Company Registration in Tanzania in 2023-24
Tanzania is a country situated in East Africa. With approximately 61 million people, the country is one of Africa’s major markets. Businesses seeking to grow their operations in the manufacturing, tourism, and agricultural sectors might consider company registration in Tanzania. Tanzania’s economy is mostly reliant on the agricultural sector which contributes approximately 26% of the nation’s GDP.
Another significant source of economic opportunity in Tanzania is the country’s swiftly expanding tourism sector.
Tanzania has Africa’s 11th-lowest consumer cost index. Tanzania’s corporate expenses are thus minimal. English is one of the official languages of the country, which makes it easier for businesspeople to interact in the nation. Over the previous five years, Tanzania’s economy has experienced consistent growth. Tanzania is ranked 93rd worldwide in the Index of Economic Freedom 2022 by the Heritage Foundation. This makes it a favorable location for entrepreneurs to register a company in Tanzania.
This article will cover the procedure for Tanzania company registration. It will outline the documentation, requirements, advantages, taxation, and costs associated with company registration in Tanzania.
Procedure for company registration in Tanzania
Entrepreneurs who wish to register a company in Tanzania have to follow the steps given below:
Decide the business structure
The first step for Tanzania company registration is to decide on the business structure. An entrepreneur can choose to establish a sole proprietorship, an LLC, a public company, a branch office, or a partnership firm.
Register your company name
For company registration in Tanzania, an entrepreneur is required to decide on a company name and register the name with the Business Registration and Licensing Agency (BRELA).
Submit documents to the BRELA
Prepare the Memorandum and Articles of Association of the firm and complete Form 14A, and send it to BRELA.
Acquire the Certificate of Incorporation
Following the filing and verification of Form 14A and other documentation, BRELA issues the Certificate of Incorporation.
Enroll with the Tax Authority
Apply for VAT and acquire a Taxpayer Identification Number (TIN) from the Tanzania Revenue Authority
Acquire business licenses
Obtain a business permit from the Ministry of Industry, Trade, and Investment in order to conduct commercial operations in the nation.
Documents to register a company in Tanzania
The following list of paperwork is necessary to register a company in Tanzania:
- Properly signed application forms by the authorized signer
- Memorandum of Association
- Articles of Association
- Copies of the directors’ and stockholders’ passports
- Certified copy of the rental contract
Business entities for company registration in Tanzania
The various business entities for Tanzania company registration are discussed below:
Sole Proprietorship
A company that is managed and owned by just one individual is known as a single proprietorship. This person is entitled to all the earnings and is fully liable for the company’s debts and liabilities.
Limited Liability Company(LLC)
A Limited Liability Company, which is excellent for forming small firms with simple shareholder arrangements, is the most common organizational structure selected by international business owners. In Tanzania, an LLC is a distinct legal entity from its stakeholders. Every stockholder’s accountability for the obligations and liabilities of an LLC is only to the degree of their individual share capital contributions. A minimal share capital requirement is not mandated.
Partnership
A partnership is a combination of two or more people who jointly operate a company with the intention of making a profit. In a partnership firm, each partner’s liability is constrained by the amount of capital they have invested in the business. Here, all of the firm’s gains and losses are distributed among the partners.
Public Company
An organization in Tanzania is considered a public company if its stocks can be traded by the general public. Such a corporation must have a minimum of 2 directors and 7 stockholders in order to be established.
Branch Office
A branch office of an international business may be established in Tanzania with 100% foreign ownership. It might be used to carry out both residential and business operations.
Representative Office
A representative office is an extension of the parent firm which has its headquarters in a different nation and is established only for promotional or market research objectives. Commercial or business-related activities are not permitted in the case of a representative office.
Eligibility criteria for Tanzania company registration
The eligibility criteria for Tanzania company registration are discussed below:
- Shareholder: A corporation must have a minimum of two shareholders to be formed in Tanzania.
- Director: A business must have a minimum of two directors to be formed in Tanzania.
- Registered business address: Forming a corporation requires having a registered business address in Tanzania.
Taxation structure in Tanzania
If you register a company in Tanzania, you must pay the various business taxes in the country. Resident corporations in Tanzania must pay taxes on all of their global earnings. Non-resident corporations must pay taxes on income that is derived from sources within Tanzania.
