Tunisia is the destination for investors:

Thanks to its geostrategic positioning, being located at the junction of the eastern and western basin of the Mediterranean and its rapprochement with the European Union, Tunis is a regional hub for investment, trade and production offering the best business opportunities within a favorable environment designed to help companies prosper.

This enabling ecosystem is made up of:

• An airport network in Tunisia has 9 Tunisian international airports open to public air traffic.
• 7 Commercial seaports
• 1 Oil terminal
• A submarine fibre-optic cable link with Europe
• 12 competitiveness clusters whose aim is to promote innovation and competitiveness
• 157 industrial zones
• 15 Cyber parks to support young / new business creators in the incubation phase of their projects.

Tunisia achieves competitive performances:

In early 2021,  Foreign Direct Investment Intelligence, in association with research firm Briter Bridges; published its first report "African Tech Ecosystems of the Future 2021/2022" to map the reality of the vibrant technology ecosystem developing around the African continent  and explore its potential and  its reserves in human skills to transform their ideas into a prosperous business atmosphere.

Indeed, according to the results of this report, Tunisia occupies:[1]

• The5th regional rank and the2nd Arab rank with more than 190 startups making an investment amount of $3. $3M in 2020
• The1st rank according to the "Cost profitability" of its technology startups and is elected the African leader.
• The3rd place in terms of "Business friendliness" thanks to the regulatory measures taken by the government in favor of startups.
• The3rd regional rank and  the 1st Arab rank in terms of "Human Capital and Lifestyle"

Tunisia's trade agreements and arrangements for the promotion of the country's trade and economic cooperation.

Tunisia is positioned at the heart of the Euro-Mediterranean supply chain by being located at the northern tip of the African continent and only 140 km from Europe. It is thus an attractive destination for investors and the ideal hub that provides access to several major markets.

Tunisia is a signatory to important trade agreements, including the Association and Free Trade Agreement with the EU, the WTO Agreement, bilateral and plurilateral agreements with members of the Arab League and the agreement with Turkey.

Indeed, Tunisiais the first country in the southern Mediterranean to have signed an Association and Free Trade Agreement with 27 Member States of the European Union.

Law No. 2016-71 of 30 September 2016 aims to promote national and international investment movements and promote the country's economic development through:

• The creation of value and employment as well as the increase of the country's competitiveness through a better capacity to export its wealth regionally and internationally and thanks to a competent stock of human resources.

Articles 4, 5 and 6 of this law set out the state of access to the Tunisian market:

• Investment is free according to Article 4. The deadlines, procedures and conditions for granting authorizations as well as the list of administrative authorizations and the list of activities subject to authorization are fixed by government decree at most, one year after the publication of the law.
• If authorization is refused, the decision must be reasoned and notified to the applicant in writing or by any other means leaving a written record within the legal time limits. Failing this, and in the event of silence after the expiry of the time limit, the authorization will be provided to the applicant after verification that the application meets all the required conditions.
• According to article 5 of the same law, the investor has the freedom to acquire, lease and exploit non-agricultural immovable property for the purpose of carrying out direct investment operations.
• The clause related to the recruitment of executives set out in Article 6 of the law stipulates that the number of foreign executives in a company may not exceed 30% of the total number of its executives during the first 3 years since its legal incorporation (the rate decreases to 10% from the 4th year). Failing this, an authorization must be issued by the Ministry of Employment to the company in accordance with the provisions of the Labour Code. 
• Guarantee the investor's assets and intellectual property rights as provided for by the legislation in force (Article 8).
• Guarantee the freedom of the investor to transfer capital abroad in foreign currency as predicted by the exchange regulations discussed above (Article 9).

