Special economic zones in Tunisia

Tunisia has several special economic zones (SEZs) that were created to attract foreign investment and promote the country's economic growth. These zones offer a range of financial and non-financial incentives for companies, such as tax breaks, simplified regulations, and access to skilled labor.

The development of SEZs has had a positive impact on the Tunisian construction industry. The establishment of new industrial and commercial facilities in these zones has led to an increase in construction activity, especially in the manufacturing and textile sectors. Tunisia's SEZs have attracted a moderate amount of foreign investment, mainly from European countries such as France, Italy and Spain.

The country's relatively low labor costs, its geographical proximity to Europe and the government's efforts to improve the business environment have made it an attractive destination for foreign companies.

Free economic zones are created on state or municipal lands, are used for private enterprise purposes and are considered state property.

The conditions for the establishment and management of SEZs, as well as the tax incentives offered to investors there, are determined by the Law on the Economic Free Zones in Tunisia. Free zones are not subject to regular legislation.

A port or airport may be located within their territory, which must have clearly defined boundaries.

According to the scheme approved by the Law, individuals and legal entities, residents and non-residents, may invest in free economic zones. Investors who invest in the production of export goods and services also receive a tangible advantage here. Investments in foreign currency or convertible dinars are made without any restrictions.

PRIVATES for the management of the FEZ may be granted to any individual or legal entity registered in the agreement as a manager. The agreement is concluded between the manager and the Minister of National Economy and is subject to approval by the National Investment Committee. The so-called Memorandum of Obligations, which defines the conditions under which the FEZ will be managed and the types of future activities, must be attached to the agreement. It also defines the manager's level of responsibility.

The Memorandum specifies activities prohibited by national and international law, including national security, healthcare, and food production. Also prohibited are activities that may damage the ecological balance of Tunisia or pose a threat to environmental protection.

According to the law, the agreement and the Memorandum must be accompanied by a Charter defining the relationship between the manager and the persons carrying out specific practical activities on the territory of the FEZ.

Tax system of the FEZ in Tunisia

Entrepreneurs and companies operating on the territory of free economic zones of Tunisia in the field of creating their infrastructure are exempt from income tax and corporate income tax, as well as from all customs duties and fees.

Corporations, however, must pay taxes in the form of:

• fees and taxes on the ownership and operation of private cars;
• single compensatory road tax;
• sanitary tax;
• contributions and contributions to the existing compulsory social security scheme, unless non-resident employees opt out of the Tunisian insurance system, in which case neither employees nor employers are subject to such payments;
• corporate income tax and income tax, which is levied after a 50% reduction in export profits. However, during the first 10 years from the date of the first export transaction after the relevant application has been submitted, the exemption from these taxes will be complete.

Companies that invest all or part of their profits within their companies may benefit from tax incentives if:

• reinvested profits are transferred to a “special investment account” and is integrated into the company's capital before the deadline for filing the final tax return;
• the announced reinvestment program is linked to a corporate income tax refund;
• for at least 1 year after the effective start of production, there are no clauses on the transfer of assets related to the above-mentioned investments;
• for 5 years after the start of production, there is no reduction in the volume of capital investment, except in cases related to the desire to avoid possible losses.

Foreign personnel who have non-resident status at the time of employment will have the following benefits:

• 20% compensation for renting an apartment, if they do not apply for the application of the provisions of the general law to them,
• deferral of fees and taxes on imported items intended for personal use and on one passenger car for each employee.

Persons operating in the FEZ may be residents or non-residents, but they must strictly adhere to the exchange control regulations in force in Tunisia. Legal entities operating in the FEZ may choose to be non-residents if at least 66% of their capital is owned by non-residents of Tunisia or foreigners importing foreign currency.

Residents may subscribe to the shares of the above-mentioned legal entities by making a contribution in currency converted into dinars.

Legal entities whose registered office is located abroad are considered non-residents. Subsidiaries are financed through the import of foreign currency.

Non-residents who invest in the FEZ through the import of foreign currency receive guarantees for the transfer of the invested capital and the income from it.
They must, however, make all payments for goods and services received in Tunisia, duties and taxes on dividends distributed to resident shareholders through offshore accounts in foreign currency or accounts in convertible dinars.

Developed industrial zones

Tunisia has 157 industrial zones covering a total area of 5,000 hectares. They are divided into coastal zones, which are not subsidized, and regional development zones, which receive different subsidies depending on the group.

These zones are distributed as follows:

• 35 zones in Greater Tunis, covering 1,900 hectares, i.e. 38% of the total area.
• 63 zones in coastal areas with a total area of 1,100 hectares, i.e. 22% of the total area.
• 59 zones in regional development zones with a total area of 2,000 hectares, i.e. 40% of the total area.

