How a foreigner can open a company in Tunisia

Tunisia has always been a bridge between Europe, Africa and the Middle East. Opening your own company in Tunisia provides an excellent opportunity to enter the international business arena and invest capital profitably.

Advantages of registering a company in Tunisia

• Optimal rates of economic development;
• Political stability;
• Developed infrastructure (8 international airports, 5 ports for various purposes, a modern railway);
• Belonging to the international free trade association GAFTA;
• A wide range of activities and a high level of development of most of them;
• A double taxation agreement (DTA) with more than 40 countries and a low tax burden;
• Qualified specialists with knowledge of their industry among the local population and emigrants.

New legislation designed to stimulate the activities of investors, first of all, provides "most favored nation" treatment residents, non-residents or partners who invest and create new jobs in sectors of the Tunisian economy such as agriculture, fisheries, manufacturing, public works, tourism, the development of artistic crafts, transport, education, vocational training, culture and environmental protection.

Foreigners (residents and non-residents) are free to make any capital investment in these sectors, but their participation in companies that partially operate in the export system is subject to approval by the High Commission for Investment if their share exceeds 50% of the company's authorized capital.

The only restriction concerns agriculture. Foreigners can only lease land and only on condition that it is cultivated. The purchase of agricultural land by foreigners is not allowed. At the same time, any foreigner can purchase real estate in Tunisia. To do this, you only need to obtain permission from the governor of the district in which you intend to make the purchase.

Types of companies in Tunisia

Export companies

Companies whose activities are entirely focused on export enjoy the greatest tax benefits in the country. Export companies include those whose products are entirely intended for export abroad, or companies that offer their services abroad or in Tunisia, but for use abroad. They also include companies working with enterprises established in free economic zones, as well as with banking and financial organizations working mainly with non-residents.

Taxation of "entirely export" companies is regulated by legislation adopted for free economic zones. During their activities in Tunisia, they are required to pay:

• Taxes and fees for the operation of passenger cars;
• Single compensation tax on road transport;
• Sanitary tax;
• Operating costs;
• Taxes and fees levied for the efficiency of services provided in accordance with current legislation;
• Contributions and contributions to the existing social security system (however, upon joining the company, non-resident foreigners have the right to opt out of the Tunisian social security system; in this case, neither employers nor employees will pay taxes to the Tunisian system);
• Income tax on individuals, which is levied after a 50% reduction in export profits. In the first ten years following the first export operation, the export profits declared in the annual tax return are not subject to income tax;
• Corporate income tax is paid according to the same scheme.

Companies engaged in full export operations are considered non-resident if the capital acquired by the non-resident through the import of convertible foreign currency is at least 66%. These companies may freely import any components they need to ensure their production process. They are authorized to sell their own products or services in Tunisia in proportions determined by decree depending on the nature of the activity and the products manufactured, but not exceeding 20% of turnover.

Agricultural and fishing companies are considered fully exporting if at least 70% of their production is exported, and they may sell the remainder on the domestic market. The sale of these goods and services is subject to the provisions of foreign trade, and customs duties and import taxes are paid.

Upon notification to the Ministry responsible for the recruitment and training of workers, fully exporting companies may employ foreign personnel, including managers, but no more than four persons per company. In addition, companies are required to comply with the provisions of a special program approved by the Ministry in accordance with Article 260 of the Labor Law.

The following benefits are provided to foreign personnel, foreign investors or their representatives:

• Payment of a lump sum (without differentiation of components) of income tax in the amount of 20% of gross income;
• Exemption from customs duties and import tax on goods necessary for the stable activity of foreign personnel, as well as from import tax on one passenger car for each person.

Companies operating entirely for export are subject to inspection by the competent administrative authorities, which ensure that their activities are fully compliant with the laws. Companies must constantly undergo customs control and be responsible for the timely payment of salaries to staff and office rent.

Companies partially operating in the export system

This type includes companies engaged in the following activities:

• Sale of goods abroad;
• Provision of services on the foreign market;
• Sale of goods and services to companies fully operating for export, companies registered in free economic zones, banking and financial organizations that work mainly with non-residents, as well as foreign companies providing services in Tunisia.

