MP logo Meyer-Reumann & Partners
German Legal Expertise in the Middle East since 1981

The Important Advantages of the Yemeni Investment Law

Guiding Principle

In this Article, the author illustrates the advantages of the Yemeni Investment Law between exemptions, warranties and facilities.

A.The Yemeni Investment Law

Looking at the Yemeni Investment law, appropriate legal environment for encouraging investment exists. With this law and since the government issued the Economic Laws, the Yemeni Government gives investors more incentives and facilities in order to create a tempting environment for new investments. Investment Law No. 22 of 2002, which came as an alternative to the Investment Law No. 22 of 1991 (as amended), regulates and encourages investments and grant facilities and incentives for investors in all areas except a few fields which are:

  • Exploring and extracting oil and gas and minerals that are governed by special agreements with the Ministry of Oil and Minerals.
  • Manufacture of weapons and explosive materials.
  • Industries that harm the environment and health.
  • Banks and exchange.
  • Financial trade, import, wholesale and retail.

B.The Advantages of the Yemani Investment Law


  • Exemption of fixed assets required to establish, expand or develop investment projects from taxes and customs duties.
  • Exemption requirements of animal production, agriculture and fisheries from customs duties and tax exemption as well as the production requirements of other projects by 50% of all customs duties to existing and registered projects.
  • Exemption of projects from the profit tax for a period of 7 years in the major cities of Sana’a, Aden, Taiz, Hodeidah and Mukalla, and increasing the exemption period to two (2) years for other regions of the Republic from the date of commencement of production or activity, whereas this period can be increased for an additional period of two (2) years for each case achieved in the project of the following cases that do not exceed the total exemption period of 16 years:
    1. Projects that increase the proportion of the local component of the fixed assets of 25% of the total value of fixed assets projects.
    2. Projects owned by public companies of not less than the proportion of the IPO for 25% of the paid-up capital.
  • If the project faced losses during the exemption period, it has to be recycled during the year or years in which it occurred and no later than three years from the first year following the year the exemption.
  • Projects exempt from income tax on profits distributed by the projects.
  • Exemption from all duties and taxes of any kind imposed on exports.
  • Exemption from the tax due on profits from export earnings, after the expiry of the exemption according to the project. The grant projects at the same expanded tax exemptions for the same duration per capital value added.
  • Projects exempt from property tax and fees documentation of contracts for the establishment of projects, as well as all contracts associated with the project until implementation is complete.


  • Non-nationalization of projects and not to seize or confiscate their money or reservations, freezing or seizure or the imposition of security only through a judicial ruling.
  • Equality between the investor and non-Yemeni Yemeni in all the rights and duties.
  • The possibility for a non-Yemeni investor to own 100% of the investment project including its land and real estate.
  • The possibility of securing the investor against his non-commercial risks in any of the international institutions which Yemen is a member of which are:
  1. Inter-Arab Investment Guarantees Corporation.
  2. International
    Agency to guarantee that investment.
  3. The Islamic
    Corporation for Insurance of Investment and Export Credit.
  • Freedom of investors in the management of their
  • Exception of mandatory set pricing on products
    of investment projects.
  • The right to export products or projects, in
    particular mediation, without restrictions.
  • Freedom of investors to convert their money in
    foreign currency to and from the Republic
    of Yemen and re-import
    money invested abroad, whether in kind or in cash upon liquidation or disposal
    of the project.
  • Law does not allow any decision to cancel
    registration of the investment project made under the Act or withdraw any right
    or exemption granted pursuant to, except under court order.
  • Give the investor the full right to choose one of the following methods to resolve disputes that arise between him and the Yemeni Government in the application of the provisions of the law:
  1. Unified Agreement for the Investment of Arab Capitals in Arab countries.
  2. International Convention to resolve investment disputes that arise between States and Nationals of other countries.
  3. Any international or bilateral agreement to which the Republic is a party.
  4. Rules and procedures for commercial arbitration of the International Law Commission of the United Nations.
  5. Arbitration rules and procedures within the Republic.


  • Dealing with the Agency as a one window (one stop shop).
  • Provide information required by investors.
  • Simplicity of the procedures required to establish or expand or develop investment projects.
  • Simpler procedures for the establishment of investment companies and open branches.
  • Ease of recruitment procedures for foreign expertise is available locally.
October, 2011 Mansour Elaraby
  Meyer-Reumann & Partners -Alexandria
For free subscription send us your contact details to