This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 07 SANAA 001690 
 
SIPDIS 
 
STATE FOR EB/IFD/OIA, NEA/ARP AND NEA/PPR 
STATE PLEASE PASS TO EXIM, TDA AND OPIC FOR RO'SULLIVAN 
TREASURY FOR DO/GCHRISTOPOLUS 
USDOC FOR 4520/ITA/ATAYLOR AND ANESA/ONE/CLOUSTAUNAU ALSO 
FOR 6000/ITA/ADVOCACY CENTER/CJAMES 
PLEASE PASS TO USTR FOR FHUGEL 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ELAB ETRD KTDB PGOV YM OPIC ECON COM
SUBJECT:  2003 INVESTMENT CLIMATE STATEMENT - REPUBLIC OF 
YEMEN 
 
REF: STATE 128494 
 
¶1.  THE FOLLOWING IS EMBASSY'S YEAR 2003 INVESTMENT CLIMATE 
STATEMENT FOR YEMEN. 
 
¶2.  BEGIN TEXT OF INVESTMENT CLIMATE STATEMENT: 
 
 
¶A. 1.  Openness to Foreign Investment 
 
The Republic of Yemen Government (ROYG) is committed to 
attracting foreign investors by improving its overall 
investment climate.  To this end, it adopted a new policy of 
uniform treatment for all investors, domestic and foreign. 
The lead ROYG agency is the General Investment Authority 
(GIA), established in March 1992, which has worked with the 
World Bank's Foreign Investment Advisory service to update 
Yemen's Investment law 22 of 1991 (as amended).  The 
alternative Investment Law number 22 of 2002 was adopted by 
parliament on June 2002 and signed by the president on July 
20, 2002.  However, to date the law has not been 
implemented.  Once implemented the new law will safeguard 
all exemptions and benefits called for in the previous 
investment law and shift the focus of the GIA from 
regulation to registration and promotion.  The new law will 
eliminate intervention of the GIA and other government 
agencies in investment projects and gives wider freedom to 
investors in running their projects. The new law will cancel 
some legal provisions, which provided special exceptions for 
investors from obtaining import and export licenses from the 
Ministry of Industry and Trade and also from paying relevant 
stamp duties.   The new law will encourage local production 
by reducing customs duties by 50 percent on imported raw 
materials and 100 percent on raw materials produced locally 
for agricultural and fisheries projects.  Finally, the new 
law will cancel some tax categories.  The new investment law 
falls under the government's financial, economic and 
administrative reform program, intended to encourage foreign 
investment. 
 
Under the new law 22 of 2002, the primary role of the GIA is 
limited to registration and promotion of investment 
opportunities.  The GIA provides potential investors with an 
information packet that includes a copy of the investment 
law, an investment guide summarizing GIA activities, and an 
application form with instructions.  Packets may be obtained 
from the promotion section, General Investment Authority, 
P.O. Box 19022, Sanaa, Republic of Yemen (Phone:  967-1-262- 
962/3 or 268-205; Fax:  967-1-262-964, E-mails: 
mohdhussein@yahoo.com; website is:  www.giay.org. 
 
The GIA welcomes investment in all projects with the 
exception of arms and explosive materials, industries that 
could cause environmental disasters, banking and money 
exchange activities, and wholesale and retail imports. 
Investments in the exploration and production of oil, gas 
and minerals are subject to special agreements (e.g., 
production sharing agreements) under the authority of the 
ministry of oil and mineral resources and do not fall within 
the purview of the GIA.  Investment is open to Yemeni, Arab, 
or foreign investors acting solely or in partnership on any 
project. 
 
