Investment in Jordan Legal Analysis

By Ghaith Al Majali

Companies in Jordan


Type of Companies


Companies founded by a maximum of 20 natural partners, all over 18 years of age, all partners are liable in their own possessions to all the company loses.



A company founded by natural, founders both over and under 18 years of age. Those over 18 are the General Partners who are responsible for the day to day management of the company.


Limited partners contribute only to the capital of the company but have no authority in or involvement with its management.



A company founded by two or more partners, with their liability determined in accordance with their capital shares.



A company founded by a number of promoters, with a minimum of two subscribers. The liability of shareholders is limited to their capital shares. A public shareholding company can consist of one person only upon the approval of the Minister and the Controller of MIT.



An Operating foreign company means a company of body which is registered outside the Kingdom, and its head office in another country whose nationality is considered Non-Jordanian. In terms of its nature it shall be divided into two types:

* Companies operating for a limited period, which are awarded tenders for executing their works in the Kingdom for a limited period. The registration thereof shall cease upon the completion of such works unless the said company obtains new contracts in which case, the registration of same shall extend to cover execution of such works.

* Companies operating permanently in the kingdom under license from the competent official authorities.



  1. A Non-Operating Foreign Company in the Kingdom is a company which has a Regional Office or Representative office in the Kingdom for operations that it conducts outside the Kingdom for the purpose of using such a Regional or Representative Office for managing its operations and coordinating them with its Headquarters.
  2. A Non-Operating Foreign Company is prohibited from carrying out any business or commercial activity inside the Kingdom, including the operations of commercial agents and middlemen.
  3. The registration of a Non-Operating Foreign Company in the Kingdom may be made pursuant to the previous of this Law for the purpose of establishing Regional Offices, Representative Offices, and the City of Amman shall be its venue for litigation.



A limited liability company that consists of one person. The registration of this company is permissible only upon the approval and the recommendation of the Minister of MIT.


A limited liability company founded by a minimum of four partners: two general partners and two limited partners.

The general partners are jointly liable for the debts incurred by the partnership. The liability of the limited partners is limited to their capital shares.


A public shareholding company established for the purpose of acquiring shares in other companies, managing them, and extending loans, guarantees, and credit facilitations. Funds are invested in shares, bonds, and securities.

A Holding Company owns more than half of the company’s capital and /or has authority over selecting the company’s board of directors.


A public shareholding company founded for the purpose of investing funds in securities for third parties, as per the Securities Law.


Either a public or a private shareholding company with limited liability. This company is registered as a Jordanian company that may not carry out any operations in Jordan. The company’s name must include the word “Exempt.”




Partners jointly responsible for the management of the company’s activities, with full liability over the company’s private properties, debts, and liabilities.


Partners who contribute to the company’s capital without having the right to manage the company or perform its activities. The liability of such partners is limited to their capital shares.



Registered Capital

The company’s capital declared within the Company Founding contract and it’s Memorandum of Association. It is the maximum capital that can be claimed during the company’s duration.


Authorized Capital

The company capital needed only for the registration of the company.Shares in Cash .The partner capital share in return for his cash value contribution in constituting the company’s capital.

 Shares in Kind

The partner capital share in return for the in -kind value contribution to the company’s capital.

Capital Value in Cash

The cash value of the total shares which constitute the company’s capital.

Capital Value in Kind

The total shares in kind paid to constitute the company’s capital

Number of Shares offered for Public Subscription

The registered capital designated for subscription. This is only applicable for public shareholding companies.

Company Duration

The company life cycle. This is assumed to be unlimited unless otherwise stated by the Founding Contract and the Memorandum of Association.

Nature of Company

The nature of the company to be registered must be defined. This is defined by specifying both the type and class of company.

Type of Company

Different types of companies offer different advantages and have different requirements and conditions for both registration and operation.
The following are the types of companies which may be registered:

  • General Partnership
  • Limited Partnership
  • Limited Liability
  • Limited Liability – One Person
  • Limited Partnership in Shares
  • Public Shareholding
  • Public Shareholding – One Person
  • Foreign Company


Class of Company

Within each company “type,” the “class” of company must also be specified. Each class of company has its own set of conditions.

