Tunisia - Country Commercial Guide
Market Challenges
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The Tunisian economy is marked by heavy government control.  Government and state-owned institutions still dominate several key economic sectors, such as finance, hydrocarbons, pharmaceuticals, and utilities.

Despite GOT efforts to reform tax procedures, businesses continue to perceive the taxation system as complex, cumbersome, and lacking coherence.          

The market is also affected by substantial price regulation and subsidies.  The GOT regulates prices of socially important commodities, including sugar, flour, gasoline, propane, milk, and cereals.  Per the 2023 budget law, the GOT is expected to spend the equivalent of about 6% of GDP on transfers and subsidies with about 64% of all subsidy expenditures going to energy products.  These subsidies are available to all households, irrespective of income.

The 2016 Investment Law is much shorter and clearer than the previous Investment Code of 1993, but some regulations remain complicated.  In May 2018, the GOT adopted ministerial decree #417, which listed 100 economic activities requiring government authorization for investment.  The sectors include natural resources and construction materials, transportation by land, sea, and air, banking, finance, insurance, hazardous and polluting industries, health, education, telecommunications, and services. 

The Tunisian Central Bank must give prior approval for foreign-exchange transactions and may apply restrictions to foreign-exchange accounts and operations.  However, certain foreign investors who are accorded tax exemptions are not subject to this requirement.  Under the new investment law, repatriation of funds and assets is free for all non-resident companies (i.e., firms having more than 66% foreign ownership).  For firms with foreign ownership but still considered resident companies (i.e., foreign ownership of less than 66%), a request must be filed with the Central Bank to repatriate funds and assets. 

Tunisia employs two investment regimes: “offshore” and “onshore.”  Offshore investment, in general, supports export-only goods and services.  This investment category benefits from several tax breaks and other incentives.  Onshore investment is directed primarily toward commerce within the Tunisian market.  For onshore investment, foreign investors are often required to partner with a local Tunisian firm, subject to some exceptions.

U.S. companies may perceive the Tunisian bureaucracy as cumbersome, slow, and burdened with a regulatory environment that lacks coherence and consistency.  The GOT decision-making process can appear opaque and at odds with the government’s official pro-business posture.  However, favorable business results can be obtained with adequate planning and sufficient lead times. 

Imports from the EU often enjoy a considerable price advantage over those from other countries.  Most non-food EU products are exempt from import duties because of Tunisia’s Association Agreement with the EU, which entered into force in 2008.  U.S. products are generally in demand.  However, despite their reputation for quality, they remain at a disadvantage due to additional costs associated with transportation, third-party distribution channels, and the depreciation in recent years of the Tunisian dinar against the U.S. dollar.

The EU and many European countries offer excellent financing terms for trade, and Tunisian companies are familiar with these opportunities.  Tunisians are generally unfamiliar with financing opportunities available to them when purchasing U.S. goods.  The U.S. Embassy in Tunis works closely with the U.S. Export-Import Bank (EXIM), the U.S. International Development Finance Corporation (DFC), and other U.S. organizations to promote awareness of financing options.   

Despite challenges navigating the bureaucracy, American firms have competed successfully for Tunisian government contracts, particularly in projects demanding cutting-edge technology. 

Local law prohibits the export of foreign currency from Tunisia to pay for imports prior to the presentation of bank documents confirming that the merchandise was shipped to the country.  Usually, a freight forwarder or Tunisian Customs documents fulfill this requirement.  In past transactions, U.S. exporters have used confirmed irrevocable letters of credit, or letters of credit that authorize “payment against documents.”