Step-by-Step Guide to Company Registration in Tanzania

Business Opportunities in Tanzania

Tanzania has the second-largest economy in East Africa and a consistent development trajectory due to its expanding trade and investments. The country’s political integrity has a considerable positive impact on foreign direct investments. The total amount of trade flows, which accounts for 42% of Tanzania’s GDP, demonstrates the importance of foreign commerce to the country’s economy. The government recently passed several reforms to promote foreign investment, including changes to the tax code and creating an investment promotion committee. 

If you plan to set up a business in Tanzania, the most promising sectors include ICT, Infrastructure, and Agribusiness. A great opportunity exists for American firms to investigate software devices that might support the growth of local enterprises. The government has significantly invested in infrastructure projects like highways, airports, and railroads. 

Additionally, this opens up the potential for American businesses to market their innovations in these global economies. Over 75% of Tanzanians are still employed in agriculture, which remains the country’s primary economic activity. There is a huge potential for American businesses to provide innovations in agriculture here in an endeavor to produce more.

This page will give you a deep insight into the company registration process in Tanzania and how to start a business in Tanzania.

Benefits of Starting a Business in Tanzania

Tanzania is increasingly being included in organizational expansion plans across various industries. Over time, Tanzania has developed into a top-tier corporate climate graduating from low-income status to a lower-middle-income country (as of July 2020). 

The advantages of setting up a business in Tanzania are numerous, some of which are listed below:

• The plethora of investment incentives by the government for foreign investors
• A simple business setup process 
• A politically stable country to invest in
• Excellent business prospects in various industries
• Readily available labor market 
• Special economic zones which offer incentives like 100% VAT exemption on utility 

Requirements for Starting a Business in Tanzania

If you plan to set up a business in Tanzania, you must know the company registration process. If you are unsure or doubtful about the same, here are the crucial steps you need to know about the requirements to start a business in Tanzania:

• Certificate of Compliance: Companies incorporated outside of Tanzania’s mainland and entering the nation as branches of such foreign firms are given certificates of compliance by BRELA. To get authorization, companies need to send an application to BRELA, and once approved, a Certificate of Compliance is offered to the company.
• TIN for Foreigners without NIDA ID: Companies must have a Taxpayer Identification Number (TIN) issued by Tanzania Revenue Authority (TRA). To get a TIN, the company/employer must have a National Identification Number from the National Identification Development Authority. Foreign nationals can directly contact the TRA regional office to get a TIN.
• Company TIN Number: Every company planning to establish itself in Tanzania must have a Company TIN. Each shareholder/director must register for the TIN to pay taxes. The TIN is issued by Tanzania Revenue Authority (TRA) to the company with the incorporation certificate.
• Tax Clearance Certificate: Every business planning to set up business in Tanzania must obtain relevant licenses from BRELA. Before this, you need a tax clearance certificate that can be obtained from the respective tax regions in which it is registered. Companies must submit a written application and tax compliance proof.
• Business License: Any company operating in Tanzania must obtain a business license from the Business Registrations and Licensing Agency (BRELA) and Municipal/City Council.

In addition to these requirements, the following core documents are essential for registering a foreign company in Tanzania:

1. Certified Copy of the Certificate of Incorporation: This is a fundamental document that proves the company’s legal existence and its incorporation outside of Tanzania.
2. Certified Copy of the Memorandum and Articles of Association: These documents outline the company’s structure, objectives, and the rules governing its operations. Alternatively, a statute, charter, or any other instrument defining the constitution of the company may be required.
3. Board Resolution Authorizing the Opening of a Company in Tanzania: This document is a formal decision made by the company’s board of directors approving the establishment of a branch or subsidiary in Tanzania.

By ensuring these documents and requirements are met, foreign companies can smoothly navigate the registration process and establish their presence in Tanzania.

Types of Business Structures in Tanzania

You can opt for one of the following companies if you want to start a business in Tanzania:

Sole proprietorship –

• Sole proprietorship is the easiest and most cost-efficient. 
• As there is only one owner, decision-making is more straightforward.
• Tax is applicable on the personal income rate rather than a corporate tax. 

