22 Sep Jordan, an oasis for doing business in a very instable area
22/09/2016 source “Expansión”
Although it share borders with Syria, Iraq, Palestine and Israel – one of the most conflicting and unstable geographical areas of the globe – Jordan became an oasis of relative political and economic stability and intends to continue to develop an open economy abroad.
The current situation and its geographic location caused major population movements that made 30% of residents in the country are foreigners (almost half of this percentage, more than one million people are Syrian refugees who have arrived in recent years). The impact of these demographic movements and the consequences of the global crisis slowed the annual growth of GDP since 2010, placing it around 3%.
The Government must address and resolve the challenges of reducing the fiscal deficit, the imbalance in the trade balance with the outside world and social inequalities. The aim is to consolidate an economy of services with a high level of human resources and a wide projection on the rest of the region. While retaining its Arab roots, Jordan is a westernized country that appreciates punctuality and formality.
Jordan is a country open to trade with the outside and has a liberalized system. In the report Doing Business carried out by the World Bank, it currently occupies the 113th place in the ranking of countries where it is easier to do business. The minimum investment to set up a foreign company is located around the 63,000 Euros and the time needed to open the business takes between one and three months. The rate of Corporate Income Tax varies between 14% and 35%, depending on the type of activity. Currently is still pending between Spain and Jordan an agreement to avoid double taxation.
The European Union is the main trading partner, but until recently Spain played a secondary role; only in recent years it is that domestic companies have begun to take advantage of the market potential with an increase in exports and trade between local companies and the Spanish SMEs. More than half of costumes duties for Spanish products are exempt from payment, while for others there are 16 different types that can reach up to 200% in the case of tobacco and alcohol. Moreover, it is important to check whether they are subject to an extra fee under the General Sales Tax.
The most common feature to install a foreign company in the country is to form a joint venture with a local partner that provides market knowledge and contacts. There are seven development zones in the country where foreign companies can benefit from advantages such as exemptions from some taxes and no limitations for the number of foreign workers.