Since December 1992, the process of liberalization of exchange regulations (1987) stipulates that:

• Any resident enterprise enjoys the freedom to make free transfers in connection with their imports of goods and services.
• Any partially or wholly resident exporting company has the freedom to invest abroad.
• Any bank or company can honor the needs of its activity by borrowing in foreign currencies of a minimum amount of 3 MTD up to 10 MTD.
• Any foreign investor is able to participate up to less than 50% in the portfolio in Tunisian companies listed or not listed on the stock exchange.

Capital transactions:

Foreign Direct Investment (FDI) in Tunisia:

Direct investment is free in Tunisia. Although the value of investments in the services sector fell by 44% in 2020* due to the pandemic that shook the entire world, Tunisia moved up 2 places in the   World Bank's "Doing Business 2020" report, ranking 78th out of 190 countries. This is explained by the structural reforms carried out by the Tunisian government.

(Read more)

In 2019, Tunisia's parliament also passed the 2019-47 law, which contains 38 amendments to address loopholes in existing laws and regulations that have hindered investment.

Similarly, Tunisia has free trade zones in Bizerte and Zarzis called in Law No. 92-81 of 3 August 1992 Parks of Economic Activities, where companies are exempt from taxes and customs duties and benefit from unlimited foreign exchange operations.

The Tunisian Investment Authority "TIA" is the first focal point for investors providing investors/entrepreneurs/companies with support services in the search for investment opportunities and at each stage of the investment value chain.

Within the Tunisian Investment Authority, a "Single Interlocutor for Investment" is responsible for:

• Welcoming, accompanying and informing the investor
• Carry out the administrative procedures related to the incorporation of the company and the granting of the required authorizations.
• Coordinate with relevant agencies to detect investor requests and propose appropriate solutions.
• Provide the investor with a certificate of filing of the investment declaration and the documents of creation or extension of the company, at the latest within one working day from the date of filing. 

Similarly, the Tunisian Investment Authority offers investors a set of services to facilitate investment procedures in Tunisia. The list of services offered is as follows:

• Declaration Service: used to inform and inform investors about the single package for the declaration of the launch and/or extension of a project.
• Filing a request: Through this service, investors are able to file their requests for information and requests throughout the project implementation period.
• Incentive request: Investors in projects worth more than 15 million dinars can apply for financial incentives and then the department in charge of bonuses and incentives is required to review, monitor and communicate these requests.
• Submission of a Project of National Interest: Study, evaluate and monitor projects of national priority.
• Legal Constitution : This service allows investors to finalize all the necessary legal incorporation formalities remotely. The single point of contact will be responsible for the completion of peripheral procedures for the creation of the company.
• Application for authorization: Through this service, investors are able to complete the formalities of authorization request remotely.

Reference institutions and service providers:

Corporate taxes

The Finance Law 2021 amended the CIT rates applicable in Tunisia as follows:

• The general CIT rate applicable to profits realised from 1 January 2021 will be 15% (instead of 25% before the amendment).
• The rate of 20% (applicable to small enterprises) has also been reduced to 15%.
• The CIT rate of 13.5% applicable to enterprises operating in strategic sectors, as provided by the Finance Laws 2019 and 2020, has been increased to 15%.

The rates of 10% and 35% have not been modified.

According to the above and starting from 1 January 2021, CIT rates applicable will be as follows (subject to exemptions and tax incentives):

• 10% as a reduced rate applicable for some activities detailed below.
• 15% as a general rate.
• 20% for companies subject to CIT at a rate of 35% and whose shares are admitted (no later than 31 December 2024) to the Tunis Stock Exchange.
• 35% for financial, assurance, automotive, telecom, and other important sectors, as detailed below.

