Jordan promotes export-oriented industries

The Hashemite Kingdom of Jordan has been recording economic gains lately.  Economic  growth  in  the first quarter this year reached 2.6 percent year-on-year, an improvement from the 2.2 percent in the fourth quarter, central statistics office data showed. Even the International Monetary Fund (IMF) expects the economy to expand above 3 percent in 2013 as a result of higher government capital spending, recovery in exports and domestic  consumption.  Moreover,  the country’s foreign exchange reserves has risen by at least $1.5 billion giving much-needed boost to its image as an attractive investment site.

Opportunities abound for investors in industries that are being encouraged by the government. The chemical processing industry produces petroleum products such as fuels and lubricants, mineral fertilisers, industrial chemicals, paints and coatings, adhesives and more. The industry benefits from the Middle East region’s abundant supply of raw materials. Jordan’s phosphate / potash industries have been evolving from extraction/mining industries into export-oriented sectors shipping out phosphoric acid, diammonium phosphate, bromine, and aluminium fluoride.

An important industry, oil refining, benefits from the liberalisation policy. Expansion of refining capacity to meet demand and move away from reliance on oil has been advancing. Other industries such  as  cement  manufacturing  retain their  importance  due  to  the  planned developments,  infrastructure  and construction projects.
 
Free trade zones
Jordan's free zones were created to promote export-oriented industries and enhance trade. These zones also serve as storage of commodities due to the presence of storage and manufacturing facilities, and enjoy the usual exemption from excise fees and other taxes. There are two major free zones in Jordan, located in Aqaba and Zarqa. These zones are operated by the Jordanian Free Zones Corporation, an autonomous government agency.

The Aqaba  Free  Zone  covers  one million  square  metres  (sq.m.)  with additional 2.5 million sq.m. being allocated for the purpose of establishing industrial projects, similar to the Jabal Ali Free Zone in Dubai, U.A.E. The Zarqa Free Zone lies 35 km. northeast of Amman, along a route that connects Jordan with neighbouring countries. It covers 5.5 million sq.m. with over 60 licensed industrial companies and more than 150 warehouses. There are also commercial trading and industrial projects in Jordan's two free zone areas. These are engaged in storage, repackaging, mixing and manufacturing operations. Land and buildings in the free zone areas are available for rent at concessionary prices.

Another important free trade zone is the Sahab Industrial City, which has been designated as ideal location to serve industrial companies and export-oriented industries. Another free zone project at Queen Alia International Airport has been allocated for the purpose of serving transit trade and establishing light high-tech, pollution-free industries. Private free zones are also being planned as well.

Enterprises operating in industrial estates are usually exempt from income and social services taxes for a period of two years from the commencement of operations. They are also exempt from paying land and building taxes throughout the lifespan of the project. Foreign and local companies established in free zones also enjoy tax-free importation or exportation of all commodities. Products bound for external markets are not required to pay customs duties, import and all other taxes and fees. The salaries and bonuses of non-Jordanian employees working in the free zones are exempt from income and social affairs taxes. ConstrNEW BALANCE