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When you think of the Middle East, “complicated” might be the first word that comes to mind. However, Jordan is a stable and ambitious country that’s carving out a path for itself. For years, Jordan’s economy relied on mining for phosphates and potash. Now, the government is taking smart, deliberate reforms to build a more modern and investor-friendly economy.
In the World Bank’s Doing Business 2020 report, Jordan shot up 29 spots in the global rankings, moving from 104th to 75th. This massive jump made it one of the top three most-improved countries for business that year.
There’s more. The Economic Modernization Vision (EMV) is a 10-year strategy to bring in $60 billion in investments and create a million new jobs. If you’re looking for a smart, affordable, and talent-packed home base to reach markets across the Middle East and North Africa, Jordan is an opportunity you shouldn’t overlook.
Before we get into the nitty-gritty of setting up a business, let’s take a quick look at Jordan’s economy. It has proven to be tough, weathering regional and global storms while creating a predictable business environment due to sensible government policies.
Recent numbers from the World Bank show that the economy grew by 2.7% in 2023 and 2.4% in 2024. The growth is spread out in different sectors: tourism and hotels had a record-breaking year in 2023, and manufacturing hit an all-time high in the third quarter of 2024. Plus, the Central Bank has kept inflation in check, and costs stay relatively balanced for businesses and people.
Ironically, with Jordan’s steady growth comes high unemployment. The rate was 22% in 2023, dipping slightly to 21.4% in early 2024. While the government is focused on creating jobs, this situation creates an interesting opportunity for foreign investors.
You have a growing economy on one hand and a large pool of available talent on the other. Foreign employers have access to a large, motivated, and highly educated workforce, especially in tech and engineering, with less competition for top talent. This “labor market paradox” is a key reason why Jordan is a great place to hire.
When you’re getting ready to make your big move into Jordan, the first big decision is choosing the right legal structure for your company. Jordan’s Companies Law offers a few options, and each has different rules about liability and ownership. Getting this right is key to building a strong legal foundation.
The main types of companies you can set up are:
Most foreign investors go with the LLC option. Here’s what you need to know about setting up an LLC in Jordan:
The government uses the hefty capital requirement as a filter to make sure foreign companies are serious and well-funded. While it encourages long-term investment, it’s a sizeable financial hurdle if you just want to test the waters or hire a small team. Then you may wonder: Is there another way to hire Jordanian talent?
If setting up a full company doesn’t fit your plans, Jordan also allows for Operating and Non-operating Foreign Companies. An Operating Foreign Company is usually for a specific, short-term project, like a government contract. A Non-operating Foreign Company acts as a representative office to manage business outside of Jordan.
Let’s be honest, dealing with paperwork to register a company is a headache no matter where you are, and Jordan is no different. The government has made improvements, but setting up is still a journey with multiple steps and agencies. Even the World Bank, which praised Jordan’s overall progress, notes that the “Starting a Business” part can be slow.
The real cost is more than the money. It’s also the time and energy your team will spend cutting through red tape. Each step requires different documents and a trip to a different office, which adds to the administrative load.
Here’s a typical roadmap for registering a Limited Liability Company (LLC):
Jordan’s system includes corporate tax rates that change by industry and a progressive income tax for employees. Companies hiring worldwide will benefit from a partner specializing in Global Payroll to manage tax and payroll duties with keen attention to detail.
The tax rate you pay depends on what your business actually does. On top of the main CIT rate, there’s also a “National Contribution Tax” that varies by sector.
| Industry / Sector | Corporate Income Tax (CIT) Rate | National Contribution Tax Rate |
| Banks | 35% | 3% |
| Telecommunications, Insurance, Reinsurance, Financial Intermediation, Electricity Generation & Distribution, and Mining Companies | 24% | 2% – 7% (varies by sub-sector) |
| All Other Companies | 20% | 1% |
As an employer in Jordan, you are required to withhold personal income tax from your employees’ paychecks.
| Annual Taxable Income (JOD) | Tax Rate |
| 0 – 5,000 | 5% |
| 5,001 – 10,000 | 10% |
| 10,001 – 15,000 | 15% |
| 15,001 – 20,000 | 20% |
Source: PwC
In addition, anyone with an annual taxable income over JOD 200,000 pays an extra 1% national contribution tax.
Social Security is mandatory for both employers and employees. These payments go to the SSC and fund pensions, unemployment benefits, maternity leave, and workplace injury insurance.
| Contributor | Contribution Rate |
| Employer | 14.25% |
| Employee | 7.50% |
| Total | 21.75% |
Source: PwC
These percentages are applied to an employee’s monthly salary, up to a certain limit that changes with inflation.
The Jordanian government uses tax breaks to encourage investment in key areas. If you set up your business in a designated Development Zone, Free Zone, or the Aqaba Special Economic Zone (ASEZ), you can get some great perks; including a much lower corporate income tax rate (sometimes as low as 5%), no customs duties, and simpler paperwork.
Once you’re set up, it’s time to build your team, and to do that, you must get familiar with Jordan’s labor laws. The main rulebook is the Jordanian Labour Law No. (8) of 1996, which gets updated from time to time. The good news for foreign companies is that the laws are becoming more modern and are starting to look more like the global standards you’re probably used to.
Here are some key rules every employer needs to know:
Understanding and complying with all these rules can feel like a full-time job in itself. It’s one thing to read the regulations, but it’s another to build them seamlessly into your HR and payroll systems from day one. That’s often when the reality of global expansion and its administrative weight sets in.
The good news? You don’t have to become an expert in Jordanian labor law to start hiring. Partnering with an Employer of Record (EOR) lets you tap into Jordan’s growing talent pool without getting buried in compliance details.
An EOR partner acts as the legal employer for your team in Jordan, handling all the local HR tasks for you. They take care of employment contracts, payroll, taxes, social security, and benefits.
With the “how” of hiring made simple, let’s turn to the next big question: the “where”. Here are some of the most promising sectors for investment in Jordan today.
Through its Ministry of Investment, Jordan has pinpointed several priority sectors to drive growth. Focusing on these areas can make your entry into the market much smoother.
Here are the key sectors Jordan is excited about:
Jordan makes a strong pitch for international businesses. It offers a stable economy, a government committed to reform, a deep pool of educated talent, and a prime location for accessing the entire Middle East. The country is actively modernizing its laws and economy, making it a reliable partner for growth.
But, as we’ve seen, setting up shop isn’t exactly a walk in the park. Luckily, the EOR model is a cheaper and simpler way than even the Operating and Non-operating Foreign Companies method to sidestep these challenges.
The EOR offers a smart alternative to setting up your own company. An EOR lets you hire talent in Jordan quickly and legally without having to create a local entity. This means you can skip the capital requirement and the entire registration headache.
Using an EOR reduces your risk, gets you into the market faster, and lets you focus on your business while tapping into Jordan’s amazing talent. Check out Remotepad’s guide on choosing the Best Employer of Record to find the right partner for your global expansion.
