Why Register a Company in Yemen?
- The restriction on a foreign business to have a Yemeni partner has been eliminated therefore a foreign investor can set up a business in Yemen without needing a Yemeni partner.
- In Yemen, the transfer of investment capital and profits is allowed without limitation on amount or currency.
- Yemen authorities, with the help of foreign donors and DFIs, continuously review legislation related to trade and investment in order to ascertain its effectiveness. This states that the government is actively involved in strengthening the business sector in Yemen.
- An effort to encourage more investment and to promote the private sector growth has been made through a new Investment law promulgated in 2010, which offers reduced tax rate base, the right of ownership in real estate, customs exemptions, and guarantees of no expropriation of the project.
How to Set Up a Business in Yemen?
While establishing a company in Yemen it is critical for an investor to understand the legal process, international regulations, and sufficient investment needed for the success of the business. The cultural, social, political factors that will affect the establishment of and growth of one’s business must be known, as the failure to do so could result in unintended consequences. Even though Yemen faces a lot of problems on foreign investment, the people across the globe show a lot of interest in setting up a business in Yemen. Let us have a look at how one can set up a business in Yemen.
1. Select a Business Entity
One can set up a business in Yemen through various business entities. The different types of business structures available in Yemen are a Limited Liability Company, Joint stock Company (public or private), Joint venture, Branch of a foreign company, Sole proprietorship, and a Partnership company.
2. Register Your Company Name
Once you are done with deciding on a business structure for the company, the next step is business name registration in Yemen. One should always check the list at the company registrar if the name you want for the company is available, as two companies cannot have the same name. You can register the Unique Company Name at the Commercial register under Ministry of Trade & Industry, on the applicable form type.
3. Register for a License
The Founders are required to provide the request for a license to the controller (the Director General of the Directorate General of Companies) with a signed copy of the incorporation agreement and a copy of the proposed article of association. This shall be done after filing an application for setting up a business in Yemen.
4. Sign on the Articles of Association
The Articles of Association has to be amended in compliance with the company’s law and after completing so record the signature in front of the controller, or whoever they delegate for the same, or with the related courts. The requested license and article of association are approved by the Ministry within a month from the date of receiving the request for the license. If the request is rejected, a reason will be defined.
5. Register for Income Tax
Register as taxpayers with the General Taxes Department for the Payment of Income tax, obtain taxation card, and register the employees and also register for other taxes. It has no cost but just a lengthy documentation must be submitted for doing all these activities on company’s behalf.
After you are done with these steps, you can also apply for a membership at the Chamber of Commerce. It is mandatory for all the companies incorporated in Yemen to apply for the membership at Chamber of Commerce after paying YER 15,050. Lastly, the company also needs to register its employees for the social security. It is an obligation to register in the social security department under the Ministry of Social Security by providing a full list of employees in the prescribed form to obtain the registration.
Documents Required to Set Up a Business in Yemen
- An application form filled with complete details of the number of shareholders, directors, and personal as well as company details
- A copy of company registration and Articles of Association of the company
- Passport copies if the members are of foreign national
- Detailed business plan
- Incorporation license
- Copy of the reservation of company name