Tunisia

Population

Population Projections (millions)

Population (2019)	11.69
Population Projections (2030)	12.75

Source: United Nations Population Division, Department of Economic and Social Affairs.

Population Residing in Urban Areas (%)

Population Projections (2019)

Percentage of Population Residing in Urban Areas (2030)

Source: United Nations Population Division, Department of Economic and Social Affairs.

Youth Literacy Rates (2014, %)

Youth Literacy Rate, Population 15-24 Years, Both Sexes	96.2
Youth Literacy Rate, Population 15-24 Years, Female	95.8
Youth Literacy Rate, Population 15-24 Years, Male	96.61

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force)

Unemployment, Total	22.58
Unemployment, Female	12.91
Unemployment, Male	15.47

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+)

Labour Force Participation Rate, Total	46.46
Labour Force Participation Rate, Female	24.07
Labour Force Participation Rate, Male	69.88
Labour Force, Total (number)	4,074,574

Source: World Bank, World Development Indicators 2019.

Economy Overview

GDP

	2014	2015	2016	2017	2018
GDP at Market Prices (current, billions of USD)	47.63	43.15	12.39	39.95	39.6
GDP Growth (annual %)	2.97	1.19	1.26	1.82	2.51

Source: World Bank, World Development Indicators 2019.

Value Added by Sector (% of GDP)

Indicator

Agriculture

Manufacturing

Industry

Services

Construction

Electricity, gas and water

Mining and quarrying

Education

Finance, real estate and business services

Public administration and Defense

Health and Social Work

Other services

Transport, storage and communication

Wholesale and retail trade, hotels and restaurants

Source: AFDB Socio Economic Database.

Trade Profile

Top Import Partners (USD ‘000)

	2014	2015	2016	2017	2018
World	24,763,817	20,187,678	19,448,356	20,803,636	22,714,228
Italy	3,651,366	2,981,958	2,841,709	3,239,408	3,572,213
France	4,015,008	3,596,145	3,008,647	3,140,784	3,249,310
China	1,779,256	1,691,235	1,819,591	1,864,096	2,168,126
Germany	1,736,682	1,478,627	1,504,299	1,668,804	1,737,733
Turkey	925,140	787,188	856,531	943,000	1,040,718

Source: COMTRADE Statistics.

Top Export Partners (USD ‘000)

	2014	2015	2016	2017	2018
World	15,993,590	13,438,521	12,901,961	13,638,589	14,694,535
Italy	3,202,617	2,596,016	2,364,448	2,358,235	2,474,777
Germany	1,709,158	1,476,550	1,431,174	1,659,799	1,867,668
Spain	593,028	699,668	475,025	542,961	780,929
Libya	667,317	539,927	442,815	396,894	498,732
Algeria	618,585	558,040	664,347	470,403	425,976

Source: COMTRADE Statistics.

Top Import Products (USD ‘000)

Chapter	Description	2014	2015	2016	2017	2018
	All products	24,763,817	20,187,678	19,448,356	20,803,636	22,714,228
27	Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	4,525,898	2,873,028	2,144,246	2,697,940	3,420,480
85	Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	2,813,623	2,536,381	2,755,382	2,928,464	3,256,863
84	Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	2,547,971	1,891,646	2,119,905	1,951,544	2,055,429
87	Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	1,834,972	1,580,937	1,610,052	1,580,253	1,416,816
39	Plastics and plastic products	1,276,905	1,115,177	1,161,084	1,228,161	1,388,629

Source: COMTRADE Statistics.

Top Export Products (USD ‘000)

Description	2014	2015	2016	2017	2018
All products	16,743,908	14,070,422	13,577,889	14,317,801	15,564,683
Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	4,187,446	3,656,531	3,742,148	4,069,550	4,042,414
Articles of apparel and clothing accessories, not knitted or crocheted	2,009,308	1,551,740	1,580,940	1,624,047	1,813,610
Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	394,572	1,068,166	511,634	530,753	911,534
Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	2,209,085	1,014,677	767,069	853,558	885,730
Articles of apparel and clothing accessories, knitted or crocheted	726,535	599,727	560,227	624,588	626,788

Source: COMTRADE Statistics.

