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 labor 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.
Benefits of Starting a Business in Yemen
The following are the benefits of incorporating a business in Yemen:
- 100% foreign ownership
- Local sponsorship is not mandatory
- Booming commercial opportunities
- Exemption from profit taxes for a period of 7 years which is extendable up to 16 years
- Easy transfer of investment capital and profits is allowed without any limitations on the amount, currency, or location
- No nationalization, reservation, or seizure of investment projects
Types of Business Entities in Yemen
For conducting business in Yemen, one can choose from the following business entities:
Limited Liability Company
A limited liability company (L.L.C.) is a type of entity where the liability of the members is limited to the extent of their share in the capital. A local partner is not mandatory to form a limited liability company in Yemen. The minimum requirement for shareholders is two, and the maximum requirement is twenty-five. Also, the members are not allowed to engage in banking, insurance, and savings activities. To incorporate a limited liability company, shareholders must fully pay a minimum share capital of YER 1 million (approximately US$4,100). A bank certificate is required to confirm this payment.
Public Shareholding Company
A public shareholding company divides its share capital into equal shares, making their value negotiable and transferable. The minimum number of shareholders required under this entity is five. The Ministry of Industry and Trade supervises public shareholding companies as per the procedures given by the law. The minimum capital required for a public shareholding company is YER 5 million (approximately US$20,100). Also, the Board of Directors, whose maximum limit is eleven, must not be public employees.
Partnership Limited by Shares
This business structure combines elements of a partnership and a limited liability company. It divides capital and ownership between shareholders with limited liability and one or more partners who hold full liability for any remaining debts. To start a business in Yemen with this legal structure, a company needs to have at least five participating shareholders and one general partner, making a total of six founding members. A local partner is not a mandatory requirement under this entity. The minimum share capital required is YER 3 million (approximately US$12,100). It is to be noted that in a partnership limited by shares, the appointment of an external auditor is mandatory.
The other types of business entities that are permitted to establish business in Yemen are General Partnerships, Limited Partnership, and Joint Venture.
How to Set Up a Business in Yemen?
When starting a business in Yemen, an investor must understand the legal process, international regulations, and the sufficient investment needed for business success. It is also essential to be aware of the cultural, social, and political factors that may affect the establishment and growth of the organization, as failing to do so could lead to unintended consequences. Despite the challenges Yemen faces in attracting foreign investment, people from around the world continue to show interest in setting up businesses in the country. Let’s take a look at how one can establish a business in Yemen.
Select a Business Entity
One can set up a business in Yemen by selecting any of the business structures mentioned above. Entrepreneurs need to be mindful when choosing the structure and move forward with the one that best fits their needs. Once selected, the business structure cannot be changed.
Register Your Company Name
After finalizing a business structure for your company, the next step is deciding on a business name. You should always check with the company registrar to ensure the name you have chosen for your organization is available. You can register your company’s unique name with the Commercial Register using the applicable form.
Register for a License
The founders are required to submit a request for a license to the controller (the Director General of the Directorate General of Companies), along with a signed copy of the incorporation agreement and a copy of the proposed Articles of Association. You can complete this process after applying for the incorporation of your business in Yemen.
Signing the Articles of Association
The founders must amend the Articles of Association to comply with the company’s law. After doing so, they must record the signature in front of the controller, a delegated representative, or with the relevant courts. The Ministry will approve the requested license and Articles of Association within a month from the date of receiving the request. If the Ministry rejects the request, it will provide a reason for doing so.
Register for Income Tax
Register as a taxpayer with the General Taxes Department for the payment of income tax. Obtain a taxation card, register the employees, and also register the company for other taxes. While there is no cost involved, you must submit extensive documentation on behalf of your company to complete the registration.
After completing these steps, you must apply for membership at the Chamber of Commerce. It is mandatory for all companies incorporated in Yemen to do so. The cost for the same is YER 15,050 (approximately US$61). Finally, the company must register its employees for social security. It is obligatory to register with the Social Security Department under the Ministry of Social Security by providing a detailed list of employees in the prescribed form to complete the registration.
Documents Required to Set Up a Business in Yemen
The following documents are required to set up a business in Yemen:
- An application form filled with complete information on the number of shareholders, directors, and personal as well as company details
- A copy of company registration along with the Articles of Association
- Passport copies (if the members are of foreign national)
- Detailed business plan
- Incorporation license
- Copy of the reservation of company name
Who We Are
Business Setup Worldwide is a platform designed to help you start a business in Yemen. Our services include company formation, registration of the business, accounting and bookkeeping, and company secretarial services. We offer unparalleled experience in incorporating your business in Yemen and the rest of the world, as well as managing regional office set-up and licensing. Our team of dedicated experts can help you form a company in Yemen and provide you with all the necessary documents to open a bank account. Our specialists are available round-the-clock to counsel and guide you through the company formation process in Yemen.
Why Us?
At Business Setup Worldwide, we offer a broad range of services to help foreign investors establish their businesses in various regions. Each country presents its own set of challenges for forming, developing, and sustaining a business. Investors should enter these engagements with the support of a knowledgeable and experienced advisory team. Only advisors with detailed knowledge of local and international corporate law can effectively set up an overseas business while avoiding the common pitfalls that affect many new companies. Our team of professionals understands the local market, has the technical expertise, and possesses the necessary knowledge to start your business cost-effectively and within an appropriate timeframe. They will work to incorporate your business effectively and align it with your corporate strategy. Contact us to start your business in Yemen seamlessly!
