The intrepid investor guide to Jordan

Last week, the Council of Ministers issued an amendment to the requirements/instructions for granting a Jordanian citizenship and residency to investors "for the purpose of creating an environment that attracts foreign investment". Never mind that the act of providing residency or citizenship does not create an environment that is conducive to investment, but also, the requirements themselves may put off some investors from investing in Jordan. The below is some of the highlights that warrant further contemplation from the regulators.

According to the new instructions, granting a Jordanian citizenship to the investor requires the investor to deposit one million US dollars for a period of three years at the Central Bank of Jordan with zero interest. No withdrawal is allowed. Or, the investor must purchase one million dollars’ worth of treasury bonds for a period of six years at an interest to be determined by the Central Bank of Jordan. Furthermore, the investor must have been for at least for one whole month in the Kingdom prior to the citizenship application date.   

Upon reading this paragraph in the instructions, a quick slew of questions come to mind, and they are most oratorical.  Here we go: 1) Where did the US$1 million limit come from? 2) Did the regulator conduct a comparison with what is offered elsewhere? 3) Why should the amount be deposited at the Central bank without interest? 4) Why does the central bank determine the interest rate on the bonds instead of using the going rate on treasury bonds? Is it to make the most of interest from the investor? Let’s be careful here as this sounds as if the government is selling the nationality for the interest on the deposit or the bonds.  5) Does the author of this not know that Jordan thus appears to sell citizenship for the interest earned? 6) Doesn't such a condition send the wrong message to the world? 7) And if the interest amount is the primary target and goal, then the regulator should determine such a value and demand it outright for the investor and save all from the acrimonious process of depositing a million and then withdrawing it. Just take the money (the calculated cumulative interest amount over the three years), and give the person his/her citizenship. 8) And why should the investor be present in Jordan a whole month before submitting the citizenship application? Are we going to ask him to prove that? What is the purpose for this request in the first place? May be the regulator should try to appear less of an authoritarian bureaucrat since we/he/she, and all of us, are in the business of investment promotion. 9) Why make the deposit/bonds in US dollars and not in Jordanian dinars to encourage the demand for local currency from investors residing in Jordan, especially since Jordan’s foreign currency reserves are at their highest level ever?

One other condition for granting citizenship is the purchase of shares in Jordanian companies for an amount of no less than one and a half million US dollars (note, again in US$), provided that the shares are not disposed of for a period of no less than three years! 10) What will happen to the investor if the company goes bankrupt? 11) Is it possible that this condition is biased against emerging and small companies, and promotes investment in large companies that do not need funding or support in the first place? 12) Isn't it the policy in Jordan to support small and medium businesses? 13) Does this condition support our stated directions? Of course not!

Ah, but wait! There is a condition whereby if one buys a real estate for JOD200,000, then the person can be granted a five-year residency? Is it renewable? The answer is not mentioned in the copy of instructions that was circulated.  

Then comes another gem; the principle of granting a temporary passport for a period of three years when establishing a productive project with a paid-in capital of at least 1 million US dollars within the borders of the capital, and US$750,000 if the project is located outside the capital governorate, provided that 10 “real” job opportunities are provided to Jordanians. What is a “real” job? Who determines if it is real or fictitious? Will there be search or inspection parties sent to the investors’ locations to determine the reality of the jobs? How many times will they visit to determine realism? They would definitely have a significant power over the investors because their determinations could lead to losing the temporary passports.

Also, what would happen if the number of real jobs falls below 10? And, why discriminate against other governorates by asking for less investment there to be granted the residency? Is it because the quality of life there is below that of living in the capital, so we ask the investor to invest less as if investing is a tax or something painful and unrewarding? Investment, albeit requires spending is not a tax, so it should not be subject to similar conditions. Besides, tax holidays as incentives have failed to create an attractive environment for investment in the governorates.

It is also possible to obtain residency in the Kingdom for a period of five years “regardless of the investor’s previous stay in the Kingdom”, when buying a property, with a value of no less than JOD 200,000, which value is determined " According to the assessment of the Department of Lands and Surveys” (meaning that any other assessment is not recognised), with the property being kept for a period of no less than 5 years without any right to dispose of it or mortgage it. Still, the right to obtain residency is not automatic even in this case. Rather, the residency is issued by a decision of the Minister of Interior and based on the recommendation of the Special Investors Committee. Furthermore, when any of the previous conditions is violated, the citizenship is withdrawn and the residency is cancelled for the investor.

Have you had enough? Wait, there is more. There are also limitations and restrictions on the age and sex of the children of an investor who are entitled to a Jordanian citizenship. Why can't a father grant his children citizenship once he/she becomes a citizenship? If the investment exceeds three million US dollars, the investor can grant citizenship to his male children (not the females) that are over thirty years of age. Is this discrimination based on gender? I think so!

There are also limits on the number of investors that can benefit from these instructions per year. They should not exceed 500 per year. Shall we tell the rest, in case more than 500 desires to benefit from these wonderful instructions that our quota is full for the year and that they should wait until next year? What is if the 501 investor turns out to be a billionaire who wants to He invests hundreds of millions of dollars in Jordan. Would you tell him to wait?  

There are so many more heart-wrenching measures in the instructions that may give the wrong idea about Jordan. In fact, the instructions will harm the investment climate instead of improving it. Please withdraw them before it is too late.