The investment law revision is part of a large ROYG economic 
restructuring program, sponsored by the IMF and World Bank, 
begun in 1995.  The broad objectives of the program have 
been to stabilize the economy and stimulate sustainable 
growth.  By and large, it has been successful, and the ROYG 
will negotiate with the IMF after the April 2003 election 
for a new three-year poverty reduction and growth facility 
(PRGF) for 2003-2005.  Macroeconomic stabilization has been 
achieved with the Yemeni rial stable and floating at market 
rates at the range of (1 USD equaled approximately 174 YR 
until October 2002; and 183 YR from October 2002-July 2003. 
Inflation (as measured by the CPI) declined from 71 percent 
in 1994 to 11. 8 percent in 2003, and foreign currency 
reserves now reached USD 4.7 billion, or 17.6 months of 
imports.  Most bilateral debt has been rescheduled under the 
Paris Club and commercial debt has largely been eliminated 
through a World Bank grant program.  External debt is now 
about 48.7 percent of GDP as at March 2003. 
 
Under the international financial institutions' reform 
programs, Yemen's trade environment has also improved, and 
basic elements of a social safety net have been implemented. 
A simplified and less protective tariff structure has been 
initiated with the elimination of nearly all import bans, 
export restrictions, and import licensing, and the adoption 
of a unified tariff.  Under the new (investment) law 22 of 
2002, duties applied on raw materials not available locally 
will be exempted by 50 percent.  There will also be a full 
exemption on imported materials included in agricultural and 
fisheries projects.  Also as instructed by the president, 
there should be a 100 percent exemption on lands in the 
southern and eastern provinces if the project cost, 
excluding land, is more than ten million dollars.  A 
privatization program, begun in 1998 with sixteen 
enterprises in industry, tourism, and trade, came to a 
standstill in April 2001 when parliament refused to approve 
a World Bank credit to fund a larger, long-term 
privatization program.  Financial sector reform has advanced 
with passage of a new law granting full independence to the 
Central Bank.  Commercial banks have also been required to 
improve their accounting procedures and loan recovery rates. 
That said, the bank system remains weak, with most 
commercial banks owned by families who have very low 
capitalization rates. 
 
A.2. Conversion and Transfer Policies 
 
The Yemeni rial is freely convertible at market rates.  It 
has been stable at the 176-177YR/1USD range through October 
¶2002.  The rial went down to 182-183YR/1USD through the end 
of the year, due partially to the impact of the attack on 
the oil tanker M/V Limburg off the coast of Yemen.  All 
other foreign currencies, especially U.S. dollars, are 
readily available and trade freely at market rates.  Under 
Investment Law 22, investors may transfer funds in hard 
currency from abroad to Yemen for the purpose of investment 
and may re-export invested capital, whether in kind or in 
cash, upon liquidation or project disposal.  Net profits 
resulting from investment of foreign funds may be 
transferred freely outside of Yemen. 
 
A.3. Expropriation and Compensation 
 
Yemen's investment law stipulates that projects will not be 
nationalized or seized.  Moreover, the funds will not be 
blocked, confiscated, frozen, withheld or sequestered by 
other than a court of law.  Likewise, real estate may not be 
expropriated except in the national interest, according to 
the law and a court judgment, and against fair compensation 
based on its market price on the issuance date of the court 
judgment.  Such compensation may be freely transferred 
abroad. 
 
Since Yemen's unification in 1990, there have been no cases 
of property expropriation.  The ROYG recognizes that 
expropriation (which existed in the socialist-led Peoples' 
Democratic Republic of Yemen, the former South Yemen, until 
1990) is contrary to its economic reform aspirations.  Much 
of the expropriated lands in the southern and eastern 
provinces have been returned to the rightful owners.  Land 
registration, however, is in its infancy in Yemen, and 
disputes over both residential and commercial plots are 
frequent and nearly impossible to adjudicate legally. 
 
