1. Openness To, and Restrictions Upon, Foreign Investment
3. Legal Regime
4. Industrial Policies
5. Protection of Property Rights
6. Financial Sector
7. State-Owned Enterprises
There are 110 state-owned enterprises (SOEs) and public institutions in Tunisia per the Ministry of Finance’s most recent (May 2020) report on public enterprises. SOEs are still prominent throughout the economy but are heavily indebted. Per the Tunisian Ministry of Finance report on transfers and guarantees to SOEs, total transfers reached $2.6 billion in 2021 with $392 million dedicated to payroll. Annual budgetary transfers amounted to 6.3 percent of GDP in 2021, with significant amounts directed to three SOEs in the form of subsidies for cereals, fuel, and electricity.
Many SOEs compete with the private sector, in industries such as telecommunications, banking, and insurance, while others hold monopolies in sectors considered sensitive by the government, such as railroad, transportation, water and electricity distribution, and port logistics. Importation of basic food staples and strategic items such as cereals, rice, sugar, and edible oil also remains under SOE control.
The GOT appoints senior management officials to SOEs, who report directly to the ministries responsible for the companies’ sector of operation. SOE boards of directors include representatives from various ministries and personnel from the company itself. Similar to private companies, the law requires SOEs to publish independently audited annual reports, regardless of whether corporate capital is publicly traded on the stock market.
The GOT encourages SOEs to adhere to OECD Guidelines on Corporate Governance, but adherence is not enforced. Investment banks and credit agencies tend to associate SOEs with the government and consider them as having the same risk profile for lending purposes.
8. Responsible Business Conduct
Tunisia adopted law no. 35 in June 2018 to encourage Corporate Social Responsibility (CSR). The law requires companies to allocate a portion of their budgets to finance CSR projects such as those in sustainable development, green economy, and youth employment. According to the law, an organization in charge of monitoring CSR projects will be created to ensure that the projects comply with the principles of good governance and sustainable development. Tunisia is an adherent to the OECD Guidelines for Multinational Enterprises.
Since 1989, the public sector has been subject to a government procurement law that requires labor, environmental, and other impact studies for large procurement projects. All public institutions are subject to audits by the Court of Auditors (Cour des Comptes).
The Tunisian Central Bank issued a circular in 2011 setting guidelines for sound and prudent business management and guaranteeing and safeguarding the interests of shareholders, creditors, depositors and staff. The circular also established policies on recruitment, appointment, and remuneration, as well as dissemination of information to shareholders, depositors, market counterparts, regulators, and the general public.
In January 2019, the High Committee for Administrative and Financial Control (HCCAF) under the Presidency of the Government, published a guide on best practices for improved governance of public enterprises and establishments.
In May 2019, the Parliament adopted law no. 2019-47, which introduced in Chapter 5 a set of articles designed to improve corporate governance and increase transparency. For example, the new legislation required that all companies listed on Tunisia’s stock exchange have on their board of directors at least two independent members, and separate individuals serving as the chairman of the board and the chief executive officer.
On October 14, 2020, the High Instance for Public Procurement (HAICOP) under the Presidency of the Government, published a report on risk management strategy in public procurement.
In March 2022, President Saied issued decrees regarding the creation of “community companies” and the penal reconciliation program that will help fund them. The intention is for
community companies to be established by private communities in marginalized areas of the country to help with infrastructure development and job creation. Community companies will receive funding from financial penalties paid by businesspeople found guilty of economic and financial crimes, and they will receive amnesty in return.
The national point of contact for OECD for Multinational Enterprises guidelines is:
Ministry of Economy
Avenue Mohamed V
Tel: +216 7184 9596
Fax: +216 7179 9069
Tunisia has not yet joined the Extractive Industries Transparency Initiative (EITI). However, in June 2012, former Prime Minister Hammadi Jebali announced the GOT’s decision to implement the EITI. In June 2016, Tunisia officially began publicizing all documents pertaining to oil agreements signed in Tunisia, including permits and operating benefits governed by specific agreements and annexes dating to 1960. Tunisia participated in the eighth world conference of the EITI in Paris, France, in 2019.
