Tanzania company registration

DOING BUSINESS IN TANZANIA IN 2019

Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with establishing a business in Tanzania. Our services include with i) Tanzania business registration ii) government compliance iii) license registrations iv) visa applications v) work space rental solutions and vi) employee recruitment services in Tanzania.

Summary of Tanzania company registration

SummaryPrivate limited liability companySpecial Economic Zone companyFast company setupTourism companyLimited Liability PartnershipRepresentative office
Also known asLLCSEZTurnkey companyTourism companyLLPRO
Best use of company?All products and servicesIndustrial and services activitiesAll products and servicesRecreation, food & lodging servicesProfessional servicesMarketing & research
How soon can you invoice Clients\sign sales contracts?7 weeks12 weeks2 weeks7 weeks10 weeksNo sales
How soon can you hire staff?7 weeks12 weeks2 weeks7 weeks10 weeks10 weeks
How soon can you sign a lease agreement?1 week1 weekImmediately1 week1 week1 week
How long to supply corporate bank account numbers?4 weeks4 weeks2 weeks4 weeks4 weeks4 weeks
How long to supply company registration \ tax numbers?7 weeks12 weeks2 weeks7 weeks10 weeks10 weeks
Corporate tax rate on annual net profits?30%0% for 10 yrs30%30%30%0%
Limited liability entity?YesYesYesYesYesNo
Government grants available?YesYesYesYesYesNo
Government approval required for foreign owners?NoNoNoNoNoNo
Resident director/partner/manager/ legal representative required?NoNoNoNoNoNo
Minimum paid up share capital?US$8US$8US$8US$8US$8US$8
Can bid for Government contracts?YesYesYesYesYesNo
Corporate bank account location?Standard Chartered BankBarclays BankEcobankStanbic BankAccessBank Akiba Commercial Bank
Can secure trade finance?YesYesYesYesYesYes
VAT payable on sales to local customers?18%0% on exports, 18% otherwise18%0%18%None
Average total business set up engagement costs?US$27,750Request a proposalRequest a proposalRequest a proposalRequest a proposalUS$30,370
Average total engagement period?4 months4 months1 month3 months4 months4 months

Tanzania company registration summary

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  • Advantages of Tanzania company registration

    business registration guides in Tanzania

    1. It is easy to form a company in Tanzania because i) there is no paid-up capital requirement (all needed is issuance of two shares worth US$1 each) and our Clients only need to appoint ii) two shareholders and iii) two directors, who both can be foreigners and are not required to reside in the country or travel to complete the procedures;
    2. Tanzania offers fiscal incentives and low operational costs for manufacturing companies, because:
      • The Tanzanian Government refunds entrepreneurs 50% of the costs of i) plants ii) machinery and iii) vehicles purchased within the country;
      • Tanzania’s Special Economic Zones (SEZ) offer benefits including i) 10 year exemption from corporate tax and withholding tax ii) 100% VAT exemption on utilities and iii) local Government taxes;
      • Imported machinery and raw materials for production purposes are exempt of import duties;
      • Tanzania is home to 22 million unskilled workers costing an average monthly wage of only US$50 per month;
      • The average electricity tariff is only US$0.06 per kwh;
      • Tanzania has one of the lowest consumer cost index in Sub-Saharan Africa. Consequently, Tanzanian business expenses are low.
    3. Tanzania’s membership of three regional trade blocs allows foreign companies i) absence of withholding tax on foreign payments ii) to hire workers from the partner countries without any employment restrictions and iii) giving it barrier-free access to an African market base of over 400 million people;
    4. Tanzania offers many tax incentives for resident companies, including:
      • Withholding tax on dividends is reduced to 5% if the entrepreneur owns at least 25% stake in the company issuing these dividends;
      • Tanzania has double taxation and bilateral investment treaties with 23 different countries including Canada, Germany, India, Norway and UK to reduce withholding taxes on foreign payments
      • All businesses are allowed to carry forward company losses indefinitely;
      • There are no foreign exchange controls to hinder repatriation of funds from Tanzania.
    5. Tanzania has significantly improved the business environment by developing its ICT infrastructure through i) construction of the national fibre optic cable; ii) implementation of e-government and e-commerce facilities; and iii) implementation of e-learning facilities in all educational institutions to make its workforce more competitive.
  • Disadvantages of Tanzania company registration

    1. Doing business in Tanzania can be difficult because of:
      • The inefficient bureaucracy of the Government to approve i) business licenses ii) work visas;
      • Tanzania’s infrastructure is poorly ranked on the WEF’s Global Competitiveness Index. Problems such as frequent power failures and poor road transport lead to business delays;
      • Seaport and airport services in Tanzania, below average compared to other African countries;
      • Restrictions on foreign ownership, existing in a few sectors including telecommunications, mining and tourism.
    2. Foreign investors are nervous about the security of their investments in Tanzania because:
    3. It is difficult to employ skilled labor in Tanzania because:
      • The literacy rate is only 68% and ranks 164th in the world;
      • English fluency rate is only 15%;
      • Only 1% of Tanzanians enroll in universities each year;
      • It is difficult to hire foreign employees.
    4. There are several hindrances by customs and port authorities to doing trade in Tanzania which affects manufacturing and exporting companies in the country. Further, these hindrances cause huge delays and also result in payment of huge levies by the foreign entrepreneur to the customs and port authorities.

Company registration

  • Time to incorporate: Five weeks
  • Cost to set up: US$27,750
  • Minimum capital: US$1
  • Physical office required: No

Required appointments

  • Shareholders: 2
  • Directors: 2
  • Company secretary: Yes
  • Resident director: No

Key facts

  • Corporate tax rate: 30%
  • Corporate tax base: Worldwide
  • Shelf companies: No
  • Main company type: Private company

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Contact us

For additional information on our company registration services in Tanzania, please contact our in-house country expert, Ms. Tatyana Kovpak, directly:
Consultant at HC - Tatyana
  • Ms. Tatyana Kovpak
  • Client Engagements Manager
  • Contact me!