Investing in an Existing Tunisian Company: What to Check Before Transferring Funds

1. Share purchase or capital increase?

In a purchase of existing shares/interests, the price normally goes to the seller. In a capital increase, funds go into the company in exchange for newly issued interests and existing holders may be diluted.

Funding destination, warranties, procedure, tax and exchange consequences differ.

2. SARL transfer to an outsider is regulated

Article 109 of the Tunisian Commercial Companies Code requires, in the case it governs, approval by a majority of partners representing at least three quarters of the capital for transfer of SARL interests to a person outside the company and establishes notification and timing rules.

“Outside the company” is not a reference to foreign nationality.

A private purchase agreement does not replace the required corporate approval procedure.

3. Read the articles before negotiating price

The articles, partner register, earlier decisions and RNE filings should be reconciled. The investor must understand the legal rights that accompany the advertised percentage.

4. Legal due diligence

Depending on scope: company existence and authority, capital and title to interests, corporate decisions, key contracts, debt/security, disputes, real estate/leases, licences, employment exposure, tax/social matters within scope, intellectual property and key assets.

5. RNE is a starting source

The National Business Register provides important corporate information and filings, but does not necessarily reveal every private contract, unrecorded liability or dispute.

6. Regulatory approvals

A long-standing company may depend on a sector licence. Check validity and whether the change in ownership/control triggers a new approval or notification.

Buying the company does not cure an unlawful activity.

7. What does 30% really control?

Percentage alone does not explain governance. Voting thresholds, manager powers, assemblies and reserved matters should be mapped.

8. Shareholders’ agreement

Information rights, reserved matters, funding, pre-emption, transfers, exit and deadlock can be organised contractually within mandatory law and in coordination with the articles.

9. Seller warranties

The contract should address title, debts, tax, contracts, licences and disputes and specify what happens if a statement is false: claims process, survival period, cap and indemnity mechanism.

10. Conditions precedent

Corporate approval, regulatory clearance, release of security, regularisation or delivery of documents can be made conditions before closing and full payment.

11. Foreign investment and exchange compliance

For a non-resident investor, the bank flow should match the real transaction and be documented under exchange rules and, where applicable, Central Bank Circular No. 2018-14.

Buying a partner’s interest is not the same as making a capital contribution to the company.

12. Plan the exit before entry

Review future transfer restrictions, partner approval, price mechanisms and exchange documentation needed to sell and transfer proceeds abroad.

Practical case 1: buying 30% of an SARL

Articles, partner register and approval are checked first; due diligence then drives warranties and closing conditions.

Practical case 2: capital increase instead of purchase

If the business needs funding, corporate and banking documents should describe a subscription into the company rather than a payment to the outgoing partner.

Practical case 3: 49% plus veto rights

The lawyer determines which protections can be included in the articles or shareholders’ agreement without conflicting with the Code.

Frequently asked questions

Is buying shares the same as a capital increase?

No. The recipient of funds and corporate consequences differ.

Can an SARL partner freely sell to an outsider?

The approval regime of Article 109 applies in the cases it covers and the articles must also be checked.

Are financial statements enough for due diligence?

No. Contracts, licences, disputes, title and security should also be examined within the agreed scope.

Does 30% automatically give a veto?

No. Voting rules and corporate documents determine the actual powers.

Why document the incoming funds?

For exchange compliance and future traceability when dividends are paid or the investment is sold.

Legal and Regulatory References

• Tunisian Commercial Companies Code, including Article 109 and SARL provisions.
• Investment Law and sector regulations.
• Law on the National Business Register.
• Foreign-exchange rules and Central Bank Circular No. 2018-14.
• Tax rules applicable to share transfers and capital increases.

Update Note

Annual review of exchange, tax and sector restrictions.