Per Tunisia’s 2014 constitution, projects related to commercial development of oil, natural gas, or minerals are subject to Parliamentary approval. However, following the July 25, 2021 events resulting in the freeze of the Parliament, these decisions are currently made by the Ministerial Council.
Most U.S. firms involved in the Tunisian market do not identify corruption as a primary obstacle to foreign direct investment. However, some have reported that routine procedures for doing business (customs, transportation, and some bureaucratic paperwork) are sometimes tainted by corrupt practices. Transparency International’s Corruption Perceptions Index 2021 gave Tunisia a score of 44 out of 100 and a rank of 70 among 180 countries marking the same score and a slight ranking improvement from 69 in 2020. Regionally, Tunisia is ranked 7 for transparency among MENA countries and first in North Africa, ahead of Morocco, Algeria, Egypt, and Libya. Transparency International expressed concern that Tunisia’s score has not improved in recent years despite advances in anti-corruption legislation, including laws to protect whistleblowers, improve access to information, and encourage asset declarations by public officials or individuals with public trust roles.
Polls indicated that most citizens viewed widespread corruption as a key hindrance to effective government. President Saied has consistently stated that ending corruption and prosecuting corrupt businesspeople and others is one of his top priorities. Since July 25, 2021, some members of parliament were charged and detained based on corruption allegations. Recent government efforts to combat corruption include: assurances that price controls on staple and basic food products are respected; combatting price gouging; hoarding, and monopolistic practices; enhancement of commercial competition in the domestic market; arrests of corrupt businessmen and officials; and harmonization of Tunisian corruption laws with those of the European Union.
The constitution requires those holding high government offices to declare assets “as provided by law.” In 2018, Parliament adopted the Assets Declaration Law, identifying 35 categories of public officials required to declare their assets upon being elected or appointed and upon leaving office. By law, the National Authority for the Combat Against Corruption (INLUCC) is then responsible for publishing the lists of assets of these individuals on its website. In addition, the law requires other individuals in specified professions that have a public role to declare their assets to the INLUCC, although this information is not made public. This provision applies to journalists, media figures, civil society leaders, political party leaders, and union officials. The law also enumerates a “gift” policy, defines measures to avoid conflicts of interest, and stipulates the sanctions that apply in cases of illicit enrichment. In 2019, Tunisia’s newly elected government officials declared their assets, including the 217 Members of Parliament. The declaration of assets was also made in September 2020 and again in October 2021, when new governments took office.
On August 20 security personnel ordered the closure of INLUCC’s headquarters. Beside the declaration of assets by the new cabinet on October 15, 2021, INLUCC’s offices have remained closed and its work paused. INLUCC’s regional offices have been closed since January 1, 2022. The government has not given a reason for the ongoing closure and has not announced plans for the creation of an alternative anticorruption institution.
In February 2017, Parliament passed law no. 2017-10 on corruption reporting and whistleblower protection. The legislation was a significant step in the fight against corruption, as it establishes the mechanisms, conditions, and procedures for denouncing corruption. Article 17 of the law provides protection for whistleblowers, and any act of reprisal against them is considered a punishable crime. For public servants, the law also guarantees the protection of whistleblowers against possible retaliation from their superiors. In September 2017, the GOT established the Independent Access to Information Commission. This authority was prescribed in the 2016 Access to Information Law to proactively encourage government agencies to comply with the new law and to adjudicate complaints against the government for failing to comply with the law. Following the passage of the access to information and whistleblower protection laws, the government initiated an anti-corruption campaign led by then prime minister Youssef Chahed. A series of arrests and investigations targeted well-known businesspersons, politicians, journalists, police officers, and customs officials. Preliminary charges included embezzlement, fraud, and taking bribes.
