The Jordanian Legal System

Background

The Jordanian Constitution of 1952 guarantees equality before the law to all Jordanians. As a Constitutional Monarchy, the King promulgates and ratifies laws passed by two levels of National Assembly. The House of Deputies consisting of 110 members is elected while the 55 members of the Senate are appointed by the King. All Judicial decisions are pronounced in the name of the King.

Court System

Chapter 6 of the Constitution establishes the Judiciary and provides that Judges are independent and subject to no other authority than the Law in the exercise of their judicial functions. The Courts are divided into three categories:

1. Civil Courts have jurisdiction over civil and criminal matters.
2. Religious Courts deal with matters of “Personal Status” such as marriage, divorce, child custody and
     inheritance.
3. Special Courts include the State Security Court and the High Court of Justice (which deals with
     administrative claims), in addition to the Court of Income Tax, and Customs Court.

The Civil and Criminal Courts are divided in the following manner:

1. Trial Level Courts:

1. Magistrate and Courts of First Instance: Magistrate courts have jurisdiction over misdemeanors and civil cases with claims of up to 3,000 Jordanian Dinars. Courts of First Instance have jurisdiction over felonies and civil cases in excess of 3,000 Jordanian Dinars.

2. Grand Felonies Court: A first Instance Trial Court with jurisdiction over cases of grand felonies (e.g. murder, manslaughter, attempted murder etc.)

3. Courts of Appeal: There are three Courts of Appeal in Jordan that hear appeals from Magistrates and Courts of First Instance.

4. Court of Cassation: The Court of Cassation has jurisdiction over appeals from the Court of Appeal, the Grand Felonies Court and the State Security Court. It is the court of final appeal and decisions issued are binding only on the parties to the case presented before it.

Brief Legal Background on Areas of Specialization

(A)     Companies Law

Registration Requirements:
All enterprises operating in Jordan (excluding joint ventures) are required to register with the Controller of Companies at the Ministry of Industry and Trade.

Some of the Types of Companies that may be registered:

1.          Non Operating Foreign Companies (Regional Offices)

A non-operating foreign company is a company which establishes a regional or representative office to represent the affairs of the company in the region and conducts business outside Jordan, with the intention of using its regional or representative office in directing the said affairs and coordinating them with the head office. It is also important to note that Regional Offices may not engage in any business activity inside the borders of Jordan. Regional offices enjoy several very attractive benefits which are:

2.         Operating Foreign Companies – Branch Office

An operating foreign company is a company or a body registered outside Jordan, and whose nationality is non-Jordanian. Such companies are classified into two types according to the nature of their activities:

Kindly be informed that the Operating Foreign Company in Jordan does not have any income tax exemptions.  Therefore, the Income Tax Law, Sales Tax Law and other related laws are applied to any Operating Foreign Company registered in Jordan.

3.         Offshore Companies

An offshore company (or exempt company) is a public company (limited liability, private shareholding company or a partnership limited in shares), which is registered in Jordan, but conducts its business outside of Jordan. Off shores companies enjoy tax free status and minimal government control and scrutiny.

4.         Public Shareholding Company

A public shareholding company (PLC) may be formed by at least one promoter who can subscribe to negotiable, transferable, and merging shares. The liability of the promoters is limited to their shares in the company's capital. The minimum authorized capital is set at JD 500,000 of which at least 20% should be paid upon incorporation, with the remaining amount to be paid within three years.
Banks, financial institutions and insurance companies may only be incorporated as public shareholding companies.

5.         Limited Liability Companies

The Limited Liability Company (LLC) is composed of one or more persons (legal or natural). The Company’s liability shall be considered independent from the liability of every shareholder in it. The liability of any shareholder therein for debts, obligations and losses is limited to the share in the LLC. The LLC is either managed by a general manager or Board of Directors (whose members shall not be less than two and not more than seven). The Board of Directors must elect a chairman, a deputy chairman and those authorized to sign on behalf of the company.  The minimum capital of LLC is JD 30,000, half of which must be deposited at the bank upon incorporation. 

Non-Jordanians cannot fully own a limited liability company in Jordan unless it has certain objectives that qualify the company to be fully owned by non-Jordanians. According to the Investment Promotion Law, there is no discrimination between Jordanian and foreign investors. Investors can own and operate any project in Jordan with the exception of the following main sectors, where ownership is limited by law to 50% foreign ownership: transportation, mining, trade and retail operations, and construction & contracting. The minimum contribution of any foreign shareholder must not be less than JD 50,000.  

Most LLCs are subject to a corporate tax of 25% on profits.  However, the Investment Promotion Law provides several tax reductions for several sectors and areas.  In addition, the Investment Promotion Law allows for the industrial and other equipment to be imported duty free if they fall under the promoted sectors.

6.         Private Shareholding Limited Liability Companies

Private Shareholding Companies (PSC) has similar features to the LLC and may be formed by one or more shareholders, whereby the liability of said shareholders is limited to their shares in the company’s capital.  PSC offers flexibility in terms of the content of the Articles and Memorandum of Association allowing for, among other things, differences in voting powers and issuance of shares.

