Everything you need to know to set up an operating company with a bank account.
There are prison terms for disclosing customer bank details to third parties (and possibly fines).
Banks are partially subject to strict customer due diligence regulations (old FATF recommendation 5 / new FATF recommendation 10).
Banks are largely required to maintain sufficient records of their customer and transaction data for law enforcement (old FATF recommendation 10 / new FATF recommendation 11).
Banks and / or other covered entities are NOT required to report large transactions in currency or other monetary instruments to designated authorities.
A limited liability company in Jordan can be formed with a single shareholder, with the prior agreement of the Commissioner of Business Registration. While shareholders can be of any nationality, foreigners i) must make a minimum share capital contribution of US $ 70.650 and ii) must enter into a joint venture agreement with a Jordanian partner, if investing in restricted sectors.
The Jordanian LLC will be managed by at least 1 director, who can be of any nationality and place of residence. The company will also need to i) have its annual financial statements audited by a licensed auditing firm and ii) file them with the Jordanian Registrar of Companies by April 30.
A Jordanian corporation only requires i) 1 shareholder, with the prior agreement of the Commissioner of the Registrar of Companies and ii) a paid-up share capital of at least US $ 100.000. Foreigners can establish a PLC in Jordan, but i) they must pay at least US $ 70.650 to the company's share capital and ii) they will be required to form a joint venture with a Jordanian citizen, if they invest in restricted sectors.
Public limited companies are not required to be listed in Jordan. To do this, a PLC must i) increase its authorized share capital to US $ 700.000, of which at least 25% must be listed on the stock market and ii) appoint a board of at least 3 directors, half of which must be independent of the company.
The Jordanian offshore company can only operate and sign contracts with entities based outside of Jordan and can only be registered by foreign corporations and individuals. Hereinafter, this business entity is commonly used by foreign entrepreneurs as i) an operational headquarters for their operations in the Middle East and / or ii) to receive income from foreign sources, since such company can open a non-resident corporate account in Jordan.
Setting up an offshore company in Jordan only requires signing a lease in Jordan. If employees are hired, 50% of them must be Jordanian. While Jordanian offshore companies are still required to submit audited financial statements, they do not pay i) corporate taxes and ii) payroll taxes and social security contributions on the wages of foreign employees.
Our clients who establish an offshore company in Jordan generally do so to reduce taxes on foreign-sourced earnings, as this business entity enjoys 100% exemption from i) corporate taxes and other taxes levied on corporate earnings and ii ) no withholding tax from Jordan when remitting such income to our Client's parent company.
Incorporating a Jordanian offshore company is easy, as it only requires i) 1 dollar of share capital ii) 1 shareholder and iii) 1 director, who can be of any nationality and place of residence for most business activities.
Using an offshore company in Jordan as a tax optimization vehicle also enables our clients to pay lower taxes outside of Jordan, thanks to the country's double tax avoidance agreements with 35 countries, including Canada, France, India, Indonesia, Malaysia, Qatar, and the United Kingdom
Jordanian company law stipulates that foreign companies may open branches in Jordan, provided that i) they can demonstrate that such opening is necessary for the performance of a contract with a Jordanian customer and ii) the branch will not carry out operations or commercial activities in sectors restricted to foreign ownership.
The Jordan branch must also i) appoint a resident representative and ii) file audited financial statements with the Registrar of Companies, which must be published in advance in two daily Jordanian newspapers.
Incorporating a branch in Jordan is a complicated procedure, as the company must
While the Jordanian representative office may be 100% foreign owned, it is not allowed to conduct business or production related activities in Jordan. Consequently, this entity can only carry out i) market studies and ii) promote the parent's business.
The representative office must also enter into a lease in Jordan.
Foster Swiss helps our Clients secure offices or we provide an office address. Most emerging markets require our Clients to have a 12-month office lease before company registration is approved.
We help our Clients overcome this challenge in the following ways:
DDepending on the country and city, the rates range from US $ 900 to US $ 2000 and the annual active virtual office services range from US $ 1500 to US $ 4000).
LThe one-time fee is US $ 850. Thereafter, our Client pays the monthly rent directly to the owner).
D Depending on the country and the city, the rates range from US $ 5.000 to US $ 8.000).
Jordanian companies are subject to a 14% corporate tax rate on their profits. Tax returns must be filed and paid before April 30. Failure to do so may be sanctioned with a fine of up to 80% of the amount owed.
The standard VAT rate in Jordan is 16%. All businesses with sales over $ 42.000 must also register for a VAT number and submit corporate VAT returns every two months.
Jordanian companies can carry forward their business losses indefinitely. Refund of losses is not allowed.
Dividends distributed to both resident and foreign parent companies are exempt from i) corporation tax and ii) withholding at source.
Capital gains from the sale of stocks and other securities are fully tax-exempt, as long as they are not made by a bank or other financial institution.
Interest and royalties paid to a non-resident are subject to a 7% withholding tax, unless reduced by a tax treaty.
The salary distributed between i) non-resident directors and ii) non-resident managers are subject to a 7% withholding, unless reduced by a tax treaty.
