Company Registration in Yemen

Company Registration in Yemen

Yemen is an Arabic country present in the Arabian Peninsula. It is one of the largest countries in the Arabian Peninsula. Yemen is officially known as the Republic of Yemen. The coastline of Yemen stretches more than 1800 Kilometres. Political crisis in Yemen started in 2011 with more amount of unemployment, corruption and constitutional drawbacks. Hence doing business in Yemen is not easy. Company registration in Yemen is quite straightforward; however it is important to comply with the local regulations in Yemen.

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  • Procedure for Company Registration in Yemen
  • Documents required for company registration in Yemen
  • Liaising with the concerned regulatory authority for company registration in Yemen
  • End to End Support
Company Registration in Yemen

Company Registration in Yemen- An Overview

Yemen is an Arabic country present in the Arabian Peninsula. It is one of the largest countries in the Arabian Peninsula. Yemen is officially known as the Republic of Yemen. The coastline of Yemen stretches more than 1800 Kilometres. Political crisis in Yemen started in 2011 with the increase of unemployment, corruption and constitutional problems. Hence doing business in Yemen is not easy. There are strict laws which all individuals have to follow. Company registration in Yemen is quite straightforward; however it is important to comply with the local regulations in Yemen. As per the World Bank Survey, Yemen is ranked at 156th place in the world for ease of doing business.

In 2013, the GDP of Yemen was recorded at USD 61 Billion. The services sector contributes the most to GDP. Approximately about 60% of the GDP comes from the services sector. Other sectors which contribute to the development of GDP include the industrial sector, agriculture sector and petroleum sector.

Most individuals in Yemen are employed in the agricultural sector. Commodities such as grains, vegetables, fruits, pulses, qat, coffee, cotton, dairy products, fish, livestock (sheep, goats, cattle, camels), and poultry are the main products which traded in Yemen.

The industrial sector in Yemen majorly comprises of crude oil production, refining of petroleum and food processing activities. Apart from this, SMEs and small scale industries contribute to the development of the economy. Shipping construction complexes for refurbishing and building new ships are common in this country.

An investor going for company registration in Yemen can choose urban cities to develop the company. These cities include Sanaa, Aden and Taiz. The population in Yemen mostly comprises of youngsters. About 2 million individuals are present in Yemen.

Political turmoil as well as threats from militant groups are the main problems in Yemen. Hence an investor going for company registration would find it quite hard to carry out a business in Yemen.

Benefits of Company Registration in Yemen

The following are the benefits of company registration in Yemen:

  • Services Sector

    The services sector contributes the most to GDP. Approximately about 60% of the GDP comes from the services sector. Other sectors which contribute to the development of GDP include the industrial sector, agriculture sector and petroleum sector.

  • Agriculture Sector

    Most individuals in Yemen are employed in the Agricultural sector. Commodities such as grains, vegetables, fruits, pulses, qat, coffee, cotton, dairy products, fish, livestock (sheep, goats, cattle, camels), and poultry are the main products traded in Yemen.

  • Industrial Sector

    The industrial sector in Yemen majorly comprises of crude oil production, refining of petroleum and food processing activities. Apart from this, SMEs and small scale industries contribute to the development of the economy. Shipping construction complexes for refurbishing and building new ships are the major activities that occur in this country.

Eligible Business Structures for Company Registration in Yemen

The following are eligible business structures for company registration in Yemen:

  • Partnerships

    Partnership is a form of entity characterised by two or more people having an agreement to carry out business activities with a view of sharing profits and losses. In a partnership entity, the liability of the individuals would be unlimited. Hence the creditors can go after the personal assets of the partners.

  • Limited Partnerships

    Limited Partnership is a form of entity whose liability is limited to a particular extent. Here there are two or more partners which comprise the partnership company. As the liability is limited, the creditors cannot go after the personal assets of the partners.

  • Limited Liability Company

    This form of entity is also known as an LLC. This type of business structure is commonly utilised by different investors. An investor going for company registration in Yemen can choose this form of entity as there are many benefits. It has the structure of a partnership and also the benefits of a company. There is no minimum capital requirement for forming a limited liability company. This form of entity can carry out different forms of business activities and services. Usually an LLC in Yemen is 100% domestically owned. One local director is required to be appointed for running an LLC in Yemen.

  • Joint Stock Company

    A Joint Stock Company is an entity that lists shares in a public stock exchange. There are minimum number of directors and shareholders required for this form of entity. Shareholders of this company would be member of the public. There are allowed to trade shares as per the Articles of the Company.

Minimum Eligibility Criteria for Company Registration in Yemen

As an LLC is the most popular form of business structure in Yemen, the below criteria state the requirements of an LLC. The following is the eligibility criteria for company registration in Yemen (LLC):

  • National

    An applicant going for company registration in Yemen must appoint a national to run the company. A Yemen resident has to be appointed. The Managing Director of an LLC must be a Yemen National.

