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U.S. Department of State
Tunisia Country Commercial Guide
Office of the Coordinator for Business Affairs
COUNTRY COMMERCIAL GUIDE -- Tunisia
TABLE OF CONTENTS
I. Executive Summary
II. Economic Trends and Outlook
III. Political Environment
IV. Marketing U.S. Products and Services
V. Leading Sectors for U.S. Exports and Investment
VI. Trade Regulations and Standards
VII. Investment Climate
VIII. Trade and Project Financing
IX. Business Travel
I. EXECUTIVE SUMMARY
Tunisia offers good potential for American business. It has sound
macroeconomic policies and has successfully completed an International
Monetary Fund and World Bank sponsored restructuring program (1987-
1994). Thanks to ongoing privatization and market liberalization
programs, the economy has grown at an average rate of 4.5 percent over
the past three years. Progress has been made in reforming the banking
and financial sectors. The local stock market, while still closed to
foreign investors, is becoming more active.
The private sector is playing an ever increasing role in the economy.
Textiles and tourism are two of its biggest revenue earners. The
privatization program will pick up speed in 1995, focusing on industries
in competitive sectors.
Tunisia is committed to a free trade regime and export-led growth. Most
goods can be imported without restriction. Significantly, Tunisia and
the European Union initialed a free trade accord in 1995. The pact will
enter into force in 1997 and phase-in over 12 years. The accord will
allow the free trade of goods and services between Tunisia and its
Tunisia welcomes foreign investment. Although residual bureaucratic
bottlenecks can still hamper business, Tunisia has a comprehensive
investment code, offering a variety of incentives to foreign investors.
U.S. companies are present in Tunisia in a variety of sectors. In
recent years they have successfully competed against entrenched European
interests and won significant Tunisian government contracts.
Country Commercial Guides are available on the National Trade Data Bank
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the National Technical Information Service (NTIS) at 1-800-553-NTIS.
II. ECONOMIC TRENDS AND OUTLOOK
Major Trends and Outlook
Tunisia, the Maghreb's smallest country, should not be overlooked
because of its size. An examination of its economic data tells an
impressive story. According to Tunisian government statistics more than
60 percent of the population is middle class. Only 6.7 percent falls
below the poverty threshold. The national savings rate is 23 percent.
Eighty-one percent of Tunisians own their own homes. Eighty-six percent
of Tunisian homes are connected to the electrical grid and 70 percent
have potable water.
Since independence, Tunisia has traditionally taken a balanced approach
to development that has emphasized family planning, education, and
promotion of the status of women. During 1987-1994, with International
Monetary Fund (IMF) and World Bank support, it engaged in a series of
important structural reforms. Tunisia simplified its tax system and
reduced taxes, with a fixed maximum rate of 35 percent. Banking and
financial sectors were partly liberalized and restructured. Some public
companies were privatized and foreign trade and domestic prices
decontrolled. As of 1995, 87 percent of prices are free at the
production level and 85 percent at the distribution level. Over 93
percent of imports are unrestricted.
At the end of the structural adjustment program in 1994, all basic
economic indicators had improved. The average growth rate over 1987-
1994 was 4.5 percent with an average inflation rate of 5 percent. The
Government budget deficit went from 5.5 percent of Gross Domestic
Product (GDP) in 1986 to 2.6 percent in 1994. It is expected to fall to
1.5 percent of GDP in 1995. Over the same period, the current accounts
deficit went from 8 percent of GDP to 4.6 percent. Similarly, debt
service as a percentage of exports declined from 27.9 percent to 18.5
Tunisia's efforts have attracted international attention. It
successfully raised $550 million in two bond issues on the Samurai
market. Moody's recently gave it an investment grade rating (BAA3).
Tunisia has attracted 800 foreign companies to invest in its
increasingly diversified economy.
A member of GATT since 1990, Tunisia has concentrated its efforts on
developing export-led growth. Textiles and tourism are currently
Tunisia's main hard currency earners. In 1994 total textiles and
leather export earnings were $2.1 billion. Tourism followed at $1.3
billion. Other important sectors were mechanical and electrical
equipment at $576 million, phosphates at $540 million, agriculture and
food products at $525 million, and energy products at $460 million.
General trade figures in 1994 show exports near $4.7 billion and imports
averaging $6.6 billion.
Principal Growth Sectors
Constant GDP was $12.8 billion in 1994, of which services accounted for
about 33 percent. The manufacturing and agriculture sectors each
comprised about 15 percent. Non-manufacturing industries, primarily
phosphate mining and hydrocarbons, contributed 12 percent to GDP. The
remainder was made up of noncommercial activities.
Manufacturing consists primarily of textiles and food processing with
textiles contributing over half the total revenue in the sector and most
of the growth. Tourism plays the same role in the services sector. The
Ministry of Tourism hopes to welcome five million tourists annually by
the year 2000, 25 percent over current levels.
A poor harvest due to a severe drought in 1993-94 slowed overall 1994
economic growth to 3.4 percent, more than 2¸ points below early
estimates. Growth could well be under 4 percent in 1995 as Tunisia
experiences a second consecutive year of drought. The olive crop is
In 1994, strong performances by the textiles and tourism sectors
moderated the impact of the drought. Such relief may not be available
in 1995. Although textile exports remain strong, tourism will not
likely repeat its record 1994 performance. First quarter 1995 tourism
figures, especially by Europeans (Tunisia's most important tourism
market) are off by 5 percent compared to last year.
