Foreign Currency Control
In accordance with the Foreign Exchange Control Law No. 95, of 1966 and the Foreign Exchange Control Regulations of 1978, as amended in 1979, the Central Bank of Jordan (CBJ) is the ultimate authority for enforcing foreign exchange controls in Jordan. Its foreign exchange controls cover all fields of transactions in the Kingdom including: inflow and outflow of Jordanian and foreign means of payment; dealing in foreign currencies; resident and non-resident accounts in Jordanian Dinars and foreign currencies; lending in foreign currencies; commercial payments; free trade zone payments; invisible payments and capital transfers; guarantees; export earnings' repatriation; commissions on foreign exchange permits; reporting requirements; and auditing and statement of account regulations.Law No. 95 allows for the free exchange of bank-notes, coins and gold. It allows licensed banks, with the approval of the CBJ, to manage foreign currency accounts, as well as to purchase and to sell foreign currencies. According to Article 6 of the Law, foreign residents may open accounts in local and foreign currency and may transfer funds without restrictions.
Conversion and Transfer Policies
In March 1995, the CBJ announced that the Jordanian Dinar is fully convertible for commercial transaction purposes.There are no restrictions on transferring funds associated with investments. CBJ Regulations permit non-residents and foreign investors who transferred funds into Jordan to remit their funds abroad in the same or in any other transferable currency.
To transfer funds outside Jordan, a local bank must obtain a permit from the CBJ. Furthermore, before an investment is made, the CBJ must be informed when an investor transfers funds into Jordan, opens a non-resident account at a local bank or seeks to transfer foreign currency funds outside Jordan. CBJ’s approval for these transactions is generally granted liberally.
Prior to investing in Jordan, non-residents may obtain explicit regulations governing their specific needs from the CBJ. There are no limitations on the inflow or outflow of funds for remittance of profits, capital gains and royalties regarding intellectual property, as long as a prior authorization from the CBJ has been obtained.
The CBJ is in favor of liberalizing the country's check clearing and current account system. An initiative to automate and modernize the system is currently underway, and will likely be instituted in the near future.
Banking
The CBJ is the monetary authority of the country. Other financial institutions include approximately 15 foreign and Jordanian commercial banks and specialized credit institutions, such as the Industrial Development Bank. The specialized credit institutions offer equity capital. Banks, both foreign and Jordanian, may be established in a free zone; must deal exclusively in foreign currency and must operate independently of other banking activities in the country.© 2000 Mena Report (www.menareport.com)
