The report observes additional incentives approved by the government in November 2024 for new industrial projects in the Karak and Tafilah industrial zones, including discounts on electricity tariffs between 25% and 80%, 50% support for handling export containers through the Aqaba port for three years, an immediate 20% discount on land purchases, and eased payment terms.
The report describes the Jordanian financial sector as open and flexible; there are no caps on foreign ownership in the Amman Stock Exchange, and non-Jordanian ownership reached 48% of the market value as of February 2025, while the central bank oversees 20 banks with total assets of $99 billion by the end of 2024, characterized by high solvency, high liquidity ratios, stable profitability, and a delinquency rate of 5.6%.
The Jordanian dinar has been pegged to the US dollar since 1995 at 1 dinar per 1.41 dollars, with freedom to transfer profits and capital, despite the absence of an active sovereign wealth fund, although the legal framework permits its establishment.
The report addresses the labor market with official figures: 1.8 million employed individuals aged over 15, 460,000 unemployed, a 33.2% participation rate, and a 21.4% unemployment rate by the end of 2024, with UN estimates of a workforce of 3.3 million. The predominance of informal labor in sectors like agriculture and domestic service could account for up to 41% of the workforce and 15% of output, with non-Jordanians making up 39% of the population. Policies enforce localization quotas and closed professions for Jordanians (28 professions), with a cap on non-Jordanian labor not exceeding 25% of total employees, raised to 40% in the absence of specialized Jordanians.
The tripartite wage committee set the minimum wage at 290 dinars monthly with a review scheduled for December 2027, and a sector agreement for apparel at 230 dinars.
The report concludes by highlighting the role of US development finance institutions; the US Development Agency's portfolio in Jordan amounts to $471 million for projects mostly already implemented in energy and water, with loan guarantees for small and medium enterprises, and includes recent quality loans of $14 million for the "Aqaba Digital Center" to establish a data center and connect international cables, $10 million for "NEF UK" to support refugee programs in Jordan and Lebanon as part of a development impact bond, and $5 million for the company "Liwwa" to support financing for small and medium enterprises.
The report sees Jordan as an "excellent candidate" for further programs in the US Development Agency's portfolio given a specific project list at the Ministry of Investment and Amman's openness to discuss preferential arrangements and link them to US export opportunities.
The report concludes that the investment environment in Jordan is a pivotal element for growth and job creation, strengthened by a mix of legal and regulatory reforms, selective incentives, an extensive network of international agreements, a robust financial sector, and growing protection for property and data, with a clear understanding of the challenges and work to minimize them.
