I can’t say I have personally started a business in Jordan, but I have met many locals who say it isn’t easy. I wanted to dig a bit deeper about how to start a business as a Jordanian in the hopes to guide a few in the right direction to adding to the start-up scene in the country.
The following article is a contribution of tips by the CEO, Dr. Ahmad Alnajjar, of FuAIS, an IT start-up in Amman with the goal to provide high-quality, cost-effective services to the internet & IT outsourcing community and businesses.
According to Dr. Ahmad’s first-hand experience, here are some things to consider when starting a business in Jordan.
Background Considerations Before Starting a Business
Before starting any business, no matter where you are in the world, there are many things that should be considered. For example, the concept of your initial idea, name/brand, developing a proper business plan and overall business knowledge.
This is fundamental to the success of your business. It can, and probably should take inspiration from other companies. Looking outside of Jordan can be good but make sure that ideas are appropriate culturally, logistically, etc.
Your company name should evoke the kind of image you are looking for. If it has to be wordy then try to make it fit an acronym.
For example, FuAis got its name after the team analyzed the general mission and goals of the company. The words that make up the name are associated with progress and development. Also, you can stretch the pronunciation to being like fouaz (فوز) which means “win” in Arabic.
A business plan continuously changes but the main thing is to try to set out goals in the short, medium and long-term, and the methods you will use to try to achieve them.
For example, FuAis’ starting business plan is to map out the first two years where they plan to focus on their core services, i.e. web and app development with a focus on augmented reality. Projects will likely be in Jordan for the most part with a small number of potential projects in surrounding countries (e.g. Palestine, Saudi Arabia). This will allow them to build up a client base, portfolio of projects and revenue streams. Over the course of this period, they will also look to develop their knowledge and skills related to other emerging technologies such as IoT and renewable energy.
Learning About Business
If you don’t come from a business background, academically or professionally, try to study the essentials of business through an online course, textbooks, etc. Another good way to learn about starting a business is to talk to someone who has done it themselves, such as a friend or family member.
Registering a Company in Jordan
This is required to be done through your local authority. A registration fee of up to 250 JD needs to be paid.
In Amman: you will have to go to the Greater Amman Municipality (GAM) in Omar Matar Street (map). They will provide you with guidelines on how to register the business including what documents you will need to bring and what forms need to be completed. It is likely that you will also have to visit the Amman Chamber of Commerce in Shmeisani (Prince Shakir Ben Zaid Street – map).
Legal & Taxation Guidelines
There are different guidelines depending on what type of business you are trying to set up and details can be found through your local authority.
The corporate tax rates in Jordan are applied based on the industry/business activities from which the taxpayer generates income. According to the income tax law, the corporate tax rates are as follows:
- 35% for banks.
- 24% for telecommunication, insurance and reinsurance, financial intermediation companies (including exchange and finance leasing companies), companies that generate and distribute electricity, and companies that undertake mining raw material activities.
- 14% for the industrial sector.
- 20% for other companies.
As you can see, the corporate tax rate is between 14 – 35%. This makes it higher than UAE (and likely Lebanon at 15%) but at a similar level to Egypt. Relative to the rest of the world, it’s similar to the US (21%) and lower than a lot of European countries.
Typically, initial funding can be a little tricky if you can’t personally raise funds. However, things are improving with greater access to venture capital and easier loan schemes available. Another avenue to look down is grants offered by local and international government agencies, as well as NGOs.
Finding Staff in Jordan
There are lots of highly-qualified graduates in Jordan and the job market is fairly competitive. However, you need to describe your future goals as there may be a reluctance to commit to a start-up company which hasn’t been established for a long time.
The way recruitment has been done at FuAIS has mostly been through social media, such as Facebook, LinkedIn, and Twitter. Other popular job listing boards in Jordan are akhtaboot.com, bayt.com, and opensooq.com.
An internship scheme can also be a good way for aspiring employees to learn about the company. It’s important that the initial employees buy into the whole idea and mission of the company and that they are versatile and adaptable.
Are you starting your own business in Amman and want to share your tips? Send me an email to firstname.lastname@example.org or comment below