The classes of company permissible by law are as follows:


  • Regular
  • Civil
  • Offshore
  • Non-Profit
  • Holding
  • Mutual Fund


Registration Requirements

  • Registration Application form
  • Personal identification card.
  • Passport for non-Jordanians.
  • Fill the form prepared by the department including the articles and memorandum of association or prepared by the partners.
  • Power of attorney in case of non presence of the partners


Registration Procedures

  • Fill the form with all of the following data:
    1. The names of the partners.
    2. The company’s capital.
    3. Headquarter of the company.
    4. The objectives of the company.
  • Signing before the specialist employee or notary public or licensed lawyer.
  • The approval of the General controller of companies or whomever he may authorize in writing.
  • Banking book includes the deposition of not less than (50%) of partners share, provided that, it shall not be less than (50%) of company’s capital taking with consideration the “Non-Jordanian Investments Regulation” required the deposition of 100% of partner’s shares.
  • To issue the registration certificate.
  • Registration Fees

In pursuance to regulation No. (77) For the year 2008 (The companies law Issued by the article (287) of companies law No. (22) For the year 1997

Company’s Form General Partnership & Limited Partnership  Co. Limited  Liability Co. Private Shareholding Co. Public Shareholding


Non-operating Foreign Company


Operating foreign Company
Registration fees
25 0.002 0.002 0.002 5000
Fees value of capital increase 25 0.002 0.002 0.002
Stamp duty 0.003 0.003 0.003 0.003
Proxy deposition fees if found 10 10 10 10 10 10
Value of article of association and amendments 10 10 10 10
Issuance of the certificate 10 10 10 10 10 10
Access to information 20 20 20 20 20 20
Documents deposition fees 10 10 10 10 10 10
Any amendments after registration 20 20 20 20 20 20
Mortgage / release mortgage 20 20 20 20
Ratification duty 5 5 5 5 5 5
Registration a foreign name if found 500 500 500
The minimum fees for registering a company   250 1000 5000 5000
Publication duty 10 15 25 50 15 15


  • In case of transforming the legal entity of the company into another type with the continuity of its corporate body, the differential fees for registration shall be received along with the stamp fees 0.003
  • Annual fees for the Limited Liability Companies (Offshore) =1000
  • Annual fees for the Private Shareholding Companies (Offshore) =3000






Who is liable? All income derived from Jordan is subject to tax in Jordan regardless of the residence of the recipient. In addition, income that is realized outside Jordan by Jordanian and other residents, including interest, commissions, investment returns and profits from trading in currencies, valuable metals and securities, is taxable if such income arises from funds and deposits held in Jordan.

A non-Jordanian national is considered resident for tax purposes if he or she resides in Jordan for a total of at least 183 days per year. Residents may claim personal allowances.

 Income subject to tax

  • Employment income. Income tax is assessed on all remuneration and benefits earned in Jordan. This includes directors’ fees and employer-paid rent, school fees, air tickets and relocation expenses.
  • Self-employment and business income. Jordanian individuals must pay tax on income earned from all taxable activities in Jordan at the rates described in Rates.
  • Investment income. Interest income is subject to income tax. Banks must withhold 5% from interest earned.
  • Rental income is treated as ordinary income and taxed at the rates set forth in Rates, with certain exceptions.
  • Capital gains. In general, capital gains, including those derived from the sale of shares and land (but excluding goodwill), are not taxed in Jordan. However, if the individual has business income, certain costs relating to dividends or capital gains on investments in shares are disallowed. Gains on depreciable assets, within certain specified limits, are subject to tax at the rates described in Rates.
  • Income for a non-Jordanian resident fiscal person is exempt from income tax if this income incurred outside of Jordan



Personal and family allowances. The following personal and family allowances are granted:

  • Single person: JD 12,000
  • Married couple: JD 24,000



Tax rates for individuals are levied according to the following graduated scale.