The general CIT rate is 15% (as per the Finance Law 2021). However, specific rates are foreseen for specific sectors of activity. Indeed, CIT is due at the rate of:

• 10% for:  
  • Companies carrying out craft activities, agricultural and fishing activities, and fitting out fishing boats.
  • Trading groups of retail businesses organised as service cooperatives, governed by the general cooperation legislation.
  • Service cooperatives formed between producers for the wholesale of their production.
  • Consumer cooperatives governed by the general cooperation legislation.
  • Profits made in the context of industrial or commercial projects benefiting from the youth employment programme or the national fund of the promotion of crafts and small businesses.
  • Benefits derived from exports (except wholly exporting companies where the ten-year tax holiday period has not expired). Note that the reduced CIT rate of 10% applicable to exports will no longer apply as of 1 January 2021. As of that date, the general CIT rate will apply depending on the activity notwithstanding whether the benefits are derived from exports or from local activities.
  • Support and pollution control activities.
  • Companies operating in the regional development zones after the expiry of the total deduction period.
  • Benefits derived from investments in the agricultural or fishing sectors at the end of the total deduction period.
  • Non-resident financial service providers for profits derived from transactions realised with non-residents (for profits realised starting from 1 January 2014). Note that the reduced CIT rate of 10% applicable to profits derived from transactions realised with non-residents will no longer apply as of 1 January 2021. As of that date, the general CIT rate will apply depending on the activity notwithstanding whether the benefits are derived from exports or from local activities.
• 20% for companies subject to CIT at a rate of 35% and whose shares are admitted (no later than 31 December 2024) to the Tunis Stock Exchange. The 20% rate is applicable for five years as from the year of admission.
• 35% for:
  • Banks (including Islamic banks) and financial institutions (leasing companies, factoring companies, investment banks).
  • Offshore financial institutions governed by the code related to financial services destined to non-residents, and this only for the benefits derived from services provided to non-resident persons. Note that the reduced CIT rate of 10% applicable to profits derived from transactions realised with non-residents will no longer apply as of 1 January 2021. As of that date, the general CIT rate will apply depending on the activity notwithstanding whether the benefits are derived from exports or from local activities.
  • Investment companies (SICAF and SICAR).
  • Insurance, mutual insurance, and reinsurance companies.
  • Takaful insurance and reinsurance companies (added by Finance Law 2020).
  • Debt collection companies.
  • Telecommunication operators.
  • Profits derived from services relating to the hydrocarbon sector (listed by Article 130-1 of the Hydrocarbon Code promulgated by the Law 1999-93).
  • Companies rendering services to companies operating in the oil and gas field.
  • Companies operating in the production and the transport of hydrocarbons and governed by particular conventions, as well as companies operating in the transfer of hydrocarbons via pipeline.
  • Companies operating in the oil refining sector and the wholesale of hydrocarbon products.
  • Hypermarkets (constructed area exceeding 3,000 m² or sales area exceeding 1,500 m²) as of 1 January 2020.
  • Car dealers (as of 1 January 2019).
  • Franchisees of a foreign brand or trademark, except for enterprises with a rate of integration equal to or greater than 30%.

Personal Taxation[1]:

The net global income serving as the basis of the PIT shall be composed of the excess of the gross yield, including the value of the profits and benefits in kind, over the charges and expenses paid out in view of the acquisition and conservation of the income.

The net global revenue shall be composed of the total amount of the net income determined separately in accordance to the rules proper to each of the following categories of income:

• Industrial and commercial profits.
• Profits from non-commercial professions.
• Profits from agricultural or fishing activities.
• Wages, salaries, indemnities, pensions, and annuities.
• Real estate income.
• Income from securities and investments.
• Foreign-sourced income.

PIT is due by all individuals considered as tax resident in Tunisia on the basis of their worldwide income (including foreign-sourced income, except those already subject to tax abroad).

For non-Tunisian tax resident individuals, Tunisian-sourced income realised by non-resident employees is subject to income tax in Tunisia, in general, through a withholding tax (WHT) to be applied by the Tunisian established debtor.

The WHT rates depend on the nature of income as well as the existence of a double taxation treaty (DTT) between Tunisia and the state of residence of the individual.

For salaries, the net income is calculated as the gross salary reduced by the mandatory social security contributions paid to Tunisian social security organisations and 10% on the amount net of Tunisian social security contributions as deduction for professional expenses, capped at TND 2,000.

