www.dzc.jo

www.dfzc.jo

The Development and Free Zones Regime of Jordan

Fourth Forum for Investment In Free Zones and Development Areas

Muscat, Sultanate of Oman

3rd-4th December 2011

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1.The National Economic Setup

2. Investment Enabling Platforms

3. The Regulatory Role

4. The Financial Incentive Package

5. Site Development & Management

6. Existing Portfolio

Presentation Highlightswww.dfzc.jo

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Critical National Investment Drivers

• National policy on key economic sectors

• Track record of economic and political stability

• Transparent and dynamic business environment

• Geographic location; a transportation and logistics hub

• Access to major international and regional markets

• Educated and experienced workforce

• High quality infrastructure

• Support and commitment at all governmental levels

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Access to National, International and Regional Markets

• Member of the WTO

• Jordan-US Free Trade Agreement

• Great Arab Free Trade Agreement

• Euro-Jordanian Association Agreement

• Aghadeer Agreement

• Bilateral Free Trade Agreements with Singapore, Canada and Turkey

“Customs Free and Quota Free” Access to 1 Billion Consumer

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Enabling National Policy for Cluster Development

• Objectives: - Promote FDI and DDI

- Expand Export Potential under Preferential Market Access - Distribute Economic Gains across Sub-national Regions - Create Jobs and local economic benefits

• Key Economic Clusters:- Dry Port and Logistics- Electricity Generation from Renewable Solar Energy Sources- ICT, Clean Technology and BPO- Eco-tourism and Wellness; Dead Sea and Ajloun- High Value Added Industries

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The Development and Free Zones as an Investment Enabling Platform

Government• Policy

enablement• Land• External infra-

structure• Financial

Incentives

Commission

• Planning approvals

• Business licensing

• Provide Gov”t interface

Master Developer

• Onsite infrastructure

• Municipal services

• Marketing

Investor

• Construct project• Regime in

exchange for commitment

The Law Provides Total Business Solutions

Provide training Generate Jobs

Transparent, Proactive, Unified and Streamlined

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DFZC Roles and ResponsibilitiesGood Governance and Friendly Interface

1.Economic Planning:

2.Regulating

3.Site Management

4.Local Economic Development

• Harmonizing National Investment Location Map• Recommending establishments of new sites

• Land zoning, planning and construction permitting• Business registration and licensing• Environmental management• Expatriate workforce permitting

• Establishing and regulating Municipal or Common Facility Management Regime

• Managing Master Development Contracts

• HR Training & Development• SME’s Support• Supporting Corporate Social Responsibility

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Tax Exemptions for Development AreasAutomatic and Project Life-Long in exchange of Preferential Market Access

Corporate Income TaxOn income accrued by all business operations conducted within the zone

5%

Custom DutiesOn all capital assets and goods imported for conducting business operations 0%

Sales TaxOn all goods and services procured for conducting business operations

Social Services TaxOn accrued business income

Capital Gains Tax

No restrictions on Foreign Direct Investment

0%

0%

0%

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Corporate Income & Social Services TaxOn income accrued by all business operations conducted within the zone 0%

Custom DutiesOn capital assets and production input materials

0%

Personal Income TaxOn salaries and remittances of non-Jordanian employees0%

Tax Exemptions for Free ZonesPreferential Market Access is Restricted

Buildings & Land Tax and Licensing FeesOn assets within the zone 0%

Full Repatriation of FDI Capital upon Liquidation

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Master Developer’s Roles & ResponsibilitiesAdvanced Municipal Entity

Business Planning, Site Development & Management, Promotion and Marketing

• Preparing and implementing: - Market Assessment and Business Plans - Master Plan and Infrastructure Engineering Plan - Financing Plan - Marketing and Promotion Plan - Strategic Environmental Assessment Study

• Managing sub-development agreements with located business• Site and Facility Management & Provision of Municipal Services• Assuming regulatory powers delegated by DFZC

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Master Development CompaniesPublic Funds with Long Term Investments Horizon & Opportunities for PPP’s

1.Master DevelopersThe Investment

Unit/Social Security Corporation

• Business Park• Irbid• Mafraq• 10% Jordan Armed Forces,

5%King Abdullah II Fund For Development, 5% The Hashemite Fund For Development of Jordan Badia

Jordan For Development Zones

(100% Public)• Dead Sea• Ajloun

King Abdullah II Fund For Development

• Ma’an(Jordan Industrial Estates Corporation, Al-Hussein Bin Talal University)

2.Master Developers to be Grandfathered within the DFZC Regime

• Industrial Zones Company• Free Zones Company• 9 private companies in Private Industrial Zones• 35 private companies in Private Free Zones

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Harmonize all Investment Enabling Platforms and Consolidate within a National Vision

Level-Playing Field with Additional Room for Performance Based Incentives

Leading Sectors

IndustryTourismTrade & Logistics

IT Services

More than 8000 businesses

61 Sites6 Development

Areas15 Industrial

Zones 40 Free Zones

More than 85,000 Jobs

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Development AreasA Platform to Enable and Spread Investments across Different Regions of Jordan

فرص العملقيمة االستثمارات: مليون دينارالمناطق التنموية

المساحة )دونم(تاريخ اإلعالنعدد المؤسسات

المسجلة

تم استثماره قبل إعالن المنطقة

التنمويةاستثمارات جديدة

العمالة قبل إعالن المنطقة التنموية

فرص العمل الجديدة

ملتزم بهمتحققملتزم بهمتحقق

Nov ,200621,000 16 - 43 143 300 2,900المفرق1

Sep ,20079,000 18 - 60 685 85 1,100معان2

Nov ,20073,200 9 - 900إربد3

May ,200940,000 27 391 17 372 2,100 3,040البحر الميت4

- - July ,20092,300جبل عجلون5

Jan ,20101,400 14 - 1,100مجمع األعمال6

7,940 1,485 1,200 120 84 76,900المجموع

ΎϬϧϣΓΩΩΟΗϣϟΔϗΎρϟΔϓέόΗέΎυΗϧΎΑϥϭϳϠϣ

مطلع في أعمالها الهيئة 2009مباشرة

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Industrial Estates and Free ZonesUnifying the Regulatory Framework and Removing Existing Distortions

فرص العملقيمة االستثمارات: مليون دينارالمدن الصناعية والمناطق الحرة

عدد المناطقتاريخ التأسيسعدد المؤسسات

المسجلة

تم استثماره قبل إعالن المنطقة

التنمويةاستثمارات جديدة

العمالة قبل إعالن المنطقة التنموية

فرص العمل الجديدة

ملتزم بهمتحققملتزم بهمتحققJIEC :1980المدن الصناعية

Under DFZC: 2011

29,000 1,400 500 6العامة

34,000 450 175 9الخاصة

JFZC :1973المناطق الحرةUnder DFZC :2011

12,000 2,700 7,600 5العامة

8,000 1,000 100 35الخاصة

- 83,000 5,550 8,375 55المجموع