A limited liability company can be established under the Companies Act 2002 which sets out the relevant legal framework. The relevant bodies or authorities involved in the establishments of a business are as follows: –
- Business Registration and Licensing Agency (BRELA), the body for registering companies in Tanzania
- Ministry of Industry Trade and Investment responsible for issuance of business licences to companies carrying on business in Tanzania
- Tanzania Revenue Authority (TRA), responsible for issuing tax identification number (TIN) certificates and tax clearance certificate to residence or non-residence persons carrying on business in Tanzania.
To set up a limited liability company, the general requirements are
- A minimum of two shareholders and two directors (for foreigners, must have at least one local partner)
- Propose the company name (should be searched and cleared)
Proposed Share Capital
- List names of shareholders and directors
- Propose the names of company secretary (only one)
- Propose company address, secretary and shareholders address (postal and physical)
List Date of Birth of each director
List business occupation of each director
Establishing a presence from abroad
General, a foreign company/individual establishes a business in Tanzania by either
- Setting up a limited liability Tanzanian new company or as a group subsidiary
- Registering a foreign limited company in Tanzania as a branch, that is, having an established place of business in Tanzania. If a company has a charitable purpose it will set up a Tanzania company limited by guarantee. The limitation of liability concepts applies in a similar way to other law jurisdictions.
Once a foreign company is registered in Tanzania, it has the same powers as if it were a company incorporated in Tanzania, and is therefore subject to the laws of Tanzania. A foreign company seeking to establish a place of business in Tanzania must deliver the following documents to the Registar:
- Certified copy of memorandum and articles of association or other instrument constituting the constitution of the company. If the instrument is not in English, a certified translation is required.
- A list of directors and company secretary of the company
- A statement of all subsisting charges created by the company
- Names and address of one or more persons, resident in Tanzania authorized to accept on behalf of the company service of process and any other notices required to be served on the company, and to represent the company as its permanent representative at its place of business (with a statement as to the extent of its authority)
- Full address of registered principal office of the company and full address of place of business in Tanzania
- Statutory declaration made by directors or secretary of the company stating the date on which the company’s place of business in Tanzania was established, the business that is to be carried on and if different from the register name of the company, the name under which that business is to be carried on.
- A copy of the most recent account and related reports of the company including, if not in English, a translation of the same.
The Government fees for registration are approximately USD1,250. The filling fees are approximately USD220
On completion of the registration, the foreign company will be issued with a BRELA Certificate of Compliance.
Foreign companies that have established in Tanzania must file, among other things, annual accounts in every calendar year.
In addition, the foreign companies must have the following documents: –
- TIN Certificate: The company must register with the Tanzania Revenue Authority (TRA) for a Tax Identification Number that will be used by the company for payment of taxes.
- VAT Certificate and Electronic Fiscal Device (EDF). This will make sure you comply with VAT act by issuing special receipt for all sales.
- TAX Clearance Certificate. A Tax Clearance Certificate is obtained from the TRA prior to making an application for business licence.
- Business License. The company must have a business license specific to its type of business. This is usually obtained from the Ministry of Industry Trade and Investment, or relevant Municipal Council, depending on the type of business.
Other licenses and authorizations/permits: Company trading in certain business sector may require special authorizations/permit. For example, a company dealing in manufacturing of commodities must obtain an Environmental Impact Assessment Certificate from the National Environmental Management Council. Other will need approval from Tanzania Bureau of Standards (TBS) or from Tanzania Foods and Drugs Authority (TFDA) etc.
Any foreigner is obliged to apply for working permit before he/she start working in Tanzania. This includes business man/woman.
Documents Required at Labour Commission
- Contract of employment
- Application Form, TFN 901
- Job Description
- Curriculum Vitae for the Applicant
- Two recent passport Size photos of the applicant
- Certification from respective professional bodies that regulate the post for which a work permit is sought, ie engineers, auditors, accountants, advocates/lawyers, medical doctors etc
- Academic professional certificates
- Certified translation in authorized Kiswahili or English certificates if they are in other languages than Swahili/English.