Investment Profile

FDI Inflows (millions of USD)

Year	2016	2017	2018	2019	2020
FDI Inflows	885.0	880.8	1,035.9	844.8	652.1

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outflows (millions of USD)

Year	2016	2017	2018	2019	2020
FDI Outflows	241.6	57.5	34.0	21.8	43.4

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inward Stock (millions of USD)

Year	2016	2017	2018	2019	2020
FDI Inward Stock	28,940.1	29,516.5	26,764.6	31,605.5	35,005.7

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outward Stock (millions of USD)

Year	2016	2017	2018	2019	2020
FDI Outward Stock	461.3	500.8	453.2	525.6	603.4

Source: United Nations Conference on Trade and Development, World Investment Report 2021

Doing Business

Overall Doing Business Ranking

2020	78/190
2019	88/190

Source: World Bank, Doing Business, 2020

Starting a Business

2020 Rank	19/190
Procedures (number)	3
Time (days)	9
Cost (% of income per capita*)	2.9
Paid-in Minimum Capital (% of income per capita*)	0.0

*GNI per capita used: USD 3,5000
Source: World Bank, Doing Business, 2019

Paying Taxes

Paying Taxes

2020 Rank	108/190
Payments (number per year)	8
Time (hours per year)	144
Total Tax Rate (% of profit)	60.7
Profit Tax (% of profit)	13.6
Labor Tax and Contributions (% of profit)	25.3
Other Taxes (% of profit)	21.8

Source: World Bank, Doing Business, 2020

Trading Across Borders

2020 Rank	90/190
Time to Export: Border Compliance (hours)	12
Cost to Export: Border Compliance (USD)	375
Time to Export: Documentary Compliance (hours)	3
Cost to Export: Documentary Compliance (USD)	200
Time to Import: Border Compliance (hours)	80
Cost to Import: Border Compliance (USD)	596
Time to Import: Documentary Compliance (hours)	27
Cost to Import: Documentary Compliance (USD)	144

Assumptions

• It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
• It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
• A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
• Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
• If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
• The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
• Time is measured in hours, and 1 day is 24 hours.
• Costs do not include tariffs.

Source: World Bank, Doing Business, 2020

Investment Regime

Investment law

Investment Law n° 71 of 2016

Key guarantees in terms of investment protection include:

• Investment is free and foreign companies have the possibility to hold 100% of their capital in most business activities
• Foreign companies are free to own, rent and exploit non-agriculture properties for the purpose of achieving direct investment operations or re-investment.
• Foreign companies are free to transfer funds (profits, dividends and assets) abroad
• Foreign companies enjoy guarantees in accordance with international standards on fair and equitable treatment and industrial, and intellectual property
• Foreign companies have the possibility to recruit up to 30% of foreign managerial staff during the first three years of operation upon simple declaration and 10% guaranteed thereafter
• Dispute Settlement: Where a dispute arises between the Tunisian State and the investor, parties are freely allowed to agree on the mediation’s procedures and rules, Otherwise, Conciliation Rules of the United Nations Commission on International Trade Law shall If a dispute between the Tunisian State and a foreign investor is not settled through conciliation, it may be submitted to arbitration under an agreement between the parties.

