Corporate Law at Jordan
Sure! Here’s a concise overview of Corporate Law in Jordan:
Corporate Law in Jordan
Jordan’s corporate law framework is designed to regulate the formation, management, and dissolution of companies, balancing local business needs and attracting foreign investment.
Legal Framework
Companies Law No. 22 of 1997 (amended several times)
This is the main statute regulating companies in Jordan. It covers incorporation, governance, shareholder rights, and company types.
Jordan Securities Law and the Jordan Securities Commission (JSC)
Regulate public companies and capital markets.
Commercial Law
Contains provisions relevant to business transactions and commercial contracts.
Types of Companies
Limited Liability Company (LLC - شركة ذات مسؤولية محدودة)
The most common company type for small and medium enterprises. Shareholders’ liability is limited to their capital contributions.
Joint Stock Company (Public Shareholding Company - شركة مساهمة عامة)
Can offer shares to the public and be listed on the Amman Stock Exchange. Requires a minimum capital (usually 500,000 JOD).
Private Shareholding Company (شركة مساهمة خاصة)
Similar to joint stock companies but shares are not offered to the public.
Partnerships
Includes general partnerships and limited partnerships, where liability differs based on the partner’s role.
Foreign Company Branches
Foreign companies can register branches in Jordan subject to certain requirements.
Key Features
Incorporation Requirements:
Companies must be registered with the Ministry of Industry, Trade, and Supply, and obtain a commercial registration.
Corporate Governance:
Joint stock companies are governed by a board of directors. LLCs are managed by one or more managers.
Minimum Capital:
Varies by company type; LLCs have no fixed minimum, while joint stock companies require a substantial capital base.
Share Transfer Restrictions:
Especially in LLCs and private shareholding companies, transfers often require approval from other shareholders.
Annual Reporting:
Companies must prepare and submit annual financial statements audited by certified auditors.
Foreign Ownership:
Generally permitted, but some sectors have restrictions. Foreign investors can own 100% in most sectors.
Regulatory Authorities
Ministry of Industry, Trade and Supply
Handles company registrations and commercial licenses.
Jordan Securities Commission (JSC)
Oversees capital markets and publicly listed companies.
Income and Sales Tax Departments
Responsible for taxation compliance.
Advantages of Incorporating in Jordan
Strategic location connecting the Middle East markets
Developed banking and financial services infrastructure
Competitive tax rates and various investment incentives
Access to free trade agreements with several countries
Robust legal framework supportive of investor rights
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