Company registration in Tanzania

Tanzania is one of the African countries that can interest foreign investors. The jurisdiction offers simple conditions for entering the local markets and opportunities for growth in different sectors: agricultural, energy, tourism, mining, finance, etc. Starting a business in such sectors as the tobacco industry, food processing, tea, and coffee production, aviation sectors are also good business options to evaluate. If you preliminary find this jurisdiction as suitable for investing, this effort can be implemented in one of the next registration forms.

Major Forms of Legal and Business Presence

If you wish to become present in Tanzania and do your business from there, these business registration opportunities may be utilized for your objective:

• Private Company Limited by Shares – a body corporate that is legally separated from its participants who don't bear any liability in excess of the amounts unpaid for their shares. They also don't risk losing more than the value of owned shares. The number of participants, in this case, should be from 2 to 50. The amount of statutory capital is not legally determined but it should be sufficient for activities an enterprise is going to undertake. The company's bylaws should cover conditions (restrictions) applicable to the transfers of its shares. They may not be offered to the general public without complying with certain conditions also.
• Public Company Limited by Shares – a body corporate that is designated mostly for attracting external financing so it can freely offer its shares for subscription and allows free transfers of such shares. The shareholders don’t bear any liability in excess of the amounts invested in such shares. At least 7 shareholders are required to establish this entity. The amount of statutory capital depends on the activities this enterprise is going to undertake.
• Branch – an opportunity for doing business suitable for a non-resident company that intends to extend its commercial activities in Tanzania subject to local legislation. Registration and a local representative are required for this purpose.
• Representative Office – a good opportunity for a non-resident entity to investigate local markets and promote its activities. Being engaged in any type of commercial transaction is prohibited for a representative office.

Registration Requirements and Steps

If you assess an opportunity of company registration in Tanzania, the next approximate company setup steps should be passed:

1. Clarifying commercial priorities you intend to implement through a local body corporate.
2. Selecting, checking, and reserving a business registration name.
3. Gathering particulars about the company's founders, beneficial owners, and officials.
4. Choosing a registered business address for a future body corporate.
5. Drafting and formalizing statutory and other documents necessary to register a future entity.
6. Submitting the package of registration documents for completing the company incorporation process.
7. Registration for tax and social security purposes.
8. Corporate bank account opening.
9. Obtaining additional permits and licenses that may be required for listed regulated activities.

Legal and Regulatory Framework

The legal system is based on English common law, customary law, and Islamic law. It is comparatively easy to enter the local market and operate a business there. The Business Names Registration Act and the Companies Act are major legal acts in the area of doing business. Major state authorities foreign businessmen may deal with while entering this jurisdiction and conducting business there are the National Identification Authority, the Business Registration and Licensing Authority, the Ministry of Industry, Trade and Investment, and the Tanzania Revenue Authority.

Tax System of Tanzania

An opportunity of company incorporation in Tanzania should be assessed along with the next tax highlights relevant to this state:

• Corporate income tax (CIT) rate – 30%
• Personal income tax rates – (i) residents – 30% (ii) non-residents: (a) employment income only – 15% (b) total income – 30%
• Value-added tax rates – (i) Tanzania mainland – 18% (ii) Tanzania Zanzibar – 15%
• Withholding tax rates (for non-residents) – (i) dividends – 5% or 10% (ii) interests – 10% (iii) royalties – 15%
• Capital gains tax rates – (i) corporate – subject to the basic CIT (ii) personal – (a) residents – 10% (b) non-residents – 30%

Advantages of the Jurisdiction

If your current business aim is to create a company in Tanzania, the next advantages that characterize Tanzania as a jurisdiction may become available to you:

• simple procedure of establishing entity through the Online Registration System
• absence of requirements to the company’s statutory capital except for companies in certain regulated sectors
• incentives available to investors (zero VAT import and export duty benefits)
• availability of benefits foreseen by signed investment treaties (Canada, China, Italy, Denmark, etc.)
• good access to local markets for enjoying exporting opportunities (coffee, tobacco, gold, cotton, manufactured goods, etc.) and importing possibilities (machinery, crude oil, raw materials, transportation, and other equipment, etc.)
• zero exchange control restrictions

How Prifinance Specialists May Help You

We offer prompt company registration and bank account opening services in Tanzania and worldwide. New registration and ready-made options. Provide extensive details for more precise consultations and suggestions that can be effective for your future project.