Government Role in the Economy
The government of Tunisia is methodically reducing its role in the
economy. By 1994, 46 of the 189 public enterprises were completely or
partially privatized either through sale of shares or assets. However,
most of these 46 firms were small. Although the privatization program
is supported by the National Labor Federation (UGTT), the government is
moving carefully to avoid mass firings in unprofitable and overstaffed
public companies. While the Tunisian government has been slow to carry
out privatization, the program may be picking up steam in 1995. A
further 99 companies are under consideration for privatization. The
government is focusing on the stock market as the principal vehicle for
the program. Specific targets are companies operating in competitive
sectors. TunisAir and other major state owned companies will partially
or wholly privatize by selling shares through the market.
The most dramatic reorientation has occurred in the financial and
banking sectors. The Central Bank is gradually shifting to a
supervisory and regulatory role. Interest rates were officially
deregulated and commercial banks allowed to move into the long term
credit market. The government made the dinar convertible for current
account transactions and currency trading was privatized. In the
financial markets, the former state controlled exchange, the Bourse, was
privatized. The new structure is composed of brokerage houses.
Similarly, a privately held central stock clearing house company was
established. The state will continue to exercise its supervisory and
regulatory role through the Financial Market Council. Non-Tunisians
still cannot participate directly in the market. The Bourse will need
further growth and experience before it becomes an important vehicle for
capital formation and investment.
In 1995, the government restructured its economic ministries. The
former Ministry of National Economy was split into the Ministries of
Industry and Commerce. The Ministry of Industry is responsible for
improving the international competitiveness of Tunisian industry. It
also retains control of the majority of state-owned industries. The
Ministry of Commerce manages consumer subsidy and price control
policies. Finally, the Ministry of Economic Development, formerly the
Ministry of Planning, is responsible for long-term budget and policy
The Tunisian government and the European Union in 1995 negotiated a
major economic agreement on free trade. The pact establishes the
framework for free trade between Tunisia and the European Union. The
agreement, which will enter effect in 1997, has a 12-year phase-in
Balance of Payments Situation
Tunisia's trade deficit fell by 34 percent in 1994 to $1.671 billion.
In 1994, exports surged 22.5 percent, but imports were held to a 4.3
percent increase. In the first five months of 1995, exports grew by
15.7 percent and imports by 4.9 percent, causing the trade deficit to
drop by 15 percent overall.
The U.S. trade surplus with Tunisia widened in 1994 by nearly 17 percent
as imports from the United States increased by 22 percent. Exports to
the United States increased, too. The United States is Tunisia's fourth
largest supplier of goods and services behind France, Italy and Germany.
Agricultural exports typically account for one third of U.S. exports to
Tunisia has a well-developed infrastructure: a 20,000-km road network;
eight commercial ports; and six international airports. Telephone
density is now five telephones per 100 inhabitants and will reach 10
telephones per 100 in 1996. Total electric generating capacity of 1400
MW will increase to 2050 MW in 1996. An electricification rate of 81
percent will increase to 86 percent in 1996. A 500-km natural gas
network serves principal population centers. In major cities such as
Tunis, Sousse and Sfax, infrastructure is generally good. Water,
electricity, sewage, telecommunications and roads are reliable and well-
maintained. However, in rural areas, these services are consistently
less reliable, less well-maintained and less accessible. Rates for
electricity and international telecommunications remain expensive.
Tunisia has a network of primary and secondary roads with one modern
four-lane freeway linking Tunis and the eastern coastal city of Sousse.
This highway will eventually be extended to the industrial city of Sfax
and ultimately to the Libyan border. Another freeway is planned between
Tunis and the northern coastal city of Bizerte. All primary roads and
most northern secondary roads are paved and generally well-maintained.
However, the road network remains inadequate for growing levels of
commercial and private traffic. The government of Tunisia is strongly
committed to improving the road system and has obtained funding for road
projects from the World Bank and African Development Bank.
Tunisia has international airports in six cities: Tunis-Carthage;
Monastir; Jerba-Zarzis; Tabarka; Sfax; and Tozeur-Nefta. The government
airline, TunisAir, flies from Tunis to all major destinations in Europe
and the Middle East, except Israel. Most major European and Middle
Eastern airlines stop in Tunis, but no U.S. carrier offers direct
service to Tunisia. A $45.6 million extension to upgrade the Tunis-
Carthage airport is currently underway. Total capacity will be expanded
to handle 4.5 million passengers. Work will start in third quarter 1995
on construction of a new three level terminal to accommodate departures,
arrivals, and public transportation. Parking areas will be expanded and
an extension will also be added to Tunis' excellent light rail system to
serve the airport.
Reliable rail transport is available for passengers and freight to most
major Tunisian destinations. The Tunisian government is planning to
upgrade its railroad network.
Much effort is being put into developing telecommunications, to include
fiberoptic transmission cable and digital switches. Tunisia hopes to
develop a telephone density similar to that of Southern Europe by the
year 2010. The French on-line information system, Minitel, will be
available in Tunisia in late 1995.
Serious study is being given to expanding Tunisia's container port
capacity. The U.S. firm Moffatt and Nichol just completed a feasibility
study on a building a container terminal for the northern city of
Bizerte. Additional consideration is being given to modernizing the
Tunis/Rades terminal and the port of La Goulette.
III. POLITICAL ENVIRONMENT
Nature of the Political Relationship with the United States
Tunisia and the United States enjoy friendly bilateral relations.
President Ben Ali and his government are firmly committed to good
relations with the United States, briefly interrupted during the Gulf
crisis, when Tunisia did not support U.S. policy. Tunisia hosted the
PLO leadership from 1982 until Yasir Arafat departed Tunis in July 1994.