Jordanian real estate owners must pay property taxes at a rate of 15% on all rental income received.
Employers are required to pay social security contributions that represent 12,5% of their employees' gross salary. However, the maximum contribution is capped annually at US $ 850 per employee.
Social contributions paid by employees must also be withdrawn, at a rate of 6,5% of the employee's net salary.
Additionally, employers must withdraw payroll tax, which applies at rates of up to 14%, from their employees' gross wages.
Jordan has signed agreements to avoid double taxation with 35 countries, including Canada, France, India, Indonesia, Malaysia, Qatar and the United Kingdom.
All Jordanian companies, including offshore companies, must i) have their annual financial statements audited by a certified accountant and ii) submit them to the Registrar of Companies by April 30.
DAccording to Jordanian law, each entity must obtain a tax identification number (TIN) and register for VAT with the Business Registry.
According to the Jordanian Companies Law, the issued share capital of US $ 70.650 must be deposited into the company's bank account before the company is fully registered.
It is mandatory for all Jordanian companies to appoint i) an independent local law firm and ii) a local audit firm.
Unfortunately, all shareholder and director information must be officially translated into Arabic, notarized, and certified by the Jordanian embassy in your home country. Most of our clients request that we translate all company documents from Arabic to English and vice versa.
This service carries an additional cost.
All companies must maintain a registered office address in Jordan at all times. Upon incorporation, they will be required to secure a 12-month lease as proof of compliance with said regulation.
The statutes of Jordanian companies are available to the public and comprise i) company name, objectives, headquarters ii) names, nationalities, addresses of shareholders and directors iii) amount of paid-up share capital.
Jordan LLC is required to transfer 10% of net earnings each year to a legal reserve, until such reserve reaches a level of 50% of paid-in capital stock.
All companies should always keep records of their accounts and financial statements, as the Ministry of Finance has the right to i) conduct a corporate tax audit for up to 4 years and ii) request the company to pay additional taxes.
Joint venture agreements must be registered with the Jordanian Ministry of Commerce and Industry, if they result in the creation of a separate business entity.
All companies must also file a copy of the Minutes of i) the mandatory annual shareholders meeting and ii) all other shareholders meetings with the Registrar of Companies, no later than 10 days after these meetings.
All employment contracts must be translated into Arabic. Non-Arabic speaking employees should also receive a copy of the contract in a language they understand.
According to the Jordanian Labor Code, the probationary period cannot exceed 3 months for all employees.
The minimum wage is set at US $ 230 per month.
Jordan is a member of the World Intellectual Property Organization, which allows i) foreign companies to apply for a patent or trademark and ii) grant them the same intellectual property protection as Jordanian nationals.
Jordan has acceded to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention). Therefore, arbitration awards made in countries that are party to this convention must be enforceable in Jordan in accordance with the provisions of the convention.
In Jordan there are different ways to resolve a dispute. The most common way to resolve a business dispute in Jordan is to refer the dispute to the Jordanian courts. Since Jordanian courts tend to favor Jordanian companies over foreign ones, we recommend that our clients include a clause in their clients' contracts that specifies how certain types of disputes will be arbitrated.
Jordan's Anti-Corruption Law punishes businessmen convicted of bribing public officials with i) up to 4 months in prison and ii) a fine of up to US $ 7.000, but this regulation is rarely enforced.
EThe Jordanian consumer market may not be attractive to multinationals because i) the population is low (6 million compared to other GCC countries) and ii) Jordanians have a low annual purchasing power of only US $ 5.500 per person, the 5 lowest in the Middle East iii) Jordan is a fragile and open economy, very sensitive to the health of the economies of the United States, the EU and the Middle East.
Certain business sectors still require a local joint venture partner who must own at least 51% of the company's share capital. Examples of restricted business sectors include i) advertising ii) tour operator services iii) restaurants and cafes and iv) retail.
Before the government approves company registration, our clients must provide a paid-up share capital certificate of at least US $ 70.650.
All the supporting documents of shareholders and directors necessary for the incorporation of the company must be translated into Arabic and some of them even legalized at the Jordanian embassy in the country of origin of our Clients.
Employers are prohibited from hiring foreign workers, including i) engineers ii) accountants iii) drivers iv) clerks and secretaries and v) warehouse workers.
For all other industries, employers must still show evidence that no suitable Jordanian can be found for the position, before they are allowed to apply for a work visa.
Employers are also i) required to post a bond of up to US $ 420 per foreign worker and ii) are liable for any misconduct by their foreign employee.
To ease dissent on local youth unemployment, the Jordanian government sometimes stops issuing work permits to foreigners without notifying local businesses.
Before allowing a civil case to be heard in a local court, Jordanian corporate law requires entrepreneurs to find an amicable solution to most business disputes over a period of 6 months.
Courts are painfully slow in Jordan. Once a lawsuit has been filed, it takes on average 2 years to resolve a dispute. Insolvency proceedings also have an average duration of 3 years.
