Doing business

(Last updated: 05 Nov 2008)
 

Business opportunities

The Jordanian economy remains on a growth spurt of an estimated six per cent, spurred by direct investment by relatively wealthy nationals of the Middle East states; an influx of Iraqi middle class with their capital; solid aid programs from Western nations; tourism; and historical extractive exports.

Opportunities lie in the construction sector; services - especially finance, IT, health and education, food and beverages, franchising, defence and security.

Australian companies find doing business in Jordan relatively less constrained than other markets of the Middle East. Businesspeople are open, progressive and well educated.

Relationships are important and care needs to be taken in establishing representation

Jordan is an ideal Middle East test market as well as being a useful adjunct or supporting market for more established business in the Gulf.

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

In conjunction with the market profiles, the Opportunities Online portal may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, identified by our overseas network to Australian businesses.

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

Business etiquette

Business tips

Jordanian businessmen usually extend an invitation of friendship before any business deals are transacted.

Knowing a few simple Arabic words and phrases such as Shukran (thank you), min fadlak (please), kaifhalak (how are you) is always helpful.

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

The Jordan Government has made an effort to create a liberal and attractive business environment. As a result of joining the World Trade Organization, all previous restrictions placed on imports were lifted. However, most imports into Jordan are subject to tariffs and import taxes. Industrial raw materials and capital equipment imported by licensed project are exempt. Duties will be reduced to reach 20 per cent by 2010 and 16 per cent Value Added Tax has been added to most imported products with the exception of essential food items such as rice, sugar, flour, milk and tea.

Most imports are subject to tariff rates ranging between zero per cent and 30 per cent assessed on the CIF value with the exception of tobacco and alcohol, which are subject to tariff ranges of 50-180 per cent.

The import of alcohol and pork is not restricted but are subject to high tariffs.

Goods imported are subject to 16 per cent general sales tax based on the (value CIF + duty), and some products are subject to supplementary taxes ranging between 14-16 per cent as in the case of electrical appliances, passenger cars 10-50 per cent (depending on the engine capacity).

Some tariff and GST exemptions are applied on goods imported from the Gulf Cooperation Council, member states of the Arab Free Trade Area, the USA and European Union following bilateral free trade agreements or trade protocols Jordan has signed a Free Trade Agreement with the USA and is a member of the EU-Mediterranean Cooperation Agreement.

Customs authority contact details:

Customs Department
Tel: +962 6462 3186 Ext. 2114 or 2119
Fax: +962 6461 9682
Email: customs@customs.gov.jo

Non-tariff barriers

Import restrictions

The Ministry of Industry and Trade issues the import licenses/cards for customs clearance purposes. Import licenses/cards are required for the import of non-commercial shipments exceeding JD2000 in value:

• Biscuits of all types
• Mineral water
• Dried milk for industry purposes
• Used tires
• Items requiring prior clearance from specific authorities

Importers can be Jordanian nationals or foreign trading companies.

The government has prohibited importation of plastic waste, narcotic plants and diesel passenger cars.

Import of crude oil and house gas cylinders was liberated as of 1 March 08 and is no longer restricted to the Jordan Petroleum Refinery Company.

Product certification, labelling and packaging

Labelling and marking

The packing, marking and labeling requirements are issued by the Jordan Institute of Standards and Metrology and relevant government ministries. These requirements are in accordance with the World Trade Organization directives and they vary from one product to another. Importers are responsible for informing suppliers of packaging, marking and labelling requirements.

Marking on boxes or crates has to be directly on the box or crates and should be in ink or painted and not on removable tags or labels.

The date of manufacture and expiration has to be embossed or printed on imported canned and preserved foodstuffs.

Contents of pharmaceuticals products must be clearly printed on the label.

Pesticide information labels must be in Arabic.

Brands, trademarks or copyrights are protected by Intellectual Property Right laws.

Local business people may only import products that comply with the labelling and marking requirements issued by the Department of Standards and Specifications and other responsible government ministries.