The Tunisian government has been a force for moderation in the Middle
East Peace Process. Since the beginning, Tunisia has been an active
participant in the multilateral aspect of the Process. Tunisia has also
contributed military contingents to U.N. peacekeeping missions in
Cambodia, Somalia, the Western Sahara, and Rwanda. Cooperation between
the Tunisian and U.S. military has been growing, with an increasing
number of joint exercises.
U.S. bilateral economic assistance programs are being phased out,
principally because of Tunisia's impressive economic development
Major Political Issues Affecting Business Climate
Tunisia is particularly concerned about the security situation in
neighboring Algeria. Tunisia is bordered on the east by Libya, a state
under international sanctions for its involvement in the Lockerbie
bombing of 1988. Tunisia honors the sanctions imposed by the U.N.
Security Council on Libya.
Synopsis of Political System, Schedule for Elections and Orientation of
Major Political Parties
The government of the Republic of Tunisia is headed by a president
(since 1987, Zine el-Abidine Ben Ali) elected directly by universal
suffrage for a five-year term. Under the constitution, the president
may be elected for a maximum of three terms. Cabinet members are named
by the president and are responsible only to him. Tunisian law
prohibits parties based on religion, race, language or region. The
Tunisian Islamist party, An-Nahda (Renaissance), was banned in 1992
after the Government accused members of the group of attempting to
overthrow the Government. Two hundred-sixty-five individuals were tried
in 1992 and sentenced to varying prison terms. The 163 members of the
unicameral parliament, the Chamber of Deputies, are elected for five
year terms. In the March 1994 general election, 144 deputies were
elected on party lists in Tunisia's 25 electoral districts under a
winner-take-all system. To ensure representation of minority parties,
nineteen additional seats were distributed proportionally on a national
basis among the losers in the district balloting. In March 1994, the
voters gave President Ben Ali his second five-year electoral mandate.
In the same election, the ruling Democratic Constitutional Rally (RCD)
won the 144 district parliamentary seats. Four opposition parties split
the 19 proportional seats, with the Movement of Socialist Democrats
(MDS) winning 10 spots. The next presidential and legislative elections
are slated for 1999. Municipal elections took place in May 1995. The
RCD won 4,084 municipal council seats, a three-party opposition alliance
took three, the MDS won two, and an independent candidate, one. The RCD
controls all of the country's 257 municipalities.
Under the leadership of Ben Ali the ruling RCD is a pragmatic political
grouping, committed to economic liberalization and to Middle East peace.
As recent election results suggest, the RCD is the dominant force on the
Tunisian political scene. The largest opposition party, MDS, usually
supports RCD policies. The other five opposition parties do not have
IV. MARKETING OF U.S. PRODUCTS AND SERVICES
Distribution and Sales Channels
Tunisia's distribution and sales channels have options for wholesale or
retail marketing. Most activity occurs in the major coastal cities,
i.e., Tunis, Sfax, Sousse-Monastir, and Bizerte.
Use of Agents and Distributors; Finding a Partner
Agents/distributors can be an important help in introducing products
into Tunisia. Knowledge of the local market and local contacts can mean
the difference between success and failure. The key, however, is to
find the right representative. The Embassy commercial section can
provide advice on reputable contacts. U.S. firms should note that
exclusive distribution contracts in Tunisia are now forbidden by law.
Franchising is new to Tunisia. A major fast food chain introduced the
idea with the opening of a Tunis store in 1994. An important American
hardware chain is scheduled to open a local franchise in 1996. There is
growing interest in the idea and many Tunisian entrepreneurs are seeking
contacts with American companies.
Direct marketing offers certain advantages. Companies can avoid the
sometimes lengthy process of looking for a suitable representative.
However, it does require a local presence to follow through on details.
There are several successful examples of joint ventures in Tunisia.
Common sense, however, must be exercised. Companies should be rigorous
in selecting a partner. It is important, too, to ensure a controlling
share in any resulting joint venture company. Licensing agreements work
well. Periodic visits are necessary to ensure adherence to quality
control and other standards.
Steps to Establishing an Office
Establishing an office is a relatively simple task. The Agency for the
Promotion of Industry (API) offers a "one stop shop" service to
investors seeking to set up in Tunisia. Generally, it takes
approximately two weeks to complete all the necessary work. Companies
should get the advice of a local lawyer before starting the process.
Many commercial lawyers have specialized staff who can handle the
details with API or other ministries. The Embassy maintains a list of
reputable, English-speaking attorneys.
V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
Best Prospects for Non-agricultural Goods and Services
1 - Telecommunications Equipment (TEL)
There are a variety of opportunities in telecommunications. The
Ministry of Communications is expected to issue a $30-$40 million tender
for a network systems management system in late 1995. Additionally in
the same period it intends to issue a $30 million tender for a second
phase expansion of its rural microwave communications system. The
Ministry also plans to develop Tunisia's limited cellular telephone
network. We expect a tender to be issued in late 1996. The Ninth
Development Plan (1997-2001) calls for a further 800,000 - 900,000 line
expansion of Tunisia's main network in 1997/98. There is also a
significant unexploited market for private switchboards for hotels and
2 - Construction and Engineering Services (ACE)
Beginning in 1991 the Government of Tunisia, supported by the African
Development Bank (AFDB) and the World Bank, embarked on a decade-long
program to construct 21 large and medium sized and 100 smaller sized
dams. The program was privatized in 1992 and offers good opportunities
for U.S. construction and engineering firms. One American company is
already involved in the sector.
