How to set up a company in Tunisia

There are different legal forms for companies in Tunisia, such as sole proprietorships, partnerships and corporations. The most common types of corporations are the public limited company (SA) and the limited liability company (SARL).

The SARL is often chosen as a corporate form for small and medium size projects. The SARL or SUARL (in case of a single shareholder) requires a minimum capital of 1.000 TND (roughly 300 EUR) and is standardised in many ways, so the shareholders do not have to take many decisions on the governance of the corporation. However, this standardisation also limits the shareholders in case they would like a more custom-tailored governance.

Tunisia distinguishes between “offshore” and “onshore” investment regimes. Offshore investment, in general, supports export-only goods and services (at least 70 percent of the production must be destined for the export market), and it benefits from several incentives including tax breaks. Investments in some sectors can be classified as “offshore” with lower foreign equity. For instance, foreign capital in the agricultural sector cannot exceed 66%, and foreign investors cannot directly own agricultural land. Still, investments in this sector can be classified as “offshore” if they meet the export threshold.

In most non-industrial projects, the “onshore” investment regime limits foreign equity participation at a maximum of 49 percent, unless specifically approved otherwise by the government, in which case the foreign equity rate can reach 100%.

Upon Article 4 of the 2016 Investment Law (entered into force on April 1, 2017), the implementing decree of May 11, 2018 (effective July 1, 2018) regulates those investment categories which are subject to governmental authorization, namely: Natural resources; construction materials; land, sea and air transport; banking, finance, and insurance; hazardous and polluting industries; health; education; telecommunications. If the competent authority does not respond to an investment request within (normally) 60 days, the authorization is considered as automatically granted.

For foreign-exchange transactions require prior approval by the Tunisian Central Bank. Restrictions to foreign-exchange accounts and operations may apply. Certain foreign investors, though, who benefit from tax exemptions are not subject to this requirement.

All non-resident companies (firms having more than 66% foreign ownership) are free to repatriate funds and assets under the new investment law. In turn, firms with foreign ownership below 66% (hence considered resident companies) must request the Central Bank to authorize the repatriation of funds and assets.

In case of the SARL, Tunisian or foreign nationals can manage the company. There can be one manager or several co-managers (individuals only, not companies). There is no board of directors by the law, and the corporate form does not allow for it either. In case of mismanagement, the manager may be liable for the company liabilities in case of bankruptcy, and bear even criminal responsibility in tax matters. The modification of the company status, e.g. the increase of share capital needs the approval of at least 75% of the shareholders. The company financial statements need to be certified by an external auditor if the company fulfils two of the following indicators: (1) turnover exceeds 300.000 TND; (2) balance sheet exceeds 100.000 TND; (3) number of employees exceeds 10.

In general terms, the following steps are required to register a company in Tunisia:

• declaration certificate from the competent Investment Promotion Agency depending on the sector or activity;
• registration of the company with the court clerk;
• filing of the company’s declaration certificate and statutes with the tax office;
• filing of the declaration of opening and request for a tax identification number from the tax office;
• publication of the request for registration in the Official Journal of the Republic of Tunisia (JORT);
• request for a customs code number;
• work permits for all foreigners;
• residence permits for foreign investors and/or promoters.
  

For foreign companies (but equally locals) setting up a company in Tunisia need to deal with a Tunisian bureaucracy that tends to be cumbersome, slow, and inconsistent. Their decisions can be opaque and unpredictable at times, especially in a fragile political and economic context. Difficulties also arise from the regulatory framework (see above) which sometimes requires benevolent public officials to obtain authorisations and incentives for certain offshore or onshore categorization. On the other hand, Tunisia has traditionally been a reliable location for offshore labour-intensive industrial production for European companies. The Tunisian workforce is well trained in those sectors, Tunisia is close to Europa and maintains interesting logistic and economic ties to other African countries.