Tunisia’s penal code devotes 11 articles to defining and classifying corruption and assigns corresponding penalties (including fines and imprisonment). Several other regulations also address broader concepts of corruption. Detailed information on the application of these laws and their effectiveness in combating corruption is not publicly available, and there are no GOT statistics specific to corruption. The Independent Commission to Investigate Corruption handled corruption complaints from 1987 to 2011. The commission referred 5 percent of cases to the Ministry of Justice. In 2012, the commission was replaced by the National Authority to Combat Corruption (INLUCC), which has the authority to forward corruption cases to the Ministry of Justice, give opinions on legislative and regulatory anti-corruption efforts, propose policies and collect data on corruption, and facilitate contact between anti-corruption efforts in the government and civil society. Tunisia’s constitution stipulates that INLUCC is a temporary institution, and that Parliament must appoint members to a permanent Institute for Good Governance and Anticorruption. Parliament did not make substantive progress toward establishing this permanent institution prior to July 25, 2021. Prime Minister Fakhfakh resigned on July 15, 2020, following allegations of a conflict of interest involving his partial ownership of companies that received government contracts. In apparent retaliation for his ouster, Fakhfakh dismissed then INLUCC president Chawki Tabib, replacing him with Imed Boukhris, a former judge.
During a March 16, 2019 press conference, INLUCC president Chawki Tabib said that it takes 7-10 years on average for corruption cases to be processed in the judicial system. In 2018, the Tunisian Financial Analysis Committee, which operates under the auspices of the Central Bank as a financial intelligence unit, announced that it froze approximately 200 million dinars ($70 million) linked to suspected money-laundering transactions. The committee received approximately 600 reports of suspicious transactions related to corruption and illicit financial flows during the year.
Since 1989, a comprehensive law designed to regulate each phase of public procurement has governed the public sector. The GOT also established the Higher Commission on Public Procurement (HAICOP) to supervise the tender and award process for major government contracts. The government publicly supports a policy of transparency. Public tenders require bidders to provide a sworn statement that they have not and will not, either by themselves or through a third party, make any promises or give gifts with a view to influencing the outcome of the tender and realization of the project. Starting September 2018, the government imposed by decree that all public procurement operations be conducted electronically via a bidding platform called Tunisia Online E-Procurement System (TUNEPS). Despite the law, competition on government tenders appears susceptible to corrupt behavior. Pursuant to the Foreign Corrupt Practices Act (FCPA), the U.S. Government requires that American companies requesting U.S. Government advocacy certify that they do not participate in corrupt practices.
10. Political and Security Environment
President Kais Saied was elected in the aftermath of presidential and parliamentary elections held in September and October 2019, the country’s first elections since its post-revolution constitution was ratified in 2014, which were widely regarded as well-executed and credible. The transition of power was smooth and without incident, following a clear procedure outlined by the 2014 constitution.
In the 10 years since the revolution, Tunisia has made significant progress in the areas of civil society and rights-based reforms, but economic indicators continue to lag and have been a major driver of frequent protests. Public opinion polls indicated that corruption, poor economic conditions, and persistently high unemployment fuel public discontent with the political class.
On July 25, citing widespread protests and political paralysis, President Saied took “exceptional measures” under Article 80 of the constitution to dismiss Prime Minister Hichem Mechichi, freeze parliament’s activities for 30 days, and lift the immunity of members of parliament. On August 23, Saied announced an indefinite extension of the “exceptional measures” period and on September 22, he issued a decree granting the president certain executive, legislative, and judiciary powers and authority to rule by decree, but allowed continued implementation of the preamble and chapters one and two, which guarantee rights and freedoms. Civil society organizations and multiple political parties raised concern that through these decrees President Saied granted himself unprecedented decision-making powers, without checks and balances and for an unlimited period. On September 29, Saied named Najla Bouden Romdhane as prime minister, and on October 11, she formed a government. On December 13, Saied announced a timeline for constitutional reforms including public consultations and the establishment of a committee to revise the constitution and electoral laws, leading to a national referendum in July 2022. Parliamentary elections would follow in December 2022. On March 30, President Saied issued a decree formally dissolving Parliament.