Tunisia is considering the possibility of using a build-operate-transfer
(BOT) scheme to develop a series of major highway projects. The first,
Tunis-Bizerte, is a 60-kilometer link costing $165 million. The second,
Tunis-Bousalem, is 140 kilometers long and will cost $480 million. The
final link, M'saken-Gabes, is 250 kilometers long and will cost $750
Other major opportunities in the future are the construction of a major
sports complex for the 2001 Mediterranean games ($130-140 million), a
national cultural center ($50 million), and a major international
The National Port Authority (OPNT) is planning the construction of a
container terminal for the port of Bizerte. The U.S. Trade Development
Agency financed a feasibility study for the project using the U.S.
engineering company, Moffatt and Nichol. Along with Bizerte, OPNT also
plans to rehabilitate and modernize the ports of Rades and La Goulette.
Total estimated project cost for the three ports is $78 million, of
which 39 percent will be funded by a grant from the European Investment
3 - Electrical Power Systems (EMP)
Tunisia is actively exploring the possibility of a build-operate-own
(BOO), or BOT proposal for power generation. The estimated $300 million
project calls for three 100 MW plants to be built in northern Tunisia by
2000/2001. The electric power authority, STEG, is now considering
options for implementation.
4 - Medical Equipment and Services (MED)
The number of increasingly sophisticated medical and dental clinics in
Tunisia is growing. In the last five years there has been a tremendous
increase in private sector care. There are now approximately 15,000
beds and 2,000 beds in public and private sector hospitals,
respectively. Opportunities exist in both areas for equipment sales and
there is mounting interest in hospital management services.
5 - Computer Equipment and Services (CPT)
The computer sector in Tunisia is experiencing substantial growth. U.S.
equipment is preferred to European and Asian alternatives. Tunisians
want to buy directly from American companies. The market is becoming
more sophisticated and there is growing specialization, especially in
computer services. Opportunities are available in both government and
the private sector. Notably, Sun Microsystems signed a partnership
agreement with the Tunisian company TMI to develop its services in
Tunisia. U.S. firms may also want to consider Tunisia as a regional base
for marketing efforts in the Maghreb, or even Subsaharan Africa.
6 - Pollution Control Equipment and Services (POL)
Tunisia continues to play a leading role in regional environmental
affairs. It has signed many environmental treaties and conventions and
has been the host to a variety of environmental conferences. Tunisia has
an active Ministry of Environment. American exporters of environmental
goods and services should find an interested and receptive market. The
most likely areas of interest are: clean technology; environmental
cleanup; water resource and solid waste management; hazardous material
handling; environmental accident response; and oil spill prevention and
The government is exploring BOT and BOO alternatives for several major
environmental projects. The first involves a water treatment plant for
the Greater Tunis region. The project would include three pumping
stations and two treatment stations at an estimated cost of $6 million.
The second concerns a variety of purification plants, sewerage systems,
and waste water treatment plants for Tunisia's largest cities, Tunis,
Sousse, Bizerte, Gabes, and Sfax. The total estimated cost is over $93
The final project involves a concession for solid waste treatment and
landfills for Tunis, Sousse, Nabeul, Monastir and Sfax at a total cost
of $31.7 million.
Best Prospects for Agricultural Products
Cereals and Meal Feed
The GOT, in response to the 1994/95 drought, will increase imports of
cereals and other agricultural products to cover basic food needs. GOT
estimated cereals imports in the July 1995 - June 1996 period will reach
at least $420 million, compared to a $130 million annual average.
Higher than average cereals imports will likely continue through 1997,
because Tunisia will need to replenish its strategic cereals reserve.
The drought has also reduced Tunisian animal fodder and feed grain
production, creating opportunities for corn, barley and soya meal feed
Grain Silos/Elevators, Agricultural Equipment, and Livestock
We believe that there is a sizeable market for agricultural equipment in
Tunisia. A GOT decision to privatize grain stockage has created a
demand for silos. Privatization of state owned farms and government
incentives, including the new investment code, is spurring growth in the
poultry, dairy, and other industries. There is growing demand for new
equipment and livestock.
VI. TRADE REGULATIONS AND STANDARDS
Tunisia is a member of the World Trade Organization (WTO) and is fully
committed to a free trading regime. Government officials have publicly
and strongly supported WTO. While maintaining restrictions on a few
designated strategic areas, the Tunisian government is pursuing its
program of freeing up imports. By the first trimester 1995, over 90
percent could be imported without prior authorization. This represents
a substantial increase over 1986 when only 23.6 percent of imports could
be freely imported. Tunisia has made substantial progress in
liberalizing its trade regime. Future polices and agenda are expected
to reinforce this trend.
Tunisia's basic tariff ranges from 10 percent to 43 percent. In
addition, several years ago Tunisia imposed a temporary supplemental
duty on certain imports that compete with locally produced goods. This
policy, enacted in 1992, authorized a maximum additional duty of 30
percent, to be reduced in 10 percent increments over three years. It
was originally scheduled to be phased out at the end of 1994, but
remains in effect. While the original items selected for the surcharge
in 1992 have been reduced as scheduled, others have been added each year
at the 30 percent rate. The government now reports it does not intend
to phase out the surcharges until all imports are otherwise free. At
this time, approximately 90 percent of imports are free of restrictions.
Those articles still restricted are either hazardous materials or
defense or security items.
There are two agricultural products that face import barriers. First,
cotton imported from the United States and certain other non-Arab
countries is subject to a 17 percent duty. Cotton from Egypt, Syria and
other major Arab-world suppliers is duty free. Second, Tunisia
prohibits the importation of American meat treated with hormones.
