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Since King Abdullah II’s 1999 ascension to the throne, Jordan has taken steps to encourage foreign investment and to develop an outward-oriented, market-based, and globally competitive economy. Jordan has also positioned itself as a platform to host investments focused on the reconstruction of Iraq and other projects in regional markets.
Jordan’s economic growth has been limited, constrained for over a decade by exogenous shocks, including energy disruptions during the 2011 Arab Spring, the 2015 closure of Jordans borders with Iraq and Syria, the ongoing Syrian civil war, and the COVID-19 pandemic. Although the borders with Iraq fully and Syria fully reopened in 2017 and 2018 respectively, cross-border movements have not recovered to previous levels. Jordan experienced 2.7 percent GDP growth in 2022 and IMF projections estimate growth of 2.7 percent in 2023. Foreign Direct Investment (FDI) dropped slightly by 1.5 percent to JD 509.8 million ($720 million) in 2020 compared to 2019 and reached JD 325 ($459 million in 2021. FDI picked up in 2022 and outperformed 2019 levels standing at JD 629.3 million ($888.8 million).
Jordan is committed to attract investment as a driver of economic growth and job creation, though in practice investment promotion policies are implemented unevenly. Traditionally, foreign investment has been concentrated in the energy (from both conventional sources and renewables), tourism, real estate, manufacturing, and services sectors. In 2022, the Royal Hashemite Court Launched the Economic Modernization Vision aimed at advancing economic growth through an improved investment environment. The vision targets attracting $60 billion in investments and creating one million jobs over the next decade. May 2023, The Ministry of Investment announced its “Investment Promotion Strategy” for 2023-2026 and identified film making, high value added industries, Information and communication technology, health care, tourism, real estate, mining, chemicals, agriculture and logistics as priority areas.
In 2021, Jordan established a dedicated Ministry of Investment, which absorbed the duties of the Jordan Investment Commission and the Public Private Partnerships (PPP) Unit. The Minister of Investment is charged with all issues related to local and foreign investors and setting policies to stimulate investment and enhance competitiveness.
In October 2022, Jordan passed the Investment Environment Law No. 21 of 2022, which came into effect in January 2023, to replace the Investment Law No. 30 of 2014. This law was intended to create an investment‑friendly environment and attract more investment. It reaffirmed that non-Jordanian investors shall be treated like Jordanian investors and expanded the number of sectors able to benefit from incentives, provided the activity met certain criteria.
The new law stipulated three sets of incentives. Incentives are tied to certain criteria such as job creation and women’s employment, export activities and expertise, technology transfer, and/or geographical location. Incentives must be approved by the Council of Ministers based on the Incentives and Exemptions Committee’s recommendations.
The law also liberalized companies’ ability to employ foreign labor. Companies can hire non-Jordanians in administrative and technical jobs that require specialized skills at a rate of no more than 25 percent of the total number of employees, and the percentage may be increased up to 40 percent if qualified Jordanian labor is not available.
Despite these improvements on doing business indicators facilitating investment and business operations in Jordan, operating in Jordan can be more difficult than elsewhere in the region. U.S. investors specifically cite instability in the tax regime and incentive packages as a key challenge, as well as public-private interface issues including the government’s inconsistent interpretation of its policies and regulations.