A new rule requiring small and medium-sized Tunisian businesses to provide a 20% bank guarantee for service contracts is stirring concern about economic paralysis among local entrepreneurs. According to a recent study from the Institut arabe des chefs d’entreprises (IACE), the measure—adopted September 23, 2025, as part of labor market reforms—forces all service providers to deposit the equivalent of one-fifth of their contract value with a bank within three days of signing. The government introduced the rule to safeguard the payment of wages and social security in case employers default.
Business leaders argue this burden is disproportionate for most SMEs. Many fear banks will refuse such guarantees, pushing smaller players out of the market and benefiting larger, well-capitalized competitors. The risk, according to IACE, is increased market concentration and less competition, undermining the health of Tunisia’s business ecosystem.
The IACE study points out the new rule exceeds national and international norms—public contracts in Tunisia now require only a 10% guarantee, while global standards are between 2% and 5%. The institute calls the measure “economically unsustainable” for a majority of service providers.
Among proposed adjustments, IACE recommends calculating guarantees based on payroll rather than the full contract value, phasing the required rate according to company size and capping it at 5% for SMEs. The institute also urges limiting the guarantee’s validity to the length of the contract and improving access via stronger coordination with the banking sector. In the event of a contractor default, IACE supports allowing client companies to use the guarantee for wage payments and recover the funds directly.
Rigid implementation, the study warns, could increase costs and prompt businesses to pass them to customers, cut jobs, or cancel non-essential contracts—resulting in slowed activity for many sectors. The IACE labels the new measure “experimental” and is calling for a dialogue with authorities to revise details, aiming for a sustainable balance between worker protection and business viability.