Imports are subject to a maximum tariff rate of 43 percent. Certain
products are also subject to a temporary additional duty that can run as
high as an additional 30 percent. Goods are also subject to a customs
formality fee, currently costing five dinars. Certain imports are also
liable to a value added tax (VAT) and a consumption tax. These taxes
also apply to locally produced items. VAT rates run from six to 29
percent. Consumption tax rates can vary from 10 to as high as 500
percent and are also payable on similar locally produced items.
Tunisia still has non-tariff barriers such as import licenses on certain
products, particularly consumer goods that compete against locally
produced equivalents manufactured by "developing" industries, e.g.,
textiles. For such products an importer must obtain a license from the
Ministry of Commerce specifying the product, quantity and amount of
foreign exchange needed. Without this license a bank will not authorize
the foreign currency transaction.
Export controls exist on some limited products. These include items
concerning security, public order, hygiene, health, morality, protection
of flora and fauna, and cultural heritage. Prior authorization is
required for export of goods in these areas. Other products not in
these categories may be subject to technical control to ensure that they
meet international standards, or the standards of the importing country.
Other than for the previously mentioned restrictions, no specific
documentation is required. Importers obtain hard currency for payment
by presenting a pro forma invoice to their commercial bank.
Offshore enterprises are allowed temporary entry of goods. Goods are
allowed limited duty free entry into Tunisia for transformation and
reexport. Factories in this area are considered bonded warehouses and
have their own assigned customs personnel.
Labeling, Marking Requirements
The Consumer Protection Law of 1992 established standard labeling and
marking requirements. Goods not specified under existing Tunisian
regulations must meet international standards.
Imports of explosives and security-related equipment are tightly
controlled. Imports are only allowed under license.
Tunisia is moving to embrace ISO 9000 standards. The National Institute
for Standardization and Industrial Property (INNORPI) is responsible for
establishing national standards. European Union consultants are working
with INNORPI in a three-year program to fully set up ISO 9000 norms by
Free Trade Zones
Tunisia has two free trade zones, one in the north at Bizerte and the
other in the south at Zarzis. The land is state owned, but managed by a
private company. Companies setting up in the free trade zones are
exempt from most taxes and customs duties and benefit from special tax
Membership in Free Trade Arrangements
Tunisia is a member of the Maghreb Union (Tunisia, Algeria, Morocco,
Mauritania, Libya), which allows duty free trade among members. It also
has an associate membership with the European Union, allowing
preferential access for most Tunisia exports, except certain textile and
agricultural products. Tunisia initialed a free trade agreement with
the European Union in April 95. Following negotiations on various side
issues, the agreement is expected to enter into force in January 1997
and phase-in over 12 years. After a four-year grace period, tariffs
will gradually be lowered to zero. Tunisia expects assistance from the
European Union's Mediterranean Fund for its local industries during the
VII. INVESTMENT CLIMATE
Openness to Foreign Investment
The Tunisian government actively encourages foreign direct investment
and has an open investment regime; there is no screening of foreign
investment. There are some restrictions, however. For onshore services
companies, government authorization is required if foreign ownership
exceeds 50 percent. Foreign investors are denied national treatment in
the agriculture sector. Although land can be gotten on long-term lease,
foreign ownership of agricultural land is prohibited.
The privatization program has again picked up. The government intends
to privatize companies operating in competitive sectors. Among those
slated for partial or full privatization in 1995/1996 are TunisAir, the
ferry company CTN, the Coca Cola and beer bottler SBFT, SOSTEM the
bottled water company, SOTUVER the glass manufacturing company, the
Hotel Africa, the Hilton Hotel, and various cement companies. The
government has stated its willingness to have foreign participation in
the revamped privatization program.
There is no discrimination against foreign investors either at the time
of the initial investment or later. There are no discriminatory or
excessively onerous visa, residence, work permit or other requirements
inhibiting foreign investors.
Conversion and Transfer Policies
The Tunisian dinar is now commercially convertible for all bona fide
trade and investment operations. The dinar is still subject to a few
restrictions. It is illegal to take Tunisian bank notes and coins in or
out of the country. Central Bank authorization is still needed for some
foreign exchange operations, particularly those done by Tunisians.
There is no limit to the amount of foreign currency that visitors can
bring into Tunisia and exchange for Tunisian dinars. The unused balance
of such foreign currency may be taken out of the country. Amounts
exceeding the equivalent of TD 1,000 must be declared at the port of
Nonresidents are exempt from most exchange regulations. Foreign
investors may transfer returns on direct or portfolio investments at any
time and without prior authorization. This applies to both principal or
capital in the form dividends or interest. Under foreign currency
regulations, nonresident companies are defined as having:
- nonresident individuals who own 66 percent of the capital, and;
- capital financed through imported foreign currency.
The dinar is traded on an intra-bank market, established in 1994.
Trading operates around a "fix" established by the Central Bank. The
dollar/dinar value fluctuates on a daily basis, but is roughly
equivalent to one to one.
The estimated annual U.S. dollar value of local currency likely to be
used by the Embassy is estimated at $7 million. The average exchange
rate is 1:1. There is little likelihood of significant devaluation or
depreciation over the next year.
Expropriation and Compensation
The government does expropriate property by eminent domain. Just
compensation is offered at the time of expropriation. There are no
recent cases of investment expropriation. Nor have there recently been
any cases of expropriation or nationalization of business property.