The gross salary includes the value of benefits in kind (e.g. lodging, car, transportation, meals, school expenses, medical expenses). Benefits in kind are valued at their actual value.

For salaries, income tax is to be withheld at source by the employer (or the employee in the particular case of expatriates earning salaries from outside Tunisia for work done in Tunisia) on a monthly basis. The monthly income tax is calculated as 1/12 of the annual income tax determined according to the progressive scale below.

However, the income tax may be due at a flat rate of 20% of their gross income, before deductions for any reason whatsoever (including compulsory social security contributions for the establishment of their retirement pensions), for:

• Non-resident employees working in Tunisia for a period or periods not exceeding six months per fiscal year.
• Certain employees of foreign nationality (managers and trainers) employed by:
  • Totally exporting companies.
  • Oil and gas companies governed by the Decree-Law n°85-9, if the concerned employees’ work is related to exploration.
  • Oil and gas companies governed by the Hydrocarbon Code promulgated by the Law n° 99-93, whether the personnel carries out activities related to exploration or production.
  • Companies based in Free Trade Zones as defined by the Law n° 92-81.
  • Financial institutions working mainly with non-Tunisian residents, governed by the Code for financial services provided for non-residents.

Value-Added Tax:

VAT is levied under the Tunisian VAT Code and is due on all transactions taking place in Tunisia.

The sale of goods is considered as taking place in Tunisia, and subject to VAT, if the goods sold are delivered in Tunisia. The sale of services is considered as taking place in Tunisia, and subject to VAT, if the services sold are exploited or used in Tunisia.

The standard rate of VAT is 19%. Lower rates of 13% and 7% apply to specifically designated operations. Note that these rates are effective as of 1 January 2018 (previously 18%, 12%, and 6%, respectively). 

Some operations, products, or services are out of the scope of VAT in Tunisia, and some others are expressly exempt from VAT.

Some goods and services may be acquired VAT free, based on a certificate delivered for the purpose by the relevant tax authorities. This exemption is granted mainly to wholly exporting companies (other than international trade companies and service companies, that no longer benefit from the VAT free acquisition of goods as per Finance Law 2022 (please see detail below)), oil and gas companies, their contracts, and their subcontractors.

Registration for VAT purposes may be either obligatory or optional.

Voluntary registration is allowed where persons:

• carry out activities that are outside the scope of the Tunisian VAT, in which case the option has to be a full option, which means that all the activities carried out by these persons will be subject to VAT, or
• carry out operations that are exempt from VAT and that are destined for export, or supply products and services that are exempt from VAT to persons liable to VAT, in which case the option may be a partial or a full option.

The Labour Code applies to public and private establishments in industry, commerce, agriculture and their dependencies. This code also applies to the liberal professions, craft establishments, cooperatives, civil companies, associations and trade unions or any other group.

This Code covers all the particularities of the formation of the employment contract, the obligations and rights of the employee, working conditions as well as leave and termination of the contract.

Employment contracts: may be concluded for an indefinite period (ends at the end of the notice period) or for a fixed period (the end date of the contract is predicted by this contract or concluded by the performance of the mission subject to the contract).

Termination of contract: The worker signing a contract of indefinite duration must be notified in advance (one month before the termination of the contract) by a registered letter which must include the cause in case of dismissal.

• Probation Period : 6 months.
• Working hours: 48 hours or 40 hours.
• The retirement age is 62.
• Annual leave: At least 21 days.

• Socio-economic and political situation

During last decades, Tunisia has experienced demographic and socio-economic development, that has led to a strong urban growth that resulted in a increase in the quantity of waste produced. This evolution associated with political instability lead to the absence of rigorous mechanisms for quantification and characterization of waste. The available data are estimates carried out within the framework academic studies, that remain very approximate.

