Amman – Jordan is currently promoting a program to encourage companies to establish themselves in the country. By means of “development zones,” which are free zones of sorts, the government grants a series of benefits to entrepreneurs in industry, services, trade, tourism, real estate, technology and research.
The incentives include exemption from tax in the purchase of products and services necessary for business, from import tariffs, from tax on payment of dividends, and social contributions. The only tariff is 5% of tax on income obtained within the free zone.
The Development Zones Act, passed by the Jordanian Parliament last year, forecasts fast and easy processes for establishing companies, free transit of capitals and delegates the management of certain areas to the private sector.
“We need to get out of the way and allow the private sector to develop [these areas],” said the chief commissioner of the Development Zones Commission of the Jordanian government, Saleh Kilani, during a presentation given last Monday (9th), in Amman, to the Brazilian business delegation currently visiting the country.
According to the CEO of the King Hussein Bin Talal Development Area (KHBTDA), Rami Al Qusus, in charge of three such enterprises, the government has a goal of doubling the Jordanian Gross Domestic Product (GDP) in 10 years, and one of the means for doing so is to increase exports of goods and services.
According to Kilani, each of the areas is going to house specific sectors, depending on the economic vocation of the region in which they are located, and on the demand of the target markets at hand.
Complex
The Brazilian delegation, headed by the president of the Arab Brazilian Chamber of Commerce, Salim Taufic Schahin, visited one of the zones, located in Amman. It is the recently established King Hussein Business Park, geared towards healthcare, computing, telecommunication, media, education, security and other services.
Concluded roughly two months ago, the office building complex was initially designed to be the country’s military headquarters, but during construction, the plans changed, and now it is going to house companies. The structure has been concluded. There are 13 office buildings, an auditorium, a gymnasium, a TV broadcasting station, optic fibre cables and even a bunker that will be used for protecting sensitive equipment, such as servers.
One of the buildings, previously meant as the working quarters for higher-ranking officials, is now going to house luxury offices, stores and restaurants. What would be the officials’ sleeping quarters is going to become a four-star hotel, and what would be the soldiers’ quarters will now be a professional training centre and a business incubator.
Located in a new and high-priced area of the capital, with shopping centres and commercial buildings, the complex has rent prices 35% cheaper, on average, than outside of them.
For the time being, the complex only houses the head office of the Development Zones Commission and the office of financial advisory firm PanBuck, owned by the North American Robert Starbuck, who spared no compliments to the project.
“We have not begun doing marketing [for the area] yet,”, said Rami Al Qusus, adding that management will be entrusted to United States-based company Hines. “It is important to carry out road shows in order to promote [the development zones],” said Salim Schahin.
The three enterprises under the management of Qusus are funded by the Jordanian state-owned pension fund, which by law can only make domestic investment.
Another development zone is located in Mafraq, 60 kilometres to the northeast of Amman, and focuses on the light and medium industries and on logistics. According to Qusus, there are already 14 factories either operating or being built there, six of which began after the onset of the international financial crisis.
According to the executive, the area has strategic location, with access to the Iraqi, Syrian and Saudi borders. In addition to road connections, an old military air base nearby is going to be converted into a cargo airport, and there is a project for building a railway network.
The third enterprise is the Irbid Development Area, in the north of the country. Located near four of the largest Jordanian universities, it is geared towards the fields of computing, telecommunication, healthcare, and research and development. Qusus underscored that the price of rent in the area is equivalent to 25% of the price paid in Amman.
Three other development zones are being developed, one in Ma’an, 210 kilometres to the south of Amman, and two other tourism-oriented ones, one in the Dead Sea, and the other in the mountain range in Ajloun, to the north of the capital. The program for the development areas was established in 2006, based on an experiment regarded as successful that took place in Akaba, on the Red Sea coast.
Further information:
Jordan Investment Board
WWW.jordaninvestment.com
King Hussein Bin Talal Development Area
www.kinghusseinzone.com
Development Zones Commission
www.dzc.jo
*Translated by Gabriel Pomerancblum