Planned industrial zones

69 industrial zones with a total area of 2,254 hectares are planned. The industrial zones in operation are distributed as follows:

• 51 zones in Greater Tunis and the coastal areas, with a total area of 1,508 hectares.
• 18 zones in the regional development zones, with a total area of 746 hectares.

The Bizerte and Zarzis parks were created by a 1992 law signed by then President Ben Ali to encourage foreign investment, as part of a broader market liberalization program undertaken by the government. To this day, they operate as public-private partnerships, providing tenants with space to manage various projects.

Bizerte Region

Bizerte is located in the heart of the Mediterranean, on the shipping lanes of the Strait of Sicily. It is the meeting point between Africa and Europe on the one hand, and between East and West on the other. The province of Bizerte is an important economic centre, based on industry, services, trade and agriculture.

Key sectors for investment

In addition to the two key sectors in the region: industry and agriculture, whose contribution to the national productive effort is important, the regional economy is supported by the dynamism of a special services sector, driven by tourism, a very promising sector showing significant development.

Industry

In addition to heavy industry based on oil refining, steel and cement production, the Bizerte region is home to a well-developed and diversified manufacturing network, with a significant share oriented towards exports. The main manufacturing industries established in Bizerte are:

• Textiles and clothing;
• Leather, footwear and accessories;
• Mechanics, electrical and electronics;
• Accessories;
• Shipbuilding and ship repair.

Bizerte — a major industrial centre, home to:

• 500 active industrial enterprises
• 342 companies employing more than 10 people, with a total workforce of 54,231 jobs
• 228 companies working exclusively for export, employing 46,565 people.

The region's contribution to national exports: 9% (2% of national exports in manufacturing are provided by the Bizerte Economic Activity Park).

Agriculture

The Bizerte region provides at least 8.6% of national production, of which 13% of national cereal production, 17% of dried vegetables, 19% of potatoes, 16% of feed, 8% of table grapes, 12% of milk, 11% of red meat, 28% of tomatoes and 7% eggs.

Currently, agriculture and fisheries provide over 42,000 permanent jobs in addition to seasonal work offered by family farmers.

Trade

Commercial activity in Bizerte is well developed and meets the demand of businesses and households.

Infrastructure

Bizerte has a developed basic infrastructure that meets the needs of export activities:

• Road network connecting the province with other neighboring provinces.
• A 52 km long motorway connecting the city of Bizerte with the Tunis-Carthage International Airport (40 min).
• A railway line connecting the province with the capital via Mateur, and also connecting Bizerte with Algiers via a standard gauge railway.
• A yacht harbor.
• An important commercial port.
• A telephone network with an average of 101.6 lines per 100 inhabitants.

The governorate is rich in water resources:

• 6 large dams,
• 23 dams on the hillsides,
• the groundwater level is 52 million cubic meters.

Moreover, with four dry docks on Lake Bizerte and their facilities, the shipyard has a comparative advantage over the Northern Mediterranean shipyards due to its skilled workforce and competitive costs.

Port of Bizerte

The commercial port of Bizerte — one of the most important ports in Tunisia.

Thanks to its strategic location on the GIBRALTAR-SUEZ shipping axis, its proximity to Southern Europe and the development of the region's industrial enterprises, the Bizerte Economic Activity Park, the port of Bizerte-Menzel-Bourguiba plays an important role in the socio-economic and cultural development of the city of Bizerte and its surrounding areas.

Thus, its strategic maritime location and developed land routes allow the port to offer producers, investors and transport specialists an indispensable business tool for conquering the markets of Europe and the Mediterranean.

Significant advantages of the port:

• Cargo: 5,664,240 tons.
• Import: 4,708,223 tons.
• Export: 956,017 t.
• Vessels: 506
• Number of containers: 32,313 equivalent to 20 feet

The port expansion project is a priority in the regional development program. The study, which is currently being finalized, concerns the expansion of the port on an area of 3.5 hectares in Bizerte and 10 hectares in Menzel Bourguiba.

Investment opportunities

Promising sectors are identified taking into account the specificities of the region and its comparative advantages in order to encourage and stimulate private investment in the province of Bizerte:

• Mechanical, electronic and electrical industries.
• In the governorate of Bizerte, there are 83 companies operating in this sector, 47 of which export their products entirely.
• Most of the companies specialize in automotive components.
• Leather and footwear industries.

Food industry

The province of Bizerte is considered an agricultural center, as it ranks first in the production of certain varieties of fruits and vegetables and contributes significantly to domestic production.

The development of the agricultural sector has directly contributed to the creation of a network of enterprises for the processing of agricultural and food products, consisting of 38 companies, 8 of which export their products entirely.

