Yemen - Foreign investment
Foreign investment is encouraged by the Yemeni government as it is prospecting for more oil and hoping to develop it natural gas reserves. The Yemen General Investment Authority (GIA) was established in 1992, and worked with the World Bank's Foreign Investment Advisory Service, to revise Yemen's Investment Law 22 of 1991 (as amended) to refocus it on promotion rather than regulation of foreign investment. As of 2002 the Yemeni Parliament had not ratified the revisions. Investment law restructuring is part of the IMF-World Bank-sponsored economic reform program that has been being pursued in Yemen since 1995. The Yemeni Free Trade Zone Public Authority was established in 1991 to develop the Aden Free Trade Zone. The port was developed as a joint venture between the Port of Singapore Authority (PSA) and the Bin Mahfouz Group of Saudi Arabia. In Phase II of the program, 30 hectares were made available for lease. Free zone incentives the right to have 100% foreign ownership, no personal income taxes for non-Yemenis, a 15-year corporate tax holiday, renewable for up to 10 years, and the right to 100% repatriation of capital and profit.
There are no reliable statistics on foreign investment in Yemen. US investment has mainly been in the oil and gas sector. The Houston-based Yemen Hunt Oil Company, which operates on the only other refinery in Yemen, has been operating since 1984. Its pipelines line have been repeatedly attacked. Security can not help but be a concern for Western investors given events like the kidnapping of 16 tourists in 1998 (with four killed in the rescue attempt; an bomb explosion at the Aden Refinery in 1998, the bombing of the USS Cole in Aden Harbor October 2001, with 17 dead, and a year later, the explosion and fire on the French-flagged tanker the Limburg in October 2002, with one killed and 90,000 barrels of oil spilled. More hopeful is the settlement of the its debt issues with Kuwait and Saudi Arabia which has thus made Yemen eligible for concessional loans from these neighboring states. In 1995, a consortium was established for the development of natural gas production. In addition to the government's 26% share, Total (France) had 36% equity; Hunt Oil (US), 14.6%; Exxon (US), 14.1%; and Yukong (ROK), 9.3%. On June 2002 Exxon (now ExxonMobil) and Hunt Oil withdrew from this enterprise, which has stalled for lack of an identifiable market through which the investors could recoup their investments.