Do you want to start a business in Tanzania? The process is as easy as making a tea. The following guide should help you kick-start your dream business in Tanzania. In case of any inquiry or assistance, Fortis Attorneys will be with you throughout the process to make sure it is less costly and less time consuming.
A. Register a Local Company
A local company is any company incorporated in Tanzania regardless the citizenship of the members/shareholders of the said company or whether or not the said company is a subsidiary of a foreign company. The Registrar of Companies at the Business Registration and Licensing Agency (BRELA) is responsible for registration and regulation of companies in Tanzania. The minimum number of persons required to form any type of a company is two (2). The following basic processes are involved:
- Clearance of the proposed name of the Company
- Preparation of Memorandum and Articles of Associations, Forms 14a and 14b
- Submission of the above documents for inspection and assessment of fees payable
- Payment of assessed fees
- Submission of the documents and evidence of payment for registration
- Completing and submitting Form PL.5 (Integrity Pledge for Private Sector)
- Obtaining the Certificate of Incorporation
- Obtaining Certificate of Commencement of Business (for public companies)
The whole process can take between three (3) to seven (7) days at most. Fees structure is dependent on the proposed nominal/authorized share capital for companies limited by shares.For more details on how to incorporate a company, contact our Team.
B. Register a Foreign Company
A Foreign Company is any company incorporated outside Tanzania but having a place of business in Tanzania regardless the citizenship of the members (shareholders) of the said company or whether or not the said company is a subsidiary of a local company. A Foreign Company is not deemed to have a place of business in Tanzania solely on account of its doing business through an agent in Tanzania at the place of business of the agent. Any Foreign Company wishing to establish place of business in Tanzania is required (within a month of establishing a place of business), to obtain a Certificate of Compliance from the Registrar of Companies. The following basic processes are involved:
- Clearance of the proposed name of the Company
- Preparation of Memorandum and Articles of Associations, Forms 14a and 14b
- Submission of the above documents for inspection and assessment of fees payable
- Payment of assessed fees
The whole process can take between 3 to 7 days at most.For more details on how to register a foreign company, contact our Team.
C. Obtaining TIN (Tax Identification Number) Certificate
Upon obtaining Certificate of Incorporation or Certificate of Compliance for a newly registered company, the next step before commencing business will be obtaining a TIN from the nearest Tanzania Revenue Authority (TRA) offices where the registered office of the company is situated. In essence TIN becomes your business assumed identity in respect of all taxes and taxation matters save for VAT. The following requirements must be fulfilled to obtain TIN:
- Clearance of the proposed name of the Company
- Preparation of Memorandum and Articles of Associations, Forms 14a and 14b
- Submission of the above documents for inspection and assessment of fees payable
- Payment of assessed fees
- Submission of the documents and evidence of payment for registration
- Completing and submitting Form PL.5 (Integrity Pledge for Private Sector)
At least one director of the company must be physically present at the tax office to give their fingerprints. The process takes only hours and is free of any charge.For more details on how to obtain a TIN visit www.tra.go.tz or contact our Team for guidance.
D. Obtain Tax Clearance Certificate
It is a requirement to clear all the previous tax debts/liability before being issued with a business licence. Tax Clearance Certificate is a proof document that all your tax liabilities have been cleared. TRA is responsible for issuing Tax Clearance Certificates. Only a stamped application letter is needed here.
Before applying for Tax Clearance Certificate, all tax records should be in good order before submission. These records include audited accounts, returns and EFD machine receipts. One does not need to carry the documents because TRA have the records online. For new businesses TRA expects the applicants to have paid at least the first instalment (first 3 months) of tax estimates to get clearance certificate.For more details on how to obtain Tax Clearance Certificate, visit www.tra.go.tz or contact our Team for guidance.