Taxable income
Exceeding Not exceeding Rate
0 12,000 0
12,000 24,000 7
24,000 14


Employer withhold 7% from any amount above 1000JD and 14% from any amount above 2000JD of the gross employee’s monthly salary and remit this withholding tax to the tax authorities. Employer dose not Contribute any amount to income tax.


For payments made by resident taxpayers to nonresidents for taxable activities in Jordan, taxpayers must withhold 7% of gross payments and remit this withholding tax to the tax authorities within 30 days after the due date or payment date, whichever is earlier. This tax is final.


For payments made by resident taxpayers to individual service providers, companies that do not have a tax number and resident professionals, such as engineers, auditors or lawyers, taxpayers must withhold 5% of gross payments and remit this withholding tax to the tax authorities within 30 days after the due date or payment date, whichever is earlier.

For rent payments made by resident taxpayers (except rent paid by governmental parties), taxpayers must withhold 5% of gross payments and remit this withholding tax to the tax authorities within 30 days after the due date or payment date, whichever is earlier.


Tax filling & payment procedures

The tax year is the calendar year. Tax returns must be filed in Arabic using a prescribed form within four months after the end of each fiscal year. The total amount of tax due must be paid at that time.

Married persons are taxed jointly or separately, at the taxpayers’ election, on all types of income.




In general, income tax is levied on corporate entities and foreign branches with respect to taxable profit from all sources arising or deemed to arise in Jordan. Income is deemed to arise in Jordan if one of the following circumstances exists:

  • The place of performance of work is located in Jordan.
  • The place of delivery of work is located in Jordan.
  • The place of signing the contract is located in Jordan.
  • Jordanian capital is invested outside Jordan.
  • The output from a service performed outside Jordan is used in Jordan.


Rates of corporate tax.

Corporate income tax in Jordan is imposed at flat rates. Rates for resident corporations vary from 14% to 30%, depending on the type of activity. The following are the corporate income tax rates.


Sector Rate (%)
Banking 30
Insurance, telecommunications,
stockbrokers, finance companies,
currency-exchange companies and
leasing companies
Others 14

Business deductions.

All business expenses incurred in generating income are deductible. However, certain limitations apply. The taxpayer may deduct the following acceptable expenses including the following expenses:

  1. Foreign income tax paid on income from sources outside the Kingdom if it was subject to tax in that country according to the provisions of this law
  2. Interest and Murabaha paid by banks, financial companies, or companies which are carrying out financial lease activities.
  3. 1. Interest and Murabaha paid by a taxpayer other than banks, financial companies and financial leasing companies, provided that the deduction shall not exceed the total debt paid-in-capital ratio as follows Tax period Ratio:

2010 6:1

2011 5:1

2012 4:1

2013 and later 3:1

  1. The amount of interest and Murabaha that exceeds the allowable limit in the relevant tax period shall not be deducted or carried forward according to paragraph (1) above.
  1. bank allocations according to the provisions of Banks Law subject to the following provisions:
  1. Banks will be required to reduce non-performing credit facility special allocations in any of the following cases:
    1. Transforming non-performing credit facilities to a performing credit facility according to the provisions of the Banks Law and its directions.
    2. Collecting the value of the non-performing credit facility.
    3. Writing off such credit facilities as bad debts.
    4. Any other cases provided in the Central Bank directions.


  1. In cases where non-performing credit facilities allocations are reduced, the bank is required to state in his gross income the reduced amount which has already been accepted for tax purpose in the tax period in which the reduction took place.
  1. Insurance company reserves related to unearned premiums and the reserve of claims under settlement and the account reserve from its gross income, provided that what was deducted from these reserves during the direct previous tax period shall be added to this gross income after deducting the re-insurance portion according to the provisions and procedures defined by instructions.
  1. Bad debts which have already been accounted for in the taxpayer gross income, provided that if the bad debt or any part of it was collected after being deducted, the collected amount shall be added to the gross income in the period during which it was collected.
  2. Amounts paid for insurance of risk related to his taxable activity.