Limited Liability Company (LLC)-

• A limited liability company (LLC) is a distinct legal entity that exists independently from its shareholders. 
• Each shareholder’s obligation to pay the debts and liabilities of an LLC is only as much as their share capital contribution. 
• LLC must have at least two shareholders and two directors, who may be from any country. 
• There is no stipulation for a minimum paid-up share capital. 
• The most popular legal form foreigners choose to register their businesses is an LLC, which is ideal for incorporating small businesses with straightforward shareholding structures.

Public Company – 

• In Tanzania, a public corporation is one whose shares are open to public trading. 

• Such a corporation must have at least two directors and seven shareholders, one of whom must be a Tanzanian native and hold at least a 40% ownership position.
•  To establish a public corporation, US$300,000 in share capital must be invested. A public company is the best option if someone wants to raise money or list their business on Tanzania’s national stock exchange.

Partnership –

• It is easier for companies to form a partnership as it is simpler to form, run, and manage.
• Setting up costs are lower
• Decision-making is more straightforward, like a sole proprietorship 

Branch – 

• A branch office of a foreign company from another country may be established in Tanzania. 
• It could be utilized to conduct domestic and commercial operations.

Other than these significant business structures, companies can also go for the following:

• Representative office: For promotional or market research objectives
• Co-operative societies: When ten or more people form democratically controlled organizations to achieve the need for social, cultural, professional, religious, and economic benefit. 
• Non-governmental organizations: Excellent for voluntary, non-profit sharing organizations. 
• Company limited by guarantee: Good for companies that are limited by guarantee. It intends to promote investment, commerce, trade, or other investments. 

Company Registration Process

If you’re looking to register a company in Tanzania, whether local or foreign, this guide details every step you need to follow. Here’s how you can navigate the process smoothly:

Step 1: Choose the category of business entity.

The first step is to select the business-appropriate Tanzanian entity. Companies can opt for partnership, sole proprietorship, or LLC, depending upon your idea of business.

Step 2: Pick a business name

Regardless of their legal structure, companies need to register company names in Tanzania with the Business Registration and Licensing Agency (BRELA). If the name is unique and available, companies will get name clearance from BRELA.

Step 3: Get a notarized compliance certificate

Getting a certified compliance statement is next. The incorporator should do this by going to a notary to have the declaration of compliance notarized.

Step 4: Request Certification

Applying for a Certificate of Incorporation at the Tanzania Investment Center is in the fourth stage. Here, the person appointed as Director in the Articles of Association (AOA) should submit the following documents:

1. The company’s first directors, secretaries, and proposed registered office location
2. Declaration of Compliance with Regards to Company Registration Application.

Step 5: Proposed Articles of Association and Memorandum

The next step is drafting Memorandum and Articles of Association. A Memorandum of Association essentially serves as a detailed declaration of the company’s objectives. The Articles of Association help as a written statement of the managerial structure and procedures.

Draw the Memorandum and Articles of Association (MAA) and submit it to BRELA along with form 14A.

Step 6: Apply for a Taxpayer ID Number (TIN)

When applying for TRA, the TIN application must also be accompanied by the Memorandum and Articles of Association and the Certificate of Incorporation. The limited corporation must complete the TIN registration forms in the following ways to request a TIN certificate:

1. Application for the business
2. Application for each director and shareholder

Once you have a TIN, TRA shall open a tax file for your business.

Step 7: Apply for a business license

Registering for a business license with the Ministry of Industry and Trade (MIT) and Local Government Authorities is the seventh stage (LGAs). Depending on the type of business, either MIT or LGAs will issue the license. The following documents are required:

1. Certificate of incorporation
2. Evidence of a suitable business location
3. Memorandum and Articles of Association (MAA)
4. Identification Number for Taxpayers
5. Evidence of citizenship in Tanzania (if applicable)

Step 8: Finish the Value Added Tax (VAT) Registration process

Businesses with an average initial capital of $50 million in the first six months and $100 million in the first year must register for VAT. To get the necessary paperwork for registration, one must go to the TRA office or TRA official website.

Step 9: Become a Workmen’s Compensation Insurance applicant

The following action is to enroll in workers’ compensation insurance through the National Insurance Corporation or another insurance company. Employers must submit the Workmen’s Compensation Tariff Proposal Form for this to the Tanzania Insurance Regulatory Authority (TIRA) and Workers Compensation Fund (WCF). Tanzania’s Mainland Employers must all enroll with the Fund. Any employer before July 1, 2015, must register with the Fund by July 1, 2015; any employer after July 1, 2015, must enroll with the Fund within thirty (30) days of hiring their initial employee.

