Yemen gets serious about starting businesses

Author: Karim Belayachi and Yara Salem
Publication: Celebrating Reform 2009
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Yemen, a low-income country, sought to reach middle-income prosperity levels. In its “Strategic Vision for 2025,” the government put private-sector development at the top of its agenda. It started off by reforming business registrations—and that made Yemen one of the top reformers in the Doing Business “starting a business” category in 2009.

The project was implemented in 3 phases over 2007 and 2008, as this case study details. It reduced what was measured as the world’s 2nd-highest minimum-capital requirement—from around $15,000 (approximately 20 years of average income per capita) to essentially zero. Entrepreneurs in Yemen are now free to choose the amount of capital to invest in their business. Yemen also successfully launched a one-stop shop for business start-ups to cut procedures and save entrepreneurs time.

Main Findings

  • Yemen jumped from last place (178th) in Doing Business 2008 to the top third (50th) in Doing Business 2009 for the “starting a business” indicator.
  • The number of procedures required to start a business dropped from 12 to 7.
  • The time required fell from over 2 months to only 13 days.
  • Start-up costs were almost halved.