| Yemen: Integrity Scorecard Report > Sub-Category: Business Licensing and Regulation | ||
| Indicators | Score | |
| 70 | Are business licenses available to all citizens? | 63 |
| 71 | Are there transparent business regulatory requirements for basic health, environmental, and safety standards? | 100 |
| 72 | Does government effectively enforce basic health, environmental, and safety standards on businesses? | 25 |
Indicator and sub-Indicator Details
| 70 | Are business licenses available to all citizens? | |||||||
| 70a: In law, anyone may apply for a business license. | ||||||||
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Comments: The third source states that the Investment Law "ensures equality between Yemeni, foreign and expatriate capital without distinction or discrimination between rights, duties and measures." "The Commercial Law encourages investments and attract new investors in various sectors. The Commercial Company Law facilitates registration procedures and attracts foreign trade investments." There are some additional conditions for foreign wives of Yemeni citizens and women, who must have the permission of their husbands, and foreigners, who must have Yemeni partners, according to the Commercial Law. References: Investment Law No. 22, 2002, [ LINK ] Executive Bylaws for Law No. 22, 2002, Concerning Investment, [ LINK ] Law of Commercial Registration No. 33, 1991, Concerning Trade Registration, and subsequent amending laws No. 31, 1997, Law No. 14 1999, [ LINK ] Commercial Law No. 32, 1991, and its Amended Law No. 6 of 1998, [ LINK ]
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| 70b: In law, a complaint mechanism exists if a business license request is denied. | ||||||||
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Comments: Article 14 provides a mechanism that involves a letter to the minister complaining of rejection or removal from the commercial register, whose ruling is final. However, Article 3 does provide for resorting to the courts if the "head of a relevant authority does not act upon an appeal or rejects the appeal of an applicant for a procedure that is handled by that relevant concerned authority." It might be said for investment projects only, but the Constitution and the Judiciary Law give citizens the right to resort to the courts if their rights are violated or they are treated unfalirly in any government dealings. The fourth source illustrates the fundamental existence of such a mechanism of appeal: "The applicant is entitled to appeal the Registrar's decision before the High Court of Justice within a period not exceeding one month from the date of the Registrar's decision." References: Law of Commercial Registration No. 33, 1991, Concerning Trade Registration, and subsequent amending laws No. 31, 1997, Article 14 Law No. 14 1999, [ LINK ] Commercial Law No. 32, 1991, and its Amended Law No. 6 of 1998, [ LINK ] Investment Law No. 22, 2002, Article 38, [ LINK ]
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| 70c: In practice, citizens can obtain any necessary business license (i.e. for a small import business) within a reasonable time period. | ||||||||
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Comments: The first source shows that almost 20 days (most likely an optimistic tally, according to government sources) are needed to set up a limited liability partnership. A conservative estimate based on the experience of a random selection of many acquaintances in the private sector optimistically reflects a month and a half. The researcher's experience 25 years ago was 2 days, less procedures 4 and 6. With a ranking of 98, Yemen is still a long way from showing competetive conditions for attracting private sector initiatives. References: [ LINK ]
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| 70d: In practice, citizens can obtain any necessary business license (i.e. for a small import business) at a reasonable cost. | ||||||||
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Comments: When you add the minimal capital requirements, according to Corporate Business Law (1,000,000 rials (US$5,000) for a limited partnership and 5,000,000 rials (US$25,000) for shareholding companies, of which a sizable sum will be spent for registration (nearly US$900), which for limited companies amounts to a minimum 20% of the capital requirements, for a poor country like Yemen, the cost can be prohibitive and hardly encouraging to the entrepreneurial spirit. "The overall freedom to start, operate and close a business is restrained by Yemen's regulatory environment.