Employers can register with the Fund digitally at portal.wcf.go.tz or by correctly filling out and submitting registration forms WCR-1 and WCR-2 to the local Fund office or Labour office.

Step 10: Register for a Social Security Number

Getting Social Security Registration Numbers from all necessary security programs is the eleventh and last stage in registering a company in Tanzania. You can visit the National Social Security Fund (NSSF) office with your identity proof and obtain your member ID card with your Social Security Number.

Step 11: Become a member of the Occupational Safety and Health Administration (OSHA)

Any individual who owns a business must register with OSHA by submitting the application form and providing registration documents. The following is necessary for the application:

1. Owner’s Name and Address
2. Work type Number of employees in total

Additional Requirements for Foreign Companies

If you are registering a foreign company, additional specific requirements must be met. Here are the crucial documents needed to register a foreign company in Tanzania:

1. Certified Copy of the Certificate of Incorporation: A legalized copy of your original Certificate of Incorporation.
2. Certified Copy of the Memorandum and Articles of Association: This could also include statutes, charter, or any other instrument defining the company’s constitution.
3. Board Resolution: A resolution from the company’s board authorizing the opening of a branch or subsidiary in Tanzania.

Foreign companies have two avenues for registration:

• Tanzania Investment Centre (TIC)
• Business Registration and Licensing Agency (BRELA)

These agencies provide the regulatory framework and support needed for foreign companies to operate legally within the Tanzanian business environment.

By following these detailed steps and ensuring you have all required documentation, you can efficiently register your company in Tanzania, whether you’re a local entrepreneur or an international business looking to expand.

How Long Does It Take to Register a Company in Tanzania?

The duration for registering a company in Tanzania depends on several factors, such as the thoroughness of your application and the current workload of the relevant registration authorities. Generally, from the submission of your complete application to receiving your final registration documents, you can expect the process to take about two weeks.

Factors Influencing the Timeline:

Completeness of Documentation: Ensuring all required documents are accurately filled out and submitted can significantly speed up the process.

Workload of Authorities: The current number of applications being processed by the Business Registrations and Licensing Agency (BRELA) can impact the timeline.

Verification Process: Additional time may be needed if further verification or additional documents are requested by the authorities.

By preparing your documents meticulously and submitting them promptly, you can help streamline the registration process and avoid unnecessary delays.

Can I Register a Company in Tanzania Remotely?

Absolutely, you can register a company in Tanzania without being physically present. The entire process can be managed online, allowing you to handle everything from the comfort of your home.

Here’s how it works:

1. Documentation:
   • You’ll need to gather and complete the necessary paperwork. This includes your company’s memorandum and articles of association, proof of identity for all directors and shareholders, and a business address in Tanzania.
2. Submission:
   • These documents can be submitted to the Business Registrations and Licensing Agency (BRELA) online. Their e-filing system makes it easy to upload and send all the required information.
3. Approval:
   • Once your application is reviewed and approved, BRELA will issue a Certificate of Incorporation. This official document confirms that your company is legally recognized in Tanzania.
4. Bank Account:
   • To complete the setup, you’ll also need to open a business bank account in Tanzania. Many banks offer remote account opening services, though you may need to visit a local branch to finalize the process.

Benefits of Remote Registration

• Convenience: Handle everything from anywhere in the world.
• Speed: Digital processes often expedite approval times.
• Cost-Effective: Save on travel and accommodation expenses.

Things to Keep in Mind

• Ensure all submitted documents are accurate and properly authenticated.
• Stay updated on any changes in Tanzanian business registration laws.
• It might be advantageous to consult with local legal or business professionals to streamline the process.

By leveraging these remote capabilities, you can efficiently establish your business presence in Tanzania without the need to travel.

Company Registration in Tanzania: Comprehensive Services

Setting up a company in Tanzania can be streamlined and efficient when you have access to the right services. Here’s a detailed look at what’s available to facilitate your business registration process:

Company Registration

Our services ensure that your company is registered smoothly and swiftly, adhering to all local regulations and requirements.

Accounting Services

We offer comprehensive accounting services to help manage your finances effectively, ensuring compliance with Tanzanian financial laws.

