Tanzania, a captivating East African nation renowned for its natural beauty and cultural richness, offers a favorable business environment for investors. Its strategic location and investment incentives make it a compelling choice for companies seeking to expand their operations.
Moreover, Tanzania is a growing economy in East Africa. It’s a good place to do business because the government is making it easier for foreign companies to invest. Good business ideas for Tanzania include technology, construction, and farming. The government is building roads, airports, and train tracks, which could be useful for businesses.
The Business Opening in Tanzania
- Digital Services: The growing digital economy in Tanzania offers opportunities for businesses providing software development, e-commerce, cybersecurity, and digital marketing services.
- Local Tourism: Tanzania’s diverse tourist attractions, including national parks and beaches, attract many visitors annually, creating opportunities for tourism-related businesses like hotels, and tour companies.
- Advisory Services: The high demand for professional advice and support in various fields, such as management, finance, and human resources, creates opportunities for consulting services.
- Farming business: Tanzania’s fertile land, favorable climate, and growing demand for agricultural products offer opportunities for entrepreneurs.
- Small-Scale Manufacturing: The increasing demand for manufactured goods in Tanzania provides opportunities for small-scale manufacturing businesses.
- Natural Resources: Tanzania has a rich endowment of minerals, oil, and gas presents opportunities in the extraction industry
Benefits of Starting a Business in Tanzania
Some notable advantages of starting a business in Tanzania;
- Political Stability: Tanzania offers a peaceful environment for businesses to operate and grow.
- Affordable Labor: Tanzania has a readily available workforce, making labor costs relatively low.
- Regional Integration: Tanzania’s membership in the East African Community (EAC) offers opportunities for foreign trade and investment.
- Investment Incentives: The Tanzanian government provides various incentives, such as tax breaks and duty exemptions, to attract foreign investors.
- Shared languages: Swahili and English languages easily facilitate business operations for entrepreneurs from other nations.
- It’s easy to start a business – forming an entity does not involve so many processes.
- Readily available labor market – Tanzania is a gateway to the East African Community (EAC) market, with millions of consumers.
There are many good business opportunities. - Agricultural opportunities: Vast arable land and favorable climate create prospects in agribusiness and agro-processing.
- Low cost of living: compared to other Sub-Saharan African countries it is an attractive destination for business startups.
- Offers a favorable investment climate: with no restrictions on capital inflows or profit outflows, fostering a conducive environment for businesses.
Requirements for Foreigners to Start a Business in Tanzania
To start a business in Tanzania, the following be obtained:
- A business Visa: This allows you to enter Tanzania for business purposes.
- Work permits: For foreign employees, one needs to obtain work permits.
- Company registration: One can either register a branch company or establish a new one.
Requirements for Starting a Business in Tanzania
To start a business in Tanzania, one needs to obtain the following documents:
- Certificate of Compliance:
Foreign companies setting up branches in Tanzania must obtain a Certificate of Compliance from the Business Registration and Licensing Agency (BRELA). - Tax Identification Number (TIN):
All companies, including foreign-owned ones, need a TIN issued by the Tanzania Revenue Authority (TRA).
Foreign individuals without a National ID can get a TIN directly from a TRA regional office. - Company TIN:
Every company registered in Tanzania must have a unique Company TIN issued by the TRA. - Tax Clearance Certificate:
Before obtaining a business license, you must have a tax clearance certificate from the relevant tax region. - Business License:
To operate legally, a business license from both BRELA and the local municipal or city council must be obtained.
Accomplishment of the above steps makes it possible for one to establish a business in Tanzania and comply with local regulations.
Types of Business Structures in Tanzania
One can choose from these business structures:
- Sole Proprietorship: – Owned and managed by one person.
- Easiest and cheapest to set up.
- The single owner makes all decisions.
- Taxes are based on personal income.
- Limited Liability Company (LLC): – Owned by shareholders with limited liability.
