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Yemen
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Yemen with efficiency and assurance.
WHY YEMEN?
Yemen, officially the Republic of Yemen, is a country in West Asia. Including the Socotra Archipelago, mainland Yemen is located in southern Arabia; bordering Saudi Arabia to the north, Oman to the northeast, the south-eastern part of the Arabian Sea to the east, the Gulf of Aden to the south, and the Red Sea to the west, sharing maritime borders with Djibouti, Eritrea, and Somalia across the Horn of Africa. Covering roughly 455,503 square kilometres (175,871 square miles), with a coastline of approximately 2,000 kilometres (1,200 miles), Yemen is the second largest country on the Arabian Peninsula by area, and the largest by population.
Nestled on the Arabian Peninsula in the southwest of Asia, Yemen is the ancestral homeland of all Arabs in the Middle East. Known to the Ancient Romans as Arabia Felix (“Happy Arabia”) for its beauty and historical influence, Yemen has now become one of the most influential places, offering significant opportunities for growth across sectors. Key industries such as agriculture, fishing, oil and gas, manufacturing, and tourism have been promising in the last few decades. With its competitive labour costs and strategic location between Asia, Africa, and Europe, Yemen is on its way to becoming a hub for global business access, making it the fastest-growing economy in an increasingly interconnected world. Due to this, if you decide to establish a business in Yemen, you can seek multiple advantageous opportunities, making your venture extremely lucrative.
ADVANTAGES
- Global Shipping Lanes: Yemen is located at the southern end of the Arabian Peninsula, sharing borders with Saudi Arabia and Oman. Its extensive coastline provides access to the Red Sea and the Arabian Sea, placing it directly on major global trade routes between Asia, Africa, and Europe.
- Deepwater Ports: The city of Aden features a naturally protected deepwater seaport, an international airport, and a dedicated Aden Free Zone, which facilitates maritime trade and manufacturing.
- Foreign Ownership: Yemen allows 100% foreign ownership of businesses without the need for a local sponsor or partner.
- Tax Exemptions: The government offers significant tax incentives, including profit tax exemptions for 7 to 16 years and a reduced corporate tax rate of 15–20% for certain entities.
- Capital and Currency Freedom: There is no minimum capital requirement to start a Limited Liability Company (LLC). Additionally, there is freedom to transfer hard currency to and from the country and full repatriation of profits.
- One-Stop Shop: The General Investment Authority (GIA) utilizes a “one-stop shop” system to simplify the issuance of permits and licenses for investment projects.
- Energy and Minerals: Yemen possesses significant proven reserves of crude oil (over 9 billion barrels) and liquefied natural gas (LNG). It also has untapped deposits of gold, copper, iron ore, and zinc.
- Marine Wealth: Its extensive territorial waters have the potential to produce over 800,000 tons of fish annually, making the fishing industry a high-return sector for export.
- High Demand: Due to the ongoing crisis, there is extreme demand for essential goods like food, pharmaceuticals, and construction materials.
- Large Consumer Base: With a population of over 33 million, Yemen is an underserved market with a growing young, tech-savvy demographic, offering significant opportunities for e-commerce and digital services.
- Reconstruction Needs: Estimated reconstruction costs are approximately $19 billion, presenting long-term opportunities in infrastructure, renewable energy, and telecommunications as the country stabilizes.
- Competitive Labor: Yemen offers a large, young labour pool with competitive wages compared to other developing nations.
- Low Startup Costs: The removal of high minimum-capital requirements has made it a low-cost environment for starting operations.
TAX REGIME
Corporate Income Tax (CIT)
A standard rate of 20% applies to most companies.
- Oil and Gas: Generally taxed at 35%.
- Investment Projects: May qualify for a reduced rate of 15%.
Personal Income Tax (Residents):
A progressive system with rates ranging from 0% to 15%.
- First YER 120,000: 0%
- YER 120,001 – YER 240,000: 10%
- Over YER 240,000: 15%
Personal Income Tax (Non-Residents):
Taxed at a flat rate of 20% on Yemeni-source income.
Value Added Tax (VAT) / Sales Tax:
The standard rate is 5% on most goods and services.
- Telecommunications and mobile services are taxed at 10%.
- Cigarettes are subject to a higher rate, often cited at 90%.
Withholding Tax (WHT):
A standard rate of 10% applies to dividends, interest, and royalties paid to non-residents.
Zakat:
A mandatory Islamic tax for Muslims and Muslim-owned businesses, typically levied at 2.5% of net wealth/income.
YEMEN COMPANIES
Limited Liability Company (LLC):
Most common for small to medium businesses, offering limited liability; can now often be 100% foreign-owned.
Joint Stock Company (JSC):
Suited for larger enterprises, allowing public share issuance.
Partnerships:
Includes General Partnerships (unlimited liability) and Limited Partnerships (some partners have limited liability).
Branch Office:
For foreign companies to establish a physical presence, regulated under specific laws.
Representative Office:
For limited market research or liaison, not direct commercial activity.
Sole Proprietorship:
Owned by one individual, with full personal liability.
Joint Venture:
Partnerships with local entities for specific projects.
Non-Profit Organization:
For social, charitable, or educational missions
Contact Us
Get in touch with the right people to get the right help in setting up your business in Yemen.
enquiries@chandrawatpartners.com.