Foreign investment into Tunisia rose sharply in 2025, driven by strong inflows into key sectors and ongoing reforms aimed at improving the business climate.

Foreign investment reached 3.572 billion Tunisian dinars (about $1.2 billion) by the end of 2025, up 30.3 per cent from a year earlier, the head of the country's Foreign Investment Promotion Agency (FIPA), Jalel Tebib, said in an interview with state news agency TAP.

Foreign direct investment (FDI) accounted for most of the inflows, rising 30.1 per cent year-on-year to 3.506 billion dinars, while portfolio investment stood at 65.6 million dinars.

The inflows were largely directed into manufacturing, services, energy and agriculture, underlining Tunisia's continued reliance on a mix of industrial and resource-based sectors to attract capital.

Excluding energy, FDI supported 921 projects valued at 2.935 billion dinars, creating more than 14,000 jobs in 2025.

This reflects a steady recovery in investor activity, particularly in labour-intensive industries that remain critical to employment.

European countries continued to dominate investment flows. France emerged as the largest investor outside the energy sector, followed by Germany, Italy, the Netherlands and the United States. The trend highlights Tunisia's close economic ties with Europe, even as it seeks to diversify its investor base.

The rise in inflows comes amid a series of reforms introduced in recent years to make the country more attractive to investors.

Authorities have focused on simplifying administrative processes, improving transparency, and expanding digital services to reduce bottlenecks that have historically slowed investment.

New incentives rolled out in 2024 targeted infrastructure gaps, faster approvals and better monitoring of investment performance across regions and sectors.

These measures are part of a broader effort to shift investment towards higher value-added activities with wider economic and social impact.

The government is also preparing a longer-term strategy for 2026–2030 aimed at deepening reforms, with priorities including digitalisation, improved access to finance and stronger investor support systems.

However, structural challenges remain. Investment is still heavily concentrated in coastal regions, though there were early signs of increased activity inland in 2025. Tunisia also continues to face external financing pressures, including constraints linked to its engagement with the International Monetary Fund.

Looking ahead, FIPA expects foreign investment to reach around four billion dinars in 2026, suggesting continued momentum if reforms are sustained.