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Jordan: Investment Fund Law Enacted

(June 29, 2016) Jordan recently enacted the Jordanian Investment Fund Law, to establish a fund (the Fund) as a legal entity endowed with administrative and financial independence and authorized to own movable and immovable properties. (Law No. 16 of 2016, AL-JARIDAH AL-RASMIEH [OFFICIAL GAZETTE] No. 5399 (May 26, 2016) , art. 3(a) (in Arabic) (showing page 1 of the text.)  The Fund has the exclusive right, notwithstanding the provisions of any other law or legislation, to own, develop, operate, manage, and exploit certain specific projects, the most important of which are: a) the national railway system; b) the electric connectivity system with Saudi Arabia; and c) the pipeline transporting crude oil and other oil derivatives to a petroleum refinery, together with consumption and storage facilities.  (Id. art. 4(a).)

The Fund will be managed by a Board of Directors consisting of the Prime Minister as Chair; the Minister of Planning and International Cooperation as Vice-Chair; the ministers of finance; of energy and mineral resources; of industry, trade, and supply; the chair of the investment commission; and three members appointed by the Council of Ministers. (Id. art. 5.)  The main office of the Fund will be located in the capital, Amman, and may by a decision of the Board open other offices inside or outside of the Kingdom.  (Id. art. 3(b).)

Sovereign funds and investment institutions, whether Arab or foreign owned, are invited to establish one public shareholding corporation (Corporation) or more to invest in the exploitation of the development rights and investment projects covered in the Investment Fund Law.  (Id. art. 8 a).)  Notwithstanding any provisions in the Company Law, Financial Papers Law, or any other law the Corporation will be established by special rules organizing its affairs; these rules will be contained in a regulation to be issued by the Council of Ministers.  (Id. art. 8(b).)

The relationship between the Fund and the Corporation will be regulated through investment and development agreements and contracts concluded between the parties. (Id. art. 9(a).)  Such contracts and agreements will not include a guarantee from the government protecting the funds invested or assuring investors of a certain percentage of profit.  (Id. art. 9(b).)  In all the projects involved, the Fund and the Corporations are exempt from customs and other governmental fees.  (Id. art. 11(a).)

Despite any provisions in any other laws, a High Technology Commission will be established by the Council of Ministers for the purpose of granting all licenses, permits, and approvals, including working permits, needed for the projects coming under the umbrella of the Fund. The decisions of the Commission in this respect are binding on all relevant and concerned institutions, after the approval of the Prime Minister.  (Id. art. 12.)