A Selective analysis of the Development Areas Law in Jordan

by Law Gate (LG) Attorneys & Legal Counselors

This study has been made to determine whether the current Development Areas Law for the year 2007 is in a form that attracts investors to invest in the sustained development of the area of Ajlun. In this regard, there are three elements necessary to be present in laws that aim to attract certain investments to a particular area or region. Firstly, they should always eliminate the procedural burdens that investors face when welling to invest in a certain area. This approach is by no means immaterial, in fact one can look at the World Bank and other specialized financial bodies' reports and see how they regularly include statistics examining the period of time necessary to allow the investor to start his business in a certain country. This fact has been quickly identified by the Jordanian Legislator. Hence, specialized laws promoting investments in particular parts of Jordan such as the Aqaba Special Economic Zone Law for the year 2000 and the Development Areas Law for the year 2007 have all had the aim of establishing an entity (usually a special Commission) that acts as a one-stop-shop for the investor. Accordingly, an investor welling to establish a business in Aqaba Special Economic Zone has no longer to have to apply to the Ministry of Industry and Trade to register his company, the Ministry of Environment to acquire the environmental permits or the Municipality to acquire building permits or vocational licenses, rather he has to deal only with the Aqaba Special Economic Zone Authority to establish a business; it is the one-stop-shop entity which grants him all the necessary permits to establish his business, saving him time, effort and cost.

Secondly, these entities should also act as the regulatory body empowered over the areas they have been mandated to develop. This is necessary since any successful development has to be based on successful planning; this entails coordination between the different authorities that undertake this duty. Taken the inescapable fact that Ministries in the Kingdom focus on development of the Kingdom as a whole and without dedication to a particular part of Jordan, it was necessary to give the aforementioned regulatory bodies the powers to regulate and develop particular Areas of the Kingdom and those area only; assuring, thus, efficient planning, coordination and dedication. Accordingly and based on the above, both the Aqaba Special Economic Zone Law for the year 2000 and the Development Areas Law for the year 2007 have given great regulatory powers to the Commissions empowered with the development of the areas they were created to develop. These mainly include zoning, recommending or applying imminent domain, the power to negotiate, reach and sign concessions and powers over Historic Sites and Tourist Sites.

The final element in successful laws that aim to attract certain investments to a particular area or region is that they should include financial incentives which result in the investments being attracted to the targeted area rather than other parts of the country or even the region.

In the general context the Development Areas Law has already encompassed the above elements, thus in principle this law has tackled all the necessary requirements needed to be present in a law that successfully ensures the sustained development of Ajlun. However, the Law cannot be carefully assessed unless the peculiarities of the above elements are examined in detail and on an Article by Article basis. Therefore, the below analysis aims to assess whether the Articles of the Development Areas Law have been drafted in such a manner that ensures that it achieves the policy underlining it.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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