The Development and Free Zones Regime of Jordan www.dfzc.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

Presentation Highlights 1.The National Economic Setup www.dfzc.jo 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

Critical National Investment Drivers www.dfzc.jo 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

Access to National, International and Regional Markets www.dfzc.jo 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

Enabling National Policy for Cluster Development www.dfzc.jo 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

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 Development and Free Zones as an Investment Enabling Platform www.dfzc.jo The Law Provides Total Business Solutions Provide training Generate Jobs Transparent, Proactive, Unified and Streamlined

DFZC Roles and Responsibilities Good Governance and Friendly Interface www.dfzc.jo Harmonizing National Investment Location Map Recommending establishments of new sites 1.Economic Planning: Land zoning, planning and construction permitting Business registration and licensing Environmental management Expatriate workforce permitting 2.Regulating Establishing and regulating Municipal or Common Facility Management Regime Managing Master Development Contracts 3.Site Management 4.Local Economic Development HR Training & Development SME’s Support Supporting Corporate Social Responsibility

Tax Exemptions for Development Areas Automatic and Project Life-Long in exchange of Preferential Market Access www.dfzc.jo 5% Corporate Income Tax On income accrued by all business operations conducted within the zone Custom Duties On all capital assets and goods imported for conducting business operations 0% 0% Sales Tax On all goods and services procured for conducting business operations 0% Social Services Tax On accrued business income 0% Capital Gains Tax No restrictions on Foreign Direct Investment

Tax Exemptions for Free Zones Preferential Market Access is Restricted www.dfzc.jo 0% Corporate Income & Social Services Tax On income accrued by all business operations conducted within the zone 0% Custom Duties On capital assets and production input materials 0% Buildings & Land Tax and Licensing Fees On assets within the zone 0% Personal Income Tax On salaries and remittances of non-Jordanian employees Full Repatriation of FDI Capital upon Liquidation

Master Developer’s Roles & Responsibilities Advanced Municipal Entity www.dfzc.jo 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

Master Development Companies Public Funds with Long Term Investments Horizon & Opportunities for PPP’s www.dfzc.jo 1.Master Developers The 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

Harmonize all Investment Enabling Platforms and Consolidate within a National Vision www.dfzc.jo Level-Playing Field with Additional Room for Performance Based Incentives 61 Sites 6 Development Areas 15 Industrial Zones 40 Free Zones More than 8000 businesses More than 85,000 Jobs Leading Sectors IT Services Trade & Logistics Tourism Industry

Development Areas A Platform to Enable and Spread Investments across Different Regions of Jordan www.dfzc.jo مباشرة الهيئة أعمالها في مطلع 2009

Industrial Estates and Free Zones Unifying the Regulatory Framework and Removing Existing Distortions www.dfzc.jo