A new Foreign Company Branches and Agencies Regulatory Law in Yemen has been issued and sanctioned by Parliament. This new law embraced limitations on the activity and business of a foreign company branch, and imposed a laundry list of terms, conditions and approvals on foreign company agencies.
Subject to the new law, and in addition to the nationality requirement, it is provided that a person wishing to practice business as a foreign company agency should be a permanent resident of Yemen. As for companies wishing to engage in the agency business, only those organized under the laws of Yemen and having their headquarters therein, may be allowed to practice such business.
A provision, however, requires approval from the Ministry of Trade and Supply, prior to engaging in any business of foreign company agency. While the matter of licensing by public departments for becoming an agent does not exist in most countries, yet the Yemeni Law has punished the violation of this provision by fine.
In protection of agents, on the other hand, the law restricted importation of some products, such as vehicles, to licensed agents, provided these agents furnish adequate maintenance and spare parts services. Moreover, the competent department in Yemen shall not approve of a different agent, if a dispute arose between the previous agent and the principal, and until such dispute is finally resolved.
A foreign company wishing to practice business through a branch in Yemen must obtain approval of the competent department at the Ministry. Any practice to the contrary, will render the foreign firm liable to fine. The sectors and businesses under which a foreign branch may operate are listed in the law as follows:
1. Banking business.
2. Consulting and Technical Services,
3. Hotels and Touristic activities.
4. Contracting, and in particular construction of roads, ports, airports, public utilities and housing projects.
5. Investment in the industrial field.
6. Investment in the field of petrol and minerals.
7. Investment in the fields of agriculture, fish-farming and livestock resources.
8. Any other field approved by the Council of Ministers upon recommendation of the Minister.
From the wording of this law, it is evident that the aforementioned activities are not final, and may be added by resolution of the Cabinet. What is particularly interesting, however, is the broad manner in which the fields of business were enumerated, whereby fields traditionally closed as against foreigners in most countries were included under the list of foreign investment sectors.