Doing Business in Jordan?

Jordan, a unique crossroads in the Middle East, connects the East with the West and the North with the South. Its pro-western stance and enduring stability have not only made it a crucial ally but also established its capital, Amman, as a favored hub for international corporations in the Orient. What distinct opportunities does Jordan present to the world, and what are the specific challenges that await prospective investors?

Established in 1946, the Hashemite Kingdom of Jordan is led by the Hashemite royal family. The current monarch, King Abdullah II, holds a significant position within Jordan and actively represents the country on the international stage. Jordan’s population is predominantly homogeneous, consisting mainly of Arabs. With over 11 million inhabitants, nearly a third (including foreign labor forces and refugees) do not hold Jordanian citizenship. The population has increased fivefold over the last fifty years, with urban areas, particularly the capital city of Amman, hosting over 90% of the population. The majority of the population is Muslim, with Palestinian descent constituting two-thirds of the populace. The influx of refugees from neighboring countries, such as Syria, Iraq, and predominantly Palestine, has contributed to challenges in infrastructure, water and electricity supply, and a high unemployment rate, currently at 22%.

Strategically, in terms of security, trade, and development, Jordan’s main allies are the USA and the EU, whose member states actively engage in development assistance upon which the country relies heavily. Jordan is one of the largest recipients of international aid globally, primarily due to the high number of refugees, particularly Palestinian and Syrian.

The country heavily relies on imports, with its food production unable to meet the population’s needs. Jordan imports 98% of its food and 97% of its energy, facing long-standing issues such as unemployment and indebtedness. Tourism, a key sector, is recovering from the COVID-19 pandemic, with long-term prospects focusing on the chemical industry, potash, and phosphates. Jordan is the world’s largest exporter of phenolic derivatives.

Key sectors with significant growth potential in Jordan include energy, as the country lacks its own oil and gas reserves and is dependent on thermal power plants. The government is committed to transitioning to renewable energy sources by at least 15% by 2030. The defense and security sector, which receives one-third of the budget, offers opportunities for sophisticated modern technologies, especially for border control, such as drones and systems for exploring inaccessible areas, given the extensive deserts. Other sectors of interest include healthcare and pharmaceuticals, agriculture, and food processing. The water sector is also a promising area, with substantial investments planned to find alternative sources of drinking and utility water.

Understanding the business culture in Jordan is key to successful business dealings. Jordanians are often familiar with Western culture and can communicate in English. However, it is crucial to respect local traditions during business negotiations. Jordanians value long-term personal and business relationships based on trust. It is best to initiate business relationships directly through social events or intermediaries. WhatsApp is increasingly used as a communication tool. Good manners include confirming meetings a day in advance and exchanging business cards. Gift-giving is seen as a kind gesture. The workweek is Sunday to Thursday, with Friday being a holy day for spending time with families. Awareness of different religious and cultural environments, including behaviors towards women (such as no handshaking), reservations about alcohol, and interruptions for prayer times, is crucial. Respect for religious holidays is also important. Jordanians are warm in communication and speak eloquently. While negotiations may be protracted, their outcomes may not match the enthusiasm expressed during the meeting. Access to the market and partners can be significantly facilitated by a partner with the necessary contacts and cultural knowledge.

Jordan is a safe country, and Amman is a pleasant place to stay. The city boasts numerous suitable hotels, which can be easily reservable online.

For market familiarization, trade fairs such as the Special Operations Forces Exhibition and Conference (SOFEX), combined with SONEX/JIMEX, focusing primarily on solar energy and other renewable sources, and the agricultural and food product exhibitions Sawsana, Vetrana, and IRIS, organized by the Technical Consultancy Center, are interesting avenues for showcasing products and services.