- Separate legal entity from its owners.
- Owners’ liability is limited to their investment.
- Requires at least two shareholders and two directors.
- No minimum share capital requirement.
- Popular choice for foreign businesses.
- Public Company: – Can offer shares to the public and trade on the stock exchange.
- Requires at least two directors and seven shareholders, including one Tanzanian.
- Minimum share capital of US$300,000.
- Suitable for large businesses seeking public funding.
- Partnership: – Two or more individuals or entities running a business.
- Easy to form and manage.
- Lower setup costs.
- Decision-making is straightforward.
- Unlimited Company: Members have unlimited liability for company debts.
- Branch: – A foreign company can establish a branch to conduct local operations (an extension of a foreign company).
- Company Limited by Guarantee: No share capital; members guarantee company liabilities.
- Foreign company: – Documents Needed to Register a Foreign Company in Tanzania: To register a foreign company in Tanzania, the following documents are required:
- Certified Copy of Certificate of Incorporation: – This proves a company’s legal existence.
- Certified Copy of Memorandum and Articles of Association: – These documents outline a company’s structure and rules.
- Board Resolution: – A formal decision by your board authorizing the Tanzania operation.
- Directors and shareholders’ details (Passport copies, passport photos, email addresses, phone numbers, residential details)
Eligible Person to Register a Company
Any person may register a company in Tanzania where the age Limit provided is a minimum of 21 years and a maximum of 70 years as per section 194 of Companies Act Cap.212.
Understanding the Company Registration Process
The Business Registration and Licensing Agency (BRELA) is the governing body responsible for company registration in Tanzania. The process typically involves the following steps:
- Choose and reserve a business name: – Pick a unique name and check availability through the BRELA portal.
- Prepare Documents: – Draft Articles of Association and gather necessary information including;
- Proof of identity for directors and shareholders (ID copies, passport photos, phone numbers, email address, postal address, residential details)
- Proof of company address (phone numbers, email address, postal address, registered office details)
- State the nature of activities & nominal capital details
- Submit Online: – Fill out registration forms, pay fees, and submit the application online through the BRELA portal.
- Processing and Verification: BRELA reviews and verifies the application and documents.
- Certificate Issuance: Upon approval, the Certificate of Incorporation is issued.
- Tax Registration: Obtain a Tax Identification Number (TIN) from the Tanzania Revenue Authority (TRA).
- Additional Registrations: Register with other relevant authorities or obtain necessary licenses.
- Bank Account Opening: Use the Certificate of Incorporation and TIN to open a company bank account.
Required Documents
To register a company in Tanzania, the following details are needed:
- At least three proposed company names
- A description of the business activities
- Passport-sized photographs of shareholders and directors
- Proposed business location
- Physical addresses, postal addresses, phone numbers, and email addresses of shareholders and directors
- National ID or travel passport copies of shareholders and directors
Timeline
The process of incorporating a company in Tanzania typically takes around 7 to 14 days after payment has been made. The Certificate of Incorporation serves as evidence of the company’s existence and legal capacity.
Other requirements after getting a business certificate that conforms with the Employment Act.
- Get a Tax ID Number (TIN): company documents are needed to register for a TIN online or at the Tanzania Revenue Authority (TRA). This helps them to track the company’s taxes.
- Get a Business License: Depending on the business type, one must register with either the Ministry of Industry and Trade or local government.
- Register for VAT (optional): Only businesses with high initial capital need to register for Value Added Tax (VAT). This can be done online or at the TRA office.
- Get Workers’ Compensation Insurance: This protects employees in case of accidents. It is possible to register online or at the Tanzania Insurance Regulatory Authority (TIRA).
- Social Security Number: Visit the National Social Security Fund (NSSF) office to get a social security number for your business.
- Register with OSHA (Occupational Safety and Health Administration): – This helps ensure workplace safety. It is possible to register online or by submitting an application form.
