Purchase OBG Publications

The growth of Jordan’s insurance industry reflects the maturation of the nation’s economy since independence in 1946. While the industry showed resilience during the global economic crisis, posting a rise in gross written premiums (GWPs) from 2008-09, competition within the sector is high. With 27 companies currently operating, achieving sustained profitability is a challenge for many of the smaller companies. The sector is dominated by the motor segment which in 2013 made up 40.8% of GWPs. Potential growth areas include the sharia compliant, or takaful, segment which has had considerable success across the GCC but currently accounts for a modest 7.9% of the market in Jordan. Moving forward, the pending dissolution of the Insurance Commission is set to dominate discussion within the industry, given the very central role that regulators play in developing the insurance sector across the region.

This chapter contains an outline of the legal framework in which local and foreign investors operate including an examination of the approval criteria for real estate and property transactions in Jordan and a breakdown of the first Islamic Finance Sukuk Law, enacted in late 2012, which addresses the issuance of sukuk (sharia-compliant bonds) of all forms.

This chapter contains an overview of the tax framework in which local and foreign investors operate including an introduction to a new investment law aimed at improving tax governance, an examination of the various treaties that have been established with partner countries and a breakdown of general sales tax and special sales tax. This chapter contains a viewpoint from Ali Samara, Partner, EY Jordan.

Jordan has both a private and a public school system. Of the 6355 schools operating in the 2012/13 academic year, 3582 were state schools and 2600 were private. In the tertiary education sector there are currently 10 public and 19 private universities. Foreign enrolment remains high at the kingdom’s universities, with foreign students accounting for around 11% of undergraduates in the 2012/13 academic year. The largest source of foreign students is Palestine, followed by Iraq, Syria, and then Saudi Arabia. The Ministry of Education has made entrepreneurship education a key focus and this has resulted in dedicated courses and business incubators being established at universities. Meanwhile, an emphasis on research and development aims to boost innovation in the energy and water sectors, and also in pharmaceuticals, analysis of biological materials and organic fine chemistry.

Jordan’s health care spending as a proportion of GDP was 9.8% in 2012, a high figure by regional standards. Just over 40% of the population has health coverage from the Civil Health Insurance Programme, while 27% have military-provided insurance. Currently, private health coverage stands at 9% but the sector is witnessing a wave of expansion driven by the need for additional capacity. Meanwhile, Jordan’s medical tourism sector continues to grow making Jordan the leading medical tourism destination in the Middle East with around 255,000 patients coming for treatment in 2013, up from 240,000 in 2012 and 180,000 in 2009.

After the turbulence of recent years, indicators are positive for Jordan’s capital markets. The Amman Stock Exchange (ASE) Free Float Index showed a 5% year-on-year increase in 2013, while the value of traded shares reached JD3bn ($4.2bn) in 2013, up from JD2bn ($2.82bn) in 2012. The ASE, with its total of 237 listed companies, reflects the diversity of Jordan’s economy. The recent coordination of the Jordan Securities Commission and the European Bank for Reconstruction and Development in drawing up a list of reforms is seen as a step towards increasing investor confidence and boosting foreign investment. The ASE has also taken other steps to increase foreign investment, most notably with the signing of a memorandum of understanding with the Cyprus Stock Exchange in 2012. This chapter contains an interview with Tarik Awad, CEO, Capital Investments.