Investment Incentives

Projects of National Interest 

• Are considered Projects of National Interest, investment projects contributing to the realization of one of the following national economic priorities
  • • Increasing the value added, competitiveness, export capacity and technological content of the Tunisian economy at the regional and international levels, as well as developing priority sectors;
    • Creating jobs and enhancing human resources skills;
    • Achieving inclusive regional development;
    • Achieving sustainable development;

• And which meet one of the following criteria:
  • A minimum investment cost equal to fifty (50) million TND;
  • Creation of at least 500 jobs in a 3-year period;
  • Deduction of the benefits from the tax basis in the limit of 10 years period;
  • An investment grant within the limit of 1/3 of the investment cost of the project including internal infrastructure expenses;
  • State participation in the coverage of infrastructure
  • Support for the employer’s contribution to the social security scheme (up to 10 years)
  • Granting of non-agricultural state land: long-term rental or in symbolic dinar

Economic Performance 

• Are eligible for Economic performance grants:
  • Material investments in mastering new technologies and improving productivity;
  • Immaterial investments;
  • Research and development expenditures;
  • Employee training expenditures leading to certification of skills;

• Financial Incentives:
  • Material investments for mastering new technologies and improving productivity: grant equal to 50% of approved investment component with a ceiling of 500 KTND (55% for Category “A” investments in agriculture, fisheries and aquaculture and 60% for mutual agricultural service companies and development groups in the agriculture and fisheries sector);
  • Immaterial investments: grant equal to 50% of approved investment component with a ceiling of 500 KTND; including studies grant capped at 20 KTND
  • Research and development expenditures: grant equal to 50% of investment component with a ceiling of 300 KTND;
  • Employee training expenditures leading to certification of skills: grant equal to 70% of training expenditures leading to certification of skills in accordance with international standards with a max annual amount of 20 KTND;

Sustainable Development: 

• Are eligible for sustainable development grant:
  • Investment in the treatment of Water and air pollution resulting from the activity of the Enterprise;
  • Projects adopting clean and non-polluting technologies to reduce pollution from their origin or control the exploitation of resources;
  • Collective depollution equipment carried out jointly by a public or private operator for enterprises that carry out the same activity;
  • Sustainable development grant equal to 50% of approved investment component with a maximum amount of 300 KTND.

Encouragement of Export and Innovative Sectors 

• Are considered export transactions:
  • The sale of locally produced goods and merchandise, the provision of services abroad and services provided in Tunisia and used abroad,
  • The sale of goods and products by enterprises operating in the agricultural and fishery sectors, manufacturing and craft industries to enterprises wholly exporting and to enterprises established in economic activity parks, provided that these goods and products constitute a component of the final product for export as well as to the wholly exporting international trading companies;
  • Provision of services to enterprises wholly exporting to companies established in the economic activity parks and totally exporting, international trading companies in the framework of subcontracting operations and operating in the same sector or within the framework of Services directly related to production, except for guarding, gardening, cleaning and administrative, financial and legal services.

• Are not considered as export operations, financial services, leasing of buildings, sales of fuels, water, energy and mining products and quarries.   The following enterprises are considered as wholly exporting enterprises:
  • Enterprises that sell all their goods or products or provide all their services abroad or those who provide all their services in Tunisia and that are used abroad;
  • Enterprises that sell all their products or provide all their services in accordance with the export transaction defined above;                             such enterprises may sell part of their production or provide part of their services on the local market within the limit of 30% of their export turnover in the previous calendar year
• Tax incentives
  • In terms of investment:
  • Total deduction from the income tax base for persons or corporate income tax, income or profits reinvested in the subscription to the initial capital or capital increase in fully exporting companies, within the limit of the income or profit subject to tax
  • The suspension of value added tax on imported and local purchases of materials, products and services giving entitlement to deduction and necessary for the execution of export transactions.
  • In terms of the exploitation:
  • Deduction from the income tax base of two-thirds of income from exports, and exceptional profits
  • Profits from export operations are subject to corporation tax at a reduced rate of 10%.

Innovative Sectors 

Total deduction, within the limit of the income or profit subject to tax, of the income or profits reinvested in the subscription to the initial capital or capital increase of companies making investments allowing the development of technology or its control and investments in innovation in all economic sectors, with the exception of investments in the financial sector and the energy sectors other than renewable energy, mining, real estate development, on-site consumption, Trade and Telecommunication Operators.

