Introduction
In this context, the role of Melhem Law and Business Office, which has been providing its services since 1989, becomes evident. Since 2020, the firm has contributed to the registration of more than 55 non-operating foreign companies in Jordan, including Saudi, Emirati, Gulf, and European companies, reflecting advanced practical expertise in this field.
How Do You Choose the Appropriate Type of Company to Register in Jordan?
Dear Investor, before commencing the procedures for registering your company in Jordan, it is important to determine the purpose of establishing the company in order to select the appropriate legal form. Below is a practical overview:
- If you wish to manage part or a division of your regional business operations from Jordan (if you have a company outside Jordan), without conducting any commercial activity within the Kingdom, and to benefit from the geographical location, the quality of human resources, and the reduction of operational costs, then the Non-Operating Foreign Company (Regional Office) is the appropriate option for you, and it is exempt from all fees and taxes.
- If you wish to register a Jordanian entity to manage your investments or branches abroad, and to benefit from tax exemption and avoid double taxation, then your optimal choice is the Exempt Company, whether you are Jordanian or non-Jordanian.
- If you are in the process of executing a project within Jordan or participating in an official tender, then you are required to register a Foreign Operating Company Branch, and such registration must be directly linked to the tender obtained.
After determining the purpose, you may begin preparing the required documents and appointing a Jordanian lawyer to submit the application before the competent authorities and complete the remaining procedures (registration, tax, social security, and investment).
First: Types of Foreign Companies in Jordan and the Purpose of Their Use
In light of the expansion of international business and the increasing desire of investors to benefit from Jordan’s strategic location, Jordanian law has provided several legal options for registering foreign companies or Jordanian companies of a special nature. These legal forms differ according to the nature of the business and the purpose of presence within the Kingdom.
In this article, we present a practical explanation of three main types commonly used, along with real examples and clear guidance for investors to select the most suitable structure for their business.
1. Non-Operating Foreign Company (Regional Office)
Definition
It is a branch of a foreign company registered in Jordan for the purpose of representing the parent company and coordinating its regional business and services, without conducting any commercial activity within the Kingdom.
It is not permitted to sell or provide commercial services through it, and its registration shall be cancelled if it violates this restriction.
Practical Use
It is used to achieve a strategic presence in Jordan, in light of:
- The quality of human resources
- The low operational costs and salaries
- The benefit of exemption from taxes and fees related to local activity
Real Examples
- Samsung has a regional office in Jordan to manage its marketing activities and support its agents
- Dar Al-Handasah registers a representative office to provide technical support for its regional projects
- International software and consulting companies rely on Jordan as an administrative base for the Middle East region
2. Foreign Operating Company
Definition
It is a branch of a foreign company registered in Jordan only after obtaining a tender or a project contract within the Kingdom.
It is granted a license to carry out a specific commercial activity and is subject to taxes and local regulations.
Practical Use
It is used to carry out specific works within Jordan and is often associated with:
- Government projects
- Infrastructure
- Technology
- Telecommunications
Real Examples
- Huawei established an operating branch to implement a local telecommunications project
- Siemens opened a branch after signing a contract for an energy project within Jordan
- International contracting companies register branches to execute contracts obtained through tenders
3. Exempt Company
Definition
It is a company registered in Jordan as a Jordanian entity; however, it does not conduct any activity within the Kingdom and is used to manage activities or investments outside Jordan.
It is exempt from tax on its foreign income and is considered a tool to avoid double taxation.
Practical Use
It is used by Jordanians and non-Jordanians to establish a Jordanian company operating exclusively outside the Kingdom, enabling the management of international operations through a legally recognized entity that is exempt from taxes.
Real Examples
- Estarta Solutions registers its export operations as an exempt company to provide services to Cisco and global technology companies
- Investors from the Gulf register exempt companies to own their companies in Europe or Africa
- Software startups register as exempt companies to facilitate dealings with international clients without being subject to local taxation
Second: Conditions and Requirements for Registering Foreign and Exempt Companies in Jordan
To register any of the three types (non-operating, operating, exempt), a set of official documents must be submitted in accordance with the legal procedures applicable in Jordan.