Aquaculture

The aquaculture sector occupies an important place in the economy of the governorate, given the importance of the fishing fleet, which is located in 5 ports.
The region also has a tradition in the aquaculture sector, especially in the lakes of Bizerte and Ichkeul, in addition to the opportunities offered by the hilly lakes and dams of Gezala, Seynane and Jumin.

Information and communication technologies

The Bizerte governorate has significant resources for the development of activities based on information and communication technologies, including a qualified workforce and high performance in this sector.

Tourism, Leisure and Water Sports

The province of Bizerte is endowed with unique natural and geographical advantages, mainly due to its Ichkeul Nature Reserve. Located to the west, Menzel Bourguiba, Lake Ichkeul and the mountain of the same name are classified as a natural park and registered as a UNESCO World Heritage Site. Galite Island, which stands out for its marine potential and natural beauty, and Cap Blanc are considered the pearl of the African continent.

The governorate is also famous for its Medina - an ancient Phoenician port, a mobile bridge connecting the two shores, and a yacht marina, the construction of which has already begun.

This rich and varied heritage is an ideal setting for tourism, sports and water sports.

Zarzis Business Park

The Zarzis Business Park, ideally located in the Mediterranean basin, is perfectly equipped with furnished premises, offices, industrial premises, which are adapted to the needs of investors and supported by simplified installation procedures.
Located in the heart of an area of intense economic activity and dedicated mainly to ICT and VR services, Zarzis Smart Center aims to host companies specialized in information and communication technologies (ICT) for innovative projects and aimed at international markets.

Fiscal and economic advantages

Employment

• Flexibility of employment through fixed-term employment contracts.
• Freedom of choice for non-resident employees of a social security scheme other than the Tunisian one.
• Exemption from import duties and taxes on personal belongings, and also for a passenger car for each foreign citizen.
• Application of a fixed tax system in the amount of 20% of the gross remuneration of foreign personnel.

Tax system

• Taxation of profits from export activities at a personal income tax rate of 15%.
• Return of reinvested profits.
• Deferred payment of VAT on local purchases.
• Full exemption from customs duties on imported raw materials, goods and equipment.

Foreign trade regime and regulation of changesy

• Freedom of investment.
• Freedom of profit transfer.
• Freedom of repatriation of invested capital.
• Freedom of import of goods necessary for activities.
• Possibility of selling 20% of turnover on the local market for industrial or service activities.

Key sectors for investment

• Mechanical, electrical, automotive industry
• New information and telecommunications technologies (ICT)
• Solar energy
• Shipbuilding industry
• Agri-food sector
• Logistics activities in the oil and gas industry
• Public buildings and facilities sector

Ben Garden Project

The Ben Guerdane Free Trade Zone project, which will be established approximately 11 km from the Ras Jedir checkpoint and 22 km from the city of Ben Guerdane on an area of 1.5 million m2, is one of the priority projects of the five-year development plan for 2021-2025 and will contribute to a new economic revival of the entire southern region of Tunisia.

This project is located in Alouette el-Ghonna in Choucha of the Ben Guerdane delegation and consists of:

• Customs areas dedicated to B2B logistics operations (export, re-export, import and transit), accounting for about 70% of the free zone's activity.
• Customs areas dedicated to B-B and B-C wholesale and retail commercial activities, accounting for about 20% of the free zone's activity.
• Non-customs areas dedicated to administrative and service activities, as well as the installation of equipment necessary for the proper management of the zone, accounting for approximately 10% of the free zone's activity.

«This free trade zone aims to create a trade and logistics gateway between Africa and the European and Asian markets through Libya, attracting investments and large international enterprises operating in the field of international trade and logistics services, which will help create more than 9,000 permanent jobs,” said Montassar Jarray, central director of the investment projects monitoring department of the Tunisian Office of Commerce (OCT).

Jarray said that OCT is completing the connection of the zone to the various networks, noting that the connection work has reached 95% for drinking water, 80% for electricity and 60% for roads. However, he regretted that the connection to the sewerage system is somewhat delayed due to the need to obtain permits from the National Environment Agency (ANPE). OCT has completed the stage of technical, financial and functional studies related to the first phase of the project and is currently working on the institutional aspect by creating a management company that will be entrusted with the management of the free trade zone.

The Ben Guerdane Free Trade Zone project will also provide economic operators with a number of incentives, such as access to real estate for foreigners, freedom to transfer profits, tax incentives and a one-stop shop for setting up a business, which will guarantee very competitive investment costs. According to Jarray, the zone will become a shopping tourism destination and will bring services and goods (medical services, medicines, fruits, etc.) closer to Libyan and Tunisian citizens. The facility will also be an important logistics artery for the Ben Guerdane region, which is historically known for its trading activities, as it is located between three important maritime zones, namely Misrata (Libya), Sfax and Zarzis (Tunisia).