Overview of Company Registration in Yemen

The Republic of Yemen is the birthplace of all Arabs in the Middle East and is situated on the Arabian Peninsula in the southwest of the continent of Asia. Yemen's industrial sector primarily focuses on producing crude oil, petroleum refining, and food processing. In addition, small-scale businesses and SMEs support the growth of the economy. In this nation, shipbuilding complexes are frequently used for new ship construction and refurbishment. Yemen benefits from its strategic location, which places it amid the expanding markets of Asia, Africa, and Europe and gives it access to international trade. Contact us to learn more about the requirements for establishing a business in Yemen.

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We will perform and function in the best possible manner without wasting your time and effort. With Enterslice, make your business prudent and efficient.

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Focused

We handle all administrative and formal procedures on your behalf, freeing you to focus on running your business and not worrying about anything.

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We remove all your confusion and register your business by complying with the legal procedures with the help of our international legal consultants.

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Legal Advisory Services

Our legal specialists offer legal guidance on business operations, finances, and intellectual property protection. We can evaluate the necessary Paper works and draft legal necessary papers for your company. We also make sure that all legal and regulatory requirements are adequately met.

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Business Management

Based on your company's needs, our advisors create a strategy for starting and running the company. We create cash flows and a budget for your company. We also perform company reviews and evaluate internal control procedures. We offer advice on matters about business management.

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Appropriate Set-up

We offer advice on the kind of business structure you ought to choose when establishing a company in Yemen as part of our business set-up services. Our staff at Enterslice will help you with business registration, opening a corporate bank account and post-registration compliance.

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First-class Support

With years of experience in setting up businesses, our friendly support staff is here to help you at every turn. We will assign a capable account manager to help your company's chosen method of effective communication.

Procedure for Company Registration in Yemen

Since an LLC is the most common business structure type in Yemen, the process below covers Yemen LLC registration. The procedure for registering a corporation in Yemen (LLC) is as follows:

1.Authorisation

Married women must obtain permission from the relevant authority to leave the marital residence, according to Personal Status Law No. 20 of 1992, Art. 40 (which would only apply to married women). In Yemen, spouses are permitted to register a business. Permission is needed if a woman wants to write a firm. The aforementioned procedure would take roughly one working day to complete.

2. Name Reservation

The applicant for Yemen company registration must reserve a distinctive name for the business in the next stage. Because the company's name needs to be unique, no other company or person may use it. The name may violate no Yemen local or national legislation. The corporation may reserve and register its name at the Commercial Register. The Ministry of Trade & Industry is responsible for executing this process. It would take approximately one working day to finish this process, and registration costs YER 17,020.

3. Complete the Registration Process

 

The candidate must complete the registration form and submit it with a few supporting papers in the following stage. It would take roughly a week to complete this process. Together with the registration, the following fee must be paid:

  • YER 17,020 is name registration.
  • YER 15,000 is the company incorporation fee.
  • YER 30,000 is the fee for publishing a firm in the official gazette.
  • YER 20,000 for the company's publication in a trade magazine.
  • YER 20,000 for the publication of the trade registration.
  • YER 1,020 for the trade registration card.

 

4. Sign up with the Department of General Taxes

The applicant would then need to register with the Department of General Taxation. Given that the applicant would obtain the tax registration ID, this is a mandatory prerequisite. Registering for corporation tax, income tax, and VAT with this ID is possible. One working day would be needed to complete this process.

5.Membership

The applicant must formally apply for Chamber of Commerce (COC) membership in the next phase. The membership application fee is YER 18,900, and the processing time is approximately one working day.

6.Business Licence

After becoming a member, the applicant would need a commercial licence from the Municipality. When creating the firm, the promoters are required to specify the kind of business they conduct. The municipality will supply the agency permit number. This licence must be on display in the company's registered office. It would take roughly a week to obtain this licence worth YER 80,000.

7.Employee Social Security

The company is required to register with Social Security if it employs more than two people. The employee's employer must deposit 15% of their monthly pay with Social Security. Six per cent is withheld from the employee's pay, while the employer pays the remaining nine per cent. It would take roughly two days to finish this. The Social Security Administration is the designated organisation to complete the procedure

Our additional business development service

Business Advisory

Our services aim to assist the foreign entity in selecting an appropriate corporate structure and provide guidance on setting up and registering the proposed entity in Yemen while considering tax optimisation. 

