Yemen: Investing
The war represents a serious obstacle to FDI in Yemen amid the deterioration of an already unfavourable business climate. Divestments continued to outweigh investments in 2020. According to UNCTAD's 2021 World Investment Report, FDI inflows remained negative in Yemen, amounting to USD -371 million in 2019, down from USD -282 million in 2018 (latest available data). FDI stocks fell to USD 1.9 billion in 2020, showing a significant decrease of almost USD 3 billion compared to the 2010 level. The United States and France are the main investing countries in Yemen, owing to the presence of their energy companies. There is no updated data on FDI in Yemen in 2020, but the pandemic has certainly had a negative impact. Moreover, the spread of COVID-19 in 2020 has drastically reduced the flow of remittances. The incomes of Yemenis working abroad have plummeted due to low oil prices, lockdowns and other social distancing measures in host countries. Data from Eurostat show that as of 2020 the stock of FDI in Yemen from the EU amounted to EUR 0.5 billion.
Due to the current political situation and the ongoing conflict, property rights and business activity are impaired by insecurity and corruption. The nominally independent judiciary is weak and susceptible to interference from the executive branch. Authorities also have a poor record of enforcing judicial rulings. Foreign investments in Yemen are governed by the Investment Law No.15 of 2010. Yemen ranks at the bottom of the latest Doing Business report issued by the World Bank, ranking 187th out of 190 countries, stable compared to the previous edition, signalling a very poor business climate.
| Yemen | Middle East & North Africa | United States | Germany | |
|---|---|---|---|---|
| Index of Transaction Transparency* | 6.0 | 6.4 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 4.0 | 4.8 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 3.0 | 4.7 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
| Foreign Direct Investment | 2019 | 2020 | 2021 |
|---|---|---|---|
| FDI Inward Flow (million USD) | -371 | 0 | 0 |
| FDI Stock (million USD) | 1,942.1 | 1,942.1 | 1,942.1 |
| Number of Greenfield Investments* | 0.0 | 0.0 | 0.0 |
| Value of Greenfield Investments (million USD) | 0 | 0 | 0 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Personal income tax | |
| Up to YER 120,000 | 0% |
| YER 120,000 - 240,000 | 10% |
| Over YER 240,000 | 15% |
| Non-residents and resident foreigners | 20% |
| Yemen | Middle East & North Africa | United States | Germany | |
|---|---|---|---|---|
| Number of Payments of Taxes per Year | 44.0 | 20.8 | 10.6 | 9.0 |
| Time Taken For Administrative Formalities (Hours) | 248.0 | 204.0 | 175.0 | 218.0 |
| Total Share of Taxes (% of Profit) | 26.6 | 32.1 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
| Setting Up a Company | Yemen | Middle East & North Africa |
|---|---|---|
| Procedures (number) | 6.00 | 6.28 |
| Time (days) | 40.50 | 19.51 |
Source: Doing Business.
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Latest Update: February 2023
