The Complete Guide to Company Registration and Business set-Up in Tanzania
Tanzania offers a wealth of investment opportunities, particularly for those looking to establish a business in sectors like agriculture, tourism, and manufacturing. For foreign investors, understanding the company registration process and complying with local laws are crucial steps to successfully starting a business in the country. This guide outlines the step-by-step process, along with important considerations for employing foreign staff and complying with safety and regulatory requirements.
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Two or more individuals who come together for any lawful purpose can form an incorporated company and obtain a Certificate of Incorporation. There are two main types of companies that can be registered at the Tanzania:
Local Companies: These companies limit the liability of their members to the amount of shares held by them as outlined in the Memorandum of Association.
Foreign Companies: These are companies that are incorporated outside of Tanzania but wish to establish a business presence within the country. A Certificate of Compliance is issued once the necessary documents for registration are submitted and approved.
Eligibility
Anyone can register a company in Tanzania, provided they are between the ages of 21 and 70, as stipulated in Section 194 of the Companies Act, Cap. 212.
Step-by-step process, along with important considerations for registering a company and business set-up in Tanzania
Step 1: Consult a Local Expert
Before making any decisions, it's highly recommended to consult a local expert familiar with Tanzanian business laws. Our firm provides comprehensive advisory services to help you understand the intricacies of local regulations and to ensure that you make the best legal and operational choices for your business.
Step 2: Choose the Right Legal Structure
Tanzania offers various legal forms for business registration, but the Limited Liability Company (LLC) is the most popular among foreign investors due to its flexibility and limited liability protection. As outlined in the Companies Act of 2002, you can either establish an LLC, a sole proprietorship, or a partnership, depending on your business goals. We help you decide on the structure that best fits your investment plans.
Step 3: Nominate Directors and Shareholders
Once you have chosen your legal structure, the next step is to nominate your directors and shareholders. In Tanzania, you can establish two-persons company, or involve multiple shareholders. Shareholding ratios and roles should be clearly defined in the Memorandum and Articles of Association, which form the foundation of your company’s operations.
Step 4: Pick a Unique Company Name
Your company name must be unique and approved by the Business Registration and Licensing Agency (BRELA). It’s important that the name reflects your business activities while adhering to the rules set by the Business Names (Registration) Act. Our team can assist in checking the availability of your proposed name through BRELA’s online platform to avoid delays in registration.
Step 5: Identify Your Business Activity
During registration, you must clearly define your primary business activities. These activities will determine the type of licenses and permits you need. Your business activities should align with the International Standard Industrial Classification (ISIC) codes, which are used for taxation and regulatory purposes. We guide you in selecting the appropriate classification for your business.
Step 6: Secure the Required Capital
Tanzanian law mandates that businesses meet certain capital requirements. The minimum capital requirement depends on your industry, and must be deposited into a local bank account once your company is established. Our experts help you manage this process and ensure compliance with Bank of Tanzania regulations.
Step 7: Obtain a Tax Identification Number (TIN)
Each shareholder and director must obtain a Tax Identification Number (TIN) from the Tanzania Revenue Authority (TRA). This number is essential for tax compliance, opening bank accounts, and completing company registration. We streamline this process for you, ensuring all necessary documentation is submitted accurately.
Step 8: Draft and Sign Company Formation Documents
The Memorandum and Articles of Association must be signed by all shareholders and directors. If any signatory is outside Tanzania, they can sign the documents in their home country, but these must be authenticated through an apostille or the Tanzanian Embassy. These documents will then be submitted to BRELA for registration.
Documents Required for Company Registration.
To register a company in Tanzania, you will need the following:
Local Company:
Consolidated Form (generated online after filling out all required details; signatures of all directors and the company secretary are needed).
Certified Copy of the Certificate of Incorporation.
Certified Copy of the Memorandum and Articles of Association, or any other document defining the company’s constitution.
Most recent accounts and related reports.
Form No. 434 (detailing the situation of registered offices both abroad and in Tanzania, the list of directors, and representatives residing in Tanzania; must be attested by a Commissioner for Oaths/Notary Public).
Integrity Pledge Form.
Foreign Company:
Consolidated Form (generated online after filling out all required details; signatures of all directors and the company secretary are needed).
Certified Copy of the Certificate of Incorporation.
Certified Copy of the Memorandum and Articles of Association, or any other document defining the company’s constitution.
Most recent accounts and related reports.
Form No. 434 (detailing the situation of registered offices both abroad and in Tanzania, the list of directors, and representatives residing in Tanzania; must be attested by a Commissioner for Oaths/Notary Public).
Integrity Pledge Form.
Step 9: Obtain a Business License and OSHA Compliance
Before you can open a local bank account, you must secure a Business License from either BRELA or local government authorities, depending on your business type. Certain industries, such as manufacturing or construction, also require Occupational Safety and Health Authority (OSHA) certification. OSHA ensures that your business premises meet Tanzanian workplace safety standards, and compliance is mandatory to avoid fines or operational delays.
Step 10: Open a Local Bank Account
After obtaining your business license, you can proceed with opening a local bank account. Leading Tanzanian banks such as CRDB, NMB, NBC, Absa, Equity, KCB, DTB and Stanbic Bank Tanzania provide business banking services tailored to foreign investors. We assist you in navigating the bank account opening process, ensuring that all documentation is in place.
Step 11: Work and Residence Permits for Foreign Employees
Foreign investors and employees need both work permits and residence permits to operate legally in Tanzania. The process is managed by the Ministry of Home Affairs and the Tanzania Immigration Services Department.
Work Permit (Class A or Class B): Class A is for investors, and Class B is for skilled employees.
Residence Permit: Once the work permit is approved, a residence permit must be obtained for foreign employees or directors.
The ratio of local to foreign employees in Tanzania is regulated: you are required to have at least 1 foreign employee for every 10 local employees, in compliance with Tanzanian labor laws. This encourages local employment and knowledge transfer, but exemptions can be made for technical roles where local expertise is unavailable.
Step 12: Register with Other Regulatory Bodies
Your business must also register with various local authorities, including:
TRA for tax registration.
NSSF for social security registration.
Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) for commercial registration.
Why Invest in Tanzania?
Tanzania offers numerous investment opportunities, supported by favorable investment laws, access to the Tanzania Investment Centre (TIC), and tax incentives for foreign investors in sectors like mining, agriculture, tourism, technology and manufacturing. Our consultancy service guides you through these opportunities and ensures compliance with Tanzanian regulations.
FAQs for Investors in Tanzania
Q: How long does it take to register a company in Tanzania?
A: The entire process typically takes between 3 to 14 days, provided all documentation is in order and there are no complications.
Q: Do I need to be physically present in Tanzania to register a company?
A: No, the registration can be completed through a power of attorney, allowing you to finalize the process from abroad. However, for opening a bank account and securing certain permits, a visit to Tanzania may be required.
Q: What is the minimum capital required to start a business?
A: The capital requirement varies by industry. For example, microfinance businesses have specific capital thresholds set by the Bank of Tanzania (BOT). which is TZS 20,000,0000
Q: Can I hire more foreign workers if necessary?
A: Yes, you can apply for special exemptions if your business requires more foreign employees, especially for technical positions. Approval from the Ministry of Labour will be required.
Q: What are the penalties for non-compliance with OSHA?
A: Non-compliance with OSHA regulations can result in heavy fines and suspension of your business license. Ensuring workplace safety is a key part of remaining operational in Tanzania.
Q: Is dual taxation a concern for foreign investors?
A: Tanzania has Double Taxation Agreements (DTAs) with several countries, including the UK, India, and Canada, to prevent investors from being taxed twice on the same income.
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