From a tax empire to shell companies: How the Houthis built a sanctions-proof economy

The Houthis have built an independent economic system in Yemen that generates at least $6 billion annually, including taxation, customs, port control, oil trade, communications, and shell companies. The system is relatively resilient to sanctions due to its decentralized structure and ability to change names and companies.

The Houthis, who have controlled Sanaa and large parts of Yemen since 2014, have established a comprehensive economic system that does not rely solely on external aid. The system generates at least $6 billion annually, several times the revenue of the recognized Yemeni government in Aden. The foundation is the takeover of existing collection mechanisms: income tax, customs, zakat (Islamic charity), fees, and levies. Alongside this, the Houthis exert direct coercion on businesses through terror and intimidation. The Sanaa Center for Strategic Studies described a centralized system where revenues flow to the regime, while basic civilian expenditures remain limited. A key revenue source is control over the ports of Hodeidah, Al-Salif, and Ras Isa. Between May 2023 and June 2024, nearly $800 million was collected in taxes and customs on fuel and goods. The US Treasury estimated in early 2026 that networks linked to the Houthis generate more than $2 billion annually from illegal oil sales, with Iran transferring oil through intermediary companies. The communications sector has also become a significant revenue source, with revenues of billions of Yemeni rials annually. The Houthis established a General Authority for Zakat, which became a political tool to enforce loyalty. They took over assets, banks, and large companies. Externally, networks of traders, money changers, and shipping companies operate in Iran, Oman, and the UAE, using shell companies and alternative accounts. The split of the central bank between Sanaa and Aden turned the currency into a tool of conflict. The Houthis banned the use of new banknotes printed in Aden. The secret to their resilience is that the system does not depend on single Iranian funding but relies on a large population, ports, a local market, taxation, and a flexible external trade system.