A.4. Dispute Settlement 
 
There have been no significant investment disputes involving 
U.S. investors over the past several years, although 
commercial disputes are common.  Yemen signed the Convention 
on the Settlement of Investment Disputes in 1997, but has 
not yet ratified the New York Convention on Arbitration.  In 
the interim, business disputes are generally handled by 
informal arbitration or within Yemen's court system.  In 
1998, a private arbitration center, the Yemeni Center for 
Conciliation and Arbitration, was created by a group of 
lawyers, bankers, and businessmen as an alternative to the 
courts.  The center has settled a number of cases so far in 
the areas of trade, finance, construction and industry, and 
is gaining recognition as a viable alternative. 
 
The formal judicial system is widely regarded as inefficient 
and corrupt.  While Yemen's investment-related laws are 
basically sound, enforcement remains problematic at best and 
nonexistent at worst.  The ROYG has special commercial 
courts to provide a mechanism for commercial dispute 
resolution, but they are generally considered ineffective. 
In the fall of 2002, the GIA board of directors and the 
council of ministers decided to establish specialized courts 
for settlement of investment disputes with four appointed 
judges.  To date these special courts has not been 
established.  Bilateral and multilateral donors are actively 
encouraging the ROYG to press forward with more extensive 
judicial reforms. 
 
Most investors would be best served by establishing a 
partnership with a Yemeni who knows the system, and by 
including International arbitration clauses in their 
contracts.  In cases involving interest, most judges use 
Shari'a (Islamic) law as the guideline, under which claims 
for interest payments due are almost always rejected.  Local 
commercial banks are sensitive to this problem, and rarely 
lend to other than established, large trading houses for 
this reason. 
 
A.5. Performance Requirements/Incentives 
 
Under Yemen's investment law, no performance requirements 
are specified as a condition for establishing, maintaining 
or expanding investment.  Incentives include, but are not 
limited to:  exemption from customs fees and taxes levied on 
fixed assets of the project; tax holiday on profits for a 
period of seven years, renewable for up to 18 years maximum; 
the right to purchase or rent land and buildings; and the 
right to import production inputs and export products 
without restrictions and registration in the import/export 
register. 
 
Boycott issues:  Yemen formally renounced observance of the 
secondary and tertiary aspects of the Arab League boycott of 
Israel in 1995.  However, occasional reports of violations 
occur when some Yemeni companies use old purchase order 
forms that contain prohibited language.  When these 
violations are brought to the attention of concerned 
officials, corrective action is taken.  Yemen has stated 
that it will not renounce the primary aspect of the boycott 
absent an Arab League consensus. 
 
A.6. Right to Private Ownership 
 
While foreigners may own property, foreign companies and 
establishments generally may trade in Yemen only through a 
Yemeni agent.  Law 23 of 1997 (amended), Regulating Agencies 
and Branches of Foreign Companies and Firms, outlines the 
requirements for establishing a Yemeni agent.  Chapter 3 of 
law 23 permits foreign companies and firms to conduct 
business in Yemen by establishing foreign-owned and managed 
branches.  Foreign establishments wishing to open branches 
in their own names must obtain a permit by decree from the 
Minister of Industry and Trade, subject to law 23 and other 
laws in force at the time of application.  However, as a 
practical matter, establishments should plan to engage a 
Yemeni partner.   Regarding investment projects, under the 
new investment law foreigners can own 100 percent of the 
land and can execute projects without a Yemeni agent and 
without obtaining import/export license from the Ministry of 
Industry and Trade or implementing law 23 of 1997. (The 
investment law has precedence over other laws.) 
 
Mortgage lending in Yemen is rare because of the 
aforementioned unwillingness of the court system to uphold 
the payment of interest.  In addition, Yemen has a long 
history of incomplete or inaccurate land records and 
frequent land ownership disputes, which make using land or 
buildings as collateral difficult for lenders to manage. 
While the general survey authority is working to establish a 
just and legally defensible land registry system, it is some 
years off. 
 