Our Clients must take special care when drafting mergers and acquisitions of their Jordanian company to avoid loss of capital when news is broadcast. In such a case, local regulations do not guarantee i) the need for your prior approval or ii) your right to be priority buyers.
The Islamic State (ISIS) in Iraq has publicly announced its willingness to expand into Jordan. While the US military prevents this threat, terrorist attacks and small-scale infighting can take place in the northern part of the country.
Further escalation of the Palestinian conflict may force the Jordanian government to adopt sanctions against Israel or face instability. More than half of Jordan's population is Palestinian or of Palestinian descent.
Immediately after the legal incorporation of the company, our Client must i) obtain and certify from the Municipality of Greater Amman a 12 month lease for offices in Amman. ii) appoint a local law firm and pay it an estimated annual fee of US $ 4.500 iii) appoint a local independent auditing firm and iv) perform the required post-incorporation registrations in Jordan. Examples of post-incorporation records are: a) obtain a Certificate from the Chamber of Commerce, b) obtain municipal approval for the position c) obtain a Municipal License and d) only when our Client has chosen their first employee, Foster Swiss can help our Client to register for Social Security.
Jordanian industries are likely to face a huge water crisis, as Jordan is one of the most water-stressed countries in the world.
The national business registry does NOT include the identity information of the legal owner.
Information on legal owners is not always available online (up to 10 EUR / GBP / USD).
All businesses require the registration of all legal owners.
All names plus countries of residence plus addresses or NITs or dates of birth, passport or personal identifications, or incorporation numbers are always registered.
Updating of legal property information is mandatory for all partners.
Companies available without registered information on beneficial owners.
Real property is not always available online (up to 10 EUR / GBP / USD).
It is mandatory to carry accounting data.
Business accounts are not always online (up to € 10 / US $)
There is no public information on a country-by-country basis, except for the one-time EITI-style disclosure for publicly traded startups.
There is no requirement for local submission of a global country-by-country reporting file (in accordance with OECD BEPS Action 13) by large corporate groups (with a worldwide turnover of more than 750 million euros) and local subsidiaries of foreign groups.
Unilateral cross-border tax rulings (for example, advance tax rulings, advance tax rulings) are NOT available in laws or regulations, or administrative practice.
The use of an annually updated Legal Entity Identifier (LEI), developed under the guidance of the Financial Stability Board, FSB, is not mandatory.
The use of an annually updated Legal Entity Identifier (LEI), developed under the guidance of the Financial Stability Board, FSB, is not mandatory both for Over the Counter derivatives trading; (OTC) as for some operators and / or assets of the financial market. classes beyond OTC derivatives trading.
The use of an annually updated LEI for the identification of reporting financial institutions (in accordance with the Common Reporting Standard (CRS) is not mandatory
Dividend payments: No unilateral relief for double taxation through a tax credit system.
Interest payments: No unilateral relief for double taxation through a tax credit system.
None or restricted access to both criminal and civil tax procedures.
None or restricted access to both criminal and civil tax judgments / verdicts
The jurisdiction accepts the circulation of large notes / cash notes of its own currency (with a value greater than 200 EUR / GBP / USD).
Bearer shares are not available / not circulating.
Series LLC / Shielded Cell Companies are not available.
Trusts with escape clauses are not prohibited.
Jordan is not on the FATF List of countries that have been identified with strategic AML deficiencies. The last Mutual Evaluation Report related to the implementation of anti-money laundering and terrorist financing standards in Jordan was conducted in 2019. Based on that evaluation, Jordan was found to be in compliance with 4 and largely in compliance with 15 of the 40 FATF Recommendations.
It was considered Highly Effective for 0 and Substantially Effective for 2 of the Effectiveness and Technical Compliance ratings.
Overall Non-Compliance Score for FATF Standards in Percentage: 62,5%.
(100% = all indicators rated as not met / low level of effectiveness; 0% = all indicators rated as completed or highly effective).
The automatic exchange of information is extremely secret in Jordan.
Jordan is not a signatory to the Multilateral Competent Authority Agreement (MCAA), which provides the multilateral legal framework to engage in Automatic Exchange of Information (AEOI) in accordance with the OECD Common Information Standard (CRS)
The international and digital banks They're available.
Real bank operations: 90%.
Type of visa: JOD, US $, €.
Joint accounts: SI.
Remote management account: To consult.
Asset management Depending on the rating of the company.
Rates: It depends on the type of account.
Credit / debit cards in local currency
Crypto friendly banks: It depends on the correspondent bank.
Portfolio availability: It does not depend on the correspondent bank.
Ability to issue letters of credit: SI.
Foster Swiss is an international company registered in Switzerland aimed at providing financial and compliance advice on a variety of topics related to company formation
and commercial banking internationally. We are specialized in the implementation of businesses in different jurisdictions, which means that we offer value-added services helping our clients in their expansion abroad.
Some of these services include:
Advice and consultancy,
visas, offices, nominated director / shareholder / secretary,
accommodation if necessary… to name a few.
Check with your assigned consultant for more information.