  1. The depreciation of capital and intangible assets including goodwill used for the purposes of producing taxable income and the natural resource exploration expenses according to the following provisions:
  1. The taxpayer cannot depreciate the value of Land, Inventory and any other assets that do not lose their value through time
  2. Assets cost, which have a value less than 100 Dinar, shall be totally deducted in the tax period in which they were acquired.
  3. Permanent buildings depreciation shall be determined by a portion of its original cost using the fixed amount method, and depreciation of other assets and expenses shall be determined by using the declining balance method, provided that the provisions, procedures and rates for this shall be defined by the depreciation regulation issued for this purpose.


  1. 1) Assets actual maintenance amount spent within the tax period provided that it does not  exceed 5% of its value.
    • The non-deductible value of maintenance expenses according to the provisions of sub paragraph (1) of this paragraph shall be added to the asset balance for depreciation purposes.
    • Expenses spent for the purposes of developing or extending the lifetime of an asset shall not be considered as maintenance expenses and this value shall be added to the asset balance.
  1. Taxes and duties paid on taxable activities.
  1. Amounts paid as civil compensation according to contracts concluded by the taxpayer for the purposes of carrying out his taxable activities.
  1. Amounts paid by an employer on behalf of employees for the social security corporation and contributions to any pension or savings fund or any other fund established by the employer according to the approval of the Minister for the benefit of his employees.
  1. Hospitality and travel expenses paid by the taxpayer.
  1. Employees’ medical treatment, meals on the work site, travel, transportation, and insurance against work injuries and death expenses.
  1. Marketing, research, development, and training expenses.
  1. The previous tax periods’ expenses unless they were defined and final.


Relief for losses.

Taxpayers may carry forward losses indefinitely to offset profits if the losses are supported by proper accounting records, are acknowledged by the tax assessor and relate to taxable sources of income.

Losses of foreign branches of Jordanian companies carried forward can be set off against income of foreign branches only. There are no provisions for carrying losses backward.

Export losses cannot be carried forward.

Capital gains.

Banks, financial companies, insurance companies, foreign-exchange dealers and finance leasing companies are subject to tax on their capital gains derived from sales of shares and bonds in Jordan. For other companies, capital gains derived from sales of shares in Jordan are exempt from tax (except for goodwill). However, a formula is used to calculate the disallowed part of the cost. This formula is the ratio of exempt income to total income, multiplied by total allowable cost. Capital gains derived from sales of shares in foreign markets that arise from Jordanian funds are subject to income tax.

Income derived from current assets, which are assets held for less than one year, and from depreciable assets are taxable as ordinary income.


Branch profits tax.  

20% of foreign branches’ net income of a Jordanian company shall be taxed after deducting the foreign income tax, for the Jordanian companies’ branches operating outside the kingdom as declared in their final accounts and which are certified by an external auditor. In all cases, the net amount resulting from applying this percentage shall be considered as taxable income for the company and shall be subject to income tax of 30%.



Dividends received from companies located in Jordan are exempt from tax except for dividends received by banks and financial institutions from mutual investment funds. Twenty-five percent (subject to change) of dividend income must be added back to income if it does not exceed the total allowable costs; that is, the cap for disallowed expenses is the lower of 25% of dividends or reported costs.


Interest paid by banks to depositors, except for interest on local interbank deposits, is subject to a 5% withholding tax. The withholding tax is considered to be a payment on account for resident companies and a final tax for individuals and nonresident companies. Interest paid by local banks on foreign banks’ deposits is exempt from income tax.

 Interest deductions.

Under thin-capitalization rules, for 2013 and future years, interest paid on loans in excess of a 3:1 ratio of debt to the higher of capital or average equity is not deductible. Interest paid on the borrowings used for business purposes is tax deductible.