E. Obtain Business Licence
It is a mandatory requirement for all business to have a valid general business licence in additional to any specific business licence the business has or required to have. Depending on the nature business,some business licences are issued by the Ministry of Industry and Trade and some are issued bylocal government authorities where the company’s registered office and any company’s branch office is situated. To obtain business licence, the following requirements must be fulfilled:
- Clearance of the proposed name of the Company
- Preparation of Memorandum and Articles of Associations, Forms 14a and 14b
- Submission of the above documents for inspection and assessment of fees payable
- Payment of assessed fees
- Submission of the documents and evidence of payment for registration
- Completing and submitting Form PL.5 (Integrity Pledge for Private Sector)
The requirements above are for general business. Depending on the business activity, some companies will be required to obtain specific business licences before obtaining a business licence from the Ministry of Industry and Trade or local government authorities; as for example, a copy of Customs Agency License for those applying for clearing and forwarding licenses and a copy of Tourism Agency license for those applying for licenses related to tourism promotion.For more details on how to obtain a licence and which licence is required for your business, contact our Team.
F. Obtain VRN (VAT Registration Number) Certificate
Value Added Tax (VAT) is a general consumption tax assessed on the value added to goods, services and immovable properties. Registration for VAT becomes mandatory to every business liable to pay VAT whoseturnover is above the statutory provided threshold. TRA is responsible for issuing VRN in Tanzania. The following requirements must be furnished in order to obtain VRN and VAT Registration Certificate:
- Clearance of the proposed name of the Company
- Preparation of Memorandum and Articles of Associations, Forms 14a and 14b
For more details on which business activities is liable to pay VAT and how to obtain VAT Registration certificate visit www.tra.go.tz or contact our Team for guidance
Embracing the spirit globalization, human and business integration at its core, Tanzania allows foreigners to live and work within its borders at any time provided that all the legal procedures and formalities have been complied with.
Any person who wishes to employ or engage a non-citizen in any occupation shall apply for a work permit to the Labour Commissioner prior to the entry by that non-citizen. After obtaining work permit a non-citizen is required to apply for a resident permit with the Director of Immigration Services.
Work permits are of the following classes: Class A and B, issued respectively to self-employed foreigners (owners of the business, Directors) and to foreign employees who possess prescribed profession while Class Cwork permits are issued to foreign employees who are in possession of profession other those in Class B.
Residence Permits are of the following classes: Class A and B, issued respectively to self-employed foreigners (owner of the business, Directors) and for all foreign nationals who wish to be employed in Tanzania.
For more details on the requirements, process and procedures for obtaining work and residence permits or applying for Tanzania citizenship, contact our Team.
Right to land, regardless the mode upon which the said land is hold (tenure system), is crucial for existence of man and so is to the most businesses or investments. Tanzania recognizes this right and through established mechanism, any person can own land whether a citizen or not.
A myth among many people is that foreigners cannot own land unless they do it only through derivative right granted by the Tanzania Investment Centre by virtue of their investment. This for many reason is wrong and misinterpretation of law. While granted rights/allocation of land to foreigner by the Commissioner for Land is to some extentrestricted, it is by no means the only way of acquiring land rights in Tanzania. There is no restriction to foreigners preferring a lease (of up to 99 years) instead of a grant and also to foreigners whose businesses fall under the prescribed activities including provision of health, education and other social services.
For more details on procedures of acquiring or disposing land in Tanzania, contact our Team.
With the establishment of the TIC (Tanzania Investment Centre), investing in Tanzania for both citizens and foreigners is no longer mind-tiring and soul frustrating process provided the potential investor has met the minimum requirements especially on capital.
The best and recommended approach would be for a potential investor(s) to start a local company or register a foreign company with BRELA. With an investment capital of $100,000 and $500,000 for locally and foreign owned enterprise respectively, it will entitle the potential investor(s) to be registered by TIC and to apply for certificate of incentives which carries with it various benefits including tax reliefs, access to land (derivative rights) and automatic immigrant quota of up to five people. It should be noted that, none of the procedure is compulsory and various options are available for any person wishing to invest or start a business in Tanzania.
For more details on the requirements, process and procedures for investing in Tanzania visit www.tic.co.tz or contact our Team for guidance