A.7. Protection of Property Rights 
 
Yemen has a record of inadequate protection of intellectual 
property rights (IPR), including patents, trademarks, 
designs, and copyrights.  It has not acceded to any 
international IPR conventions, and its IPR law no. 19 of 
1994 is not TRIPS compliant. Yemen's Ministry of Industry 
and Trade drafted three new projected laws known as the 
patents law; trademark law, and the designs and copyrights 
law.  These three new laws are expected to be approved this 
year by the cabinet, ratified by parliament and endorsed by 
the president, which will replace the IPR law no. 19 of 
¶1994.  In March 1999, Yemen became a member of the World 
Intellectual Property Organization (WIPO) and is now 
revising its laws with WIPO guidance.  Yemen's application 
to join the World Trade Organization (WTO) was approved in 
July 2000.  As a next step in the accession process, Yemen 
presented to the WTO a memorandum of foreign trade regime in 
October 2002.  As part of its accession requirements, Yemen 
will need to enact its revised IPR legislation and take 
concrete steps to enforce adequately these laws. 
 
A large U.S.-based multinational firm litigated successfully 
a trademark infringement case in Yemen's courts in 1999. 
The ruling is now under appeal and the violator continues to 
infringe on the trademark despite the court ruling.  A final 
resolution was expected by the end of 2000, but it is still 
pending in the Supreme Court.  In a second case involving a 
U.S. Company's trademark, the Appeal Court handed down a 
final ruling in April 2001 to enforce the rights of the U.S. 
Company.  As of April 2003, the enforcement of the final 
ruling to cease production of the infringed products has not 
been implemented.   Both of these cases demonstrate the 
soundness of Yemen's basic IPR laws.  However, enforcement 
of rulings remains weak. 
 
A.8. Transparency of the Regulatory System 
 
While Yemen has fundamentally sound investment laws, labor 
laws, customs tariff regulations and tax laws, transparency 
of implementation and enforcement is elusive.  The next 
steps required in Yemen's civil service and administrative 
reform process are to clarify procedures, create 
implementing regulations and build a mechanism by which to 
enforce these standards.  Health and safety standards are 
rudimentary and not enforced. 
 
A.9. Efficient Capital Markets and Portfolio Investment 
 
In the 1990s, Yemen's financial sector consisted of a 
banking system that suffered from a large volume of non- 
performing loans, inadequate loan provisioning, low bank 
capitalization, and weak enforcement of prudential 
standards.  Under a 1997 World Bank-sponsored financial 
sector reform program, the government took actions to 
address these problems.  A bank reform law was passed in 
December 1998 to update, strengthen, and regulate the 
industry.  By June 2000, the Central Bank of Yemen (CBY) had 
circulated strict regulations pertaining to credit risk 
management, liquidity, insider lending, foreign exchange 
exposure, financial leasing and external auditors.  Banks 
are now required to reach a capital adequacy ratio of eight 
percent and meet new classification and provisioning 
standards for loan portfolios.  Most banks are complying. 
That said, commercial banks still suffer from extremely low 
capitalization rates and are essentially owned by large 
trading families who establish the bank to service their own 
business needs. 
 
Lending to the private sector is constrained by the lack of 
judicial recourse to recover bad loans.  To correct this 
weakness, a steering committee produced a series of reform 
recommendations in mid-1999 that were approved by the 
government and sent to the Ministry of Justice for 
implementation.  Among the recommendations was the 
establishment of special loan recovery courts, which began 
operations in 2000. 
 
The ROYG was engaged in a program to privatize government- 
owned commercial banks, although progress in this area was 
thwarted when parliament did not approve a World Bank credit 
to fund the privatization program.  The National Bank of 
Yemen was to be put up for sale pending a final audit report 
for 1999, but no action has been taken.  The Yemen Bank for 
Reconstruction and Development is under restructuring and 
will likely not be privatized.  The two remaining 
specialized banks--housing and agriculture--are also being 
restructured.  Once sound, they too were to be privatized. 
 
