A recent report by the US Department of State has highlighted the challenges faced by Tunisia in attracting foreign investment to its interior, west, and south regions. Despite offering special tax incentives, these areas only account for 4.6% of the country's foreign direct investment. In contrast, the Tunis region and its suburbs attract 44% of foreign investment, followed by the north coast with 28.6%, and the east coast with 22.8%.
The report attributes the concentration of investment in coastal regions to the lack of adequate infrastructure in the interior. It also notes that investment promotion policies have not always yielded the expected results. However, there was a 30.3% increase in foreign investment in 2025, indicating some positive trends. The country's investment landscape is dominated by over 4,000 foreign companies, with Europe being the largest source of capital, accounting for nearly 54% of investments.
The sectors that attract the most investment in Tunisia are electrical and electronic components, which account for 29% of total investment, followed by services with 18.8%, energy with 16.3%, and mechanical industries with 10.7%. The textile, plastic, and food industries also receive significant investment, albeit to a lesser extent. To encourage investment in underdeveloped regions, the Tunisian government offers various incentives, including covering social security contributions for new graduates for up to seven years.
The government has established several institutions to promote and regulate investment, including the Higher Investment Council, the Tunisian Investment Authority, and the Industrial and Innovation Promotion Agency. These institutions work together to facilitate investment and provide support to investors. The Tunisian Deposit and Consignment Fund, with assets worth 13.5 billion dinars as of 2024, plays a crucial role in stimulating investment in the interior regions and supporting small and medium-sized enterprises.
Tunisia has a range of investment regimes, including the "offshore" regime, which requires at least 66% foreign capital and 70% of production to be exported. The "onshore" regime, on the other hand, limits foreign participation to 49% in most non-industrial projects, although industrial projects can be wholly foreign-owned with the necessary approvals. The country also has laws regulating foreign ownership of land and certain sectors, such as banking and telecommunications.
In recent years, Tunisia has taken steps to liberalize its investment regime, including allowing foreign ownership of agricultural companies and relaxing restrictions on foreign investment in certain sectors. The country also offers tax incentives to new companies, including a four-year exemption from corporate tax, followed by a 20% tax rate. The country's 39 bilateral investment treaties provide additional protection and promotion for foreign investors.
Looking ahead, Tunisia's investment landscape is likely to evolve in response to global trends and domestic challenges. The country's commitment to improving its business environment and investment climate will be crucial in attracting more foreign investment to its underdeveloped regions. With the right policies and incentives, Tunisia may be able to tap into its growth potential and become a more attractive destination for investors.
Key points
- Only 4.6% of foreign direct investment in Tunisia goes to the country's interior, west, and south regions.
- The country's investment landscape is dominated by over 4,000 foreign companies, with Europe being the largest source of capital.
- Tunisia offers various incentives to encourage investment in underdeveloped regions, including covering social security contributions for new graduates.
