Business entities in Tanzania in 2024
Since 2003, Healy Consultants has successfully assisted our Clients willing to do business in Tanzania with establishing the best corporate structures to suit their interest. The most common legal corporate structure preferred by many entrepreneurs is the setup of a limited liability company (LLC), locally known as a private limited company. A public limited company (PLC) is also a very interesting alternative option for investors who are able to afford the €70,000 required for share capital. Foreign companies are also permitted to register branches or representative offices in Tanzania.
The Tanzania Limited Liability Company
- This is the most commonly used business structure in Tanzania. A private Tanzania LLC must appoint at least 2 directors and 2 shareholders, who can be of any nationality. Furthermore, there is no minimum paid up share capital requirement. This entity is generally used for the formation of small businesses in Tanzania, without lesser capital needs and simple shareholding structure;
- Following Tanzania business setup, this entity must submit audited financial statements to the Business Registrations and Licensing Agency (BRELA). The company is also required to register for VAT, unless its annual sales are below US$45,000 (TNS100 million).
The Tanzania Public Limited Company
A Tanzania public LLC must appoint at least i) 2 directors and ii) 7 shareholders with 1 Tanzanian national as a 40% shareholder. Furthermore, a minimum paid up share capital of US$300,000 must be deposited before Tanzania company setup. This entity is used when the promoters intend to raise capital from the Tanzanian public or list the company on the national stock exchange.
Branch of a Foreign Corporation
A branch office functions within the scope of operations defined by the parent company. This allows the company to i) invoice Tanzanian customers ii) sign local sales contracts and iii) receive income from local customers. Before the government issues a license to these entities, a Certificate of Compliance must be obtained from Business Registrations and Licensing Agency (BRELA). Foreign branches pay additional remittance tax of 10% on net profits.
Representative/Liaison Office
A liaison office assists the parent company in i) promoting export/import to and from Tanzania and ii) promoting technical and financial collaborations with other resident firms. This entity can engage only in activities like i) promoting the business of the parent company and ii) market research.
Table of comparison between different business entities
| Private LLC | Public LLC | Branch Office | Rep Office | |
|---|---|---|---|---|
| How long to set the company up? | 7 weeks | 7 weeks | 10 weeks | 10 weeks |
| How long to open company bank account? | 4 weeks | 4 weeks | 4 weeks | 4 weeks |
| Directors and bank signatories must travel to open the account? | Yes | Yes | Yes | Yes |
| Minimum deposit (USD)? | 1,000 | 1,000 | 1,000 | 1,000 |
| Multi-currency corporate bank account? | No | No | No | No |
| Multi-currency corporate debit cards? | No | No | No | No |
| Corporate ATM card available? | Yes | Yes | Yes | Yes |
| Legal liability? | Limited | Limited | Unlimited | Unlimited |
| Wholly foreign owned? | Yes | Yes | Yes | Yes |
| Minimum paid - up share capital? | US$2,500 | US$300,000 | US$2,500 | US$100,000 |
| File annual tax return? | Yes | Yes | Yes | Yes |
| Tax registration certificate required? | Yes | Yes | Yes | Yes |
| Recommended corporate bank account? | SCB | Barclays Bank | Ecobank | Stanbic Bank |
| Does our Client need to travel? | No | No | No | No |
| Resident director required? | No | Yes | No | No |
| Resident shareholder required? | No | Yes | No | No |
| Minimum number of directors required? | 2 | 2 | 2 | 2 |
| Minimum number of shareholders required? | 1 | 7 | 2 | 2 |
| Tax identification code needed? | Yes | Yes | Yes | Yes |
| Tanzania resident corporate agent required? | No | Yes | Yes | Yes |
| Corporate shareholders allowed? | Yes | Yes | Yes | Yes |
| Corporate director(s) allowed | No | No | No | No |
| Statutory audit required? | Yes | Yes | Yes | No |
| Tanzania corporate tax rate? | 30% | 30% | 30% | 30% |
| Withholding tax rate on dividends remitted to the parent company? | 10% | 10% | 10% | 10% |
| Branch remittance tax? | N/A | N/A | 10% | N/A |
| Does the entity have to register for VAT? | Yes | Yes | Yes | Yes |
| When must VAT filings must be submitted? (if any) | Monthly | Monthly | Monthly | Monthly |
| Access to Tanzania’s double taxation treaties? | Yes | Yes | No | No |
| Regulatory licenses required? | Yes | Yes | Yes | Yes |
| What is the licensing authority? | MIT | MIT | MIT | MIT |
| How long to obtain operating license(s)? | 3 months | 4 months | 3 months | 2 months |
| Must sign a lease agreement for physical office premises? | Yes | Yes | Yes | Yes |
| Public register of shareholders and directors? | Yes | Yes | Yes | Yes |
| Resident country legal representative required? | No | No | Yes | Yes |
| Can the entity hire expatriate staff? | Yes | Yes | Yes | Yes |
| How many months to secure work permit? | 2 months | 2 months | 2 months | 2 months |
| Annual financial statements required? | Yes | Yes | Yes | Yes |
| Independent statutory audit required? | Yes | Yes | Yes | No |
| Allowed to issue sales invoices? | Yes | Yes | Yes | No |
| Allowed to sign contracts? | Yes | Yes | Yes | No |
| Allowed to import and export goods? | Yes | Yes | Yes | Yes |
| Can rent an office space in Tanzania? | Yes | Yes | Yes | Yes |
| Can buy Tanzania property? | Yes | Yes | Yes | Yes |
| Total Tanzania business setup costs in yr. 1? | US$27,750 | US$29,900 | US$34,850 | US$30,370 |
| Subsequent annual costs (incl. accounting and tax fee)? | US$4,550 | US$6,550 | US$12,050 | US$11,150 |
| Sample engagement invoice? | View invoice PDF | View invoice PDF | View invoice PDF | View invoice PDF |