7.         General Partnership

A general partnership is formed by a minimum of two and a maximum of twenty natural persons. Each partner is liable jointly and severally with all other partners for all the debts and obligations incurred by the company during the time of the partnership and shall be deemed a guarantor of such debts. Each partner is entitled to take part in the management of the partnership, even though the partnership agreement normally provides for its authorized representative and signatory.

 (B)      Investment Promotion Law

The Investment Promotion Law No (16) of 1995 and its amendments for the Year 2000 states that any project falling under the following sectors shall enjoy special exemptions and benefits prescribed in the law:
a. Industry.
b. The agriculture sector
c. Hotels.
d. Hospitals.
e. Maritime Transport and Railways.
f. Any other sectors or its branches that the Council of Ministers decides to add based on the recommendation of the Higher Council for Encouragement of Investment.

(C)      Intellectual Property Laws.

Most countries of the Middle East region have gone though almost revolutionary transformations in enhancing, amending and strengthening their intellectual property legislation.  The main source for this unprecedented effort has been the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS Agreement), which obligates its member states to enforce rights of patents, copyrights, trademarks and other forms of intellectual property protection.  Furthermore, free trade agreements signed by the United States and several Arab countries has elevated the standards of intellectual property protection and generated further reform in this area.   

Jordan has seen tremendous legislative changes over the past five years in the area of intellectual property rights.  More than eleven (11) intellectual property related legislation (copyright, patents, trademarks, industrial designs, unfair competition, trade secrets, integrated circuits, geographical indications, and new plant varieties) were passed from 1999 to 2004, five of which were introduced for the first time.  Moreover, recent intellectual property legislative amendments in Jordan have increased the level of protection to comply with US Jordan Free Trade Agreement.   

Jordan’s obligations under multilateral and bilateral trade agreements have ensured that the IP legislative infrastructure is up to international standards.   The Trademark and Copyright Laws offer civil injunctions and remedies as well as criminal sanctions.
Jordan is a signatory to the Paris and Berne Conventions; WCT & WPPT, World Intellectual Property Organization, and the World Trade Organization (WTO).

Although Jordan is a member of the Paris Convention for the Protection of Intellectual Property, the international classification of patents is not observed in Jordan. Applications for the grant of a patent are filed with the Patent Office, which examines the applications for compliance with formalities and patentability under the Jordanian Patent and may require amendments to applications to achieve conformity.  The law grants protection to both process and end products patents. 

Appeals by applicants against the requirements of the Patent Office as decided by the Registrar of Patents are made by petition to the High Court of Justice within thirty days of the Registrar of Patents' decision.  Patents are awarded for a period of twenty years from date of filing. 

In 1992, the Copyright Protection Law No. 22 was enacted. The law was also emended several times, the last being in 2005 to extend copyright protection to the Internet. The Copyright Law grants copyright protection to original works of literature, art and science of any type, purpose or importance. It covers works of art as may be expressed in writing, sound, drawing, photography and motion pictures, including books, speeches, plays, musical compositions, films, applied art, three-dimensional works and computer software.

A copyright may be deposited with the National Library (Copyright office). The work protected must be original and involve personal innovation and arrangement. The Copyright Office enjoys ex officio powers and may seize infringing material and transfer the case to the competent judicial authority.  Right holders may also request the Copyright Office to prtect their rights.   

Jordan has had a long history of protecting trademarks dating back to 1952 when the first Trademark Law (hereinafter referred to as “TL”) was adopted.  Furthermore, TL was amended in 1999 so as to bring said legislation in line with WTO’s TRIPS Agreement. In addition, an Unfair Competition Law (hereinafter referred to as “UCL”), was adopted in 2000 to further comply with Jordan’s WTO obligation The outline below provides a brief summary of both TL and UCL, in addition to outline of remedies available to right holders.

Applications for registration of a trademark are filed with the Registrar of Trademarks. The Registrar conducts an examination of the application, and, if accepted, the trademark application is published in the Official Gazette. Any interested party may file an opposition within three months of publication.

Oppositions which are not settled by the Registrar or appeals based on the Registrar's decision are brought to the High Court of Justice. If no opposition has been filed or if the Registrar or court rejects the filed oppositions, a decision granting the trademark is granted and the appropriate certificate is issued.

Trademark registration is valid for a period of ten years beginning on the date the application was filed and is renewable for additional periods of fourteen years each.

TL offers the following protection to trademark owners:

UCL offers the following protection:     

TL offers the following remedies to right holders:

UCL offers the following remedies:

 (D)     Labor Law

The Jordanian Labor Law no.8 of 1996 and subsequent amendments provides for mandatory provisions in labor contracts which offer minimum standard of protection.  The said provisions include the following:  

Working Hours:

Maximum working hours are forty-eight hours during a six day week. The seventh day is a paid weekly holiday. Additional hours will be considered as overtime and qualify for compensation of 25 percent over the regular wage.

Labor Unions

The Law regulates labor unions and employer alliances. Workers are free to join unions without objection from their employers. Strikes and close-downs are also regulated by the Law.

Non- Jordanian Laborers

It is not permissible to engage any non-Jordanian employee without a permit from the Ministry of Labor

Holidays

Employees must be provided with a minimum of 14 days of annual paid leave.