However, there are several pending cases concerning expropriation of
residential property. These relate to titles registered to foreigners
before 1958. No policy changes are anticipated that would lead to
unexpected expropriation in the future. In expropriation by eminent
domain, there is no discrimination against U.S. and foreign companies or
The Tunisian government has a relatively good track record on this
score. There have been very few investment disputes in Tunisia and none
in the past ten years. No recent investment disputes involve the
Tunisian government. There is no pattern of significant investment
disputes involving U.S. or other foreign investors. However, contracts
for investment projects should always contain a clause showing how
eventual disputes should be handled and the applicable jurisdiction. As
mentioned earlier, there are several pending court cases concerning
expropriation of residential property.
The Tunisian legal system is based upon the French Napoleonic Code.
There are effective means for enforcing property and contractual rights.
The court system is widely regarded as largely independent. There are
both written and consistently applied commercial and bankruptcy laws.
Several U.S. firms have successfully sought patent and trademark
protection through the Tunisian courts.
Tunisia is a stable country. Over the past few years there have been no
incidents involving politically motivated damage to economic projects or
installations. There are continuing concerns, however, about the
security situation in neighboring Algeria.
Protection of Property Rights
Tunisia is a member of the World Intellectual Property Organization, and
has signed the UNCTAD agreement on the protection of patents and
trademarks. The agency responsible for patents and trademarks is the
National Institute for Standardization and Industrial Property
(INNORPI). Foreign patents and trademarks should be registered with
INNORPI. Tunisia's patent and trademark laws provide excellent
protection for duly registered owners. American businesses are
guaranteed treatment equal to that afforded to Tunisian nationals in the
area of patents. Copyright protection is the responsibility of the
Organisme Tunisienne de Protection des Droits d'Auteur (OTPDA), which
also represents foreign copyright organizations. Tunisian copyright law
has recently been updated to cover modern techniques. Legislation on
industrial ownership is undergoing revision and a new law is due in
Trademark pirating exists on a small scale. It particularly concerns
clothing, sunglasses, shoes, cassettes, videos and computer software.
Royalty payments are approved by relevant government ministries in
consultation with the Central Bank. Rates reflect the estimated value
of the technology involved and the duration of the particular contract.
The Tunisian government has adopted transparent policies and laws to
foster competition. Tax, labor, health and safety, and other laws avoid
distortions or impediments to efficient mobilization and allocation of
Capital controls are still in place. Capital investors are not
currently permitted to directly invest in Tunisia. However, indirect
investment is allowed through established mutual funds. Credit is
generally allocated on market terms. Foreign investors can get credit
on the local market. There are many financial instruments available in
Tunisia. Stocks and bonds are attracting more interest. Several mutual
funds exist and a merchant bank was just established.
In the last five years legal, regulatory and accounting systems have
been brought in line with accepted international practices. Tunisian
firms quoted on the stock exchange are required to publish semiannual
corporate reports audited by a certified public accountant.
The banking system is considered generally sound. Some state owned
banks have weak portfolios, but the government is enforcing strict new
requirements. These include legal lending limits and capital
requirements. The estimated total assets of the country's five largest
banks are $9.5 billion.
There is limited merger and acquisition activity in Tunisia. Hostile
takeovers, etc. are uncommon.
Bilateral Investment Agreements
A bilateral investment treaty between Tunisia and the United States took
effect in 1991.
Investment Insurance Programs
OPIC is active in Tunisia and provides political risk insurance and
other services to a variety of U.S. companies. OPIC promotes private
U.S. investment in Tunisia and has sponsored several reciprocal
Tunisian labor is readily available. Tunisia has a labor force of
approximately 2.6 million and a national literacy rate of about 65
percent, the highest in Africa. About 90 percent of the work force
under 35 is literate. The official unemployment rate is in the region
of 15 percent, but unofficial estimates are as high as 25 percent in
some southern and interior regions. The one national labor union is the
General Union of Tunisian Workers (UGTT). The right to form a union is
protected by Tunisian law, but not much more than one fifth of the labor
force is unionized. Some foreign firms sign agreements with employees
that prohibit unions.
Free Trade Zones
Foreign firms have the same investment incentives as Tunisian ones.
According to free zone legislation, free zone land is state-owned
property and cannot be sold. It is managed by an operating company that
is responsible for infrastructure, real estate development, and various
services within the zone. Companies operating in free zones are exempt
from taxes and customs duties, except social security taxes for
employees who opt for the Tunisian social security system.
Employees with nonresident status benefit from the following advantages:
- a flat income tax rate of 20 percent; and
- exemption from customs duties and taxes on imports of personal goods,
including one car per employee.
With respect to foreign exchange and trade regulation advantages, free
zone companies may choose between resident and nonresident status
depending on the foreign contribution to the company's capital.
Nonresident companies are entitled to the following advantages:
- guaranteed transfer of foreign currency capital invested in a free
zone and the income derived from it;
- all payments made within the free zone may be made either in foreign
currency or in convertible dinars; and
- any commercial relationship between companies located in the free
zone and those located outside Tunisia, and between companies within the
free zone itself, is not subject to control.
The dinar is convertible for current account transactions.
Major Foreign Investors
Total foreign investment in Tunisia over the period 1980-1993 is
estimated at $2.85 billion. In 1994, foreign investment totaled more
than $250 million. There are approximately 370 foreign-owned, wholly
exporting companies now in business. Foreign investment in
manufacturing, tourism, services, finance, and agriculture now runs at
$90 million annually.
The majority, 78 percent, of foreign investment is in the energy sector.
European Union countries lead the way, accounting for nearly 66 percent
of total foreign investment, largely in the petroleum, textile and
leather industries. The U.S. share is 17 percent, mostly in oil
exploration. The 8 percent share of Tunisia's Arab investment is nearly
all in tourism and finance. Tourism investment in 1993 totaled $206
million. Of this, 69 percent, or $142 million, was from Arab investors
and 31 percent, or $64 million, was from Europe.
