Invest in Tunisia

A new law concerning investment:

The Law No. 2016-71 of September 30, 2016, known as the Investment Law, consists of a mere 25 articles, designed to facilitate consultation and comprehension. This law has harmonized its provisions with international standards for investment codification (such as market access, incentives, institutional aspects, and arbitration), aiming primarily to revitalize foreign investment by assuring foreign investors while enhancing the competitiveness and export capacity of the Tunisian economy. The law now applies to all economic activities without exception. The advantage of this law lies in the fact that investors can realize their projects by addressing the Tunisian Investment Authority, which serves as their sole point of contact for guidance, support, and assistance. Furthermore, the law allows foreign investors to acquire non-agricultural real estate for their investments, whereas previously, they were limited to industrial or tourist zones. The law also permits foreign investors to employ up to 30% foreign executives until the third year (from the date of company establishment or commencement at their discretion), and this percentage may increase with authorization from the Ministry responsible for employment. Additionally, the law allows foreign investors to freely convert their profits and assets abroad. Thus, the law has limited the discretionary power of the central bank, simplified procedures and setting a specified timeframe for response notification to foreign investors. The law also ensures equal treatment without discrimination between foreign and Tunisian investors. This law provides for four types of investment incentives: the value-added and competitiveness increase incentive, the employability capacity development incentive, the regional development incentive, and the sustainable development incentive. These incentives can be accumulated if their total does not exceed one-third of the investment cost. The implementing decrees of this law were promptly enacted, including the following key decrees:

• Governmental Decree No. 388 of March 9, 2017, establishing the composition and organizational modalities of the Higher Investment Council, the administrative and financial organization of the Tunisian Investment Authority, the Tunisian Investment Fund, and the rules governing their operations. The Higher Investment Council is tasked with determining the state's investment policy. The Tunisian Investment Authority (T.I.A) will serve as the sole interlocutor for investors undertaking projects with a cost exceeding 15 million Tunisian Dinars.

• Governmental Decree No. 389 of March 9, 2017, concerning financial incentives for investments made under the Investment Law.

To benefit from these incentives, investors must:

• Submit an investment declaration before project commencement.
• Submit a written request for incentive grants within one year from the date of submitting the investment declaration.
• Self-finance the project at a rate of 30% of the investment cost (10% for Category A investments in the agricultural, fishing, and marine animal breeding sectors).
• Maintain accounting records in compliance with the law and have a regularized tax status at the time of application submission and throughout the incentive period.
• Carry out the investment using new equipment.
This law provides financial and fiscal incentives for regional development, varying according to two groups of regions. Investments made in regions belonging to the first group can benefit from a 15% investment incentive with a ceiling of 1.5 million Tunisian Dinars, a total deduction of 100% from the taxable base for five years, a subsequent 10% submission, and employer contributions covered for five years. On the other hand, investments made in regions belonging to the second group can benefit from a 30% investment incentive with a ceiling of 3 million Tunisian Dinars, a total deduction of 100% from the taxable base for ten years, a subsequent 10% submission, and employer contributions covered for ten years. For the agriculture and fishing sectors, this law grants a 15% investment incentive (for medium and large projects) and 30% (for small projects) with a ceiling of 1 million Tunisian Dinars. Regarding priority sectors, the investment incentive is set at 15% with a ceiling of 1 million Tunisian Dinars for around twenty activities across all regions of the country (such as electronic industries, textile and apparel, ICT, etc.).

• Governmental Decree No. 417 of May 11, 2018, concerning the list of economic activities subject to authorization and the lists of administrative authorizations for project implementation and their simplification. This decree, which consolidates and unifies in a single legal framework all references and legal requirements for carrying out activities subject to authorization, will undoubtedly facilitate the tasks of various stakeholders involved in the investment process. Activities not listed in this decree will be freely exercised by the investor. Indeed, this decree establishes an exclusive and detailed list of 100 economic activities subject to authorization, categorized into 8 sectors, namely:

• Education.
• Telecommunications.
• Healthcare.
• Natural resources and useful substances.
• Land, maritime, and air transportation.
• Banking, finance, insurance, and the financial market.
• Hazardous and polluting industries.
• Certain commercial and service activities.