Khaberni - A U.S. report confirmed that the investment environment in Jordan has experienced a "notable improvement" in the past two years despite the regional disturbances affecting trade and investor confidence. The kingdom has maintained its investment appeal and continued its economic growth, supported by structural reforms and government policies targeting the enhancement of the business environment.
According to the "Investment Climate in Jordan for 2025" report issued by the U.S. Department of State, Jordan attracted $1.6 billion in foreign direct investment flows in 2024 and achieved a GDP growth rate of 2.5%.
The International Monetary Fund praised the resilience of the Jordanian economy, and both Moody’s and Standard & Poor's have upgraded the economic outlook based on fiscal discipline, diversification efforts, and ongoing investment flows.
The report confirms that these indicators reflect Jordan's capacity to overcome regional challenges and maintain its position as an attractive investment destination in the region.
The Jordanian economic transformation is based on the "Economic Modernization Vision," which serves as a comprehensive framework for improving the business and investment environment. This is a royal plan aiming to attract $60 billion in investments and create one million job opportunities over the decade, with investment guidance directed towards established and promising sectors including film production, high-value industries, information and communication technologies, healthcare, tourism, clothing manufacturing, real estate, mining, chemicals, agriculture, and logistics services.
Jordan’s multiple free trade agreements, led by the U.S.-Jordan Free Trade Agreement, provide competitive advantages to manufacturers looking to access markets with lower tariffs. Additionally, Jordan's well-educated and English-proficient workforce, especially in fields like engineering and IT, provides an additional lever to attract technology and professional services investments.
The report indicates that since Jafar Hassan was appointed 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, renewal of the Aqaba Container Terminal concession, the “Marsa Zayed” project, and establishing a new phosphoric acid plant.
Amman is betting on streamlining procedures, easing restrictions, and expanding private sector involvement in infrastructure, energy, water, and transport, although challenges such as bureaucracy, high energy costs, and water scarcity still affect investor confidence, despite ongoing reforms targeting mitigation of these effects.
On the level of openness and restrictions, the report acknowledges that public policy supports foreign investment and treats it almost identically to domestic investment, with restrictions in place to safeguard 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 trade agreement, with exceptions in sectors like aviation, defense, tourism, transport, media, and entertainment.
The law permits foreign ownership or leasing of property for investment purposes and one personal residence based on the principle of reciprocity and relevant authorities’ approvals, with a requirement to develop the land within five years.
In February 2025, the government eased residence requirements for investors by eliminating the condition of depositing 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, expediting registration and licensing, resolving barriers, and addressing grievances through an electronic complaint mechanism.
The law obliges official entities to decide on registration transactions within 15 business days, otherwise, approval is considered automatic, noting that the practical average in 2023 reached seven days depending on cases.
In 2024, the government launched a simplification package including incentives and exemptions and automating registration, linking the ministry's procedures with the Customs Department and the Income and Sales Tax Department for integrated procedures, and launching the interactive platform “Invest in Jordan” to display opportunities, with a phased plan for broader simplification set to initially start in May 2025.
In Aqaba, the Special Zone Authority implemented amendments in January 2025 to enhance investment and sustainability, including changes in land use policies to support green hydrogen projects, and regulations for a fuel station on the southern coast to improve logistical 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, trade agreements with the United States and “GAFTA”, and agreements with “EFTA”, Singapore, Canada, along with a negotiated economic framework with Turkey after suspending the free trade agreement in 2018.
Investment incentives are highlighted 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 income tax exemptions or reductions for projects in less-developed areas or for projects employing 250 or more Jordanians for up to five years, with the possibility of granting specific incentives by cabinet decision including preferential pricing for treasury lands, support for energy and water costs, tax discounts for infrastructure within specified operational deadlines, and incentives conditional on employment targets, local content, and knowledge transfer.
In the information and communications technology sector, Jordan has adopted a targeted stimulus package that includes income tax exemptions for service exports until 2033, a 5% income tax for local activities, sales and customs exemptions on key goods and services, and capital gains tax exemption for startups.
The zoning classification of developmental areas (A/B/C) offers varying levels of incentives to benefit less-developed areas, with the nine existing industrial cities and zones - alongside private zones - providing infrastructure and extensive reductions spanning construction and land exemptions and municipal fees.
The state manages six public free zones and more than 37 private free zones outside customs jurisdiction, providing a tax-exempt environment for transit and storage, while the Aqaba Special Zone maintains reduced taxes (5% income) and customs facilitations under a unified tax management since 2021.
Additional incentives were approved by the government in November 2024 for new industrial projects in the Karak and Tafilah industrial zones, including electricity tariff reductions between 25% and 80%, 50% support for handling export containers via Aqaba port for three years, an immediate 20% discount on land purchases, and facilitated payment terms.
The report describes the Jordanian financial sector as open and flexible; foreign ownership caps do not exist in the Amman Stock Exchange, and non-Jordanians owned 48% of market value as of February 2025. The Central Bank supervises 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 U.S. dollar since 1995 at 1 dinar per 1.41 dollars, with freedom to repatriate profits and capital and no active sovereign wealth fund despite the legal framework allowing its creation.
The report addresses the labor market with official figures: 1.8 million employed individuals over 15 years old, 460,000 unemployed, a labor participation rate of 33.2%, and unemployment at 21.4% by the end of 2024, with UN estimates of a workforce totaling 3.3 million. The predominance of informal labor in sectors like agriculture and domestic service, possible reaching 41% of the workforce and 15% of output, with non-Jordanians comprising 39% of the population. Policies impose localization quotas and closed professions for Jordanians (28 professions), with a maximum non-Jordanian employment cap of 25% of total employees, which can be raised to 40% when no specialized Jordanians are available.
The Tripartite Wage Committee set the minimum wage at 290 dinars per month with a review scheduled for December 2027, and a sectoral agreement for clothing at 230 dinars.
The report concludes by highlighting the role of U.S. development and financing institutions; the U.S. Development Agency's portfolio in Jordan totals $471 million for projects, most of which have already been implemented in energy and water and loan guarantees for small and medium enterprises, with recent specific loans including $14 million for the “Aqaba Digital Hub” to establish a data center and connect international cables, and $10 million for NEF UK for refugee support programs in Jordan and Lebanon within a developmental impact bond, and $5 million for Liwwa to support financing for small and medium enterprises.
The report views Jordan as an "excellent candidate" for further programs from the U.S. Development Agency's portfolio given a list of specified projects at the Ministry of Investment, and Amman's openness to discussing preferential arrangements tied to U.S. 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, a broad international agreements framework, a robust financial sector, and enhanced protection for property and data, with clear recognition of challenges and efforts to mitigate them.
