Jordan’s Cabinet has approved a package of incentives and exemptions aimed at attracting investment in vehicle manufacturing and assembly in the Zarqa Development Zone.
The package links incentives to the size of investment, the scale of assembly and manufacturing operations carried out in Jordan, and the number of jobs created for Jordanians. The measures are designed to increase local added value and strengthen the Kingdom’s competitiveness in the automotive sector.
The move comes amid growing regional competition to attract high-value automotive industries, as companies worldwide expand their manufacturing and vehicle assembly operations.
Under the package, incentives increase as investors carry out more stages of assembly and manufacturing locally. Full assembly or manufacturing projects under the Completely Knocked Down (CKD) model will receive greater incentives than Semi-Knocked Down (SKD) projects.
CKD projects must have a minimum investment of $50 million, while SKD projects require at least $20 million. Each project must employ at least 50 Jordanian workers and maintain their employment, according to Social Security records.
Stronger Incentives for Full Manufacturing
Full assembly and manufacturing projects will receive electricity price support of 70% for five years, a 60% reduction in land prices within the Zarqa Development Zone, and 75% support for container handling costs at Aqaba Port.
Investors that build the required infrastructure themselves will also receive a 75% reduction in infrastructure costs payable to the relevant government entity.
The package further provides a 75% exemption from land registration fees and property sales tax on real estate where the economic activity is established.
Jordanian-origin vehicles, whether hybrid, electric or gasoline-powered, will benefit from a 100% reduction in the special tax on vehicles for 10 years, along with other exemptions related to registration and customs declarations.
The package also encourages exports by reducing income tax on exports to zero for five years from the start of exporting, while the overall income tax rate will be reduced to zero for 10 years, subject to the applicable conditions.
To qualify for income-tax exemptions, full assembly projects must establish or attract at least three supporting industrial activities, such as manufacturing automotive glass, seats, batteries and tires, as well as engineering and technical services, maintenance, operations and spare-parts services.
The government aims to develop a broader automotive industrial ecosystem in Jordan rather than simply establishing vehicle assembly plants.
Lower Incentives for SKD Projects
Semi-knocked-down projects will receive incentives proportional to the scale of operations conducted locally.
These include 50% electricity price support for three years, a 40% reduction in land prices in the Zarqa Development Zone, 50% support for container handling costs at Aqaba Port, and a 40% reduction in infrastructure costs when the investor develops the infrastructure independently.
SKD projects will also receive a 50% reduction in the special vehicle tax on Jordanian-origin vehicles for 10 years, a 50% exemption from land registration fees and property sales tax, and zero income tax on exports for three years from the start of exporting.
Employment of Jordanians is also a condition for benefiting from the package. The Zarqa Development Zone is proposed to be included in programs supporting production branches and local employment.
For full assembly and manufacturing projects, wage support could reach 100% of the minimum wage during the first year and 50% for the remaining support period over five years. SKD projects could receive support equivalent to 50% of the minimum wage for three years.
Other employment support options include participation in the National Employment Program, government coverage of Social Security contributions, or partial transportation costs for workers for three years.
Jordanian-origin vehicles will also receive preference in government and official-institution tenders, supporting demand for vehicles assembled or manufactured locally.
The incentives are tied to implementation. Investors must begin establishing, registering and licensing their projects within one year of signing a memorandum of understanding with the Ministry of Investment.
The package supplements existing incentives available to companies registered in development zones, including zero-rated sales tax on purchases and imports required for their activities, customs exemptions on materials and equipment used to establish projects, and income tax rates of 5% for industrial activities and 10% for other economic activities.
Cabinet Approves Agricultural Industrial Zone Funding
The Cabinet also approved allocating the necessary funds to launch tenders for infrastructure works in the Agricultural Industries Development Zone in Ghor Al-Mazraa and Al-Haditha in the Southern Jordan Valley of Karak Governorate.
The decision aims to prepare infrastructure for the zone and enable existing factories to begin operations before the end of the year, supporting investment, food processing and local industry.
Prime Minister Jafar Hassan had previously visited the agricultural industrial zone and directed officials to provide necessary facilities to companies operating there, with the aim of expanding production, supporting food manufacturing and creating jobs for local residents.
