FOREIGN INVESTMENT IN AGRICULTURE AND FISHING

1- Agricultural Partnership Conditions

The foreign investment in agriculture and fishing is done in partnership by the creation of companies with foreign participation

The Foreigner investor can own up to 66% of the capital. The arable land is rented and cannot be subject of contribution to the capital

The agricultural investments do not require a preliminary authorization, they must be declared with the APIA.

The investments in the field of fishing are under the authorization of the ministry in charge of this sector.

The agricultural partnership can take other forms such as the contracts of cultures

2- Investment Incentives :

Within the framework of the Investment Incentives Code in force in Tunisia, the investment in agriculture and fishing profits from tax incentives and financial encouragements. These encouragements are granted as well to the Tunisian operators as the foreign operators.

a)- Financial advantages

Grants from the State vary between 7 and 40% of the investment amount,according to the areas and components of the project.Specific incentives for investment projects are granted to certain components such as:

• Organic agriculture 30%
• Fishing in the North of Tunisia 30%
• Water conservation 40%

b)- Fiscal advantages

*Two fiscal regimes can be adopted: the totally exporting regime and the wholly exporting regime.

*Are considered as wholly exporting entities the agricultural or fishing companies that export at least 70% of their production, with the possibility to sell the remainder on the local market in which foreign participation does not exceed 66% of social capital. Partnerships applying for this regime benefit from the following fiscal advantages:

• Full exemption from income tax over a period of 10 years, and exemption of up to 50% beyond this duration (10% for agriculture).
• Full tax exemption on revenues liable to income tax if those revenues are reinvested in the same company if provisions made by law nº. 89-114 of December 13th, 1989 promulgating tax code is respected.

Full and permanent exemption from the following tax and duties:

Custom duties, equivalent effects duties, value added tax and consumption tax relating to :
- Equipment with the exclusion of private cars
- Raw materials, semi-finished products, spare parts, and consumables necessary for the realization of the project
- Value added tax and consumption duties on related equipment, raw materials, semi-finished products, services, construction materials acquired locally with the exclusion of private cars,
- Subscription and stamp duties, professional training tax, and contribution to FOPROLOS,
- The exemption of customs duties and equivalent effects duties with regards to the importation of personal effects and of a private car for each person,
- Payment of an income-inclusive fiscal contribution equal to 20% of gross remuneration or opting for the Common-law regime if more favourable,
- Opting for a legal social welfare system other than the Tunisian system and subsequently not paying the subscription to the Tunisian social welfare system.
However, companies that are wholly engaged in export are liable for taxes related to vehicle circulation and for public services provided.

c) Personal of foreign nationality recruitment:

Wholly exporting companies can recruit till 4 employees l of foreign nationality without permission.

d) Other incentives

Additional encouragements in the form of premium of investment or tax exoneration can be granted by decree after opinion of the Commission higher of Investments than the investments that have particular importance for the national economy.