Are you a Tanzanian national or a foreign investor looking to conduct business in Tanzania? If yes, then this article is for you. Read on to get a step-by-step guide on starting a company in Tanzania.
What business entity can I start in Tanzania?
Setting up an LLC in Tanzania might be your best bet for buying into the economy as a foreigner or as a resident. An LLC has a low capital requirement and a simple shareholder structure, making it an attractive option, especially for overseas investors looking to fund projects in Tanzania. Plus, LLC registration is quick and easy, requiring only two shareholders and two directors. And the cherry on top? There is no minimum paid-up share capital requirement. If this sounds good already, you can launch in Tanzania right away.
Why Incorporate in Tanzania
There are several reasons why one might consider incorporating a company in Tanzania. Some of them include:
1. Favourable business environment
Tanzania has a favourable business environment, with a growing economy, good tax policies, and a stable political climate. These factors combine to make it an attractive destination for businesses looking to establish a presence in the region.
2. Strategic location
Tanzania is strategically located in East Africa and serves as a gateway to the larger East African market. This makes it an ideal location for businesses looking to tap into the growing East African market.
3. Growing economy
Tanzania has a growing economy, with a focus on agriculture, mining, tourism, and manufacturing. For businesses looking to invest in these sectors, then look no further.
4. Great tax policies
Tanzania has a favourable tax regime, with low corporate tax rates and exemptions for certain types of businesses. So if you’re looking to minimize your tax liabilities, Tanzania should make it to your list.
5. Skilled workforce
The country has a large pool of skilled workers, particularly in the areas of engineering and technical fields. This is another reason why you should consider setting up operations in Tanzania.
6. Government support
The Tanzanian government has been actively promoting investment in the country and has put in place several incentives to support businesses. This includes tax holidays, import duty exemptions, and other fiscal incentives.
It is important to note that while Tanzania offers some advantages for businesses, it is still important to carefully consider the potential challenges and risks associated with doing business in any foreign country.
Step-by-Step Guide on Starting a Company in Tanzania
When incorporating a company in Tanzania, there are several requirements and things to consider, including:
- Choose a company name: You have to choose a unique company name that is not already used. You can check the availability of a name by searching the Business Registrations and Licensing Agency (BRELA) database.
- File the necessary documents: You will need to file the following documents with BRELA to incorporate your company:
- Memorandum and Articles of Association: This document outlines the purpose of the company and its structure, including the rights and duties of shareholders, directors, and officers.
- Form 7: This form provides information about the company, including its name, registered address, and authorized capital.
- Form 8: This form lists the names and addresses of the company’s directors and subscribers.
- Pay the registration fee: BRELA will require payment of a fee for the incorporation process. The fee is based on the authorized capital of the company.
- Appoint directors and shareholders: You will need to appoint directors and shareholders for your company. The minimum number of directors is two, and at least one must be a resident of Tanzania.
- Register for taxes: All companies incorporated in Tanzania must register for taxes with the Tanzania Revenue Authority (TRA). This includes Value Added Tax (VAT), Withholding Tax (WHT), and Corporate Income Tax (CIT).
- Obtain a Business Operating License: All companies are required to obtain a Business Operating License from the Tanzania Investment Centre (TIC). The TIC provides a one-stop shop for all investment-related services, including the issuance of business licenses.
- Compliance with labour laws: Companies incorporated in Tanzania are subject to the country’s labour laws and must comply with all relevant regulations, including the payment of minimum wage, employee benefits, and working hours.
- Legal structure: You will need to decide on the legal structure of your company, such as a limited liability company, a partnership, or a sole proprietorship.
Requirements for Launching a company in Tanzania as a Foreigner
Foreigners who wish to incorporate a company in Tanzania are subject to the same requirements as Tanzanian citizens, with some additional requirements. A foreign company that wants to set up operations in Tanzania must submit the following documents to the Registrar:
- A certified copy of the memorandum and articles of association or other document outlining the company’s constitution. If it is not written in English, a certified translation must be provided.
- The names and titles of the company’s directors and secretary.
- Information about any existing charges held by the company.
- Names and addresses of one or more individuals residing in Tanzania who are authorized to receive legal documents and notices on behalf of the company, and serve as its permanent representative at its place of business. Their level of authority must also be stated.
- The full address of the company’s registered office in Tanzania.
The procedures for setting up in Tanzania could be daunting, especially as a foreigner but with Norebase, you can launch your company easily from anywhere. Simply click here to get started.