Tunisia's economic performance decelerated after the 2011 revolution, resulting in a lost decade of growth, exacerbated by the COVID-19 pandemic, which hit in 2020. GDP growth declined to 1.7 percent on average between 2011 and 2019. A significant decline in productivity growth was observed as a result of excessive regulation of economic activity, reduced trade orientation, low investment, and limited innovation.

Read more

Despite a gloomy global environment and a revolution that was economically devastating for the country, state and society so far have held on. Financial institutions are functioning properly, companies are operating and tourism, although hit hard, has shown signs of recovery. The predatory practices of the families of the deposed president and his wife now feel like ancient history.

Read more

• Waste Management Situation

The production of waste varies according to the seasons and the days of markets Tunisia observes an increase in the production of domestic waste of 25% in summer for less touristy areas and up to 50% in tourist towns especially by the sea.

Solid waste management has emerged as a big challenge for the Mediterranean country of Tunisia. The country, having an estimated population of around 11 million people, produces more than 2.5 million tons of waste each year. Tunisia is experiencing an average increase in waste volume by 3% with per capita waste generation in urban areas being 0.8 kg per day. Biodegradable organic fraction constitutes around 68% of the MSW stream.

Read more

Tunisia’s volume of waste increases by an average of 3% every day, adding up to more than 2.5 million tons each year. Many municipal landfills do not meet sanitary standards: Tunisia’s largest, Borj Chakir, the Tunis area’s only controlled dump, takes in an estimated 3,000 tons of solid waste per day — well over the 44 tons per day permitted in EU landfills.

The growing waste crisis has given rise to unrest and social tensions, such as in the governorate of Sfax in southern Tunisia. As a result of the closure of the nearby Agareb landfill, which triggered a crisis in the country’s controlled landfills, trash went uncollected; some 30,000 tons of waste piled up in Sfax’s streets. This case has highlighted the urgent need to address waste management and the broader environmental situation in Tunisia, considering its implications for both the climate and residents’ health.

At present, only 4-7% of Tunisia's waste is recycled. The recycling sector is currently driven almost exclusively by informal waste collectors known as barbechas. They go through trash containers and landfills and remove recyclable items without having any official legal status to do so.

Read more

• Main Actors

• Infrastructure

- Controlled landfills or technical landfill center (CET): 13.

- Transfer centers: 55.

- Infrastructure costs: 100 Million TND.

MSW collection is covered at 80% in urban areas and 10% in rural areas. The country has 10 controlled landfills with a capacity of 1,788,000 tons per year and four other semi-controlled landfills in the Valley Medjerda with a capacity of 62,000 tons per year. Five other discharges with a nominal capacity of 0.466 million tons per year are being built and finally five other controlled discharges are planned with an average capacity of 0.433 million tons per year.

However, many municipal landfills do not meet sanitary standards and waste is often dumped into non-sanitary areas. Interestingly, only five percent of MSW is composted and merely 4% recycled. The expenditure for waste collection and transport constitutes 75-100% of the total solid waste management budget.

• Regulatory Framework

- Law 1996-1941 of 10.06.1996: amended by Law 2001-14 of January 30, 2001, on waste control, management and disposal;

- Law 92 – 122 establishing a de-pollution fund (FODEP);

- Law 1975-33 of 14 May 1975: promulgating the organic Law of

- Law n°97-11 of 3 February 1997, promulgating the code of local taxation;

- Decree 726-1989 dated 10/6/1989 relating to rural councils entrusting waste disposal in rural areas to elected councils.

- Decree N° 2317-2005 of 22/8/2005: Establishing a national waste management agency (ANGED);

• WM initiatives and programs

- FTE (Fonds de Transition Énergétique)

- FODEP (Fonds de Dépollution)

- FODEC (Fonds de Développement de la Compétitivité)

- Switchmed program

- ERPP (Production Propre et economies des resources) 

- Outil de comptabilité des flux matière (MFCA)