Priority Sectors / Economic Sectors in Industry and Services 

• Priority sectors: Sectors characterized by their strategic nature and their ability to raise the growth pattern or have high employment capacity and priority according to the development plans.
  • Direct investment carried out in priority sectors benefit from the following incentives:
    • Grant for the improvement of value-added and competitiveness: 15% of the investment cost with a ceiling of 1 million TND; (30% of the investment cost for category “A” investment in agriculture, fisheries and aquaculture)
    • Grant for the development of employment capacity: payment of employers’ social contribution for 3 years (from the date of entry into effective activity);
    • The assumption by the State of part of the salaries paid to Tunisian employees according to the level of management in all activities except activities excluded from the incentives under the regional development
    • Participation in the capital of Enterprises created whose investment volume does not exceed 15 million TND including working capital as well as expansion investments:
      • 60% of the capital: for investment projects costing less than or equal to (2) million TND
      • 30% of the capital: for investment projects costing more than (2) million TND
• Economic Sectors: Activities which are mainly based on the valorization of structural and agricultural resources as well as natural and cultural reserves through manufacturing and employment in the production areas. They contribute to the development of value chains through the radical transformation of the nature of the product.
  • Direct investment carried out in economic sectors benefit from the following incentives:
    • Grant for the improvement of value-added and competitiveness: 15% of the approved investment cost with a ceiling of 1 million TND

Regional Development Eligible activities: 

• Incentives are granted to investment projects carried out in the economic activities covered by the Investment Law and excluding the following:
  • Extraction and commercialization of structural material sas raw products;
  • Financial and insurance services;
  • Telecommunication networks operators and Internet service providers;
  • Retail and wholesale trade;
  • Restaurants and cafes services and on-site consumption services except classified touristic restaurants and cafes;
  • Production and distribution of electricity, gas and fuel except production of Renewable energies;
  • Real estate, civil engineering and associated services civil;
  • Real estate and rental services;
  • Services provided by small businesses;
  • Shaving and beauty services;
  • Transportation;
  • Travel agencies;
  • Agriculture, fishing and aquaculture;
  • Liberal professions;
  • Paramedical and pharmaceutical services and clinical laboratories;
  • Celebration Halls; Baking, desserts and sweets production;
  • Miscellaneous condiment processing and coffee grinding; Unstructured Handcrafts industry (less than 5 employees);
• Investment grants:
  • For the first group of regional development areas:
    • 15% of the investment cost with a ceiling of 5 Million TND;
    • 65% of the total cost of the infrastructure with a maximum of 10% of the investment cost and a ceiling of 1 million TND for industrial projects;
  • For the second group of regional development areas:
    • 30% of the investment cost with a ceiling of 3 Million TND;
    • 85% of the total cost of the infrastructure with a ceiling of 10% of the investment cost and 1 million TND for industrial projects;
• Grant for the development of employment capacity: Coverage of social contributions:
  • For the first group of regional development areas:
    • payment of employers’ social contribution for 5 years;
  • For the second group of regional development areas:
    • payment of employers’ social contribution for 10 years;                The assumption by the State of part of the salaries paid to Tunisian employees according to the level of management in all activities except activities excluded from the incentives under the regional development.
• Participation in the capital of Enterprises created whose investment volume does not exceed (15) million TND including working capital as well as expansion investments as follows:
  • 60% of the capital: for projects costing less than or equal to 2 million TND
  • 30% of the capital: for projects cost exceed 2 million TND
• Tax Incentives:
  • In terms of investment:
    • Are fully deductible, the income or profits reinvested in the subscription to the initial capital or its increase of the enterprises established in regional development areas
  • In terms of exploitation:
    • Total deduction of corporate tax for the first 5 years for the first group of regional development areas;
    • Total deduction of corporate tax for the first 10 years for the second group of regional development areas;

Source: Tunisia Investment Authority (TIA).