Investment opportunities in Tunisia (Part 1)

Tunisia is renowned for its strategic geographical location in the heart of the Mediterranean, offering attractive investment opportunities in a thriving business environment.

Why Tunisia

The advantages of investing in Tunisia:

• Geographical proximity to EU member states.
• Simplicity of settlement procedures, especially after the promulgation of the new Investment Law 71-2016 of 30/09/2016.
• Complete abolition of customs duties with the EU and the Maghreb countries.
• Easy access to the Libyan and Algerian markets.
• 10 competitiveness clusters or active technopolises, two active economic parks with high-quality services, a park dedicated to the aviation industry, and one hundred industrial zones scattered throughout the country.
• The general corporate tax rate for almost all sectors is 15%, as well as an exemption from corporate tax for agricultural sectors and non-coastal areas for 5 or 10 years.
• Competitive level of production factors for investment in Tunisia.
• Renewable energy potential (mainly solar). In particular, by 2030, 30% (or 3,700 MW) of the country's electricity needs will be generated by renewable energy sources.
• Having signed an association and free trade agreement with the European Union in 1995, Tunisia received the status of an advanced partner in November 2012.  This allows it to have commercial advantages and thus gives its exports priority over European markets.
• Signing 52 agreements on the avoidance of double taxation and 54 bilateral agreements on the promotion and protection of investments (including with France, Belgium, Italy, Spain, Finland, Sweden, South Korea, Indonesia, etc.).
• Tunisia is a member of the International Centre for the Settlement of Investment Disputes and ratified the OECD Declaration on International Investment and Multinational Enterprises in May 2012 to enhance the responsibility of governments and companies.
• Tunisia is an original member of the World Trade Organization (WTO) since 1995.

Investment legislation and investment incentives

The legal investment environment in Tunisia complies with international standards, favors a free economy and offers flexible procedures and adequate protection for private investors thanks to the new laws adopted, which have improved the investment environment and attracted a significant flow of private, national and international investment.

The legal framework for Tunisian investment legislation is governed by the following regulations:

• Law No. 2016-71 of 30 September 2016 on investment law;
• Law No. 2017-8 of 14 February 2017 on the reform of the tax incentive system;
• Decree 2017-389 of 9 March 2017 on financial incentives for investments carried out in accordance with investment legislation, as amended by Decree 2024-182 of 4 April 2024.

Tunisia offers one of most attractive incentive systems in the Euro-Mediterranean region. A range of financial and tax incentives for local and foreign investors.

Foreigners, regardless of their residence status, can freely invest in projects under the new Investment Law 71-2016 of 30.09.2016.
All foreign investors can freely invest in most sectors and can own up to 100% of the capital of a project without the need for prior approval.

Foreign investors can repatriate profits and gains from the sale of capital invested in foreign currency.

The Tunisian dinar has been convertible for current transactions since 1994. Any foreign company with its head office in Tunisia may remit all its capital income, both for commercial operations and for operations related to production.

Any company may employ foreign managers in the amount of up to 30% of its total number of managers for a period of 3 years, and in all cases, 4 foreign managers are allowed.

Foreigners may invest in the agricultural sector through the exploitation of leased agricultural land. The level of foreign participation in such enterprises, as well as in aquaculture and fisheries located in the northern waters of Tunisia, may not exceed 66%.

However, the exploitation of foreign agricultural land may be carried out under long-term lease.

Foreigners may establish international trading companies in Tunisia, carry out import-export operations in goods, as well as any type of international trading operations and brokerage activities (the minimum capital must be 150,000 dinars). Profits from such companies are subject to income tax at a rate of 15% from 2021.

For the purpose of carrying out local trade (shops, restaurants, trade offices, sales agents, etc.), the foreign shareholding must not exceed 50% of the share capital, in addition to certain formalities and the authorization of the Central Bank of Tunisia.

Fiscal and financial advantages

• The general corporate tax rate for almost all sectors is 15% and dividend taxation at 10% (this taxation is related to the taxes of the countries of residence under double taxation agreements).
• Newly established companies in the services or industrial sectors.
• Deduction of 100% of profits in the first year, 75% in the second year, 50% in the third year and 25% in the second year.
• With the current corporate tax rate in 15% is equivalent to taxation at 0% in the first year, 3.75% in the second year, 7.5% in the third year and 11.25% in the fourth year.

Companies engaged entirely in exports (at least 70% of sales are exported):

• Personal income tax is 0.1% of gross turnover.
• VAT is suspended on export sales.
• Possibility of importing raw materials and equipment with a VAT payment deferral.
• Possibility of using a VAT payment deferral when purchasing goods and services on the local market.
• A tax rate of 20% as a tax deduction  on the gross salary of foreign citizens and the possibility of importing a personal car and personal belongings have suspended the payment of the tax.

Companies located in regional development zones:

Tunisia offers many advantages to those who invest in some remote areas of the coast.

First group zone

• Full exemption from income tax for the first  5 years and taxation at a rate of 10%  in subsequent years.
• A bonus of 15% of the investment (including working capital) up to a limit of 1,500,000 dinars.
• Exemption from paying employers' social contributions for a period of five years (16.57% of gross salary).

Second group zone

• Full exemption from income tax for the first 10 years and taxation at 10% in subsequent years.
• A premium of 30% of investments (including working capital) up to a limit of 3,000,000 dinars.
• 100% exemption from employers' social contributions for five years (16.57% of gross salary).

Companies in priority sectors:

• Investment premium of 15% up to a ceiling of 1,000,000 dinars.
• Exemption from paying 100% of employers' social contributions for a period of 3 years.
• The Tunisian government will cover 50% of the salaries paid to graduates hired for the first time for permanent employment, but not more than 250 Tunisian dinars per month per employee.

The priority sectors are:

• Primary processing of agricultural and fishery products
• Nanotechnology industry
• Biotechnology industry
• Textile and clothing industry
• Electronics industry
• Technical plastics and composite products
• Automotive, aviation, shipbuilding and railway industries, as well as components
• Pharmaceutical and medical devices
• Research and clinical research centers
• Industrial equipment industry
• Military industry
• Cultural and creative industry
• Collection, recovery, recycling and treatment of solid and liquid waste
• Projects for the protection and improvement of natural resources, biodiversity and combating desertification
• Production of renewable energy
• Communication and information technology (ICT)
• Logistics services in logistics areas
• Sports and entertainment centers
• Business in transformation sectors of the economy

Financial incentives

Award for increasing added value and competitiveness: 15% of the approved investment value  with a limit of 1,000,000 dinars.