References: Corporate Business Law No. 22, 1997, [ LINK ]
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| 71 | Are there transparent business regulatory requirements for basic health, environmental, and safety standards? | |||||||
| 71a: In law, basic business regulatory requirements for meeting public health standards are transparent and publicly available. | ||||||||
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Comments: The general legal framework for health and environmental protection is readily available and transparent in as far as one understands the technical intricacies involved. However, the first source states that protections are inadequate to meet international standards. References: [ LINK ] - EXCWA study Law No. 46, 1991, Concerning Fishing and Exploitation of Marine Life Law No. 37, 1992, Concerning Practice of Health Professions Law No. 26, 1995, Environmental Protection Other legislation involving health, sanitation and the environment, many of which can be found at [ LINK ].
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| 71b: In law, basic business regulatory requirements for meeting public environmental standards are transparent and publicly available. | ||||||||
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Comments: The general legal framework for health and environmental protection is readily available and transparent in as far as one understands the technical intricacies involved. However, the first source states that protections are inadequate to meet international standards. A vist to many of the public and private hospitals shows how much Yemen falls bellow standard in basic levels of safety, cleanliness and adequate equipment. References: [ LINK ] - EXCWA study Law No. 46, 1991, Concerning Fishing and Exploitation of Marine Life Law No. 37, 1992, Concerning Practice of Health Professions Law No. 26, 1995, Environmental Protection Other legislation involving health, sanitation and the environment, many of which can be found at [ LINK ].
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| 71c: In law, basic business regulatory requirements for meeting public safety standards are transparent and publicly available. | ||||||||
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Comments: Article 35 concerns the safety of laborers (including inspectors). The Civil Law covers rented property, contracting work and other work contracts. The Traffic Police Law and other police legislation cover public safety in general as well as civil defense measures. References: Labor Law, 1995, amended by Law No. 25, 2003, Law No. 11, 2001, and Law No. 25, 2007, Article 35, [ LINK ] Civlil Law No. 14, 2002, Part II, Chapter 1; Chapter 3 Traffic Police Law No. 46, 1991, and other police services ([ LINK ]
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| 72 | Does government effectively enforce basic health, environmental, and safety standards on businesses? | |||||||
| 72a: In practice, business inspections by government officials to ensure public health standards are being met are carried out in a uniform and even-handed manner. | ||||||||
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Comments: The general legal framework for health and environmental protection is readily available and transparent in as far as one understands the technical intricacies involved. However, the first source states that protections are inadequate to meet international standards. Yemen is still lacking many of the technical capabilities needed to achieve standards acceptable to rest of the world. References: [ LINK ]
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| 72b: In practice, business inspections by government officials to ensure public environmental standards are being met are carried out in a uniform and even-handed manner. | ||||||||
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Comments: The very important chapter on the environmental impact assessment (EIA), which has become a must preceding the construction of any project have an adverse impact on environment, was modified: The new law differentiates between the EIA studies, which are carried out before approving the licensing and construction of a project, and the environmental inspection to be exercised over the already existing installations. The third sourced indicates weaknesses in environmental management: "Weak environmental management and rapid population growth pose mounting pressure on natural resources. Natural resources have been over-exploitation over the decades. Land and habitat degradation and loss of biodiversity are apparent. Marine and coastal-zone management is weak. The water level in most aquifers is declining due to heavy extraction. In some cases, twice as much water is extracted as is recharged. In urban areas, waste and sewage problems pose threat to ground water. Others problems include lack of qualified personnel in environmental management and in systematic inspection work.
References: [ LINK ]
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| 72c: In practice, business inspections by government officials to ensure public safety standards are being met are carried out in a uniform and even-handed manner. | ||||||||
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Comments: Labor law and other civil safety laws (traffic, police, fire) all call for periodic inspections by the relevant authorities, but very little is being done. There is little regard for overall public safety, because there are no laws or regulations forcing the relevant authorities to schedule visits to facilities and installations. Inspections are random rather than periodic checks on outlets that trade in dangerous materials or in facilities where workers could be working in vulnerable conditions vis a vis their safety. There is a lack of defiined standards, which such outlets or facilites should have. References: [ LINK ]
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