Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Jordanian private and public sector consumers of goods and services are often price sensitive. When applicable, U.S. companies are encouraged to make use of export and development financing tools to make offers more attractive. Those participating in competitive government tenders will find that price is a particularly important consideration when national funds (versus donor assistance funds) finance a procurement.
Domestic Market Size & Purchasing Power
Jordan is considered an upper-middle income country, with a per capita GDP of $4,167. In comparison to the United States, Jordan’s domestic market is small, with a population of 10.8 million. The population growth rate continues to climb, and over 52.8 percent of the population is under the age of 24 years old, with approximately 50 percent of individuals between the ages of 15-24 unemployed. U.S. companies pursuing opportunities in Jordan are encouraged to consider a regional strategy to capture greater market share.
Despite Jordan’s stability, some companies are wary of doing business in the country due to regional instability. Regional strife has adversely impacted the country’s ability to trade with its neighbors. In 2015, Jordan’s main border crossings with Iraq and Syria were closed. However, the Trebil border crossing between Jordan and Iraq reopened to limited trade and passengers in August 2020, and the Nasib - Jaber border crossing between Jordan and Syria reopened in August 2021 at full capacity under strict health measurement procedures.
Critical Natural Resources Limited
Jordan lacks critical natural resources and is also one of the most water scarce countries in the world. The kingdom’s renewable water supply currently only meets about two-thirds of the population’s water demands, with groundwater being used twice as quickly as it can be replenished.
High Energy Tariffs
Jordan imports natural gas to generate electricity, making the country vulnerable to commodity price fluctuations with high electricity tariffs for many industrial sectors. The country overcompensated for power shortages in 2013-2017 by investing in numerous power purchase agreements causing an electricity oversupply problem. Jordan’s electricity grid is approximately 50 percent overcapacity, driving up the average electricity price for both households and businesses. In most cases, businesses pay above average and above market rates while households see subsidized, lower than average rates. In August 2021, Jordan announced a new electricity pricing structure aimed at correcting some of these distortions, to be implemented in the first quarter of 2022. Renewable energy investments are currently limited to projects that are less than 1MW.
Despite business climate improvements in recent years, doing business in Jordan can be more difficult than elsewhere in the region. Companies sometimes report frequent changes in senior Jordanian government officials and a slow bureaucracy adversely affect commercial activity. For companies establishing a physical presence, business registration can be lengthy and tedious. Likewise, dissolving a failed business endeavor can be costly.