French companies currently have 58 joint projects in plastics,
electricity and mechanics, generating a total investment of
approximately $150 million. Two major French oil companies, Total and
ELF, are active in Tunisia.
Existing Italian investment consists of $60 million in joint ventures,
including 89 export companies, up from 65 in 1991, and 22 service sector
companies. AGIP, the Italian oil company, has a strong presence, too.
Belgian investment consists of 110 Belgian or Tunisian-Belgian companies
in Tunisia worth $23 million.
German investment includes 170 companies, mainly manufacturing textile
There is no information on Tunisian direct investment abroad.
The major U.S. companies in Tunisia are Citibank, Marathon, Samedan, and
RJR Nabisco. There is no information on size of current investments.
VIII. TRADE AND PROJECT FINANCING
The Banking System
The Tunisian banking system is open and relatively modern. It is
composed of 12 commercial banks, eight development banks, one savings
bank, five portfolio management institutions, three leasing companies,
seven offshore banks, and one merchant bank. The banks are regulated by
the Central Bank of Tunisia. Tunisian banks tend to be very
conservative in their lending practices. Most lending is focused on
larger, established companies.
Foreign Exchange Controls Affecting Trade
Many foreign exchange controls have been lifted. The Tunisian dinar is
now convertible for current account transactions and there is free
repatriation of dividends and capital. Most transactions occur with
little problem on a letter of credit basis.
General Financing Availability
Financing is generally available. Tunisian banks are conservative and
are reluctant to deal with newer firms.
How to Finance Exports / Methods of Payment
Tunisian firms generally use letters of credit. They are prohibited
from paying cash in advance.
Types of Available Export Financing and Insurance
Eximbank is active in Tunisia, with lending focused exclusively on state
enterprises. EXIM has been aggressive in matching concessional
financing. Companies competing for government tenders are advised to
work closely with the Embassy and EXIM once evidence of concessional
financing becomes clear.
Project Financing Available
The World Bank (IBRD) and African Development Bank (AFDB) support a
variety of projects in Tunisia. IBRD efforts are focused on several
areas including the environment, solar power, reforestation, dams and
irrigation, and rural roads. AFDB assistance includes two major dam
The European Investment Bank (EIB) is involved in financing a variety of
major infrastructure projects. The EIB also finances imports of
European capital goods.
List of Banks with Correspondent U.S. Banking Relationships
Citibank, the only American bank operating in Tunisia, has both onshore
and offshore branches, with offices in both Sfax and Tunis. Most
Tunisian banks maintain a corresponding relationship with one or more
IX. BUSINESS TRAVEL
Tunisia is an open, western-oriented society that prides itself in being
a bridge between the European and Arab worlds. Although the official
language is Arabic, French is widely spoken and serves as the common
business language. Many Tunisians also speak German, Italian and
Travel Advisory and Visas
American business travelers may obtain an airport visa upon arrival.
Stays longer than four months require a visa extension. Residency and
work permits are available from the Ministry of Interior and Ministry of
Labor and Social Affairs, respectively. Applications for residency
permits are made through the local police station.
Major Tunisian secular are as follows:
Tunisian Independence Day March 20
Martyr's Day April 9
Labor Day May 1
Republic Day July 25
Women's Day August 13
November 7 Commemoration November 7
The following religious holidays are also observed. Actual dates are
based on the lunar calendar and vary from year to year.
Aid Esseghir (El-Fitr)
Aid el Kebir (El-Idha)
Ras el Am El Hijri
The Tunisian business infrastructure is excellent. The main container
port at Rades/Tunis handles most incoming and outgoing traffic. Sfax,
Tunisia's second largest city and a large commercial center, can also
handle container traffic. The road network is well developed. It was
improved in March 1993 when the final link in the Tunis-Sousse highway
was opened. Tunisia is embarking on a major telecommunications upgrade
that has already brought marked improvements to service and quality.
Expatriate housing is extremely comfortable and reasonably priced.
Houses in the Tunis neighborhoods of Mutuelleville, Notre Dame,
Carthage, Sidi Bou Said, La Soukra, La Marsa, and Gammarth compare
favorably with many suburban U.S. communities.
Medical and dental services are good to excellent in the major cities.
Tunis has several large, well-equipped private clinics. Except for
specialized care, most illnesses can be treated locally. Food standards
are good and the water in the coastal area is drinkable. For those who
wish, bottled water is cheap and easily available.
