Company Formation in Jordan.
Operating Foreign Company |
Regional office None operating Foreign company |
None profit company |
Limited Liability Company |
Private Share Holding Company |
| Companies operating for limited periods, which are awarded a Government’s or civil tenders in order for them to realize their work in the Kingdom for a limited period. The registration thereof shall cease upon the completion of such contract unless the company obtains new contracts, in which case its registration shall extend to cover the execution of such work. Then its registration shall be cancelled after completion of all its work in the Kingdom and after its rights and obligations are settled | A non-operating foreign company in the Kingdom is any entity that takes the Kingdom as its residence or representative office for its business conducted outside the Kingdom, with the purpose of using its residence or office to run and manage its operations in coordination with its headquarters and offices all over the world.
A non-operating foreign company in the Kingdom is restricted to conduct any commercial or trade transactions inside the Kingdom including agents and brokers. |
A nonprofit Companies are tax exempt or charitable legal entity which has been incorporated under the Jordanian company’s law and it may be registered in accordance with one of the types of companies provided for in the Law. The provisions set forth in the applicable Laws and regulations restricts the scope of operation of non-profit companies to the fields of social, humanitarian, health, environmental, educational, cultural, sports or similar services. It prohibits receiving any assistance or donation or gift or funding from a non-Jordanian party without having obtained the approval of the cabinet,
Civil society organizations. Foreign not-for-profit organizations are also permitted to establish branch offices in Jordan. |
A company founded by one or more partners, The Company’s assets and property shall be liable for its debts and obligations. The liability of any shareholder therein for these debts, obligations and losses is limited to its shares in the Company. The Company shall be managed by one manager or Management Committee whose members shall not be less than two and not more than seven, whether they are shareholders or others, who can be of any nationality and place of residence. The capital of the Limited Liability Company shall be fixed in Jordanian Dinars divided into indivisible shares of equal value of not less than one Dinar each. The name of the Limited Liability Company shall be derived from its objectives | A Private Shareholding Company is comprised of two or more persons. The duration of a Private Shareholding Company is unlimited unless its Articles and Memorandum of Association specify otherwise. Then, its period shall end by the conclusion of the period or business specified thereto. Subject to the Securities Law, a Private Shareholding Company may issue shares, corporate bonds, and other securities. The Company may decide to list its securities at the Stock Market and to negotiate same in accordance with the regulations and instructions issued by the Securities Commission. The capital of a Private Shareholding Company shall be the total nominal values of the Company shares provided that the subscribed capital shall not be less than JD50, 000.
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Characteristics |
Regional officeNone operatingForeign company |
None profit companyForeign person/company |
Limited Liability Company |
Private share holdingCompany |
| Formation | Such organizational and legal form can be registered only by foreign corporations and foreign nationals. | Such organizational and legal form can be registered (100%) ownership by foreign corporations or foreign nationals. | Such organizational and legal form can be registered (100%) ownership by foreign corporations or foreign nationals.
Foreign entities may not however have ownership in excess of 50% of construction restaurants, travel agencies and certain other commercial ventures. |
Such organizational and legal form can be registered (100%) ownership by foreign corporations or foreign nationals.
Foreign entities may not however have ownership in excess of 50% of construction restaurants, travel agencies and certain other commercial ventures. |
| Key Documents For Formation | · Certificate of Registration at its main office;
· Articles of association indicating its objectives, shares capital and type; · Financial statements for the last two fiscal years in the country of its origin certified by a chartered accountant; · Power of attorney by which it authorizes someone residing in the Kingdom to conduct its businesses. |
If the shareholder a natural person: only a copy of the partner’s passport.
If company: • Certificate of Registration at its main office; • Articles of association indicating its objectives, shares capital, shareholders and type; •Financial statements for the last two fiscal years in the country of its origin certified by a chartered accountant. |
If the shareholder a natural person: only a copy of the partner’s passport.
If company: • Certificate of Registration at its main office; • Articles of association indicating its objectives, shares capital, shareholders and type; •Financial statements for the last two fiscal years in the country of its origin certified by a chartered accountant. |
If the shareholder a natural persons: only a copy of the partner’s passport.
