Although not usually regarded as a prime investment country, Tunisia offers a number of benefits that make the country a very appealing destination for foreign investors. Over recent years, Tunisia has undergone a series of significant changes that have encouraged foreign investors to set up or relocate businesses in the country.
Following decades of heavy state participation in the country's economy, Tunisia is currently implementing strong economic reforms and liberalisation measures. A process of prudent economic and fiscal planning yielded moderate but sustained growth for over a decade.
FDI (Foreign Direct Investment) currently accounts for 10% of productive investments in Tunisia. Furthermore, FDI amounts to 15% of the total number of jobs and 30% of total exports. In recent years, despite the strong decline due to the global recession and the socio-political revolution in Tunisia, FDI strongly recovered.
Why invest in Tunisia?
Tunisia provides a credit-worthiness that guarantees access to international capital markets. Tunisian economy is also undergoing a strong diversification process as to reinforce its resistance to possible economic downturns.
The country's strategic location on the Mediterranean is an aspect investors should not overlook or underestimate. Tunis, the country's administrative and economic capital, can be easily reached from major European capitals.
Tunisia offers a very well developed social system and a very ambitious education program. This guarantees the reduction of social cost of adjustment and boost the modernisation of the country. The country's workforce is qualified, productive and grants competitive salary levels.
As a measure to encourage FDI growth, Tunisia has introduced, over recent years, several forms of aid for foreign investor. Should investors set up or relocate a business in Tunisia, they would be granted relief on income tax (or profit reinvested) up to 35%, along with the exemption from Customs duty on capital goods, in the case nothing similar is manufactured in the country. VAT would moreover be limited to 10% for capital goods importation.
Should investors decide to set up or relocate a business in Tunisian interior regions, Tunisia provides 10 year tax exemption and 8-25% investment subsidy are among these incentives.
Sectors for Best ROI in Tunisia
Traditionally, Textile-Clothing has been the key sector of Tunisian economy. However mining, energy, tourism, and manufacturing sectors play a crucial role in the country's economy. The agricultural sector (which employs half of Tunisian population), accounts nonetheless for less than 15% of the GDP.
Electronic component production is, however, a very promising sector and in increasingly attracting foreign investments. Petroleum extraction sector has increased, due to recent oil discoveries. Finally, tourism represents one of the important economic activities.
Offshore Investments in Tunisia
Setting up an offshore company in Tunisia is a rather seamless process. As a matter of fact, several countries entertain special relations with Tunisia, and have signed agreements to avoid double taxation. Moreover, profits from an offshore company in Tunisia can transferred to another country with advantageous tax rates and cannot be taxed again.
This is the list of country that have signed a treaty with Tunisia to avoid double taxation.
- Europe: France, Belgium, Germany, Austria, Norway, Italy, Denmark, Sweden, Spain, UK, Poland, Switzerland, Netherlands, Malta
- Arab countries: Morocco, Libya, Algeria, UMA, Egypt, UAE, Jordan, Iraq, Kuwait
- Other: Canada, Senegal, USA, Korea, South Africa, Iran, Mali
Many more advantages must be taken into account when deciding whether to set an offshore company in Tunisia. During the first ten years of actual activity, income and profits derived from export are fully deductible, notwithstanding the minimum tax. VAT is not requested for payments received from abroad. Only one person is required in order to incorporate the company.
Only 500 euros are needed to incorporate an offshore company. Finally, dividends can be fully transferred and no tax on that income will be paid to the country of origin, as provided by the Agreement of Double Taxation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.