Companies partially operating in the export system are granted the following tax benefits:

• Exemption from VAT and consumption tax on goods, products and services necessary for carrying out export operations.
• A reduction in the income tax rate for individuals and a 50% reduction in the profit tax for companies during the first ten years after the first export operation.
• Compensation of customs duties and taxes based on the cost of raw materials and semi-finished products imported or purchased on the domestic market for the purpose of producing goods intended for export.
• Compensation of customs duties and taxes on the import of equipment necessary for production, depending on the quantity of products and goods intended for export. The conditions for this item are determined by the relevant decree.
• Creation of more flexible conditions for the import of products and goods intended for further processing and re-export. To do this, a large sum is deposited, the amount of which is determined by the relevant decree.

To register companies fully or partially engaged in the export system, an application must be submitted to the relevant Ministry indicating: the form and procedure for investment, the main type of activity, the location of the project, information on contracts concluded, cost, sources of financing, investment plan, legal form of the company, the degree of participation of foreign investors, the timing of the project and the number of jobs required.

Limited Liability Company

Although many business structures are available in Tunisia, most foreigners prefer to create a limited liability company. Basic requirements and features for establishing such a company in Tunisia:

• The company must have at least 2 shareholders.
• Any nationality can be a shareholder of the company.
• A shareholder of the company must be at least 18 years old.
• Legal address in Tunisia.
• Appointment of a full-time auditor (if the total assets of the company exceed 55,000 US dollars).
• The minimum paid-up capital is 500 US dollars for a company that does not plan to engage in commercial activities.

Public Joint Stock Company

A foreigner can also establish a joint stock company in Tunisia. The maximum term of existence of a joint stock company is 99 years. However, to establish a limited liability company, at least 7 shareholders are required. However, a quarter of the total number of shares must be paid to the required government agency at the time of company registration. Other requirements for registering a joint stock company include:

• A minimum of 3 directors and 7 shareholders.
• The minimum paid-up capital is $3,000.
• Appointment of an auditor for a period of at least 3 years to audit the company's accounts.
• A Tunisian citizen must own at least 51% of the shares, while the remaining 49% can be owned by foreigners.

Branch or Representative Office

According to the Tunisian Companies Law, a foreigner can open a branch in Tunisia. These are the basic requirements that must be met to register a branch in Tunisia:

• One director of the company (can be of any nationality).
• Registration in the Trade Registry of Tunisia is required.
• Minimum paid-up capital of 1,000 Tunisian dinars.
• Legal address.

International Trading Company

An international trading company is created as a private limited liability company to carry out export operations and is characterized in Tunisia as follows:

• at least 66% of the capital must be paid in convertible foreign currency;
• export activities must account for at least 80% of the company's turnover.

Foreign exchange controls are regulated by the Tunisian Foreign Trade and Currency Circulation Code and allow foreign investors to repatriate capital and receive dividends in foreign currency. The Tunisian dinar is freely convertible for all legitimate trade and investment transactions, but transfers of foreign currency to and from Tunisia require approval from the Central Bank of Tunisia.

All Tunisian businesses are required to maintain accounting records and submit periodic financial and other reports.

Tunisia taxes only Tunisian-source income at a rate of 35%. Export profits are tax deductible. Individuals with Tunisian-source income are subject to income tax at rates ranging from 15 to 35%. Income up to 1,500 Tunisian dinars is not subject to taxation.

Dividends from foreign citizens, profits from the sale of shares and capital gains are exempt from taxation in Tunisia.

Land registration tax in Tunisia is levied at a rate of 5% of the value of the property.

Foreigners can own 100% of Tunisian companies, but some activities will require that the foreign investor obtain special permission from the Tunisian Investment Council to own more than 49% of the company's capital. A separate permit will also be required to transfer more than 10% of the company's voting shares.

Documentary requirements for registering a company in Tunisia

• Approved company name. Certificate of establishment.
• Registered copies of the Charter (at least 10 copies).
• Printed signature form upon establishment of the company.
• At least 4 copies of shareholders' passports.
• A copy of the certificate of ownership of the premises.
• Obtaining copies of documents on opening a bank account.
• Copies of the APII declaration.