This article provides a direct overview of the availability and specific regulatory and tax conditions for operating as a sole proprietorship in Jordan as of 2025. The guidance here covers official definitions, registration requirements, and the applicable tax regime for individual business owners.
Availability of Sole Proprietorship Status in Jordan
Jordan recognizes the Sole Proprietorship (المؤسسة الفردية) as a formal business structure. This status enables individuals to engage in business activities and issue invoices without the need to establish a separate legal entity. It remains one of the most accessible ways for Jordanian citizens to conduct business independently in 2025.
Key Legal Features
- The sole proprietorship is not a separate legal entity from its owner. The individual conducting business is personally responsible for all debts and obligations.
- Only Jordanian citizens are eligible to register a sole proprietorship under local regulations.
- Practical usage remains high, with the structure actively supported and regulated by Jordanian authorities.
Registration Process
To establish a sole proprietorship, the owner must complete a registration process with the Companies Control Department (CCD) at the Ministry of Industry, Trade and Supply. This step is mandatory and formalizes the business activity in the eyes of Jordanian law.
Summary Table: Sole Proprietorship Status in Jordan
| Status Name | Available to | Separate Legal Entity? | Personal Liability | Registration Required? | Main Registration Body |
|---|---|---|---|---|---|
| Sole Proprietorship (المؤسسة الفردية) | Jordanian citizens | No | Yes | Yes | Companies Control Department (CCD) |
Taxation for Sole Proprietors in 2025
Income earned by sole proprietors in Jordan is subject to individual income tax rates. There is no corporate tax regime for this status; sole proprietors are taxed under the same progressive rates as employed individuals. In 2025, these rates are applied by bracket as follows:
| Taxable Income Bracket (JOD) | Applicable Rate (%) | USD Equivalent (at JOD 1 = USD 1.41) |
|---|---|---|
| Up to 5,000 JOD | 5% | Up to $7,050 |
| 5,001 – 10,000 JOD | 10% | $7,051 – $14,100 |
| 10,001 – 15,000 JOD | 15% | $14,101 – $21,150 |
| 15,001 – 20,000 JOD | 20% | $21,151 – $28,200 |
| Above 20,000 JOD | 25% | Above $28,200 |
Rates are effective for income earned in the 2025 fiscal year. (USD conversion based on JOD 1 = USD 1.41.)
VAT Registration Requirements
Sole proprietors in Jordan must also consider their Value Added Tax (VAT) obligations. If annual turnover exceeds JOD 75,000 (approximately $105,750 USD), VAT registration is mandatory.
| Threshold (JOD) | Threshold (USD) | VAT Registration Required? |
|---|---|---|
| 75,000 JOD | $105,750 | Yes, if exceeded |
Liability Considerations
It is important to note that, due to the lack of a separate legal entity, all debts, claims, or legal actions arising from the business are borne personally by the business owner. This can include all business loans, taxes, and contractual obligations.
Official Information Sources
- Ministry of Industry, Trade and Supply
- Companies Control Department
- Income and Sales Tax Department
- Jordan Government Portal
Pro Tips for Sole Proprietorship in Jordan
- Maintain accurate records of all business transactions and income to ensure smooth tax reporting at the end of the year.
- Plan ahead for your personal liability exposure; consider insurance or risk-mitigation measures for higher-value contracts.
- If your business is experiencing strong growth, monitor your annual turnover to avoid missing the VAT registration threshold.
- Registration with the CCD is a legal requirement—ensure all information submitted is accurate and up to date to avoid administrative issues.
- Consult official websites for recent updates in tax rates or regulation changes before filing returns each year.
In summary, Jordan offers a clear and accessible path for individuals to operate as sole proprietors in 2025. The tax regime is progressive and straightforward, with distinct liability considerations due to the lack of legal separation. Registration is required, and VAT rules apply above a clear turnover threshold, so ongoing awareness of your revenues and obligations is essential.