If company: • Certificate of Registration at its main office; • Articles of association indicating its objectives, shares capital, shareholders and type; •Financial statements for the last two fiscal years in the country of its origin certified by a chartered accountant. |
| Requirements of Registration | · vocational license from the municipality or
· Office lease agreement. |
A Bank Deposit Account Letter under the company account from a Jordanian Bank addressed to MIT to certify account balance of (100% of capital). | A Bank Deposit Account Letter under the company account from a Jordanian Bank addressed to MIT to certify account balance of (100% of capital). | A Bank Deposit Account Letter under the company account from a Jordanian Bank addressed to MIT to certify account balance of (100% of capital). |
| Duration | Dissolved by:
Headquarter resolution to close the regional office. |
Dissolved by:
· Voluntary Liquidation · Compulsory Liquidation |
Dissolved by:
Voluntary Liquidation Compulsory Liquidation
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Dissolved by
· Voluntary Liquidation · Compulsory Liquidation |
| Liability | Generally no personal liability of the shareholders and Management for the obligations of the corporation | Partners have unlimited liability | Members not typically liable for the debts of the LLC. | Shareholders are typically not personally liable for the debts of the corporation. |
| Tax Treatment | No legal requirements. Entity not taxed, as the entity not conducting any business in the Kingdom. | Relatively few legal requirements | Income tax:
· 15% on mining, industry hotels and hospitals. · 35% on insurance and financial institutions. · 25% on all other companies. · 0% on agriculture projects or business ventures. VAT: 16% |
Income tax:
· 15% on mining, industry hotels and hospitals. · 35% on insurance and financial institutions. · 25% on all other companies. · 0% on agriculture projects or business ventures. VAT: 16% |
| Management | Sole authorized person by the head office decides everything | Typically each partner has an equal voice unless otherwise arranged | Members have operating agreement that outlines management | The corporation is managed by the board of directors who are elected by the shareholders |
| Cost of Creation | 5 JD Registration Certificate
10JD Deposit of Article and Memorandum of Association
5 JD Registration Form Fees 27 JD power of attorney stamps
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0.003 of Company’s Capital (Stamps)
0.002 to investments
10 JOD Registration Fees
10 JOD Publication Remunerations
10 JD Registration Certificate
10JD Deposit of Article and Memorandum of Association
10 JD Registration Form Fees 27 JD power of attorney stamps |
0.003 of Company’s Capital (Stamps)
0.002 to investments
10 JOD Registration Fees
10 JOD Publication Remunerations
10 JD Registration Certificate
10 JD Deposit of Article and Memorandum of Association
10 JD Registration Form Fees 27 JD power of attorney stamps |
1000.JD PSC fees
0.003 of Company’s Capital (Stamps)
0.002 to investments
10 JOD Registration Fees
10 JOD Publication Remunerations
10 JD Registration Certificate
10 JD Deposit of Article and Memorandum of Association
10 JD Registration Form Fees 27 JD power of attorney stamps |
| Capital Contributions | Zero | No Minimum | No Minimum | 50,000.00 JD |
| General assembly | Not required to hold any annual meetings or deposit meeting minutes. | Required to hold an annual General Assembly meeting. Required to deposit the General Assembly meeting minutes with the CCD. | Required to hold an annual General Assembly meeting. Required to deposit the General Assembly meeting minutes with the CCD. | Required to hold an annual General Assembly meeting. Required to deposit the General Assembly meeting minutes with the CCD. |
| Financial statements | Not required to provide annual financial statements or deposit any statements. | Required to deposit the annual financial statements with the CCD. | Required to deposit the annual financial statements with the CCD. | Required to deposit the annual financial statements with the CCD. |
| Owners need not be Jordanian citizens or residents | No, only the authorized office manager shall reside in Jordan. | No | No,
Owners may not however have ownership in excess of 50% of construction, restaurants, travel agencies and certain other commercial ventures. |
No,
Owners may not however have ownership in excess of 50% of construction, restaurants, travel agencies and certain other commercial ventures. |
| May be owned by another business, rather than individuals | Yes | yes | yes | yes |
| May issue shares of stock to attract investors | No | No | No | Yes |
| Advantages |
· Economy of operation · Tax advantage by avoiding corporate income tax · Legal life ends with the end of the company’s business. · No need to hire an external chartered accountant. · Tax exemption of salaries and wages payable to its non-Jordanian employees. · Permission to import trade samples and models, free from customs and import taxes. · Exemption of imported furniture and equipment necessary to furnish its office from customs and other fees and charges. · Permitting the Company to import one car under a temporary entry status (customs free) to be used by its non-Jordanian employees. |
· Tax advantage by avoiding corporate income tax;
· Partners have unlimited liability; · Can be registered (100%) ownership by foreign corporations or foreign nationals.
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· Partners have unlimited liability;
· Can conduct any commercial business according to its objectives. · Can be registered (100%) ownership by foreign corporations or foreign nationals. · No minimum capital contributions.
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· Partners have unlimited liability;
· Can conduct any commercial business according to its objectives. · May issue shares of stock to attract investors
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| Disadvantages | · Cant’ conduct any commercial business all businesses shall through head office or any other office abroad.
· 50% of the employees must be Jordanian. |
·Required to elect a registered auditor and pay his fees.
·Required to hold an annual General Assembly meeting. · Required to deposit the General Assembly meeting minutes with the CCD at the end of each financial year; ·Required to deposit the annual financial statements with the CCD at the end of each financial year and to clarify any losses if exceed the amount of the capital. · It prohibits receiving any assistance or donation or gift or funding from a non-Jordanian party without having obtained the approval of the cabinet, ·The funds of the company and its remaining assets after liquidation devolves to the Scientific Research Fund, any other non-profit company, public institutions or NGOs with similar objectives. The partners and shareholders are given back their actual shares of the capital at the moment of establishment. |
· Required a security clearance for every foreign shareholder;
· Required to elect a registered auditor and pay his fees; · Required to hold an annual General Assembly meeting; · Required to deposit the General Assembly meeting minutes with the CCD at the end of each financial year; · Required to deposit the annual financial statements with the CCD at the end of each financial year and to clarify any losses if exceed the amount of the capital. · Foreign entities may not have ownership in excess of 50% of some commercial ventures.
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· Usually it takes around 30-45 days to study and approve the memorandum and article of association before accepting the application.
· 50,000.00 minimum capital contributions. · Required a security clearance for every foreign shareholder; · Required to elect a registered auditor and pay his fees; · Required to hold an annual General Assembly meeting; · Required to deposit the General Assembly meeting minutes with the CCD at the end of each financial year; · Required to deposit the annual financial statements with the CCD at the end of each financial year and to clarify any losses if exceed the amount of the capital. · Foreign entities may not have ownership in excess of 50% of some commercial ventures.
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