How to Register a Business in the US from Jordan

Step 1: Benefits of starting your US business from Jordan

Starting a US business from Jordan offers a multitude of advantages that can position entrepreneurs for success on both local and global stages. One significant benefit is the ability to tap into the vast and diverse US market, which provides extensive opportunities for growth and expansion. With a large consumer base that is constantly seeking innovative products and services, Jordanian entrepreneurs can leverage this dynamic environment to scale their businesses rapidly. Additionally, the US boasts a well-established infrastructure that supports business activities, from logistics to communication, which can greatly enhance operational efficiency for companies based in Jordan.

Moreover, establishing a US business can provide Jordanian entrepreneurs with valuable resources such as access to cutting-edge technology, funding opportunities, and a robust network of industry professionals. The US is known for its vibrant startup ecosystem that includes numerous accelerators, incubators, and venture capital firms eager to invest in promising ventures. This can be particularly advantageous for Jordanian businesses seeking financial backing and mentorship to drive innovation. Furthermore, operating within the US regulatory environment can also bestow a sense of credibility and trustworthiness, attracting partners and customers globally, thus facilitating international business expansion.

Step 2: How to start your US business from Jordan

Starting a US business from Jordan involves several essential steps that require understanding both US and Jordanian regulations. First, you need to decide on the type of business entity you want to establish, such as an LLC, corporation, or partnership. This decision will affect your taxation, liability, and regulatory requirements. It is advisable to consult with a legal expert familiar with US businesses to determine the best structure for your needs.

Next, you'll need to register your business with the appropriate US state authorities. This often involves filing specific documents such as Articles of Incorporation or Organization, and paying associated fees. Once your business is registered, you'll need to obtain an Employer Identification Number (EIN) from the IRS, which will be necessary for tax purposes. Additionally, consider opening a US bank account for smoother financial transactions and better credibility with US clients and vendors.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Jordan

When running a US business in Jordan, it is crucial to navigate through various compliance requirements to ensure smooth and lawful operations. Understanding these considerations can be broken down into several key areas:

Legal Structure

Choosing the proper legal structure for your business is foundational. This can impact compliance requirements significantly.

• Branch Office: A branch office is an extension of the parent company but must adhere to Jordanian law.
• Local Corporation: Establishes an independent entity in Jordan with local accountability.
• Joint Venture: Often involves partnership with a local entity, requiring adherence to both partners' regulatory obligations.

Registration and Licensing

Registering your business and obtaining the necessary licenses are crucial initial steps.

1. Commercial Registration: Register with the Ministry of Industry, Trade and Supply.
2. Sector-Specific Licenses: Certain industries may require further permissions from relevant authorities such as the Ministry of Health for pharmaceutical businesses.
3. Tax Registration: Enroll for tax purposes with the Income and Sales Tax Department (ISTD).

Employment Regulations

Understanding Jordanian labor laws is essential for hiring and managing employees.

• Ensure compliance with local labor laws, including work hours, minimum wage, and benefits.
• Understand expatriate employment policies, including work permits and residency requirements for foreign staff.

Taxation

Tax compliance is a significant aspect and includes corporate tax obligations.

• Corporate Tax: Businesses must adhere to corporate income tax laws, with rates dependent on the sector.
• VAT: Value Added Tax must be collected and remitted according to Jordanian regulations.

Trade and Investment Regulations

Foreign investments and trade operations are subject to specific compliance requirements.

• Compliance with import and export regulations is essential, including obtaining the necessary permits.
• Understand rules regarding foreign equity and investment incentives, which can vary by industry.

Intellectual Property Rights

Protecting your intellectual property (IP) requires adherence to Jordanian IP laws.

• Register trademarks, patents, and copyrights with Jordan's Department of Intellectual Property Protection.
• Monitor and enforce IP rights to prevent infringement and protect business assets.

Data Protection and Privacy

Adhering to data protection laws is increasingly important globally, including in Jordan.

• Comply with Jordan's data privacy regulations to protect customer and employee information.
• Implement robust data security measures to mitigate the risks of data breaches.

Each of these considerations plays a pivotal role in ensuring that your US business operates legally and efficiently in Jordan. Consulting with local legal and business experts can further streamline the compliance process and help navigate the specifics of Jordanian law.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Jordan

Understanding Tax Obligations for Running a US Business in Jordan

Navigating tax obligations is crucial for any business operating internationally, especially for US businesses setting up operations in Jordan. Below are essential considerations to help understand these tax responsibilities:

1. Corporate Tax Rate

Jordan has a progressive corporate tax rate system. The standard corporate tax rate is 20%, but certain sectors like telecommunications, financial services, and insurance may face higher rates, often up to 24% or more. Businesses must determine their specific tax rate based on their industry classification.

2. Income Tax

Jordanian taxation also includes personal income tax rates that can range from 1% to 30% depending on the level of income. For expatriates, understanding these rates and their implications is essential, as they may affect both individual employees and company payroll obligations.

3. Double Taxation Agreements

The United States and Jordan have not established a double taxation agreement (DTA). This absence means business entities might experience double taxation—once in Jordan and again in the US. It's advisable to consult tax professionals who can navigate strategies to mitigate such tax liabilities.

4. Value Added Tax (VAT)

Jordan levies VAT at a standard rate of 16% on most goods and services. Businesses must be aware of VAT compliance requirements, including registration thresholds, invoicing, and periodic returns.

5. Withholding Tax

Withholding taxes apply to different types of payments, such as dividends, interest, and royalties to non-residents. Rates can vary and understanding these will be critical to ensure compliant international transactions.

6. Social Security Contributions

Employers and employees are required to contribute to social security in Jordan. The contributions are a percentage of the employee's gross salary, with specific rates for both parties. Compliance with social security contributions is vital to avoid penalties and ensure employees are covered under Jordan’s social security system.

7. Transfer Pricing

Though not as stringent as in some countries, Jordan has transfer pricing regulations to ensure transactions between related entities are conducted at arm’s length. Compliance with these guidelines helps avoid tax liabilities.

8. Local Advisors

Engaging with local tax advisors and legal experts can provide invaluable support in navigating Jordan's complex tax landscape. They can offer the latest updates, interpretations, and practical advice tailored to your business needs.

Understanding and respecting Jordan's tax laws is essential for operating smoothly and profitably. Proper planning and expert consultation can help US businesses manage their tax obligations effectively while fostering compliance and growth in the Jordanian market.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country