Terrorist groups continue to operate in the mountains of Western Tunisia and developments in Libya continue to affect the security situation along the Tunisian-Libyan border. Extremist groups, including ISIS affiliates, operate and recruit in the country’s interior, particularly in disadvantaged regions. Tunisia has been under a State of Emergency since November 24, 2015, following two major terrorist attacks that targeted tourism destinations. Under the state of emergency, security forces have more authority to maintain civil order, enabling the government to focus on combating terrorism. Despite COVID-19 and economic challenges that affect national resources, Tunisia continues to demonstrate consistent security force readiness to combat security threats. There have been no terrorist attacks targeting tourists or other western interests since June 2015. Extremist elements continue to target police and military forces in suspected “lone wolf” attacks, including in front of the U.S. Embassy on March 6, 2020, and more recently in November 2021 at the Ministry of Interior in downtown Tunis. Travelers are urged to visit for the latest travel alerts and warnings regarding Tunisia.
11. Labor Policies and Practices
According to National Institute of Statistics (INS) 2021 figures, Tunisia has a labor force of 3.4 million, 29 percent of which are women and 71 percent men. The number of unemployed in 2021 reached 746,400 people. The official 2021 unemployment rate was 18.4 percent (representing the unemployment rate for the third quarter of 2021). In November 2021, the INS published 2021unemployment rates per region, including 30 percent in the northwest, 25 percent in the southwest, 22.1 percent in the center-west, 23.4 percent in southeast, and 15.8 percent in Greater Tunis. Professionals, such as IT engineers, doctors, and professors, continue to seek employment abroad. Tunisian interlocuters maintain that around 70 percent of Tunisian young professionals seek employment in other countries after graduation. Additionally, an INS study estimated that 44.8 percent of the Tunisian workforce is employed in the parallel economy, including 11.8 percent in agriculture and fisheries.
Over the past two decades, the structure of the workforce remained relatively stable, and as of the last quarter of 2020, it stood at 13.3 percent in agriculture and fishing, 33.9 percent in industry, and 52.8 percent in commerce and services. Tunisia has developed its industrial sector and created low-skilled employment, although several manufacturers struggle to find qualified technical workers. Tunisian law provides workers with the right to organize, form and join unions, and bargain collectively. The law prohibits anti-union discrimination by employers and retribution against strikers. The government generally enforces applicable laws.
Currently, four national labor confederations operate in Tunisia. The oldest and largest is the General Union of Tunisian Workers (UGTT — Union Générale des Travailleurs Tunisiens). The others are the General Confederation of Tunisian Workers (CGTT — Confederation Générale des Travailleurs Tunisiens), the Tunisian Labor Union (UTT — Union Tunisienne du Travail), created in May 2011, and the Tunisian Labor Organization (OTT — Organisation Tunisienne du Travail), created in August 2013. However, based on the criteria established by the Ministry of Social Affairs in 2018, only UGTT can negotiate with the government on behalf of all Tunisian workers within the National Council of Social Dialogue, which has drawn criticism from other labor federations. UGTT claims about one third of the salaried labor force as members, although more are covered under UGTT-negotiated contracts. Wages and working conditions are established through triennial collective bargaining agreements between the UGTT, the national employers’ association (UTICA — Union Tunisienne de l’Industrie, du Commerce, et de l’Artisanat), and the GOT. These tripartite agreements set industry standards and generally apply to about 80 percent of the private sector labor force, regardless of whether individual companies are unionized. The regional tripartite commissions also arbitrate labor disputes. Employees have strong legal protections against dismissal. According to the labor code, employer bankruptcy is not a just cause for termination of an employee contract. Dismissal of an employee for economic considerations requires notification to the regional labor inspectorate for review and concurrence.
In January 2022, UGTT and UTICA signed an agreement to increase wages in the private sector in 2022, 2023 and 2024. This agreement includes an increase in the Guaranteed Minimum Wage (SMIG) and in allowances/benefits. This convention implements the agreement signed on September 19, 2018 between the two organizations