Study calls for granting exemptions, tax incentives for emerging businesses

AMMAN — The Jordan Enterprise Development Corporation (JEDCO) on Tuesday issued a study recommending entrepreneurs analyse their projects “thoroughly” prior to execution, and calling on the public and private sectors to grant exemptions and tax incentives to those pursuing a business in the early years of the project  in order to avoid failure. 

The recommendations came after Jordan was found to be the 16th country worldwide and the 4th in the Arab region in business interruption among a total of 65 surveyed countries, followed by Morocco, Egypt and Lebanon. 

Around 55.4 per cent of former entrepreneurs whose businesses have failed in Jordan attributed the cessation to the lack of profits, while 16 per cent blamed it on the difficulties of obtaining funding, and 7.2 per cent on government policies. 

“A large percentage of the non-success cases are based on the lack of profit, coupled with the issue of financing,” economist Wajdi Makhamreh told The Jordan Times, pointing out that “in order to stop this cycle, there must be more financial support programmes for emerging businesses”. 

In light of the results, the report stressed the need to “increase awareness on the importance of entrepreneurship in order to avoid failure in project management”, recommending the development of practical courses aimed at introducing the concept of entrepreneurship in both primary and higher education.

In addition, the study called for the activation of the role of the private sector and its partnership with governmental agencies in order to “encourage entrepreneurs to continue to lead, to help them find suitable financing for their projects, and to increase the grants and support for new ideas”.

In this regard, the report urged the public and private sectors to provide financial and technical support programmes for the evolution of entrepreneurial projects into their medium enterprise phase, pointing out the need to encourage new companies to “diversify their products to increase their competitiveness with the existing companies and their export capacity”.

“Creating centres focused on the development of business leadership in both schools and universities is essential,” Makhamreh said, noting that “many projects fail due to the lack of enough education background on how to do business”.

Regarding the results per governorate, the report stressed the need to strengthen governmental support in rural areas in order to increase their employment rate, pointing out that “the levels of interruption of work exceeded those of entrepreneurship in the governorates of Mafraq, Madaba and Tafileh”. 

“There is a huge deficit in the support that the government is providing to projects based in the most underprivileged areas, which turns into less employment opportunities and increased unemployment rates,” Makhamreh said when asked about the issue. 

The study comes in line with a previous report issued by JEDCO, which called for increasing support of the business culture among Jordanian women and recommended the development of programmes aimed at enhancing their confidence in order to become entrepreneurs.

The lack of guaranteed access to financial resources was the reason for most of the surveyed women behind not starting a business, according to the study, while 42 per cent reported fear of failure as the main reason preventing them from pursuing business.