Included among the structural benchmarks of the current IMF program, the Investment Law aimed to clarify and simplify the regulatory framework in order to make the country more attractive to investors, but above all to reduce tax loopholes and loopholes. The law is currently imprecise and raises many questions about the impact it will have on investors.
Implementing decrees to be published in early 2023 could clarify certain elements.
The new investment law modifies the institutional framework. The new law defines the role of two new entities.
– The Investment Council, which must define public policy relating to investment, ensuring that the target sectors comply with all the country’s existing strategies. Chaired by the Prime Minister, the council should meet quarterly. It will be composed of six public authorities and six representatives of the private sector.
– The Committee on Incentives, which should be chaired by a member of the government, will propose to the Council of Ministers any plan, incentive, advantage or exemption concerning economic activities throughout Jordan. It will be composed of four ministers.
The power of the Minister of Investment remains limited to an executive role, he will play the role of general secretariat for the two committees created.
Certain provisions of the new law deserve clarifications which may be provided by the implementing decrees. The framework relating to tax incentives remains vague pending these decrees, but Parliament has already wished to add to the law a certain number of criteria for the granting of incentives.
Incentives will also be granted for strategic projects. The changes to the granting of incentives should not impact investors present in Jordan in the short term, since they are non-retroactive for at least seven years if no deadline is provided for in their contract.
Regarding the settlement of disputes, the new law does not change the existing procedures. If the contract does not include specific provisions on the matter, the domestic law of Jordan or the rules of international law may be applied at the choice of the investor. The new law should ease the restrictions on foreign capital in place through implementing decrees, both on Jordanian shares in companies and on the recruitment of non-Jordanians.
The issue of free zones is dealt with in almost the same way as in the previous law.
Source Embassy of France in Jordan
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