Tunisia’s Assembly of People’s Representatives (ARP) passed a new investment law aimed at encouraging the return of foreign direct investment (FDI) on 17 September.

The law will come into effect from January 2017.

The investment law aims to simplify the previous 1993 law, which included complex regulations and financial incentives by sector.

The 2016 law unifies the tax on corporations at 15 per cent, allows foreign investors to transfer funds out of the country more easily, and liberalises more sectors for foreign investment. It also allows up to 30 per cent foreign employees.

The investment law has been delayed since 2012, and is a key element of the structural reforms demanded by development banks supporting Tunisia’s democratic transition. The US-based World Bank has agreed a $5bn five-year programme, while the International Monetary Fund will extend a $2.8bn four-year facility. The pace of reforms has so far been slow.

FDI in Tunisia stalled before the 2011 revolution and collapsed in its aftermath. In the first half of 2016, total FDI was down 7.4 per cent on the same period in 2015, reaching just TD915m ($416m), according to the Foreign Investment Promotion Agency.

This is significantly lower than the TD3.4bn recorded for the whole of 2008, and the TD2.2bn for 2010, according to the Ministry of Development Investment and International Cooperation.