For new businesses, interest incurred prior to commencement of commercial production is to be capitalized. Interest paid for financing any company is not deductible.

Interest paid by banks, financial companies, and financial leasing companies is wholly deductible

 Foreign tax relief.

Foreign tax relief is granted in accordance with tax treaties signed with other countries.



General sales tax

Sales Tax is levied on the sale of goods and services, transfer of right to use goods and when goods are used for the taxpayer purposes, VAT is collected at each stage of the supply chain and the tax burden falls on the ultimate consumer.

The rates of sales tax are:
• 16% as a general rate for goods and services.
• 4% for specified agricultural products, fruits, meat, vegetables, and live animals.
• Zero rates for a list of specified products like energy-saving products and pharmaceutical industry inputs.

Special sales tax at different rates is applicable on vehicles, beer, alcohols, tobacco, cell phone services, oil derivatives, and air tickets to outside Jordan.

A government initiative to promote industrial growth provides sales tax exemption and defers the payment of the tax payable on goods and services at importation.

Export sales and trading within qualified Free Zones are sales tax exempted transactions in Jordan.

Businesses with an annual taxable turnover of more than JOD 30,000 must register for sales tax purposes.

A sales tax return must be filed every two months, with tax due paid at that time.


Social security

Contributions are levied at a rate of 19.50% on gross salary except overtime. The employer’s share is 12.75%, and the employee’s share is 6.75%. The social security system provides retirement, maternity and death benefits as well as certain benefits for work-related injuries.


Property tax

Rented property tax is a municipal tax levied at 15% on the estimated annual rental value of the property. The estimated rental value is assessed every five years by the tax authorities. Property tax may be set off against the taxpayer’s income tax liability

No tax is levied on land property except for improvement taxes. However, real estate property is subject to tax at a variable rate between 2% to 5% of a credited value.


Universities Tax

This tax is payable by shareholding and foreign companies at a rate of 1 percent of net income before taxes and distributions.


Withholding tax on imports;

imposed on the value of goods imported for resale; paid on account against the taxpayer’s final tax liability 2%
Withholding tax on payments

to nonresident service providers 7%

Customs Duty.

Customs duty is payable on goods imported into Jordan. The rates of basic customs duty may reach up to 30% depending on the governmental strategy.

Stamp Duty.

Stamp duty of 0.003 is payable on all transactions with governmental and publicly traded corporations.

Foreign-exchange controls.

Jordan does not impose any foreign-exchange controls

Jordan does not levy net worth tax, inheritance tax, MAT tax, or gift tax.



Depreciation allowance is available as per the following rates depending on the nature of asset:


Intangible Assets (patents, trademarks,

know-how, licenses, copyrights, etc)

According to International Financial Reporting Standards
Buildings 2% to 10%
Plant and machinery 10% to 25%
Furniture and fixtures 10% to 15%



Double tax relief.

Because foreign-source income is not taxed in Jordan, no double tax relief is available.



The tax year for corporations is their accounting (financial) year. Tax returns must be filed on a prescribed form in Arabic within four months after the tax year-end.

The tax return includes a payroll listing and information pertaining to goods and services supplied for the year, including details related to the corporation’s income, expenses, exemptions, and tax due.

The total amount of tax due must be paid at the time of filing to avoid penalties.

The tax authorities may conduct an income tax audit for up to five previous years and charge the company additional tax.

Taxpayers that have gross income exceeding JOD500, 000 must make semiannual payments on account equal to 37.5% of the preceding year’s tax.



Late payment fees are imposed at 0.4% for each week of delay. A penalty of JD 500 applies for late filing by public and private shareholding companies. If the income tax due as declared in the return is less than the actual amount due, shortage fees ranging from 15% to 80% of the difference will be imposed.


Tax Treaties

Jordan has entered into double tax treaties with a few countries the following is a table of treaty withholding tax rates.

