Strengthening relations with Tunisia

Tunisia v others - costs

OCO Global is a consulting firm specialising in international trade and foreign direct investment since 2001. It is collaborating with the Tunisian Foreign Investment Promotion Agency (FIPA) to support the attraction of investment in Tunisia from several international markets, including the UK, France, Italy, and Germany.

The principal aim of OCO Global is to bring European investment into Tunisia, enabling the local industry to flourish through innovation and job creation. The UK market with its thriving textile industry is a key market for Tunisia. In conjunction with OCO Global, FIPA offers support and guidance to facilitate foreign investment in Tunisia.

The North Africa Joint Unit of the FCDO and the British Embassy Tunis (via TetraTech as the main contractor of the NATAF) has tasked OCO Global to act as a bridge between the Tunisian textile sector and international investors, working in combination with PCIAW®’s network of buyers and suppliers in the professional clothing industry.

OCO shines a spotlight on Tunisia’s thriving textiles sector, highlighting the strategic advantages that Tunisia offers businesses. Tunisia has a natural geographic advantage in its relative proximity to the UK and optimal location on the Mediterranean basin. The country is a high-quality nearshore manufacturing base for textiles with fantastic customer service, agility, and flexibility for UK workwear suppliers and buyers.

The Tunisian workwear sector has grown significantly since the 1980s, when attractive production costs, adherence to international standards, and a highly skilled workforce set the sector apart. The efficient labour force ensures that production quality is one of the finest in the world, with highly competitive costs that are lower than Eastern European countries and Morocco.

A hub of international investment 

The country’s highly educated and productive talent pool is capable of fulfilling all functions in a company’s organisation, from research and development to management positions. 

This is largely thanks to an excellent education system recognised by international observers, with over 60,000 graduates per year.

The Tunisian textile industry is well-established and experienced in partnering with international partners throughout the supply chain. Tunisia has secured FTAs with Morocco, Egypt, Jordan and Turkey; its regional and international integration is evident in its inclusion in 54 bilateral agreements to protect investments.

A Trade and Political Continuity Agreement was signed between Tunisia and the UK in October 2019. The Agreement covers trade benefits and tariff-free trade of industrial products, strengthening the relationship between the UK and Tunisia. In 2018, trade between the two countries was worth £378 million, an increase of 3.0% from the previous year.

The Tunisian textiles sector has over 1,600 foreign companies, with 75% producing exclusively for export. As many as two-thirds of companies operating in Tunisia are run or owned by foreign investors. In sum, these represent around 400,000 jobs. The country has an already well established presence of 90 British companies, which amounted to 17,788 jobs in 2019. 

Prime location

The North African nation is ideally positioned to facilitate imports and exports due to its strategic location. It benefits from ease of conducting business with European, Middle Eastern, and African markets thanks to numerous free trade agreements.

The EU is negotiating a Deep and Comprehensive Free Trade Agreement (DCFTA) with Tunisia to expand open market access for goods, services and investments for European companies. Tunisia is also able to export to over 20 member states of the Common Market for Eastern and Southern Africa (COMESA), the largest regional free trade economic organisation in Africa.

The North African country is also a member of the Greater Arab Free Trade Area (GAFTA) and has extensive bilateral agreements with other countries around the world. Tunisia’s dynamic ecosystem has been developed to facilitate collaboration between hubs, incubators, engineering schools, universities, laboratories and innovative start-ups, accelerating the improvement of project research and internal development. 

Investment incentives

Tunisia’s friendly business environment for foreign investors grants financial incentives, tax reductions, and simplified procedures of implementation and export and import. In addition, the incentives provided by freedom of profits and capital gains repatriation are key attractions to investors. 

  • Some examples include:
    • Investment grants of up to 15% of the investment cost with a maximum ceiling of 1MDT (+260K GBP) for priority sectors
    • Coverage of infrastructure spending and social contributions
    • Special incentives for regional development zones
    • Hiring foreign managerial staff within a limit of 30% of the total number of managerial staff (for 3 years, then 10%)
    • Grants available for employee training expenditures leading to certification of skills (70% of expenditures) I
    • Intellectual property protection guaranteed
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