  • Reduce the total amount of tax owed within the structure;
  • Reduce the tax on operating earnings and increase the number of fees that may be deducted from the local business; 
  • Effectively repatriate cash to the firm through the structure and 
  • Provide the company with investment and tax incentive opportunities. 
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Establishment of business

Regarding the previously described scenario, we offer the following services: 

  • Track down and acquire the Ministerial decree and registration certificate for the potential entity in Yemen; 
  • Register the potential entity commercially; 
  • Acquire the potential entity's tax number and tax card; 
  • Register the potential entity with the social insurance corporation.

Services for accounting and compliance

Our intended services include:

  •  Recording accounting transactions for the Yemen entity; payroll preparation and other related HR tasks; 
  • Income tax and social security declaration preparation for the contracted period; 
  • Assisting local management with business-related advice and problem-solving regarding HR, social security, and relationships with labour offices and income tax departments; 
  • Suggesting enhancements to the current accounting, management, internal controls, and reporting procedures adopted by the Branch regarding financial transactions and HR-related matters and 
  • Adhering to the Branch's reporting deadlines. 
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Yemen Accounting Framework

All businesses, regardless of their activities, whether domestic or foreign, must generally adhere to the International Financial Reporting Standards (IFRS) and submit audited accounts in compliance with Republic of Yemen laws and customs. Additionally, businesses must submit their final annual corporate tax declaration by the deadline, along with operating accounts certified by a locally registered auditor. Large taxpayers, including corporations, branches, and other business facilities, must maintain their accounts in the Republic for tax inspection.

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Eligible Business Structures for Company Registration in Yemen

The following business configurations are acceptable for Yemeni company registration:

1. Partnerships

A partnership is a type of organisation in which two or more individuals come to an understanding to conduct business together to split profits and losses. An individual's liability in a partnership would be limitless. Therefore, the partners' assets may be pursued by the creditors.

2. Limited Partnership

A limited partnership is an organisation where liability is restricted to a certain degree. In this case, the partnership corporation comprises two or more partners. Because of the limited liability, the partners' assets are protected from creditors.

3. Limited Liability Company

An LLC is another name for this type of organisation. A variety of investors frequently employ this kind of corporate structure. This type of corporation is a good option for investors wishing to register a company in Yemen because it offers numerous advantages. It offers the advantages of a corporation along with the structure of a partnership. Establishing a limited liability business does not require a minimum capital amount. This type of entity is capable of performing a variety of commercial tasks and providing services. In Yemen, an LLC is often 100% owned locally. To operate an LLC in Yemen, one local director must be selected.

4. Joint Stock Company

An organisation that lists shares on a public stock exchange is a joint stock company. This type of entity requires a minimum number of shareholders and directors. The public would be this company's shareholders. The company's articles of association may trade shares.

What structure should I consider for business?

Because non-Yemeni investors can own 100% of a Yemeni Limited Liability Company and the authorities are simplifying the LLC registration process, limited liability companies (LLCs) are considered the ideal business structure for foreign individuals and companies. The Limited Liability Company must also have adequate capital to achieve its goals. Therefore, there is no minimum capital needed.

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necessary papers Required

The following necessary papers are obligatory for company registration in Yemen:

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

Benefits of Company Registration in Yemen

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Services Sector

The most significant contributor to GDP is the services sector. Roughly 60% of GDP is generated by the services industry. The industrial, agricultural, and petroleum sectors are other areas that influence GDP development.

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Agricultural Sector

In Yemen, most people work in the farming industry. The primary goods traded in Yemen are cereals, fruits, vegetables, pulses, qat, coffee, cotton, dairy products, seafood, and livestock (sheep, goats, cattle, camels).

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Industrial Sector

Yemen's industrial sector primarily focuses on producing crude oil, petroleum refining, and food processing. In addition, small and medium-sized enterprises and their industries support the economy's growth. The primary industries in this nation are shipping construction complexes used for ship renovation and new ship construction.

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Yemen Tax Structure

Corporate tax

Any income from resident legal entities within or outside Yemen is subject to taxation. Yemen's revenue is subject to taxation for non-resident entities. Depending on the size and nature of their operations, resident entities are subject to different tax rates. The business tax rate that is widely used is 20%.

Individual Income Tax

Both residents and non-residents must pay salary tax on the money they make from their activities within Yemen. Yemen taxes resident employees' foreign-sourced income received within the country.

Withholding income

WHT rates broadly apply to payments made to residents and non-resident entities for services rendered in Yemen, as defined by Income Tax Law No. 17 of 2010. The legislation specifies all the steps in submitting WHT deductions, collections, and payments to the tax authorities, along with the penalties for delays or failing to follow the law's stipulated directions.

Minimum Eligibility Standards for Company Registration in Yemen

National

To register a corporation in Yemen, an applicant must designate a national to manage the business. Appointing a Yemeni resident is mandatory. An LLC's managing director needs to be a citizen of Yemen.

