To create custom workflows in Jira you need to have Administrator permissions.
Over the Jira home screen, you need to click over the cog wheel and look for Issues as shown below.

Once you click over Issues, you will be redirect to below screen.

On the lefthand side of the screen you can see workflows, once you click on workflows, you see option to “Add Workflow”.
Once you click on Add Workflow, you will see below options.

Once you click on create new, you will see below screen where you can Name and Describe about the workflow.

Once you click on create, you will be redirected to below screen.
Where you can see “+Add status” and “+Add transition” using which we can add statuses and their transitions.

You can click on add Status, it will show a little pop-up where you can see list of available statuses or add one of your own.
Also there is a check box, which will allow all the status to transition to the one that you are adding.

Once you click on add, the status will get created as shown below.

After the status is created, we can add transition.
Once you click on the dots over the status and drag it to the desired status, there will be a pop-up where From and To statuses are shown.
Name is the place where you can add name to the transition.

Once you click on add the transition gets added as shown below.

Below is the sample workflow that I have created.

You can also Import workflows from the marketplace.
Click over the marketplace as shown below.

You can search for the workflows in the marketplace and select the desired workflow as shown below.

Once you click on the select you will be below screen where you can click on next to add the workflow.
Once the workflow is added they will be present under the inactive workflows.

To assign a workflow to project, go to the project settings where you want to add the workflow.

Under project settings, you will see workflows and once you click on workflows.
You will see Add Workflow option as shown below.

Once you click on Add Existing, you will see a pop-up where you can select the desired workflow and click on next.

Once you click on next, you will see list of issue types to which you can assign the workflow.

Once you select the desired issue types click on Finish.

Once you click over the Publish, you will see below scree where you can Migrate the existing issue to the new statuses if there are any.

Once you click on Associate, you will see below screen where you can Acknowledge the published workflow.

Once you click on Acknowledge the published workflow, you will see a success message.

In this way the workflow can be created and Associated to a Project/Issue.
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