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In this page: FDI in Figures | What to consider if you invest in Tunisia | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information

 

FDI in Figures

In the context of social and political turmoil, FDI flows to Tunisia remain below their potential. According to UNCTAD's World Investment Report 2021, FDI inflows to Tunisia fell to USD 652 million from USD 845 million in 2019, a 23% drop, following the global economic crisis triggered by the Covid-19 pandemic. The manufacturing sector attracted the most FDI (54%), followed by energy (33%). The biggest impact of the pandemic on investment was in the services sector, where FDI fell by 44%, leaving its share of total FDI flows to Tunisia at only 9% in 2020. Tunisia's FDI stock was around USD 35 billion in 2019. The main investors in Tunisia are the UAE, France, Qatar, Italy and Germany. In terms of stocks, manufacturing is by far the sector that attracts the most investment, followed by tourism and telecommunications. According to preliminary data, FDI flows fell by -2% during the first nine months of 2021 and the main investors were France, Italy and Japan (FIPA-Tunisia).

The key assets of Tunisia are its proximity to Europe, sub-Saharan Africa and the Middle East, free trade agreements with the EU and much of Africa and an educated workforce. In recent years, the Tunisian government had carried out necessary structural reforms to improve Tunisia's business climate, including an improved bankruptcy law, an investment code and an initial 'negative list' and a law allowing for public-private partnerships. The government adopted laws allowing to start a business more easily (more services are available into the one-stop shop, fees decreased); registering property is now faster and more transparent and paying taxes is easier (implementation of a risk-based tax audit system). These improvements in return boosted portfolio investments and helped Tunisia progress in World Bank's ranking. Indeed, Tunisia gained 2 places in the World Bank's Doing Business 2020 report, ranking 78th out of 190 countries. Nevertheless, there are still huge bureaucratic barriers to investment. State-owned enterprises are a major player in the Tunisian economy and several sectors remain closed to foreign investment. The informal sector, estimated at between 40% and 60% of the overall economy, is still a concern since legal businesses are forced to compete with smuggled goods. Moreover, the country is facing high political and social instability, unemployment, inflation, and rising levels of public debt. The current coronavirus crisis is nonetheless seen as an opportunity to attract more FDI from neighbouring countries in sectors such as pharmaceuticals, digital technologies and technical textile (FIPA-Tunisia).

 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 845652660
FDI Stock (million USD) 31,60535,00633,440
Number of Greenfield Investments* 31108
Value of Greenfield Investments (million USD) 2,519474268

Source: UNCTAD, Latest available data.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

FDI FLOWS BY COUNTRY AND INDUSTRY

Main Investing Countries 2020, in %
France 38.0
Italy 13.5
Luxembourg 8.8
Germany 8.6
United Kingdom 7.2
Qatar 4.2
Main Invested Sectors 2020, in %
Manufacturing 84.6
Education 6.0
Telecommunications 5.8
Tourism and real estate 1.4

Source: Tunisian Investment Agency - Latest available data.

 
Main Foreign Companies

According to the latest figures from the US Department of State, more than 3,350 foreign companies currently operate in Tunisia. For some examples, consult the “Success Stories” section of the website of the Foreign Investment Promotion Agency (FIPA).

Sources of Statistics
National Institute of Statistics
Tunisian Investment Agency

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What to consider if you invest in Tunisia

Strong Points

Advantages for FDI in Tunisia:

  • The solvency of the country gives it access to international capital markets and allows it to find its place in the world economy
  • The growing diversification of the economy (tourism, mining production developed in phosphates and oil sectors, etc.) strengthens its resistance to economic crises
  • Support from the IMF and other international institutions
  • The economy can rely on a young, fairly skilled and productive workforce at competitive pay levels
  • The country's proximity to the European market and its association agreement with the EU: the capital city Tunis is, on average, two hours flight from the main European capitals
  • The social system is well developed and an ambitious education policy has been launched; it aims to reduce the social cost of adjustment and strengthen the modernisation of the country
  • The political transition has been gradual and relatively peaceful (in comparison with Egypt and Libya, for example), creating a generally positive business environment
  • The country is rich in natural resources, including phosphates and hydrocarbons.
Weak Points

Disadvantages for FDI in Tunisia:

  • Economic reform in Tunisia has not kept pace with political reform since the revolution of 2011
  • Issues of corruption and nepotism
  • High social and geographical inequalities, which may be exacerbated after the COVID-19 crisis
  • Prohibitive customs and tax regimes continue to pose barriers to small and medium-sized enterprises
  • Structural imbalances in the public and external accounts, with a significant increase in external debt
  • State-owned enterprises still play a large role in Tunisia’s economy; many sectors remain closed to foreign investment
  • The informal sector is large (estimated at 40-60% of the economy by the U.S. State Department)
  • The high level of youth unemployment, as well as unemployment among those with university degrees (about a third of the unemployed), are seen as potential risks to social and economic stability
  • The country's high public debt and the great dependence on the European economy make the Tunisian economy vulnerable.
Government Measures to Motivate or Restrict FDI
Over the last few decades, Tunisia has chosen to further liberalise its economy and to integrate it into the world economy. A new competition law cancelled previous provisions that fixed prices, limited the entry of companies into certain sectors and controlled production, distribution, investment, etc.
Furthermore, Tunisia adopted a new investment law that simplifies the procedures for obtaining licenses, permits and investment authorisations and limits restrictions on the hiring of foreign workers. The law created the High Investment Board as a central body to replace the multitude of administrative bodies that previously issued these required documents. The hiring of foreign workers is also made easier by this law, adding an element of flexibility to what are otherwise the most rigid labour market regulations in the MENA region. Other initiatives include a new bankruptcy law, an investment code and a law enabling public-private partnerships. The Tunisian Parliament also passed law 2019-47, which contains 38 amendments to address shortcomings in existing laws and regulations that impeded investment.