  Country Dividends%  Interest %  Royalties %
United Arab Emirates                                      negotiating
Algeria 15 15 15
Azerbaijan 8 8 10
Bahrain 10 10 10
Bulgaria 10 10 10
Canada 10/15 10 10
Croatia 10 10 10
Czech Republic 10 10 10
Egypt 15 15 20
France 5/15 0/15 5/15/25
India 10 10 20
Indonesia 10 10 10
Iran 5/7.5 5 10
Iraq —* —* —*
Italy 10 10 10
Korea (South) 10 10 10
Kuwait 5/10 5 30
Lebanon 10 10 10
Libya —* —* —*
Malaysia 10 15 15
Malta 10 10 10
Morocco 10 10 10
Netherlands 15 5 10
Pakistan 10 10 10
Palestinian Authority —* —* —*
Poland 10 10 10
Qatar 10 5 10
Romania 15 12.5 15
Sudan 15 15 15
Syria 10 10 18
Tunisia —* —* —*
Turkey 10/15 10 12
Ukraine 10 10 10
United Kingdom 10 10 10
Uzbekistan 7/10 10 20
Yemen 10 10 10

*The treaty does not provide for a maximum withholding tax rate.





All visitors must obtain entry visas to visit Jordan.

The following temporary visas are offered to foreign nationals:

  • Transit visa, which is valid for a maximum of 48 hours.
  • Business visa, which is valid for three months. A work permit must be obtained after arrival.
  • Student visa, which is valid for the period that the foreign national is attending school in Jordan.
  • Medical visa, which is valid for the time required to finish the medical treatment.
  • Tourist visa, which is valid for three months.


These visas may be applied for either in the foreign national’s home country or in Jordan. Temporary visas may be renewed one time for three additional months.


WORK PERMITS            

Individuals of all nationalities must apply for a working permit if they want to work in Jordan, with priority given to Arab nationals if expertise is not available locally. Work permits are issued with the approval of the Ministry of Interior.

An applicant may not begin working in Jordan before obtaining a work permit. Work permits may not be transferred from one employer to another; therefore, if an employee changes employers, the previous work permit is cancelled, and the worker must apply for a new permit.

A work permit is valid for one year and may be renewed each year. The following are the fees for renewal:

  • JD 180 for Arab workers in fields other than agriculture or nursing
  • JD 60 for Arab workers in agriculture or nursing
  • JD 300 for foreign nationals working in fields other than agriculture
  • JD 120 for foreign nationals in agriculture

According to Ministry of Labor instructions, an employer must submit a bank letter of guarantee to the order of the Ministry of Labor in the amount of approximately JD 300 to JD 1,000 for each expatriate employee.

Foreign investors may engage in almost any type of economic activity. Jordan does not impose any limits on foreigners’ investments. Except for certain sectors, including construction and trade, in which foreign ownership may not exceed 50%, non-Jordanians may fully own any economic project in Jordan. The following types of businesses may be 100% foreign-owned:

  • Agriculture
  • Hotels
  • Health care
  • Mining
  • Industrial
  • Telecommunications

In addition, under the Jordanian Labor Law, non-Jordanians are prohibited from having certain jobs, such as medical and engineering professions, administrative and accounting professions, clerical work including typing and secretarial work, warehouse work, hair cutting work, teaching profession and mechanical, and car repair profession.


Residence permits.  

Temporary residence is granted to foreign nationals who intend to work in Jordan. The permit is valid for one to six months and is renewable one time. The renewed permit is valid for three months for a maximum total period of nine months.