Here are the business taxes in Tanzania that an entrepreneur has to pay if they incorporate a company:
- Corporate income tax: Tanzania’s basic corporate tax rate for businesses is 30%.
- Value-added tax: The usual VAT rate for products is 18%, and monthly tax returns are required.
- Personal income tax: Residents are subject to personal income taxation at a marginal progressive rate with a 30% cap. Individuals who are not residents, however, are subject to a 15% tax.
- Custom duties: In Tanzania, custom duties are applied to the majority of imported products and services.
Cost for company registration in Tanzania
The cost to register a company in Tanzania depends on numerous factors including registration expenses, acquiring business licenses, registered office costs, etc.
- The fee for registering a business without share capital is TZS 300,000.
- The registration charge might range from TZS 95,000 to TZS 440,000 for the formation of a business with a share capital.
- The cost of filing documents could be around TZS 66000.
- A corporate name reservation may cost around TZS 50,000.
Why register a company in Tanzania?
- In East Africa, Tanzania has the second-largest economy.
- The nation has tremendous market potential in the manufacturing, agricultural, and tourist sectors.
- Tanzania is one of the Sub-Saharan African nations with the lowest consumer cost index, making establishing a company there affordable.
- Tanzania does not impose any limitations on the free flow of capital or earnings, which encourages investment.
- The Tanzanian government offers both domestic and international companies a variety of investment incentives via the Tanzania Investment Centre.
Advantages of company registration in Tanzania
The advantage of company registration in Tanzania is discussed below:
Special Economic Zones
Tanzania’s special economic zones have a number of advantages to offer, including 100% exemptions from VAT on utilities and a 10-year period during which there is no corporate tax or withholding tax.
Politically Stable Nation
Tanzania has never seen a civil war, an ethnic conflict, or an internal rebellion. This political stability is crucial because it protects investments and creates a climate that is particularly suited for companies to operate in and expand.
Tax Incentives
Tanzania offers a number of tax benefits for resident businesses, one of which is a reduction in the withholding tax on dividends to 5% provided the business owner possesses a minimum of 25% of the business that issued the dividends. Tanzania has bilateral investment and double taxation accords with 23 other nations.
Business Formation is Simple
Tanzania makes it simple to establish a business because there isn’t any requirement for share capital and only two stockholders, and two directors, both of whom might be foreign nationals, are needed to complete the formalities and neither of them needs to live in the nation nor make any travel arrangements.
Tourism Sector
Among the most well-liked vacation spots in Africa is Tanzania. The industry is essential to Tanzania’s economy and creates a substantial quantity of income and job possibilities there.
Conclusion
Tanzania company registration can be an ideal choice for entrepreneurs who wish to register their companies in the African coastal region. The country provides business owners with a wide range of options in industries like agriculture, manufacturing, tourism, etc. The IT sector is contributing largely to the economy with a stellar percentage. In addition, the country features special economic zones, advantageous taxation, and government incentives, making it simpler to create a business there.
You can speak with our professionals at Odint Consulting if you want to register a company in Tanzania. Our expert will assist you with the procedure for Tanzania company registration.
FAQ’s
- The fee for registering a business without share capital is TZS 300,000.
- The registration charge might range from TZS 95,000 to TZS 440,000 for the formation of a business with a share capital.
You can register a company in Tanzania by completing Form 14A, and sending it to Business Registration and Licensing Agency (BRELA) allowing with the Memorandum and Articles of Association of the firm.
Tanzania’s basic corporate tax rate for businesses is 30%.
- With a population of almost 61 million, the nation is one of Africa’s largest markets.
- Tanzania has Africa’s 11th-lowest consumer cost index.
- Tanzania is ranked 93rd worldwide in the Index of Economic Freedom 2022 by the Heritage Foundation.
- The Tanzanian government offers both domestic and international companies a variety of investment incentives via the Tanzania Investment Centre.
- Sole Proprietorship
- Limited Liability Company
- Partnership
- Public Company
- Branch Office
- Representative Office
- The country provides business owners with a wide range of options in industries like agriculture, manufacturing, tourism, etc.
- In addition, the country features special economic zones, advantageous taxation, and government incentives.
- It is simple to establish a firm in Tanzania because there isn’t any requirement for share capital and only two stockholders, and two directors, both of whom might be from any nation.