Tunisia has free trade zones (known as Parcs d’Activités Economiques) in Bizerte and in Zarzis, where companies are exempt from taxes and customs duties and benefit from unrestricted foreign exchange transactions. The production in these zones has limited duty-free entry into Tunisia for the purpose of transformation and re-export.

Further information is available on the Foreign Investment Promotion Agency (FIPA) website.

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Protection of Foreign Investment

Bilateral Investment Conventions Signed By Tunisia
To see the list of investment treaties signed by Tunisia, consult UNCTAD's International Investment Agreements Navigator.
International Controversies Registered By UNCTAD
Refer to UNCTAD's Investment Dispute Settlement Navigator.
Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International Court of Arbitration, International Chamber of Commerce
ICSID , International Center for Settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency
Tunisia is a signatory of the MIGA convention.
 
Country Comparison For the Protection of Investors Tunisia Middle East & North Africa United States Germany
Index of Transaction Transparency* 6.0 6.4 7.0 5.0
Index of Manager’s Responsibility** 7.0 4.8 9.0 5.0
Index of Shareholders’ Power*** 5.0 4.7 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

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Procedures Relative to Foreign Investment

Freedom of Establishment
There are different rules for “Offshore” and "Onshore" investments (see the "Acquisition of Holdings" section below).
Acquisition of Holdings

Foreign investment is classified into two categories:

  • “Offshore” investment, defined as commercial entities in which foreign capital accounts for at least 66% of equity, and at least 70% of the production is destined for the export market. There is total freedom of foreign equity participation for offshore companies.
  • “Onshore” investment, where foreign equity participation is capped at a maximum of 49% in most non-industrial projects.  “Onshore” industrial investment, however, may have 100% foreign equity (subject to government approval).
Obligation to Declare
Investments in the sectors belonging to the "negative list" are subject to governmental authorization (see the "Requests For Specific Authorisations" section below).
Competent Organisation For the Declaration
Foreign Investment Promotion Agency
Tunisia Investment Authority
Requests For Specific Authorisations
A “negative list” indicates the sectors subject to government authorization, including: natural resources; construction materials; land, sea and air transport; banking, finance, and insurance; hazardous and polluting industries; health; education; and telecommunications. As per government decree, if the relevant decision-making body does not respond to an investment request within a certain period (generally set at 60 days), the authorization is automatically granted to the applicant.

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Office Real Estate and Land Ownership

Possible Temporary Solutions
Consult websites such as InstantOffices, CoWorker, MatchOffice, Regus.
The Possibility of Buying Land and Industrial and Commercial Buildings
Foreign and non-resident investors are allowed to lease any type of land, but can only acquire non-agricultural land.
Risk of Expropriation
According to Tunisian law, foreign investors are entitled to fair and equitable compensation if they are victims of expropriation, which can only occur in case of public interest.

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Investment Aid

Forms of Aid
FDI incentives include tax relief, tax and VAT exemptions, reduced social security costs, advantages for the purchase of state-owned land, tax exemptions on profits and reinvested revenues, duty-free import of capital goods with no local equivalents, and full tax and duty exemption on raw materials, semi-finished goods, and services necessary for operation. These incentives are often granted on a case-by-case basis.
For more information, refer to the dedicated page on the Foreign Investment Promotion Agency website.
Privileged Domains
Incentives are generally linked to incentives linked to increased added value, performance and competitiveness, use of new technologies, regional development, environmental protection, and high employability.
Privileged Geographical Zones
The Tunisian government has historically encouraged export-oriented FDI in key sectors such as call centres, electronics, aerospace and aeronautics, automotive parts, agro-food, and other light manufacturing.
For further details, consult the "Promising Sectors" section on the Foreign Investment Promotion Agency portal.
Free-trade zones
There are two free zones in Tunisia:
- the Bizerte Free Zone
- the Zarzis Free Zone.

Business operating in the free-trade zones are exempt from taxes and customs duties and benefit from unrestricted foreign exchange transactions, as well as limited duty-free entry into Tunisia of inputs for transformation and re-export.

Furthermore, there are two "regional development zones" which enjoy tax incentives, coverage of infrastructure costs and exemptions from the Vocational Training Tax (TFP). For more information visit the dedicated page on the Foreign Investment Promotion Agency website.

Public aid and funding organisations
Tunisian Investment Authority
 
 

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Investment Opportunities

The Key Sectors of the National Economy
Energy, textiles and clothing, tourism, automotive parts, and other light manufacturing activities.
High Potential Sectors
Electronics, call centers, aerospace and aeronautics, agro-food.
Privatization Programmes
Privatisation programs took place in several sectors, including: cement works (Carthage Cement), electricity production (STEG), construction of motorways, banks (STB, BH, BNA), wastewater treatment and solid waste, telecommunications, desalination of water, fuel distribution, banking and insurance (Banque de Tunisie and Zitouna Bank), etc.
The government is expected to sell more of its stakes in state-owned banks, although no clear schedule has been announced so far.
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Tunisia
GlobalTenders, Tenders & Projects in Tunisia
Prime Ministry, Public Procurement Site of Tunisia
DgMarket, Tenders Worldwide

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Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
State-owned companies still play a prominent role in the Tunisian economy. Some of them work in monopoly, mostly in sectors considered sensitive by the government, such as railroad transportation, water and electricity distribution, port logistics, importation of basic food staples and strategic items.
Other state-owned companies compete with the private sector (i.e. in the telecommunications, banking, and insurance businesses).

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Latest Update: November 2022