Foreign Investment Regulations

 This law is designed to promote and regulate the investment of Yemeni, Arab and foreign capitals, subject to the provisions of this Law within the context of the state general policy, goals and priorities of the national economic and social development plan, and not in contradiction with the Islamic jurisdiction, in all of the sectors except the following:

Exploration and extraction of oil, gas and minerals that are governed by special agreements

Weapons industry and explosive materials.

Industries that harm the environment and health

Banks and exchange bureau

Financial trade, importing, wholesale and retail trade.

For the purposes of executing the provisions of this Law and unless the content shall otherwise imply, the terms and expressions appearing in this Law, shall have the meaning shown against each, as follows:

2. Government : The Government of the Republic of Yemen

3. Minister: The competent Minister.

4. Authority: The General Investment Authority established pursuant to this Law.

5. Board of Directors: Board of Directors of the Authority.

6. Chairman of  Board:  Chairman of the Board of Directors of the Authority.

7. Executive Administration:  The Executive Administration of the Authority.

8. Authority President : President of the Authority Executive Administration.

9. General Manager: General Manager of the Authority

 10. Competent Body: The government agency concerned, or the executive in-charge of the sector in which a project is operating or to be established or for any matters relating to a project.

11.  Regulation: The executive regulations issued by the council of ministers comprising procedural provisions, directives and rules required for the execution of this Law.

12.  Project: Every activity, whatever its legal status, included in the areas of investment referred to in Article (1), and authorized pursuant to the rules and procedures provided for in this Law and the decrees issued in execution thereof.

13. Registration: Registration at the Authority to establish, expand or rehabilitate or undertake project amendments including issuance of lists of exempted requirements and other certificate issued or amended by the authority.

14. Investor ; Every Yemeni, Arab or foreign natural person or juridical entity desirous of investing, owning or participating in a project pursuant to the provisions of this Law.

15. Investment Company: A Company established by investor or investors to establish investment project or projects.

 16. Fixed Assets : Machinery, instrument, equipment, supplies, and spare parts needed to establish, expand or rehabilitate a project including buses especially designed to transport tourists, vessels for maritime transport and fishing and furniture and furnishings for hotels and hospitals whether imported, or locally manufactured or procured.

17. Invested Capital : In application of this Law, invested capital shall mean the estimated value of foreign or local capital invested in a project and shall be determined as follows:

I. Foreign Capital

a.    Freely negotiable foreign currency for investment in establishment, expansion or rehabilitating of projects, as well as freely convertible financial securities transferred to the Republic by an Arab or foreign person or persons for investment in a project.

b.    Fixed assets imported from abroad for investment in a project.

c.    Arab or foreign incorporeal rights such as licenses, patents and trade marks invested in a project and registered in the Republic which are protected under an international or bilateral agreement to which the Republic is a party.

d.    Profits and gains earned by investment of foreign funds in the Republic and converted to capital by reinvestment in a project.

e.    Land and buildings investment cost related to a project.

II. Local Capital:

Local currency paid in Yemeni Rials by a Yemeni natural person or a juridical entity the majority of equity holderof which is Yemeni.
Local incorporeal rights and assets furnished for use in establishing, expanding or rehabilitating a project.
Profits and gains by investment of local funds in the Republic and which are converted to capital by reinvestment in a project.
Evaluation of investment capital in part I (b) and (c) and in part II (b) shall be in accordance with the rules and procedures specified in the executive regulations.

18. Service Fees

Fees charged for a service or a benefit such as port fees, storage fees and the like.

19. Expansion

Addition of new fixed assets serving to increase a project's production capacity of goods and services, or manufacture of goods previously imported, or for the purpose of producing and supplying new goods and services provided such an addition is within the scope of   activity carried out by the licensed project   in conformity with the rules and procedures provided for in the Law and the decrees issued in execution thereof.

 20. Rehabilitating

Full or partial replacement or exchange of the fixed assets of a project by installing other new or more sophisticated assets or updating existing fixed assets by adding new assets or parts thereof to improve the efficiency of operation and improve or rehabilitate the type of goods or services produced, or make them more advanced, as the case may be.

21. Production Inputs

All materials needed to operate a project such as raw materials, intermediate commodities, spare parts and maintenance requirements appropriate to the nature of the project's activity.

22. Transfer of Technology

a.    Licensing, transfer, sale, use of patents, expertise, trade marks and other incorporeal rights.

b.    Furnishing expertise, technical know-how or other engineering services in any manner or form.

c.    Management and marketing services and the like.

23. a. Authorized Capital

Total capital agreed upon by the founders in the company's articles of association under which they are authorized to establish the company.

b. Paid in Capital

That portion of the capital to be paid any time during the company's duration.

 c. Issued Capital

That portion of the capital purposely issued to be put up for public or private subscription whether paid in at the time of subscription or over a given number of years.

 24. The Law : The Investment Law No. 22 of 2002.

25. Day : The official working day.

26. Recruitment  Regulation : Authority recruitment regulation issued by a prime minister decree as proposed by the President of the Authority with the approval of the Board of Directors.

Article 3

a.    The provisions of this Law shall be applicable to all projects registered under its provisions.

b.    Yemeni, Arab or foreign capital may invest solely or in partnership in any project pursuant to the provisions of Article (1) of this law.