From China to Tunisia
A Tunisian subsidiary sells into the European Union at 0% duty on industrial goods and, until 30 April 2028, into China at 0% as well. What the tax treaty, the investment law and the incentive decrees provide, and what has to be set up from the first day.
European Union: 0% on industrial goods. Tunisian industrial goods have entered the EU free of customs duty since the free trade area came fully into force in 2008. The EU takes about three quarters of Tunisian exports. Preferential treatment depends on the goods meeting the rules of origin of the pan-Euro-Mediterranean Convention, applicable between the EU and Tunisia in its revised form since 1 March 2025: assembly of imported parts does not always confer origin, and the product structure has to be checked before the plant is designed.
China: 0% on Tunisian goods, for a defined window. Since 1 May 2026, China applies a 0% duty on 100% of tariff lines to goods from 20 African countries that are not least developed countries, Tunisia included, under an arrangement running to 30 April 2028 (announcement of the Customs Tariff Commission of the State Council, 28 April 2026). Its renewal is framed by the China-Africa economic partnership agreements: a business plan extending beyond April 2028 should treat it as expected, not acquired.
Africa. Tunisia is a party to the African Continental Free Trade Area and, since 2020, applies the COMESA free trade area subject to reciprocity.
An industrial base already in place. The industry register (APII, July 2026) counts 336 electrical and electronic companies with ten employees or more, 237 of them fully exporting, employing 118,922 people. Chinese direct investment remains small, USD 15.28 million of stock at the end of 2024 according to the MOFCOM country guide, but first movers are arriving: Taikang Electronics signed with the Tunisia Investment Authority on 4 May 2026 for an electronic components plant at Novation City, Sousse (TND 40 million, 300 jobs).
The China-Tunisia tax treaty was signed on 16 April 2002 and has been in force since 23 September 2003. The corporate income tax rate in Tunisia is 20%.
| Payment | Treaty rate | Without the treaty |
|---|---|---|
| Dividends paid to the Chinese parent | 8% under the treaty | 10% domestic rate |
| Interest | 10%, or 0% on loans from financial institutions wholly owned by the Chinese State | 20% domestic rate (10% on loans from foreign banks) |
| Royalties | 5% for technical studies and technical assistance, 10% otherwise | 15% domestic rate |
Intragroup prices with the parent must be at arm's length. See transfer pricing in Tunisia.
Investment is free. Law 2016-71 of 30 September 2016 makes investment free, except for the activities that Government Decree 2018-417 subjects to authorisation; activities not on that list need no authorisation. Foreign investors receive national treatment.
Foreign managers. Up to 30% of the managerial staff may be foreign until the end of the third year, then 10%; in every case the company may recruit four foreign managers.
Transfers abroad. The investor may transfer capital abroad in foreign currency under the exchange regulations in force. Where an authorisation of the Central Bank is required, it must decide within 90 days. In practice, the right to repatriate profits and sale proceeds attaches to capital brought in from abroad in foreign currency and documented with the bank: this documentation is set up on day one, not when the first dividend is paid.
Treaty protection. The China-Tunisia agreement on the encouragement and protection of investments, signed in Tunis on 21 June 2004, has been in force since 1 July 2006.
Regional development zones. Government Decree 2017-389 lists two groups of delegations. Group 1: full deduction of profits for five years, investment grant of 15% capped at TND 1.5 million. Group 2: ten years, grant of 30% capped at TND 3 million. Total incentives are capped at one third of the investment cost and TND 5 million, outside the State's participation in infrastructure and the employability premiums.
Projects of national interest. From TND 50 million of investment, or 500 jobs within four years of start-up (Government Decree 2024-182), or 200 graduate jobs: ten-year deduction of profits and an investment grant of up to one third of the cost, capped at TND 30 million.
Who handles the file. The Tunisia Investment Authority handles projects of TND 15 million or more; the industry promotion agency (APII) handles smaller industrial projects, and APIA agricultural ones.
1. Choose the legal form. Most foreign subsidiaries are a SARL, or a SUARL when the parent is the sole shareholder; the SA suits a project expected to open its capital. The choice fixes governance, the statutory audit obligation and the cost of future changes.
2. Declare the investment. The investment declaration is filed with the industry promotion agency (APII), or with the Tunisia Investment Authority for projects of TND 15 million or more. It is the gateway to the incentives: the timing of the filing is planned with the investment schedule.
3. Bring in the capital in foreign currency, and document it. The capital is paid into a Tunisian bank account in the name of the company being formed. Funds sent from China in foreign currency, and the bank documents that evidence them, are what later allow dividends and sale proceeds to be transferred back.
4. Register the company. Registration with the national business registry (RNE) gives the company legal existence, followed by the legal publication, then the tax registration and the affiliation of the company and its staff with the social security fund (CNSS).
5. Set up the books and the group reporting from the first month. Accounting under the Tunisian accounting system, monthly tax and payroll filings, intragroup agreements with the parent, and reporting to the group in English: what is set up in the first month avoids reassessments and blocked transfers later.
See also: foreign subsidiaries in Tunisia · setting up a subsidiary · investment law · dividend repatriation check · request a proposal. We work in English and French.