Doing business in Tanzania involves several key steps, from legal registration to compliance with local regulations.
The process is streamlined by the government’s online systems, primarily managed by the Business Registrations and Licensing Agency (BRELA) and the Tanzania Revenue Authority (TRA).
Here is a comprehensive guide to starting and operating a business in Tanzania:
1. Business Registration Process (Step-by-Step)
The process is largely conducted through BRELA’s Online Registration System (ORS).
Step 1: Choose a Business Structure and Name
Decide on the legal entity that best suits your business goals. Common structures include:
- Private Limited Company (LTD/LLC): The most popular choice, offering limited liability to its shareholders.
- Sole Proprietorship or Partnership: Simpler and less costly to set up, but the owner(s) bear personal liability.
- Branch Office: For foreign companies establishing a local presence.
You must then reserve your company name through the BRELA ORS to ensure it is unique and available.
Step 2: Register with BRELA (Business Registration and Licensing Agency)
This is the core registration step to obtain your Certificate of Incorporation (for a company) or a Certificate of Registration (for a business name/partnership).
Key Documents to Prepare (for a company):
- Memorandum and Articles of Association: Outlining the company’s objectives and internal regulations.
- Company registration forms (often generated online).
- Identification (National ID/NIN for locals, Passport for foreigners) for directors and shareholders.
- Proof of the company’s physical address (e.g., an office lease agreement).
The documents are submitted and fees are paid through the ORS.
Step 3: Obtain a Tax Identification Number (TIN)
After receiving your Certificate of Incorporation, you must register with the Tanzania Revenue Authority (TRA) to obtain a Company TIN. All directors and individual shareholders must also have their own personal TINs.
Step 4: Register for Necessary Taxes
Depending on your business’s expected turnover, you may have additional tax registration requirements:
- Value Added Tax (VAT): Mandatory if your annual turnover exceeds the TRA threshold (currently TZS 100 million). You must also acquire an Electronic Fiscal Device (EFD).
- Pay As You Earn (PAYE): Required if you have employees, for managing payroll taxes.
Step 5: Secure Business Licenses and Permits
You will need a general business license, and potentially sector-specific permits:
- General Business License: These are categorized:
- Class A Licenses: Issued by BRELA, typically for large-scale operations.
- Class B Licenses: Managed by Local Government Authorities (LGAs), for local-nature businesses.
- Sector-Specific Licenses: Required for businesses in regulated industries (e.g., finance, tourism, health services, mining). These are obtained from the relevant regulatory body.
Step 6: Social Security and Safety Registration
As an employer, you are legally required to register with national social security and safety bodies:
- National Social Security Fund (NSSF): For employee social security contributions.
- Occupational Safety and Health Administration (OSHA): For workplace safety compliance.
Step 7: Open a Business Bank Account
Open a local bank account in a commercial bank in Tanzania to manage your company’s finances, payments, and expenses. The bank will typically require your Certificate of Incorporation and TIN.
2. Key Investment and Priority Sectors
Tanzania offers significant opportunities in several key sectors, many of which are prioritized by the government and may qualify for investment incentives via the Tanzania Investment Centre (TIC):
| Leading Investment Sectors | Priority Sectors |
| Agriculture and Agro-Processing | Energy (Renewable Energy, Gas, Hydropower) |
| Mining (Gold, Gemstones, Coal, Diamonds) | Manufacturing (Agro-processing, Textiles, Cement) |
| Tourism and Hospitality | Transport & Infrastructure (Ports, Railways, Roads) |
| Petroleum and Gas | Real Estate Development and Construction |
| Financial Services and ICT (Fintech, Mobile Money) | Livestock and Fisheries |
3. Important Considerations for Foreign Investors
Investment Incentives
Foreign investors can apply to the Tanzania Investment Centre (TIC) for a Certificate of Incentives. This can provide fiscal and non-fiscal benefits, such as:
- Tax incentives (e.g., VAT deferment on capital goods).
- Assistance in obtaining permits and licenses.
- The right to transfer 100% of foreign exchange earnings, profits, and capital out of the country.
Work and Residence Permits
Foreign employees and investors intending to reside and work in Tanzania for an extended period must obtain the appropriate permits:
- Residence Permit Class A: For business owners and investors.
- Residence Permit Class B: For employed expatriate professionals.
Taxation
Tanzania has a structured taxation framework:
- Corporate Income Tax: Currently levied at 30% for companies.
- Value Added Tax (VAT): The standard rate is 18% on chargeable supplies.
- Import/Export: Tanzania is part of the East African Community (EAC) Customs Union. Import duty is applied to goods from outside the EAC, while most exports are zero-rated for VAT.
Disclaimer: The information provided is a general guide. It is highly recommended to consult with local legal and accounting professionals in Tanzania to ensure complete compliance with the latest regulations, especially concerning business structure, licensing, and tax requirements.