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1.1.1. Main Forms of Doing Business

Jordan provides several business forms for investors, of which the main forms include:

  • Company (Limited Liability or Public Limited or Private Shareholding)
  • Offshore Company
  • Non-Operating Foreign Company
  • Partnership (General, Limited or Limited Partnership in Shares)
  • Foreign Business(Subsidiary or Branch or Representative Office)

Company

Companies can be formed either as Limited Liability Companies (‘WLL’) or as Public Limited Companies (‘PLC’) or as Private Shareholding Companies.

The key aspects of Limited Liability Company include:

  • Shareholders’ liability is limited to their contribution in the company
  • Minimum capital requirement is JOD 30,000
  • Minimum 1 shareholder (with prior agreement from appropriate authority) and in other cases at least 2 shareholders, of any nationality, are required
  • Foreign shareholders are permitted, subject to certain conditions, in case they invest in restricted sectors. Further they are required to contribute minimum USD 70,650 to company’s share capital and enter into a joint venture with resident partner
  • Minimum 1 director, of any nationality, is required and need not be a resident in the country
  • Mandatory to appoint licensed auditor and submit audited financial statements to relevant authority
  • Not permitted to offer shares to the public

The key aspects of Public Limited Company include:

  • Minimum capital requirement is USD 100,000
  • Minimum 1 shareholder (with prior agreement from appropriate authority) and in other cases at least 2 shareholders, of any nationality, are required
  • Foreign shareholders are permitted, subject to certain conditions, in case they invest in restricted sectors, further they are required: to contribute minimum USD 70,650 to company’s share capital and enter into a joint venture with resident partner
  • Company is allowed to offer shares to the public provided: a) Minimum authorized share capital is USD 700,000 and 25% of such capital is offered to the public; b) Board of Directors have at least 3 members and half of them are independent from the company
  • Mandatory to suffix ‘Limited Public Shareholding Company’ in the company name

The key aspects of Private Shareholding Company include:

  • Shareholders’ liability is limited to their contribution in the company
  • Minimum capital requirement is JOD 50,000
  • Minimum 1 shareholder (with prior agreement from appropriate authority) and in other cases at least 2 shareholders, of any nationality, are required
  • Mandatory to have Board of Directors
  • Mandatory to suffix ‘Private Shareholding Company ‘LTD’ in the company name

Offshore Company

An offshore company (or exempt company) can be a public company, private company or a partnership limited by shares in Jordan but operating outside of Jordan region.

This entity cannot offer its shares for public subscription in Jordan, and is prohibited for resident customers to subscribe to its capital. At least 5% of the capital of the offshore company must be invested in Jordanian securities. The offshore company engaged in insurance, banking, finance or joint investments, is required to have minimum capital of JOD 1,000,000.

Offshore companies are eligible for certain tax benefits (See sec. 10).

Non-Operating Foreign Company

A ‘Non-Operating Foreign Company’ is an entity which has regional or representative office in Jordan and is permitted to conduct activities / operations with entities based outside of Jordan. It is set up mainly as an operating headquarters for managing operations outside Jordan and for receiving foreign-sourced income. It is not permitted to carry out business or commercial activities in the country. Minimum 1 director, of any nationality, is required and need not be a resident in the country.

Partnership

Partnerships can be formed as general partnership or limited partnership or as limited partnership in shares.

The key aspects of General Partnership include:

  • Minimum 2 partners and not more than 20 partners are required
  • Minimum capital requirement is JOD 1,000 for resident partner and JOD 50,000 for foreign partner
  • All partners are jointly and severally liable for the partnership debts

The key aspects of Limited Partnership include:

  • Minimum 2 or more partners are required
  • It consists of general partners and limited partners
  • Liability of the general partners is unlimited
  • Liability of the limited partners is limited to their contribution in the capital
  • Limited partners cannot participate in the management of the partnership firm

The key aspects of Limited Partnership in Shares include:

  • Minimum 2 or more general partners and 3 or more limited partners are required
  • General partners are jointly and severally liable for its debts and limited partner’s liability is limited to their share in the partnership equity
  • Minimum capital requirement is JOD 100,000
  • Shares can be issued to the public for subscription but cannot not exceed twice the general partner's capital in the partnership firm
  • Partners need not be individuals
  • Mandatory to suffix ‘Limited Partnership in Shares’ in the firm’s name

Foreign Business (Subsidiary, Branch, Representative Office)

Foreign companies can conduct their operations in Jordan through the constitution of a subsidiary, branch office or a representative office. A Subsidiary can be formed as a WLL or a PLC with 100% foreign holding, subject to certain restrictions.

Branch office can be set up in Jordan provided it is necessary for the execution of a contract with a Jordan customer. The branch office is required to appoint a resident representative on behalf of the foreign parent company in Jordan. It is also required to file its audited financial statements with the Company’s Registrar and publish its audited financial statements in 2 daily Jordanian newspapers. Branch office is required to renew its license every 2 years.

Representative Office (See ‘Non-operating Foreign Company’ above)