- Photocopy of passport
- Previous work permit (for renewal application)
- Business license
- Tax Identification Number (TIN)
- Value Added tax
- Memorandum and Articles of Association
- Succession Plan in the case of employment
- Other information as may be required by the Labour Commissioner
Documents Required at Immigration Services Department
- Application Forms (TIF 1) dully filled in duplicate
- General Security Covenant (TIF.13)
- Curriculum Vitae (CV) of the employee
- A copy of National Passport (with validity of not less than a year)
- Certified copies of Academic Certificates
- Service testimonial from previous employer (if any)
- Employment contract, dully signed by the employer or his presentative and the employee
- Job description
- Official translation of documents/certificates in case they are in a language other than Swahili/English
- Certificate of Registration, Clearance or License from authorized institutions i.e Persons with some job title or qualifications that require registration with authorized institutions and certificate, clearance or licenses to be issued. These include Accountant, Engineers, Architects, Surveyors, Doctor, Teachers, Nurses, Pilots, Employees in Security Companies, executive personnel in Financial Institutions such as Banks, Bureau De Change
- Memorandum and Articles of Association of the employing company
- Certificate of Incorporation or Compliance (as the case may be)
- Business licenses; these may include other licenses, issued to some business like Industrial License, Mining License, Casino License, Tourism Agent’s License, Certificate of Registration from Contractors Registration Board; etc
- Value Added Tax (VAT) Certificate – for Businesses entitled to pay type of tax
- Tax Payer’s Identification Number (TIN) Certificate
- Business License Tax Clearance Certificate
- A letter of recommendation from the Director of Employment, Ministry of Labour and Employment
- A covering letter from the Employer
- Six Passport Size Photographs
Business incentives granted in Tanzania
Investment incentives offered are the following
- Fiscal and non-fiscal incentives offered to investors registered with the Tanzania Investment Centre (TIC) include: –
- Access to various services related to permits, licenses and approvals in the TIC One Stop Facilitation Centre
- The recognition of private property and protection against any non-commercial risk. Tanzania is an active member of the World Bank Foreign Investment Insurance wing, MIGA (Multilateral Investment Guarantees Agency). Likewise, Tanzania is a member of the International Centre for Settlement of Investment Disputes (ICSID) also a body affiliated to the World Bank.
- Zero percent (0%) Import Duty on project Capital Goods, Computers and Computer Accessories, Raw Materials and Replacement Parts for Agriculture, Animal Husbandry and Fishing, Human and Livestock, Pharmaceuticals and Medicaments, Motor Vehicles in Completely Knocked down (CKD) form and inputs for Manufacturing of Pharmaceutical Products
- Ten percent (10%) – Import Duty for Semi-processed/semi-finished goods
- Introduction of pay and refund scheme for exercise duty paid on fuel purchased by eligible companies
- 100% capital expenditure to Mining and Agricultural sectors
- The Income Tax Laws allows 50% Capital allowances in the first year of use for plant and machinery used in manufacturing processes and fixed in a factory, fishing farming, or providing services to tourisms and in a hotel. Therefore, wear and tear rates apply to the remainder
- VAT Deferment granted on projects capital goods such as plant and machinery.
- EAC Customs Management Act Provide 0% import duty on Hotel Equipments imported by the a dully licensed Hotels and the imported equipments are bearing the name and log of the Hotel.
- Import Duty Drawback
- Import Duty drawback on raw materials used to produce goods for exports and deemed exports. Deemed exports cover locally produced or manufactured goods, which are sold to foreign agencies or entities operating in Tanzania, which are exempt from payment of import duty
- Zero-rated VAT on exports
- The right to transfer outside the country 100% of foreign exchange earned, profits and capital
- Automatic permit of employing 5 foreign nationals on the project holding Certificate of Incentives.