Trade barriers
Yemen's formal trade regime is relatively open. Yemen Customs Authority faces pressures, long land and sea borders and civil service regulations restrict flexibility of work practices and financial managements. The introduction of ASYCUDA system had a dramatic impact. A number of obstacles remain: anachronistic processes for doumentation, dispute process slow, inconsistent interpretation of customs law and practice , as well as informal payments.

Marketing.
Yemen is not a normal market as irregular practices are commonplace and the large scale smuggling into Yemen of consumer goods distorts the market. Agents are useful sources of local information and it is difficult to work without their assistance in view of the language and communication problems. Law No 23 of 1997, concerning agencies and branches of foreign companies, requires that a formal relationship should be in writing and that a copy of that agreement is lodged with the Department of Companies and Trade Registration at the Ministry of Supply and Trade.  Agents should be appointed with care, preferably on a 12 months trial basis or, if more appropriate, on a project by project basis. The letter of appointment should state the duration of the agency (it is advisable not to enter into an open-ended relationship) and the percentage of commission.
Infringements of patents and trademarks are commonplace in the large informal market.

Investments
Major issues are corruption, excessive bureaucracy and inefficiency of the justice system. The costs of doing business in Yemen seem unnecessarily high.
On corruption, please check the Italian law implementing the OECD Anti-Bribery Convention, on the website www.parlamento.it/parlam/leggi/00300l.htm
OECD Anti-Bribery convention can be found on the OECD website www.oecd.org.
Yemeni Investment Law 22 of 1991 (amended) offers a number of privileges and incentives for investment in Yemen. Copies of this Law and information about its application should be obtained from the General Investment Authority www.giay.org prior to analysis of any investment plans. Among the main benefits are: Investors can transfer foreign currency to Yemen for investment purposes and can re-export invested capital upon liquidation or project disposal. Net profits resulting from investment of foreign funds can be transferred freely outside Yemen. Projects may not be nationalised or seized. Moreover their funds may not be blocked confiscated, frozen, withheld or sequestered by other than the Courts of Law. No performance requirements are specified. There is provision for exemption from Customs fees and taxes on the fixed assets of the project and a temporary tax holiday on profits.Investments in oil, gas and minerals are subject to special agreements. Internal airservices and fixed telephone lines are subject to monopoly. While Yemen's Investment Law and other laws are basically sound, enforcement of these laws is not always easy. The government has established commercial courts to try to provide a mechanism for the resolution of commercial disputes but the decisions of these courts can be unreliable and, even if favourable, are not always easy to enforce. Most foreign investors will find it helpful to establish a local partnership with a Yemeni who knows the system.
Bids are not transparent and it is advisable to appoint an agent to follow the bids.
Investors are also deterred by insecure property rights and constraints on access to credit.

 www.giay.org

legals | credits | F.A.Q.