As part of the Jordanian government's package for economic reform, the Jordanian parliament passed a new law regulating and promoting investment in the country. The Investment Promotion Law No. 16 of 1995 ("Law No. 16")was issued late last year to coincide with the Middle East/North Africa Economic Summit held in Amman, Jordan, between 29 October and 2 November 1995.

Law No. 16 replaces a complex and interrelated sets of rules that used to regulate investments of both Jordanian nationals and Arab and foreign nationals. Regulations implementing Law No. 16 were issued in January 1996 dealing with issues such as non-Jordanian ownership of investment projects and incentives accorded to those projects falling under new legislation.

One of the main reforms in Law No. 16 is that it abolishes all provisions that discriminate between Arab and non- Arab investors. Moreover, the Law recognizes the jurisdiction of the International Centre for Settlement of Investment Disputes ("ICSID") over disputes between agencies of the Jordanian government and foreign investors. A draw back that persists in the new law, however, is the fact that it still places restrictions on non-Jordanian ownership in certain sectors such as banking and telecommunications.


Generally, a foreign investor may own up to 100% of an investment project,, except in certain enumerated areas, in which total foreign ownership may not exceed 50%. These restricted areas are:

1. Land and air transportation;
2. Construction contracting
3. Commerce and commercial services;
4. Banking and insurance;
5. Telecommunications;
6. Mining;
7. Agricultural produce;
8. Investment in the Amman Financial Market except in initial public 
   offerings where subscriptions by non-Jordanians exceed 50% at the 
   time of such offering, in which event the maximum foreign  
   ownership would be that which is initially subscribed by 

On the other hand, if an investor were to invest in a hotel, hospital or manufacturing plant, such investor's ownership may reach 100% of the total invested capital.

Law No. 16 also requires a minimum investment by a foreign investor of Jordanian Dinars 100,000 (approximately US$141,000). The only exception to this rule is in investments made on the Amman Financial Market where the minimum investment by a foreign person is JD 1,000 (approximately US$1,410). The foreign investor's participation in the equity of a project must be transferred into Jordan in hard currency through the banking system.


Law No. 16 provides for the establishment of the Investment Promotion Corporation ("IPC"), a specialised government agency that would oversee investment in Jordan, promote Jordan as an investment hub, grant incentives to projects that qualify under Law No. 16 and recommend amendments to laws affecting the investment climate in the country. The IPC aims at assisting investors (especially foreigners) in setting up their investment vehicles and obtaining necessary permits, and grants investors certain incentives offered pursuant to Law No. 16.


Under Jordanian law, foreign investors may set up any type of company that is available under the Companies Law, provided that they abide by the ownership restrictions outlined above. The most common forms used by investors, however, are public shareholding companies ("PLCs") and private limited liability companies ("LLCs"). The main difference between PLCs and LLCs are that (i) The number of shareholders in an LLC may not excced 50 while it is not limited in PLCs, (ii) shares of PLCs are listed and traded on the Amman Financial Market, and (iii) LLCs may not borrow through issuance bonds, debentures, or, notes, while PLCs may issue securities to the public for the purpose of raising funds.

Naturally, in both forms of companies the liability of a shareholder/investor is limited to the shares held in the investment vehicle.


Once established in Jordan, foreign investment vehicles are treated as Jordanian companies, irrespective of the percentage of equity held by non-Jordanians. Foreign investors or their employees who need to take residence and/or work in Jordan are granted the necessary permits as a routine matter.

This article is prepared for the general information of interested persons. It should not be acted upon in any specific situation without appropriate legal advice.