Background Checks

Conduct thorough company background checks, ensuring you partner with trusted and credible organizations in Tanzania.

Distributor Sourcing

Need assistance finding reliable distributors? We provide services to source the best distribution partners in the region.

Employer of Record

If you’re hiring in Tanzania but do not want to set up a legal entity, our Employer of Record services allow you to manage local employees efficiently.

Human Resource Services

Our HR services cover everything from recruitment to payroll management, tailored to your specific needs in the Tanzanian market.

Tax Consultancy

Navigate the complex Tanzanian tax landscape with our expert tax consultants who can offer personalized advice and planning.

Trademark Registration

Protect your brand with our trademark registration services, ensuring your intellectual property is secure in Tanzania.

Work Permit Applications

Streamline the process of obtaining work permits for your foreign employees with our dedicated application services.

By leveraging these comprehensive services, you can focus on growing your business while we handle the intricacies of setting up and operating in Tanzania.

How Can I Register a Company Online in Tanzania?

Registering a company in Tanzania has been streamlined through online processes to make it more convenient for individuals and businesses. Here’s a comprehensive guide to help you register your company online:

Step 1: Select a Business Name

Start by choosing a unique and memorable name that resonates with your business activities. Verify that the name isn’t already taken or too similar to existing company names. You can do this via the Business Registration and Licensing Agency (BRELA) online portal.

Step 2: Draft the Articles of Association

Prepare your company’s Articles of Association. This crucial document outlines your company’s internal framework, including its objectives, share capital, management structure, and shareholder rights. Consulting with a legal expert can ensure that your Articles of Association comply with Tanzanian company law.

Step 3: Complete the Registration Forms

Access the registration forms from the BRELA website. Fill them out carefully, providing all necessary details such as the company name, registered office address, director information, and shareholder details. Accurate and thorough completion of these forms is essential.

Step 4: Pay the Applicable Fees

Calculate the registration fees based on your company’s authorized share capital. Payment can be made at designated banks, and the fee structure will vary depending on your company’s type and size. Remember to keep the receipt as proof of payment.

Step 5: Submit the Application

Once all forms are completed and the Articles of Association are ready, submit your application online through the BRELA portal. Attach proof of payment and any other required documents. Your registration process begins immediately after successful submission.

Additional Tips:

• Legal Assistance: While optional, seeking legal assistance can help ensure that all documents meet legal requirements.
• Online Resources: BRELA provides an extensive range of resources and guides on its website to assist in the registration process.
• Following Up: Keep track of your application status through the online portal. If there are any issues or missing documents, BRELA will notify you.

Registering a company online in Tanzania has never been easier with these streamlined steps. By carefully following the outlined procedures, you can ensure a smooth and efficient registration process. If you require further assistance, consider reaching out to legal professionals or consultancy firms specializing in company registration in Tanzania.

What is the Role of the Tanzania Registrar of Companies?

The Tanzania Registrar of Companies plays several crucial roles in the corporate landscape of the country, ensuring efficient business operations and regulatory compliance across the board. Here’s a detailed breakdown of their primary functions:

1. Company Registration

The Registrar is pivotal in the initial creation of businesses. They handle the official registration of new companies, validating the legal existence of businesses within Tanzania.

2. Maintenance and Update of Company Records

Once companies are registered, the Registrar diligently maintains an up-to-date record of all vital company information. This includes changes in company names, registered offices, directors, shareholders, and the structure of share capital.

3. Compliance Monitoring

Ensuring that companies adhere to the relevant laws and regulations is another important role. The Registrar closely monitors compliance to prevent legal discrepancies and maintain corporate governance standards.

4. Company Dissolution and Liquidation Oversight

For companies that cease operations or become unviable, the Registrar oversees the dissolution and liquidation processes. This involves meticulous management to ensure the proper and legal winding down of businesses.

5. Regulatory Enforcement

Armed with the authority to enforce the Companies Act and related legislation, the Registrar ensures that companies operate within the legal frameworks. This enforcement is critical for maintaining order and legality in the business environment.

6. Information Dissemination

Serving as a central repository, the Registrar provides accessible company-related information. This service is crucial for transparency and aids stakeholders in making informed decisions.