Appendix A - Country Data
Sources - Tunisian Government Economic Budget 1995
8th Economic Development Plan
Institute National de la Statistique
Population 8.7 Million (Mid-Year)
Population Growth Rate 1.8%
Religion Moslem (Over 99%) with
Very Small Indigenous Jewish
Government System Republic with Democratically
Languages Arabic, French
Work Week Monday-Friday
(Private Sector and Banks)
Appendix B - Domestic Economy
(All figures in USD Millions)
1994 1995 1996
GDP 12784.9 13321.8 14214.4
(Constant Terms 1990)
GDP % Growth Rate 3.4 4.2 4.5
GDP per Capita 1463.5 1496.5 1567.9
As % of Current GDP 34.2 34.2 34.2
Inflation 4.7 5.8 6.0
Reserves at Year End 1500.0 1300.0 1500.0
Average Exchange Rate
$1 = 1.03 1.0
Foreign Debt 8675.0 9430.0 8975.0
Debt Service Ratio 18.5 16.4 15.7
- Economic 11.8 0 0
(including housing guarantees)
- Military .5 .8 .8
Appendix C - Trade
1994 1995 1996
Total Goods Exported 4696.6 5000.0 N/A
Total Goods Imported 6647.3 7500.0 N/A
Exports to U.S. 49.2 N/A N/A
Imports from U.S. 437.7 N/A N/A
U.S. % Share of
Tunisian Imports 6.6 N/A N/A
Imports of Manufactured
Goods 4889.3 N/A N/A
Imports of Manufactured
Goods from U.S. N/A N/A N/A
U.S. Share of Manufactured
Goods Imports N/A N/A N/A
Manufactured Goods Trade
Balance with U.S. N/A N/A N/A
Projected Average Annual
Growth Rate from World N/A N/A N/A
Projected Average Annual
Growth Rate from U.S. N/A N/A N/A
Major Trading Partners (1994)
France 1824.4 1262.4
Italy 1025.0 907.6
Germany 812.0 730.1
U.S.A. 437.7 49.2
Appendix D - Investment Statistics
1994 1995 1996
Including Gas Pipeline
And Miskar 4657.6 4798.6 N/A
Excluding Gas Pipeline
And Miskar 4237.0 4715.0 N/A
Agricultural Goods Traded
Imports of Agricultural Goods (Millions of U.S. $)
1993 1994 1995
Total (World) 846 1300* 1200*
From United States 141 260* 240*
U.S. Share (%) 17 20* 20*
Agricultural Trade Balance
(in U.S. $) 135 285* 210*
U.S. Exports to Tunisia in 1994
millions of US$
Iron and Steel Articles 31.0
(Pipes and Tubing)
Drilling platforms 42.0
Prefabricated buildings 42.0
Vegetable Oils 35.0
(Soya Bean Oil)
Mechanical Equipment 48.0
Electrical Equipment 25.0
Appendix E - U.S. and Country Contacts
American Chamber of Commerce
Tunisian-American Chamber of Commerce (TACC)
15 Rue Aziza Othmana
Ministry of International Cooperation
and Foreign Investment
149, Avenue de la Liberte
Ministry of Industry
37, Avenue Kheireddine Pacha
Ministry of Commerce
37, Avenue Kheireddine Pacha
Ministry of Economic Development
Place Ali Zouaoui
Ministry of Finance
Place du Gouvernement
Ministry of Environment
Centre Urbain Nord
Ministry of Agriculture
30 Rue Alain Savary
Ministry of Tourism and Handicrafts
Avenue Mohamed V
Ministry of Transport
Avenue Mohamed V
Entreprise Tunisienne Des Activities Petrolieres (ETAP)
27 Bis Avenue Kheireddine Pacha
(State Petroleum Company)
Agence de Promotion de l'Industrie (API)
Rue de Syrie
Institut National de la Normalisation et de la
Propriete Industrielle (INNORPI)
Cite El Khadra
(Industrial Standards and Copyright Authority)
Tunisian Gas and Electricity Company (STEG)
38, Rue Kamel Ataturk
Office National D'Assainissment
32 Rue Hedi Nouira
(State Sanitation Agency)
Direction General des Telecommunications
Boulevard du 9 Avril
(Telecommuncations Department of the
Ministry of Communications)
Boulevard du 7 Novembre
Central Bank of Tunisia
Rue Hedi Nouira
Bureau of Customs
1515 Massachusetts Ave., N.W.
Washington D.C. 20005
Tel: (202) 862-1850
Fax: (202) 862-1858
8 Ave des Etats-Unis
Tel: 216-1-792-885 / 799-297
International Executive Service Corps (IESC)
15, Rue Aziza Othmana
Banque Franco Tunisienne
13, Rue d'Alger
Banque International Arabe De Tunisie (BIAT)
70-72, Avenue Habib Bourguiba
Banque Nationale Agricole (BNA)
Rue Hedi Nouira
Banque du Sud
111, Avenue de la Liberte
Banque de Tunisie
3, Avenue De France
13 Avenue De France
Societe Tunisienne De Banque (STB)
Rue Hedi Nouira
Union Bancaire Pour Le Commerce et L'industrie (UBCI)
79, Rue Jamel Abdenasser
Union International De Banques (UIB)
65, Avenue Habib Bourguiba
Arab Tunisian Bank (ATB)
9, Rue Hedi Nouira
International Maghreb Merchant Bank
Immeuble Maghrebia Tour A
Z.I. Charguia 2035
3, Avenue Jugurtha
(Only U.S. Bank in Tunisia with
onshore and offshore Services)
U.S. Embassy Trade Contacts
American Embassy Tunis
144, Avenue de la Liberte
David Peashock, Economic/Commercial Counselor
David Fetter, Commercial Attache
Bechir Ouederni, Commercial Specialist
Charlotte Joulak, Economic Specialist
Nelly Ali, Translator/Commercial Specialist
Evans Browne, Agricultural Counselor
Office of Agricultural Affairs
Washington-Based U.S.Government Country Contacts
U.S. Department of Commerce
Tunisia Desk Officer
Office of the Near East
Herbert Hoover Building Room 2039
Washington D.C. 20230
Tel: (202) 377-2515
Fax: (202) 377-5737
U.S. Department of State
Tunisia Desk Officer
Washington D.C. 20520
Tel: (202) 647-3614
Appendix F - Market Research
The Embassy does not have the resources for in-depth market analysis,
but has produced a comprehensive guide entitled "Doing Business in
Appendix G -Trade Event Schedule
The Agricultural Festival, October 11-15, 1995.
Himyea Environmental Fair, November 29 - December 2, 1995
Tunis International Fair, October 18-27, 1996. Major U.S. participation
with national pavilion.
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