In June 2000, the president signed the Central Bank law no. 
14, which grants greater independence to the CBY.  Its 
mandate will now focus on price stability, limiting public 
sector financing to emergency loans, freedom to adopt its 
own monetary and exchange rate policies, and enforcing 
greater commercial bank accountability.  It is authorized to 
conduct inspections of all banks implement provisioning and 
capital increase schedules, and enforces penalties and 
corrective measures.  Interbank activities are limited, and 
there are no equity or bond markets.  The ROYG is planning 
to establish a stock market in Yemen to promote the 
government's private sector-led growth strategy.  However, 
the consensus of most Yemeni and foreign observers is that 
the country lacks the expertise to establish such a market 
at this time.  It is also doubtful that there are sufficient 
numbers of Yemeni investors to sustain an active stock 
market. 
 
The CBY began offering treasury bills in December 1995. 
Commercial banks purchased a large share of the bills, 
investing up to 30 percent of their assets in them.  The 
interest rate on T-bills was gradually reduced from a high 
of 23 percent in 1999 to about 13-14 percent in April 2003 
to encourage investment lending. 
 
A.10. Political Violence 
 
While there were no kidnappings in 2002, Kidnappings of 
foreigners have occurred sporadically since the 1970s and 
received wide international press coverage.  Some tribal 
groups have used hostage taking to put pressure on the 
government to obtain projects or services, or to focus 
government attention on the redress of grievances.  Victims 
have included foreign businessmen, diplomats, aid workers 
and tourists.  Historically, most have been treated well and 
released unharmed after two to three days, although some 
have been held as long as four weeks.  A botched rescue 
attempt during a May 2000 kidnapping of a Norwegian citizen 
resulted in his death.  Tribal kidnappings of foreigners 
have been on the decline since 1998, partly as a result of 
tough penalties enacted by the Yemeni government as a 
deterrent, and no foreigner has been kidnapped in Yemen 
since November 2001.  The president has spoken out strongly 
against kidnapping, terming it "terrorism."  Many tribal 
leaders have given assurances to the ROYG to cooperate in 
hunting down kidnappers. 
 
A significant exception to the usual pattern was the 
kidnapping in Abyan Governorate of 16 foreign tourists in 
December 1998.  Four died during a rescue attempt, at least 
two of those at the hands of the kidnappers.  Most 
observers, however, have concluded that this incident was 
the responsibility of Islamic extremists rather than tribal 
kidnappers.  The perpetrators were tried, found guilty of 
murder, and sentenced.  The Yemeni national who led the 
kidnapping was sentenced to death under the anti-kidnapping 
law of 1998 and executed in October 1999.  The non-Yemeni 
nationals involved were given maximum prison sentences, but 
some were deported in early 2002.  In late December 2002, 
three American doctors were killed near the city of Ibb. 
The perpetrator was convicted and sentenced to execution. 
 
Some tribal elements hijack automobiles or other expensive 
equipment owned by foreign companies as another means to 
pressure the government to accede to their demands. 
Particularly where oil and mineral extraction are concerned, 
some tribes in the mineral-rich areas feel that they are not 
getting their share of the wealth.  Investors in such 
ventures should be sensitive to the need to hire more local 
tribesmen than might first be judged economically necessary 
in order to build community relations and preserve the 
peace.  The provision of community-based buildings and 
services, such as in health care and education, can go a 
long way toward ensuring trouble-free investment in isolated 
areas. 
 
The bombing of the USS Cole in Aden harbor in October 2000, 
in which 17 U.S. Servicemen and woman were killed, and the 
October 2002 bombing of a French oil tanker of the coast of 
Mukalla, are considered to be the acts of international 
terrorists.  The Republic of Yemen Government and the United 
States are cooperating closely on counter terrorism 
measures, and in investigations and preventions following 
repeated terrorist acts. 
 