Government to Take 49% Stake in Power Project
As part of the government’s strategy of becoming a partner and key shareholder in economically and strategically important investment projects, the Cabinet approved a mechanism for government participation in a combined-cycle power generation project, known as the Seventh Independent Power Generation Project.
The Social Security Investment Fund will hold a 20% stake in the project company, while the government will participate through Samra Electric Power Generation Company with a 29% stake, bringing total government-related participation to 49%.
Samra will finance its $61 million contribution from its annual internal resources.
The government said the decision reflects efforts to actively participate in major investment projects through partnerships with investors, including the Aqaba–Shidiya–Ma’an railway project, whose foundation stone was laid recently under an equal Jordanian-Emirati partnership with a value of $2.5 billion.
Jordan Approves 2026–2029 Export Strategy
The Cabinet also approved the National Export Strategy for 2026–2029, which aims to expand the range of Jordanian products and export markets, increase the number of exporting companies and improve the competitiveness of Jordanian goods and services abroad.
The strategy targets sustainable export growth of 5% annually and seeks to increase the contribution of exports to economic growth and job creation.
Jordanian national exports reached approximately JOD 9.6 billion in 2025, with Jordanian products reaching around 150 countries.
The strategy aims to diversify exports and reduce reliance on a limited number of products and markets. It targets increasing manufactured exports from JOD 4.7 billion to JOD 7.9 billion by 2029, while expanding services exports.
Priority sectors include garments, chemicals, pharmaceuticals, cosmetics, fertilizers, engineering products and food, as well as information technology, management and engineering consultancy and creative industries.
The strategy will also support small and medium-sized enterprises by providing market information, studies, promotional support and assistance in reaching international buyers.
Sector-specific action plans for 2026–2029 will outline programs, projects, responsibilities and financing requirements, with an interim review scheduled for 2027 and an impact assessment in 2029.
Cabinet Extends Legalization Period for Foreign Workers
The Cabinet extended its decision on regularizing the status of foreign workers until December 1, 2026, covering workers across all economic sectors and activities, including domestic workers.
The measures include incentives and exemptions aimed at organizing the labor market and ensuring that non-Jordanian workers remain in the Kingdom legally through valid work permits.
The extension applies to foreign workers of various nationalities who entered Jordan for employment and previously held work permits.
Workers who entered the Kingdom for purposes other than employment are excluded from the Cabinet decision. New permits will be issued for one year from the date of application, subject to payment of the full work permit fee and JOD 500 covering previous periods.
Workers who fail to regularize their status after January 1, 2027 will be subject to enforcement and deportation measures.
The decision also applies to workers in the Aqaba Special Economic Zone, who will be exempted from 100% of late-renewal fines for expired work permits or for transferring to another employer across economic sectors.
Jordan Approves Teaching License System
As part of administrative modernization, the Cabinet approved the 2026 Teaching Profession Practice License Regulation.
Under the regulation, all teachers currently working in public and private educational institutions will automatically be considered licensed to practice the profession. The system will apply to teachers appointed in the future starting with the 2027–2028 academic year.
The regulation establishes an official license issued by the Ministry of Education as a requirement for practicing teaching in educational institutions, ensuring that teachers possess the necessary academic and professional qualifications.
It creates a unified legal framework governing the issuance and renewal of teaching licenses and applies to teachers in public and private institutions, educational institutions operated by the Jordan Armed Forces and those run by the United Nations Relief and Works Agency for Palestine Refugees (UNRWA).
The system will also introduce professional licensing examinations aimed at strengthening teachers’ professional competencies and improving educational outcomes.
A specialized committee will oversee the licensing process, establish policies and standards, and enable the Ministry of Education to monitor education quality and professional development.
New Petra Development Authority Appointments
Separately, the Cabinet appointed Dr. Maram Maan Al-Freihat as Deputy Chairman of the Petra Development and Tourism Region Authority Council, Dr. Sami Ahmad Al-Hasanat as Commissioner for Protected Area Management, and Yousef Mahmoud Al-Awdat as a commissioner on the council.