  • Office Space

    If the company or LLC has premises of its own then it should be about 1000 Square Feet. The annual lease of the office space (if leased) has to be equal to the income per capital.

  • Directors Qualification

    The directors and executive members of the LLC must be qualified to carry out their responsibilities. They must have sufficient experience to lead the company to achieve its goals. The directors and other key management executives must not be convicted under any law. They must not be adjudged as bankrupt.

  • Employees

    An LLC can have employees who are resident of Yemen. If they are married, the marriage must be registered with the official authority.

Procedure for Company Registration in Yemen

As an LLC is the most popular form of business structure in Yemen, the below procedure would cover LLC registration in Yemen. The following procedure has to be followed for company registration in Yemen (LLC):

  • Permission

    As per the Personal Status Law No. 20 of 1992, Art. 40 states that married women require permission of the concerned authority to leave the marital home (This would only be applicable to married women). Husbands in Yemen are allowed go and register the company. If a woman wants to register a company then permission is required. It would take about one working day to carry out the above process.

  • Name Reservation

    In the next step, the applicant for company registration in Yemen has to reserve a unique name of the company. The name of the company must be unique, hence it must not be utilised by any other company or individual. The name must not breach any national or local laws of Yemen. The unique name of the company can be reserved and registered at the Commercial Register. The main authority to carry out this process is the Ministry of Trade & Industry. This process would take about one working day to complete and the fee for registration is YER 17,020.

  • Carry out Registration

    In the next step, the applicant has to complete filling the registration form and submits the form with some documents. This process would take about a week to compete. The following fee has to be paid with the registration:

    • Trade Name: YER 17,020

    • Company incorporation fees: YER 15,000

    • Fees for Publication of company in official gazette: YER 30,000

    • Fees For Publication of company in trade magazine: YER 20,000

    • Fees for Publication of trade registration: YER 20,000

    • Fees for Trade Registration card: YER 1,020.

  • Register with General Taxes Department

    In the next step, the applicant would have to register with the general taxes department. This is a mandatory requirement, as the applicant would secure the tax registration ID. With this ID, registration for VAT, income tax and corporate tax can be carried out. This process would take about one working day.

  • Membership

    In the next step, the applicant has to officially apply for membership in the Chamber of Commerce (COC). The cost of application for membership is YER 18,900 and it would take about one working day to finalise the process.

  • Commercial License

    After securing membership, the applicant would have to obtain commercial license from the Municipality. The promoters of the company must indicate the type of business carried out when incorporating the company. The agency permit number would be provided by the Municipality. This license has to be displayed in the registered office of the business. Securing this license would take about one week and the cost for this license is YER 80,000.

  • Social Security for Employees

    If the firm employs more than two workers then it must register with the requirements of Social Security. Every month an employer must deposit about 15% of the employee’s salary with the social security. Out of 15%, 9% is paid by the employer and 6% is deducted from the employee’s salary. This would take about two days to complete. The authorised agency to carry out the process is the social security agency.

Compliances for Company Registration in Yemen

The following compliances have to be carried out for company registration in Yemen:

  • Tax

    A Company has to pay corporate tax at the rate of 20%. Previously, the corporate tax levied in Yemen was 35%. For this the company would have to register with the General Taxes Department. VAT and other forms of taxes also have to be paid in Yemen.

  • Register with the Chamber of Commerce and Trade registry

    The Company has to follow compliances while registering with the Chamber of Commerce and Trade Registry.

  • Social Security Registration

    If the firm employs more than two workers then it must register with the requirements of Social Security. Every month an employer must deposit about 15% of the employee’s salary with the social security. Out of 15%, 9% is paid by the employer and 6% is deducted from the employee’s salary.

  • Shareholders Meeting

    Annual General Meetings have to be held at least once a year.

  • Board Meetings

    Board Meetings have to be held if stated in the articles of the company.

Documents required

The following documents are required for company registration in Yemen:

  • Name reservation form
  • License application
  • Signed and stamped articles of association
  • Publication notice
  • Passport Information of Directors or respective Visas
  • Information on the leased premises or the registered officer.

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Frequently Asked Questions

The main authority for company registration in Yemen is the Companies Registry and the Chamber of Commerce.

The corporate tax rate in Yemen is 20%. Previously, companies had to pay corporate tax at the rate of 35%.

The following are the benefits of company registration in Yemen:

  • Services Sector
  • Agriculture Sector
  • Industrial Sector.

In terms of economy, thriving activities include agriculture services. Most of the individuals in Yemen work in this sector. In the manufacturing and services sector, commercial ships, garments production, food processing industries are prominent.

The country has been in war ever since its independence. Apart from this, political crisis has severely affected the GDP of this country.

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