A.11. Corruption 
 
As one of the poorest countries in the world, with a hugely 
overstaffed (due in part to the unification of North and 
South Yemen) and underpaid civil service, Yemen has a 
significant and widely acknowledged corruption problem.  If 
anticorruption laws exist on the books, they are not 
enforced.  Illicit activities range from soliciting and 
paying bribes to facilitate or obstruct projects, to 
leveraging dispute settlements, skewing taxation and customs 
tariff augmentations, and engaging in family or tribal 
nepotism.  The government recognizes that it must affect 
civil service and administrative reforms (better jobs, 
higher pay, removal of the worst offenders) to create new 
disincentives to corruption.  Following Yemen's signing of a 
border treaty with Saudi Arabia in June 2000, Yemen's 
president Ali Abdullah Saleh announced a new commitment to 
reduce corruption.  The Ministry of Civil Service has the 
lead on anticorruption issues and has set up an executive 
committee to address the issue.  A national strategic plan 
to eliminate corruption is still not in place, however. 
 
B - Bilateral Investment Agreements 
 
The U.S. and Yemen are currently discussing a bilateral 
investment treaty (BIT) but there is no bilateral tax treaty 
between the two governments.  According to the General 
Investment Authority, Yemen signed in 2002 three new 
investment promotion and protection agreements, bringing the 
total bilateral treaties to 31, with five additional 
countries having initialed a tentative agreement.  Yemen has 
bilateral investment treaties with Algeria, Austria, 
Bahrain, Belgium, Bulgaria, China, Djibouti, Egypt, 
Ethiopia, France, Federation of Russia, Germany, Indonesia, 
Iran, Jordan, Kuwait, Lebanon, Malaysia, Morocco, the 
Netherlands, Oman, Pakistan, Qatar, South Africa, Sweden, 
Syria, Tunisia, Turkey, the UAE, Ukraine, and the United 
Kingdom.  Yemen has initialed agreements with, Croatia, 
Hungary, India, Mongolia, and Romania. 
 
C - OPIC and other Investment Insurance Programs 
 
Yemen and the United States signed an investment guarantee 
agreement in 1972.   As of October 1997, OPIC and EXIM Bank 
are on cover (or provide guarantees) for both private and 
public sector projects of short and medium term (up to seven 
years) duration. Yemen is a member of the Multilateral 
Investment Guarantee Agency (MIGA). 
 
D - Labor 
 
The Yemeni government generally adopts International Labor 
Organization (ILO) standards regarding labor and worker 
rights.  In 1999, it ratified ILO conventions on the 
elimination of the worst forms of child labor and the 
minimum work age for employment.  As in other areas, 
enforcement of the law is weak.  Child labor has increased 
due to the negative impact of economic reforms.  Most 
children work with their families in agriculture, although 
an increasing number are being sent out to work in shops and 
restaurants.  To address this issue, the ROYG signed in June 
2000 an agreement to cooperate with the International 
Program on Elimination of Child Labor (IPEC). After 
ratification of the ILO, the ROYG established the Child 
Labor Unit at the Ministry of Labor to implement and enforce 
child labor laws and regulations. Investors may find the 
local pool of skilled labor for technology intensive 
ventures limited. 
 
Yemen's overall illiteracy rate is approximately 47 percent 
(2000), 27.7 percent for men and 67.5 percent for women. 
Given the departure of thousands of unskilled and semi- 
skilled Yemeni laborers from Saudi Arabia, Kuwait and other 
Gulf states during the 1990-1991 Gulf war, Yemen's 
unemployment rate now stands at about 35 percent.  Those who 
complete secondary education and university studies in Yemen 
often do not possess the same professional standards as 
their counterparts hailing from Western educational 
institutions.  University graduates also experience 
difficulty finding appropriate employment and are sometimes 
unwilling to accept lower skilled jobs.  The government is 
beginning to focus considerable attention on increasing 
access to and improving the quality of vocational training 
as a means to develop a cadre of skilled laborers in high 
demand fields, including construction workers, electricians, 
plumbers and carpenters. 
 
