Business entities in Tanzania in 2022

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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

how to setup a business in Tanzania for foreigners

  • 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

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For additional information on our business setup services in Tanzania, please contact our in-house country expert, Ms. Lee Wen Bin, directly:
Consultant at HC - Wen Bin
  • Ms. Lee Wen Bin
  • Client Engagements Department, Deputy Director
  • Contact me!