Last updated: July 2nd, 2021

The Tunisian Republic lies on the southern shore of the Mediterranean between Algeria in the west and Libya in the east. The country with its 11.5 million inhabitants is not quite half the size of Germany. The capital Tunis – on the site of ancient Carthage – is located in the north of the country directly by the sea.

In December 2010, Tunisia was the starting point for the political upheavals that spread to many other Arab countries. A lively democratic process has since gotten underway resulting, among others, in a new constitution in 2014 and a series of competitive parliamentary as well as presidential elections.

The EU is Tunisia’s main trading partner. An association agreement with the EU has existed since 1998. In 2016, negotiations began for deeper cooperation within the framework of a free trade area (DCFTA) for the liberalization of services and agricultural goods. Together with Morocco, Egypt, and Jordan, Tunisia is also a party to the Agadir Agreement, a free trade zone aimed at harmonizing rules on product standards and customs and removing all trade tariffs between the signatories.

Germany primarily exports electronics, motor vehicles and motor vehicle parts, machines, and textiles to Tunisia and ranks fourth among the main supplier countries.

Tunisia has a modern economic structure based on a market economy as well as important locational advantages that are valued by foreign investors: a high degree of industrialization, a well-developed infrastructure, proximity to Europe, a qualified workforce with relatively high productivity, and tax benefits for exporting companies (“offshore sector”). The services sector generates the largest share of GDP (approx. 63.8% with more than half of all jobs in the labor force). Tunisia is ranked first in North Africa in the 2020 Global Innovation Index, in the 2020 Talent Competitiveness Index, as well as in the 2020 Global Entrepreneurship Index. The greatest challenge lies in promoting employment for the relatively young population and in improving labor market-oriented training and education.

Tunisia is a country that is relatively poor in raw materials, but it is the fifth-largest olive oil producer in the world. The use of renewable energies – like wind and solar energy – still plays a subordinate role. Their share in electricity production is 6%. A medium-term energy strategy aims for a share of 30 percent by 2030.

Tunisia has carved out a good position for itself in the region by promoting the private sector and integrating it into the global economy. It has made it easier to set up businesses and improved the tax system. By concentrating on specific industries and continuing to improve infrastructure and cross-border relations, private investments are to be promoted in all provinces, including those outside the economically strong coastal region.

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