E - Foreign Trade Zones/Free Ports 
 
The Yemen Free Zone Public Authority was established in 1991 
to develop the Aden Free Zone.  Yeminvest, a joint venture 
of the Port of Singapore Authority (PSA) and the Bin Mahfouz 
Group of Saudi Arabia, was awarded the concession to develop 
the area.  PSA now holds primary ownership and manages the 
Aden Container Terminal.  ACT started operating in March 
1999, and was officially opened in September of that year. 
The impressive growth was achieved in spite of the effects 
of September 11.  However, the October 2002 terrorist attack 
on the French oil tanker M/V Limburg significantly impacted 
Yemen's economy.  Initially, insurance premiums rose 250% 
and as a result, ships were diverted to the ports of 
Djibouti and Salalah in Oman.  The ROYG is working with the 
insurance industry to lower insurance rates, and by the end 
of 2003 insurance premiums may drop somewhat. In 2003, it is 
expected to handle 388,500 Tons Equivalent Units, TEUs, a 3 
percent rise over the 377,400 TEUs of 2002. The port mainly 
serves as a transshipment hub, but attempts are being made 
to increase the percentage of the local cargo through the 
development of the industrial and warehousing estate.  Both 
the container terminal and industrial estate are run by PSA 
and its infrastructure is now in place. 
 
In its first phase of development, ACT planned to handle up 
to 1 million Tons Equivalent Units annually on its two- 
berth, 700m quay.  Recently a fifth quay crane was added in 
February 2002 bringing current capacity to 650,000 TEUs. 
The container yard of 35 hectares offers storage capacity 
for 10,000 boxes. 
 
The industrial and warehousing estate called Aden Distripark 
(ADP) has been launched.  The first 30 hectares are ready 
for occupation and building of tenants' factories and 
warehouses.  This area will grow to 74 hectares and 
eventually to 1,550 hectares when demand increases.  The 
Aden Container Terminal and the Aden Free Zone are promising 
areas for investment.  Majority ownership and operation by 
PSA as assured technical excellence both in construction and 
management of the container port.  Yeminvest is offering 
special "early bird" deals to the first investors. 
Opportunities in light industry, repackaging and 
storage/distribution operations are welcome.  Future plans 
include development of heavy industry and more extensive 
tourist facilities than currently exist in the greater Aden 
area. 
 
Free zone incentives include 100 percent foreign ownership, 
no personal income taxes for non-Yemenis, and corporate tax 
holiday for 15 years (renewable for 10 additional years), 
100 percent repatriation of capital and profits, no currency 
restrictions, and no restrictions on, or sponsoring 
required, for the employment of foreign staff.   Aden's main 
selling point is its strategic location - nine days steaming 
from Europe and seven from Singapore.  It is just 4 nautical 
miles off the main Far East - Europe sea route.  PSA's 
expertise and management guarantees stability and efficiency 
to shipping lines calling at ACT and investors to the ADP. 
For further information, contact: Richard Cheong, Chief 
Executive Officer, Yeminvest, P.O. Box 4165, Aden, Republic 
of Yemen (Phone:  967-2-234-789 or Fax:  967-2-234-880. 
Email: crichard@yeminvest.com, or check out the website: 
http://www.yeminvest.com; or http://www.psa.com.sg). 
 
In May 2001, a new terminal at Aden International Airport 
was officially opened.  In addition a study was completed in 
August 2001 for future plans for the airport to include a 
duty free zone and cargo village to facilitate transit trade 
with the Aden Free Zone port facilities.  The Aden Free Zone 
Authority is looking for a company to build and operate the 
cargo village. 
 
F - Foreign Direct Investment Statistics 
 
Yemen produces no reliable statistics on foreign direct 
investment.  Most U.S. investment in Yemen to date is in oil 
exploration, production and oil field services.