Yemen - Islamic law (Sharia)
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Yemen taxes

If you are willing to do business in Yemen, this article explains the tax laws for a LLC which is the most common legal entity in Yemen.

Yemen taxes corporate income on a worldwide basis. The prevailing approximate tax rate for offshore income, from our research, and your results may vary, is 20%. Yemen doesn't have major incentives to remit income accrued abroad. Taxes are reasonable in Yemen because the standard rate of taxation on a LLC entity is 20%. This ranks Yemen as 70th when compared to CIT globally. Higher rates apply for telecommunication business. Certain investments projects under the Investment law may be taxed at 15%. Progressive rates from 10% to 20% may apply for small business under certain conditions.

The value added tax (VAT) rate in Yemen is 5.00%, which ranks Yemen as 26th when compared to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 9% to the equivalent of a social security fund and an employee will contribute 6%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 72hours. Contributing to this is the number of yearly labor tax payments, which is 1 in YE.

Thin capitalisation standards are in effect. Thin capitalisation refers to any sort of laws on a business and the debt-to-asset ratios. Dividends received are usually included in corporate income tax base. Those received from resident public companies are tax exempt. Dividends are a distribution of a portion of a company earnings, voted by the board of directors, to a particular class of shareholders. Dividends can be either cash payments, shares of stock, or other property. Capital Gains are usually subject to Corporate Income Tax. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 10%. This means that the relevant tax authorities expects relevant legal entities to automatically withhold 10% of interest payments to non-residents, unless interests are paid to certain foreign financial institutions. The dividends withholding tax rate is 10%. Which means that the tax authorities expects legal entities to withhold 10% of payments abroad on dividends. The royalties withholding tax rate is 10%. Which means that the taxman expects companies to withhold 10% of payments on royalties to non-residents.
There is tax on wealth in Yemen. There are real property taxes. There are no known inheritance and transfer taxes. We are not aware of any widely used R&D intitiatives that provide tax relief in this country.

The above is not tax or legal advice for your company's circumstances. We are able to help you to find to a lawyer in Yemen who can properly advise you. Want to work together? Click incorporate now if you are in a hurry, or press the free consultation button above.

It takes approximately 56 hours to file and prepare documents for a Yemen Islamic law (Sharia).
The corporate tax is approximately 20% which is 70 in the world.

Owners of a company in Yemen are not allowed to carry back a loss and may be allowed to carry forward a loss for 5 years.

The vat rate in Yemen is 5% which ranks 26 in the world.

Patent box
RND credit
Wealth tax
Estate tax
Transfer taxes
Asset taxes
Capital duties
7Tax treaties
20%Offshore Tax
20%Corp rate
-Loss carryback years
56Corporate time
5%VAT rate
20%Capital gains
NoAEOI planned

Read this to learn about incorporating a company in

We can help you form a company in Yemen. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Yemen, which is required by law.

Yemen Tax Treaties

CountryTypeDate signed
DTC 2005-10-26
DTC 2002-09-29
DTC 1998-03-08
DTC 2004-03-02
United Arab Emirates
DTC 2001-02-13
DTC 2000-08-07
DTC 2006-02-08

Country Info

National Flag of
الجمهورية اليمنية (ara)
Area Code
Western Asia
Native Languages