By fulfilling these roles, the Tanzania Registrar of Companies ensures that the corporate sector operates smoothly, legally, and transparently.

How Much Does it Cost to Incorporate a Company in Tanzania?

The following fees must be paid when registering a business or incorporating a company in Tanzania:

Are Foreigners in Tanzania on Certain Passes Allowed to Start a Business in Tanzania?

To set up a business in Tanzania as a foreign investor, one must obtain a business visa. Moreover, starting a business in Tanzania requires certain passes and permits for both investors and employees. The required permits are mentioned below:

• Business visa: Foreigners will only receive one business visa, which they can use to enter the United Republic of Tanzania for the specified objectives:
  1. To carry out particular tasks, such as maintaining/repairing machines, conducting brief instructions, etc.
  2. To do professional duties such as account audits, etc.
  3. To carry out legal business per national laws.
• Multiple-entry visa: Tanzanian authorities grant this visa to those who regularly need to enter the nation, usually for business and investment interests. This visa’s duration is valid for three, six, or twelve months.
• Short-term permit: Also known as STP, this permit is issued to foreign individuals in Tanzania for short-term assignments. However, STP cannot be renewed and should be surrendered to the Labor Commissioner.
• Residence permit: Those who are engaged in work for three years can apply for a residence permit. After that, they can renew the permit (not exceeding two years). Companies can apply for either a residence permit Class A or a residence permit Class B.

Company Registration Options for Foreigners

A foreigner looking to start company registration in Tanzania can do so by either:

1. Registering a branch of their foreign company: This option allows the foreign investor to extend their existing business operations into Tanzania.
2. Registering an independent company: This involves setting up a new company entirely within Tanzania.

The entire registration process can be carried out remotely, eliminating the need for the investor to travel to Tanzania to complete the tasks. This flexibility is particularly advantageous for investors looking to streamline their entry into the Tanzanian market.

Government Assistance for Foreign-owned Businesses 

All investors registered with the Tanzania Investment Centre (TIC) are eligible to take advantage of 0% VAT benefits on exports and duty drawbacks on imports. Additional rewards include – 

• Access to all license, permit, and authorization services at the facilitation center of TIC.
• TIC grants incentives to companies investing in tourism, manufacturing, services, agriculture, real estate, transportation, energy, etc. However, foreign companies need to invest a minimum capital of USD 500,000.  
• Investment in the capital at 100% for the mining and agricultural actors
• A 10% import tax on semi-finished goods
• Tanzania is a part of the Multilateral Investment Guarantee Agency (MIGA), a division of the World Bank that handles foreign investment insurance, and the International Centre for Settlement of Investment Disputes (ICSID). For investors and lenders, MIGA provides assurances such as credit improvement and political risk insurance.
• A 50% capital allocation for buildings and equipment utilized in factories for manufacturing operations or in hotels for guest services. This proportion, which is only feasible in a product’s first year of use, complies with local income tax regulations.
• Companies established in Export Processing Zones (EPZA) are exempted from corporation tax, withholding tax, and other taxes (for ten years). VAT on utilities are also laid off along with wharfage charges.  
• You are eligible for some VAT deferment if your company employs project capital goods like real estate, structures, tools, and machinery.
• A method where excise duty paid on fuel purchased by specific firms is paid and refunded.
• Incentives are also offered to companies in Special Economic Zones (SEZ). However, it depends on the company type established. 
• The ability to transfer all profits, funds, and foreign currency made outside of Tanzania.
• Additionally, as part of the project holding the Certificate of Incentives, you have an inevitable permit to hire roughly five foreign nationals.
• According to the East African Community Customs Management Act, licensed hotels that import hotel equipment bearing the name and log of the facility pay a 0% import charge.

How Can Multiplier Help?

In Tanzania, starting a business might be challenging. You must adhere to the Tanzanian tax regimes and labor act while setting up a business. This is where you can collaborate with global EOR services like Multiplier to expand globally.  

Multiplier provides EOR services to handle the minute procedures of beginning a business efficiently. Any country where you intend to start your business has local regulations, registration requirements, and tax rules familiar to Multiplier’s in-house expert personnel.

You can start your business in Tanzania without setting up a business entity. You can test new markets for your growing companies and experiment with global professionals. Multiplier will help you generate employment contracts, maintain payroll, and support multi-country payments.