Required Documents (Depending on the Type of Company)
Non-Operating Foreign Company / Foreign Operating Company
- Certificate of registration of the parent company
(duly authenticated and translated, certified by the issuing authority, the Ministry of Foreign Affairs of the parent country, and notarized at the Jordanian embassy) - Memorandum of Association and Articles of Association
(duly authenticated and translated as above) - Audited financial statements for the last two years
(duly authenticated and translated as above) - Power of attorney for a representative in Jordan
(Jordanian or non-Jordanian)
Additional Requirements
- Registration of the company with the Jordan Bar Association (mandatory)
- Undertaking not to conduct any activity within Jordan (for non-operating companies)
- Official registration application
- Disclosure of the ultimate beneficial owner
- Appointment of an electronic authorized person
- Copies of passports or IDs of partners
Exempt Company
- Memorandum of Association and Articles of Association
- Official registration application
- Disclosure of ultimate beneficial ownership
- Identification documents of partners
Important Notes
- All documents must be translated into Arabic and duly authenticated (Ministry of Foreign Affairs of the country of origin + Jordanian embassy + notary public)
- A foreign operating company must be linked to an existing tender or project within Jordan
Third: Table of Fees and Estimated Costs
Registration Fees
- Non-Operating Foreign Company: No fees
- Foreign Operating Company: 5,000 Jordanian Dinars
- Exempt Company: 1,000 Jordanian Dinars annually (LLC)
Other Costs
- Office premises + professional license: Required
- Bar Association fees: 150 Jordanian Dinars annually
- Appointment of auditor: Mandatory (more than approximately 1,000 JOD)
- Lawyer’s fees: Subject to the law firm’s discretion
- Work permit for non-Jordanians: Approximately 1,000 JOD per permit
- Social Security: Mandatory for the representative and employees \
Section II: Requirements and Documentation for Registering Foreign and Exempt Companies in Jordan
To register any of the three types (non-operating, operating, exempt), specific official documents must be submitted in accordance with Jordanian law:
| Document | Non-Operating Foreign Company | Foreign Operating Company | Exempt Company |
| Certificate of Registration (Parent Company) | Required (Legalized and translated; certified by issuing authority, Foreign Ministry, and Jordanian Embassy) | Required (Same as left) | Not Required (Jordanian entity) |
| Articles of Association & Bylaws | Required (As above) | Required (As above) | Required |
| Audited Financial Statements | Required for 2 years (Legalized & translated) | Required for latest year (Legalized & translated) | Not Required |
| Power of Attorney for Jordan Representative | Required (Jordanian or non-Jordanian) | Required (Jordanian or non-Jordanian) | Not Required |
| Registration with Jordan Bar Association | Required | Required | Required |
| Undertaking Not to Engage in Local Activity | Required | Not Required | Required |
| Official Registration Application | Required | Required | Required |
| Beneficial Owner Disclosure | Required | Required | Required |
| E-Service Authorized Signatory Form | Required | Required | Required |
| Shareholders’ IDs/Passports | Required | Required | Required |
Important Notes:
• All documents must be translated into Arabic and certified by official authorities (Foreign Ministry + Jordanian Embassy + Notary).
• Foreign Operating Company registration must be tied to a confirmed project or tender in Jordan.
Section III: Estimated Costs and Fees for Registering Each Type of Company
| Item | Non-Operating Foreign Company | Foreign Operating Company | Exempt Company |
| Registration Fee | None | JOD 5,000 | JOD 1,000 annually (LLC) |
| Business Premises + Municipality License | Required | Required | Required |
| Jordan Bar Association Fee | JOD 150 annually | JOD 150 annually | JOD 150 annually |
| Auditor Appointment | Mandatory (Approx. JOD 1,000+) | Mandatory | Mandatory |
| Legal Fees (Year 1) | Based on law firm agreement | Based on law firm agreement | Based on law firm agreement |
| Work Permit (non-Jordanian representative) | Required (Approx. JOD 1,000) | Required (Approx. JOD 1,000) | Not applicable (no representative) |
| Social Security (Representative/Employees) | Mandatory | Mandatory | Mandatory |
Legal Basis for Appointing a Jordanian Lawyer
The Jordanian legislator has mandated that foreign companies (operating and non-operating) as well as exempt companies must appoint a legal representative or advisor from among lawyers registered in the official register of practicing lawyers.
Article (43) of the Bar Association Law provides that:
If any company or institution required to appoint a legal representative fails to do so within three months from the date of enforcement of the law, or from the date of its establishment or registration, it shall be required to pay an amount of five Jordanian Dinars to the Bar Association fund for each day of delay.
Prepared by:
Lawyer Alaa Al-Deen Melhem
References
- Jordanian Companies Law No. 22 of 1997
- Jordanian Companies Law No. 22 of 1997
- Jordanian Companies Law No. 22 of 1997
- Jordanian Companies Law No. 22 of 1997
- Jordanian Companies Law No. 22 of 1997
- Jordanian Companies Law No. 22 of 1997