To apply for temporary residence, foreign nationals should provide the following items:

  • Approval from the Ministry of Interior
  • A copy of the passport (valid for at least six months)
  • Personal commitment from the employer to report the employee to the security authorities if the employee does not finish the work contract
  • Completed residence request form and clearance from the Jordanian intelligence service


Labor in Jordan


Labor rights, conditions and affairs in Jordan are governed by the “Labor Law and its

Amendments” No. 8 for the Year 1996. Provisions of the law apply to all employees and employers except for public and municipality workers, It also establishes a number of labor rights, including but not limited to fixed weekly working hours, weekly and annual paid rest, special compensation for workers supporting families or upon dismissal, illness, old age and emergencies arising from the nature of the work, special conditions for the employment of women and juveniles, wages that are commensurate with the quantity and quality of work, health safeguards at factories and workshops, and trade unions operating within the limits of the law. Also the Labor Law codified a set of employer/employee rights and obligations:


Employment Contracts:

The contract of employment must be written in Arabic, and at least one copy must be provided to each party. If such a contract does not exist, then the worker may establish his rights by all legal means of evidence.

The duration of the employment contract should be agreed upon by the parties.


Working Hours:

The maximum number of working hours allowed is 48 in a six-day week. The seventh day is a paid weekly holiday. Additional working hours are considered overtime, subject to the employee’s consent. The employee must be paid overtime at a minimum rate of 125% of his/her regular remuneration. In addition, if the employee works on her/his weekly holiday, or on a religious or national holiday, he/she must receive compensation at a minimum rate of 150% of his/her regular remuneration.


annual paid leave & sick leave:

Employees are entitled to an annual paid leave of 14 days. This should be extended to 21 days if the employee works for the same company for more than five years. Also Employees are entitled with a approved medical report to an sick paid leave of 14 days.


Safety Measurements:

Employers must take all necessary precautionary measures to ensure that the working environment is safe for all workers. This includes providing workers with personal protective equipment, training on potential job risks and ways to prevent them, and first aid facilities.


Minimum Wage:

The current minimum wages (Monthly Salary) stands at JD 190 (equiv. to US$ 267) per month

Dismissal and Termination:

A contract of employment can be terminated if both parties agree to terminate it.

Termination also can occur if the duration of the contract has expired; the work has been completed, or if the worker dies or is no longer capable of working due to a disease or disability certified by the medical authority.

If the contract of employment has an indefinite duration, and one of the parties decides to terminate it, then he or she must give at least one month’s prior notice. If the notice was given by the employer, the worker shall be entitled to his or her remuneration for the notice period. However, if it was given by the worker and him or her leaves work before the end of the notice period, he or she will not be entitled to any remuneration for the period of absence and shall compensate the employer by paying him the equivalent of his or her own remuneration for that period. If the contract of employment is for a specified period, it can be terminated before its expiry date by both parties. The worker may terminate the contract, without notice, in the following cases:

  • The work is markedly different in nature from that agreed in the contract of employment.
  • The work conditions necessitate a change of residence and this was not stipulated in the  contract.
  • The worker has been downgraded from the agreed level of employment.
  • The worker’s remuneration was lowered.
  • A medical report has been issued by a medical authority that proves that the work, if continued, could be hazardous to the worker’s health.
  • The employer, or the person acting on his behalf, strikes or insults on any means of sexual harassment the worker during the course of work or on account of his or her work.

In case the employer shall fail the performance of any provision of this law or any ordinance to be issued by virtue of the same provided he shall have received a notice issued by the complement party at the ministry instructing him to abide by such provision.

The worker has the right to receive all her/his entitlements and benefits as stipulated by the contract. If a contract for a specified period is terminated by the worker for none of the reasons set forth above, the employer may claim damages from the worker.


The employer may not give notice or terminate the contract in the following cases:

  1. The worker is pregnant and has reached at least her sixth month of pregnancy, or the worker is on her maternity leave.
  2. The worker is performing military or reserve service
  3. The worker is on annual or sick leave or some other form of leave that has been previously agreed upon by both parties.