Office Space

Office space should be roughly 1000 square feet if the business or LLC has its location. The annual lease payment must match the income per capita if office space is leased.

Directors' Qualifications

The LLC's directors and executive members must be eligible to perform their duties. They need to be sufficiently experienced to guide the business towards its objectives. They cannot be declared bankrupt.

Workers

Employees of an LLC may be Yemen citizens. The marriage must be officially registered with the government if they are married.

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Promising sectors for business in Yemen

Yemen, renowned for its colourful culture and lengthy history, has had its share of difficulties lately. But amid the chaos, there is a window of opportunity for business owners to investigate lucrative ventures that could advance the nation's economy. Yemen has several promising industries for companies trying to get established and prosper in the marketplace. The following are some of Yemen's most promising business sectors:

  • Agribusiness and Agriculture
  • Renewable Energy
  • Tourism and Hospitality
  • Digital Services and Information Technology
  • Building and Infrastructure Advancement
  • Medical Care and Pharmaceuticals
  • Education and Practise
  • Industrial and Manufacturing Enterprises

Accounting Obligations

Businesses, branches, and other establishments must maintain their activity accounts in the Republic. This comprises the balance sheet and the profit and loss account, which must be prepared and audited by a designated chartered accountant. The Ministry of Trade and Industry must receive the audited financials (in Arabic) within four months from the end of the fiscal year.

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Compliances for Company Registration in Yemen

Commitment

Tax

Corporate tax is payable by a company at a rate of 20%. The business would need to register with the General Taxes Department for this. In Yemen, you must also pay VAT and other taxes.

Commitment

Sign up for a trade register account with the Chamber of Commerce

The Company must adhere to compliance requirements when registering with the Chamber of Commerce and Trade Registry.

Commitment

Social Security Registration

The company is required to register with Social Security. The employer must deposit 15% of their monthly pay. 6% is withheld from the employee's pay, and the employer pays 9%.

Enterslice Assistance in Yemen Company Registration

Enterslice provides a wide range of services to assist foreign investors in starting up in the area. Every nation faces unique obstacles when starting, growing, and maintaining a business. Investors need the assistance of an informed and skilled advisory team when they embark on these engagements. A thorough understanding of domestic and foreign corporation law is necessary to establish a firm abroad and avoid common mistakes many start-up enterprises make. Our team of experts is aware of the local market. It has the technological expertise, requirements, and understanding to launch your business at the right time and a reasonable cost. They'll make sure your company business strategy is successfully incorporated and integrated.

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Frequently Ask Questions

Yemen's principal company registration authorities are the Companies Registry and the Chamber of Commerce.

Yemen has a corporate tax rate of 20%. Before now, corporations were required to pay 35% corporate tax.

The advantages of registering a company in Yemen include the following:

  • Services Sector
  • Agricultural Sector
  • Industrial sector

Services and agriculture are among the economic activities that are flourishing. The majority of people in Yemen are employed in this industry. Commercial ships, clothing manufacturing, and food processing are significant industries in the manufacturing and services sector.

Since gaining its independence, the nation has been involved in wars. Apart from this, the nation's GDP has been negatively impacted by the political turmoil.

Yemen's economy is varied and subject to strong government control, with little room for individual independence.

Yemen's primary natural resources are oil, gas, cobalt, copper, gold, iron ore, nickel, and zinc.

LLP will function as a legal and corporate entity distinct from its partners. It will continue to succeed forever.

Officially, a joint stock company (public or private) takes 15 working days to receive licences and other legal papers from the relevant authorities. Obtaining licences and other legal papers from authorities is officially a seven-working-day process for Limited Liability Companies and Sole Proprietors.

The next step is to register the business name in the Ministry of Industry and Trade's commercial register after deciding on the company's business structure and receiving preliminary approval from the appropriate authority.
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Design Your Business Future with Enterslice by Incorporating a Company in Yemen

At every stage of your company's growth, from determining the scope of work to securing Yemen company formation, registration, and post-setting support services, our team at Enterslice can offer valuable assistance and strategic guidance. We provide unparalleled expertise in managing the setup and licensing of regional offices and business incorporation in Yemen and the rest of the globe. We have been their go-to partner for several innovative and imaginative projects that international businesses have been working on. If you require assistance incorporating your business in Yemen, please get in touch with us.

Our Success Story

We have over ten years of experience in local and international business registration, licencing, business planning, and other legal compliances. We have many success stories from our journey, which we have achieved by choosing wisely for new and existing enterprises over the years. Our excellent support will ensure a seamless and prompt incorporation and assist you in realising your dream of forming a company in Yemen.

 

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