Special certificates

Certain goods require pre-import clearance. The relevant pre-import license-issuing agency and the respective goods are:

• Flour and its by-products - Ministry of Industry and Trade
• Frozen animal semen, live animals, fresh/chilled/frozen meat, embalmed wild animals, imported milk products - Ministry of Agriculture
• Potatoes, onions, garlic, fresh fruit and vegetables - Agricultural Marketing Corporation
• Arms and ammunitions, explosives, switch-blade knives, fuel-operated toy cars, remote control operated toy planes, electric and electronic games for commercial use, self-defense electric tools - Ministry of Interior/Public Security Directorate
• Military clothing - Jordan Armed Forces
• Radioactive materials and uranium - Ministry of Energy and Mineral Resources
• Wireless receivers and broadcast stations, wireless alarm devices, remote control devices (including motor, garage, window and shutter control; excluding television and video devices), site mapping equipment, wireless receivers and broadcast devices, cellular-phone equipment, wireless microphones, communication terminals, remote control toy-planes (also to be cleared by the Public Security Department of the Ministry of the Interior), mobile TV equipment - Telecommunications Regulatory Commission
• Decoders and satellite receivers - Jordan Radio & Television Corporation
• Colour photocopiers - Central Bank of Jordan
• All types of medical drugs and antibiotics, food supplements for athletes, potassium bromide, food dyes, asbestos pipes and panels, frozen ice cream, baby food and milk, laser pens, oxygen and nitrogen oxide - Ministry of Health
• Halogenous materials, freon Gas - Ministry of Municipal, Rural Affairs and the Environment
• Postal clearing devices - Ministry of Information & Communication Technology
• Artesian well drills - Ministry of Water and Irrigation
• Small monitoring cameras - Military Security

For the import of used electronic equipment (including photocopiers, refrigerators, freezers and pumps), and used gas water heaters and gas ovens, the following conditions apply:

• Equipment must be in suitable, usable condition
• Equipment must conform to Jordanian and international standards
• Equipment must be free of any substances, which may negatively affect the environment and the ozone layer
• Importer must supply a certificate from manufacturing company proving the equipment is under three years old (if a manufacturer's certificate cannot be produced, shipment must be accompanied by certificate from the selling agent in the exporting country)
• New spare parts must comprise 10 per cent of shipment by value

Methods of quoting and payment

Quotations can be C&F US dollars, Euro, Pound Sterling, French Francs or Swiss Francs.

Some importers may request CIF quotations.

Payment is usually by irrevocable letter of credit.

Some importers may request deferred payment terms on L/C's from three to six months.

Documentary requirements

Commercial invoice

The original commercial invoice including value, weight and other relevant details is required. If the invoice is not written in Arabic then the importer must translate the information into Arabic For example, by hand writing directly on to the invoice.

Bill of lading/airway bill

In accordance with the customs law, every customs declaration must include maritime or airway bill of lading.

Certificate of origin

The certificate of origin issued by the relevant authority in the exporter's local area is required. The original commercial invoice and certificate of origin must be attested by the local Chamber of Commerce in the country of origin and should be notarized by the Jordanian Diplomatic mission in the country of origin. In the situation, where there is no Jordanian diplomatic mission then the certification by the local chamber of commerce is sufficient.

Insurance

Usually arranged by the importer.

Weights and measures

The metric system.

Taxation

Corporate tax main rate is 25 per cent:

• For companies in the following sectors: hospitals, hotels, mining, industry, construction and transportation – 15 per cent
• For companies in the sectors of banks and finance – 35 per cent
• For companies in the sectors of insurance, exchange, trade, telecommunications, services and other – 25 per cent

Income tax is charged on a progressive rate up to 25 per cent.
 
A 16 per cent Sales Tax is applied on all goods and services in Jordan.

Tax exemption for approved projects

Austrade works in conjunction with the Australian Taxation Office ('ATO') to administer the income tax exemption available under section 23AF of the Income Tax Assessment Act 1936 ('Tax Act').

Section 23AF should assist the international competitiveness of Australian companies and governmental organisations competing to win international tenders. Further information is available.

Intellectual property protection

Jordan is now regarded as a regional leader in the enforcement of intellectual property laws. More information can be found on the Jordan Intellectual Property Association  website.