Government seeks amendment of investment law [Archives:2005/876/Business & Economy]

The Yemeni government is planning to adopt a number of practical measures for the purpose of activating local and foreign investments in the near future and to remove impediments facing investors. Official sources have made it clear that merasur3es include adoption of reforms in financial laws and making new amendments in the investment law, especially merging some specialized departments dealing with investors and building governmental mechanism for fighting financial and administrative corruption. The sources expected that the parliament would discuss in its new session a new draft law on investment including articles aimed at offering new facilities to investors and treatment aspects of failure in customs and tax-exempts.

The draft law also includes providing opportunity for foreign companies to practice investment activities via their branches in the country as well as restricting the foreign investor property of lands in the field of industry or tourism. It is to be recalled that agricultural lands are open to be exploited through benefiting only. It also stipulates on article against expropriation of lands but pursuant to the law and to offer just compensation. The proposed law also grants the non-Yemeni investor the right to mortgage real estates for a project in order to obtain banking facilities and determines the percentage of Yemeni commission in any project by around 25%.

The draft law also includes exempts from taxes and customs of immovable goods imported for the establishment of the project for five years instead of 50% exempt of duties only. The period of exemption could be extended to another three years under approval of the cabinet. Investment projects are to be exempted for seven years from commercial profits tax while all other previous exempts are to be cancelled particularly regarding expansion or development in case it is proved there is an outflanking against the law. The law also stipulates that the state authority for investment be under the responsibility of the minister of industry instead of the prime minister.

The Yemeni government has completed preparation of a draft law on the establishment of the State Authority for Land, Survey and Planning composed of merging the authorities of land registry and survey department as well as the state real estates and urban planning at the ministry of public works. The project aims at enhancing the role of the government sides having tasks related to lands and estates of the state. The aim is also to curb the phenomenon of dispute over specialties, authorities and their duality which more frequently used to lead to the loss of the public right. The government source mentioned that the multi government sides dealing with states real estates had previously resulted in creation of a big block before investments and imposition of many difficulties on the citizen especially in his efforts to prove his propriety or dealing with the estate.

Sources affirm that the new authority aims at providing a new climate attracting investments and making the question of land a magnetic element of various investments in Yemen. That could be achieved through easing terms of owning it and simplicity in implementing investment projects on them, given that the land in general is one of the most important privileges the country would offer for attracting of more strategic investments. Normally, such investments would contribute to reduce rates of unemployment.
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