Executive Summary

Tunisia, a country of 9.6 million people in North Africa, presents a challenging commercial environment that offers mixed potential for business. For the last fourteen years, the Tunisian government has worked closely with the World Bank and others to reform and diversify its economy. Real GDP growth has averaged over 5 percent per year over the last 5 years and inflation has been held well under four percent for the same period. To spur further growth, Tunisia signed in 1995 an association agreement with the European Union (EU) under which it has committed itself to removing tariff and other trade barriers with the EU on most non agricultural goods, services and capital by 2008. The EU association agreement also enhances Tunisia’s position as a staging point for duty-free entry of products and services into Europe.

While the government retains control over certain "strategic" sectors (finance, petroleum production and refining, the national airline, electricity distribution, telecommunications, water resources), the private sector plays an increasingly important role in the economy. Tunisia continues to implement market liberalization and increase the scope of its privatization programs. Textile exports and tourism are the two sectors earning the highest foreign currency revenue. In conjunction with Tunisia’s association agreement with the European Union, the government launched an ambitious "mise a niveau" program to enhance the productivity of Tunisian businesses over the next nine years in preparation for competition in the global marketplace, and to improve Tunisia’s infrastructure, communications, and other trade-and investment-related capabilities.

Tunisia is a member of the World Trade Organization (WTO) and is publicly committed to a free trade regime and export-led growth. Most goods can be imported without prior licensing, although application of non-tariff barriers has delayed or prevented non-capital goods imports. Significant import duties, consumption taxes, and a Value Added Tax (VAT) can add considerably to the local price of imported goods.

To achieve its twin goals of maintaining stability and improving its economic competitiveness in the international marketplace, Tunisia seeks only that foreign investment that will enhance export earnings, technology transfer, and local employment while minimizing competition with domestic industry and the risk of domestic layoffs. The best investment opportunities are in the infrastructure improvement (hydrocarbons, power generation, transportation, and telecommunications) or in offshore, export-oriented, labor-intensive industries such as textiles and light manufacturing. Foreign firms and others have recommended that Tunisia reduce the role of the government in the economy, create a coherent and consistent regulatory environment, accelerate and make more transparent government decision-making, and continue to improve the quality, price, and availability of telecommunications services as essential steps toward improving the investment climate.

Business Infrastructure

Tunisia’s physical business infrastructure is improving. The main container port at rades/ Tunis handles most incoming and outgoing sea-freight traffic. Sfax, Tunisia’s second largest city and a large commercial center, can also handle a limited amount of container traffic. The road network is fairly well developed, with major highways constructed or in the planning stages between major coastal population centers. Municipal power and water are generally reliable. Access to high-quality telecommunications services, particularly high-speed / high-capacity data transmission and the internet is becoming more widely available and less expensive. International calling cards are not operational in Tunisia. However, international telephone rates dropped significantly in 1997, and the government licensed the first two private companies to provide internet access –the latter move spurring an exponential growth in local subscribers. The Tunisian government’s policies in this area reflect an ongoing effort to balance its political and security concerns with the growing demand for internet access and other new information technologies.

Expatriate housing is very comfortable, although prices have been rising. Houses in the Tunis neighborhoods of mutuelleville, notre dame, carthage, sidi bou said, la soukra, la marsa, and gammarth are comparable.

Temporary entry of goods such as laptop computers and other personal business items brought by the visitor as luggage is allowed; such items are routinely checked through the customs control posts at airports. However, publicity and exhibit materials shipped into the country require customs clearance by the receiving party in Tunisia. Provisions should be made in advance to avoid customs difficulties. .