✍️ By Attorney Haya Rahhal – Expert in Company Formation and Foreign Investment in Jordan
In recent years, Jordan has become an attractive investment destination for Arab and foreign investors due to its political stability, strategic location, and market opportunities. One of the most frequently asked questions is:
“How can I open a company or a branch of my foreign company in Jordan? What is the difference between an operating and non-operating branch? What are the basic legal requirements?”
This article provides a comprehensive guide based on Jordanian Companies Law No. 22 of 1997 and its amendments, written in a practical and professional style to answer all questions a foreign investor might have before entering the Jordanian market.
🔹 1. Legal Basis for Foreign Companies Operating in Jordan
Article 240 of the Jordanian Companies Law states:
“A foreign company shall be registered with the Companies Controller if it wishes to conduct business activities in the Kingdom, whether it is an operating or non-operating company.”
Article 241 specifies that an operating foreign company is one that:
“Conducts business in the Kingdom under a contract or a license.”
Meanwhile, a non-operating foreign company (representative office) is defined in Article 242 as:
“Not permitted to conduct any commercial activity or generate revenue in the Kingdom.”
🔸 2. Types of Foreign Companies in Jordan
1️⃣ Operating Foreign Company within Jordan
This type is typically used for:
- Executing a specific project under a tender or contract
- Permanent commercial activity in Jordan
✔ Key Requirements:
- Certified copy of the Articles of Incorporation and company charter
- Recent certificate of registration for the parent company
- Board resolution to open a branch in Jordan
- Appointment of a branch manager
- Audited financial statements (for permanent operations)
2️⃣ Non-Operating Foreign Company (Representative Office / Regional Office)
This option is suitable for companies that aim to:
- Study the market
- Build relationships and networks
- Represent the parent company
🔍 Important legally: This office cannot issue invoices or conduct any revenue-generating activity in Jordan.
🔹 3. Key Differences Between Operating and Non-Operating Branches
| Factor | Operating Foreign Branch | Non-Operating Foreign Branch |
|---|---|---|
| Commercial Activity | ✔ Allowed | ✘ Not Allowed |
| Invoicing | ✔ Yes | ✘ No |
| Tax Obligations | ✔ Subject to Tax | ✘ Exempt |
| Capital Requirement | Depends on Activity | Not Required |
| Purpose | Conduct business and generate profit | Representation and market research |
🔸 4. Foreign Ownership in Jordan
Jordanian law allows 100% foreign ownership in most sectors, except for certain regulated activities where local ownership or specific shareholding percentages are required.
🔹 5. Steps to Register a Foreign Company or Branch in Jordan
1️⃣ Prepare Documents and Certifications
- In the home country and with Jordanian authorities.
2️⃣ Submit Application to the Companies Controller
- Address any comments or requests.
3️⃣ Tax and Social Security Registration (for operating branches)
- Representative offices are exempt from taxes.
4️⃣ Commence Business Operations After Registration Certificate
- Fully compliant with Jordanian law.
🔸 6. Most Frequently Asked Questions by Foreign Investors
Q: Can a representative office be converted into an operating branch?
A: Yes, upon obtaining a contract or license and completing the legal procedures.
Q: Is it necessary to be physically present in Jordan to register a company?
A: No. A licensed attorney can handle the entire process through a power of attorney.
Q: Can a non-operating foreign office rent an office space?
A: Yes, but commercial activity is not allowed inside that office.
Q: What is the expected timeline for registration?
A: Typically 5–10 business days if all documents are complete.
🔹 7. Conclusion by Attorney Haya Rahhal
Choosing the correct legal structure is the factor that determines your success or challenges in Jordan. Many foreign investors face costly mistakes that could have been avoided with proper legal guidance from the beginning.
This is where our expertise comes in…
⚖️ Sirat Law Firm – Legal Services for Foreign Investors in Jordan
We provide:
- Precise analysis of your company situation
- Determination of the optimal legal structure for your activity
- Fast and professional company or branch registration
- Full representation before the Companies Controller and relevant authorities
- Comprehensive support for tax and legal compliance
If you are a foreign investor considering entering the Jordanian market, contact us today for a free legal consultation to determine the best path for your business:
✔ Book your appointment via messages
✔ Request instant consultation – a specialized attorney will guide you step by step
Start your business in Jordan today… with fully legal and compliant steps from day one
- email us info@siratlaw.com
- visit us at Address: 2nd Floor, The Edgo Atrium, Rafic Hariri Street, Amman
- call us +962 0797725709