In the following cases, the employer may dismiss the worker without prior notice:

  1. The worker assumes a false identity or submits false certificates or documents with the purpose of acquiring a benefit or causing prejudice to others.
  1. The worker fails to fulfill the obligations stipulated in the contract of employment.
  2. The worker commits a fault causing the employer considerable material damage, provided that the employer notifies the appropriate bodies of the accident within five days from the date on which he or she learns of its occurrence.
  3. The worker, in spite of receiving two written warnings, fails to observe the internal regulations of the establishment, including safety regulations.
  4. The worker is absent from work without good cause for more than 20 days intermittently during any one year, or for more than 10 consecutive days, provided that, prior to the dismissal, written notice is sent to his or her address by registered mail and published, at least once, in a daily local newspaper.
  5. The worker discloses work secrets.
  6. A court, in a final judgment, finds the worker guilty of a criminal offense or a misdemeanor involving dishonorable or immoral conduct.
  7. The worker attends work in a clear state of intoxication or under the influence of any drugs, or if he or she has committed, at the workplace, an act violating principles of moral conduct.
  8. The worker strikes or insults the employer, the manager in charge, a superior, a fellow worker, or any other person in the course or on account of work.

Social Security System

At present, all establishments that employ five or more workers must have social security insurance, regardless of the workers’ nationalities, contract period or form, or wages, provided that the wages are not less than the minimum wage.

The social security system in Jordan is governed by the “Social Security Law” No. 19 for the year 2001. The law applies to all male workers between the ages of 16 and 60, all female workers aged 16 to 55, all public sector employees that are not subject to civil or military retirement laws, and all Jordanians employed in foreign, political, military, or international missions in Jordan.

The types of insurances that are stipulated in the law are as follows:

  • Insurance against work injuries and occupational disease.
  • Insurance against old age, disability, and death.
  • Insurance against temporary disability due to sickness or pregnancy.
  • Medical insurance for worker and beneficiaries.
  • Family grants.
  • Insurance against unemployment.
  • Compensation for maternity leave.


Public and Health Insurance

The labor law does not require the employer to provide both the public and health insurances. If the employer wishes to provide them, they will be regulated by the internal regulations and systems of each company.

Profit Sharing

The labor law does not require the employer to provide profit sharing incentive plans for his or her employees. If the employer wishes to provide these plans, they will be regulated by the internal regulations and systems of each company.


Major laws regulating the business and

investment  environment in Jordan

Investment law No.68 of 2003 The Privatization Law No. 25 of 2000
Investment Promotion Law No. 67 of 2003 Enterprise Development Law No 71 of 2003
Electronic Transactions Law No. 85 of 2001 The Standards and Metrology Law No. 22 of 2000
Securities Law No. 76 of 2002 Company Law No. 22 of 1997
Trade Secretes and Unfair Competition Law No.15 of 2000 Commercial Agents and Intermediates Law No.28 of 2001
The Industry and Trade Law No. 18 of 1998 The Import and Export Law No. 21 of 2001
Sales Tax Law No. 6 of 1994 The Banks Law No.28 of 2000
Professional Licenses Law No. 28 of 1999 The National Production Protection Law No. 21 of 2004
Arbitration Law No. 31 of 2001 Competition Law No. 33 for 2004
Law of Leasing and Selling Immovable Properties to Non-Jordanians and juristic persons No.24 of 2002 The Law for Endorsing the United Nations Agreement for Anti Corruption No. 28 of 2004
Free Zones Corporation Law No. 32 of 1984 Credit Information Law No. 82 of 2003
Custom Law No.20 of 1998 Social Security Law No.19 of 2001
Income Tax Law No. 57 of 1985 Labor Law No. 8 of 1996
Environment Protection Law No.52 of 2006.  Copyright Law No 22 of 1992 and its Amendments
Patent Law No. 32 of 1999 and its amendments. The Law of Unfair Competition and Trade Secrets No. 15 of 2000
Trademarks law No. 33 of 1952 and its amendments. The Geographical Indications Law No. 8 of 2000.
The Protection of New varieties of Plants Law No. 24 of 2000 Goods Marks Law No. 19 of 1953
Trade Names Law No. 22 of 2003


The Protection of layout designs of Integrated Circuits No. 10 of 2000
The Industrial Designs and Models Law No. 14 of 2000