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How to start a Business in Tanzania : TCI Professional assistance

  • Writer: TCI
    TCI
  • Jul 18, 2024
  • 4 min read

Updated: May 16

Starting a Business in Tanzania


Starting a business in Tanzania can be a rewarding venture due to its growing economy, strategic location, and rich resources. If you're considering launching a business in Tanzania, here's a guide to help you through the process, with information on how TCI Consultants can support investors, especially from the Tanzanian diaspora.


1. Research and Business Idea Development


Before starting a business, thorough research is essential to understand the local market, competition, and customer needs. Tanzanians have a strong entrepreneurial spirit, and sectors such as agriculture, tourism, manufacturing, construction, and technology are growing rapidly. Diasporas can also explore unique opportunities that align with their expertise or network.


2. Choosing a Business Structure


In Tanzania, businesses can be structured as:

  • Sole Proprietorship: Owned and managed by a single individual.

  • Partnership: A business jointly owned by two or more individuals.

  • Limited Liability Company (LLC): The most common structure for foreign investors, offering liability protection for shareholders.

  • Public Limited Company (PLC): Suitable for larger businesses with plans to raise capital from the public.

Most investors opt for an LLC, especially those from the diaspora, due to the ease of formation and liability protection.


3. Registering the Business


To legally start a business in Tanzania, you must register with the Business Registration and Licensing Agency (BRELA). This includes:

  • Company Name Search: Verify if your business name is available.

  • Company Registration: Submit required documents, including your company's Memorandum and Articles of Association.

  • Tax Identification Number (TIN): Required for tax purposes, issued by the Tanzania Revenue Authority (TRA).

  • Business License: Depending on your business activity, you will need to apply for a specific license.


4. Obtain Necessary Permits and Licenses


Depending on the type of business, you may need additional permits, such as:

  • Tanzania Investment Centre (TIC) registration for foreign investments.

  • Sector-Specific Licenses: For businesses in tourism, agriculture, manufacturing, etc.

  • Local Authority Approvals: Permits from local government for physical locations or operations.


    TCI Consultants meeting with clients


5. Capital Requirements


Foreign investors are required to meet minimum capital requirements, usually ranging between USD 100,000 and USD 500,000, depending on the type of business. However, certain sectors (like agriculture) may have more flexible requirements. With TCI Consultants, this minimum capital investment could be waived, giving you flexible investment options and minimum capital requirement.


6. Opening a Business Bank Account


After registration, you will need to open a business bank account with a Tanzanian bank. Major banks like CRDB, NMB, and Standard Chartered offer business banking services.


7. Hiring Employees and Labor Laws


If you plan to hire employees, familiarize yourself with Tanzanian labor laws, including employment contracts, minimum wage requirements, and social security contributions. The government has specific rules regarding foreign employee quotas, ensuring that Tanzanians are prioritized for employment opportunities.


8. Taxation


Tanzania’s tax system involves:

  • Value Added Tax (VAT) at a rate of 18%.

  • Corporate Income Tax: 30% for large businesses, with potential tax incentives for new investors in certain sectors.

  • Withholding Tax: Applied to specific types of income like dividends and royalties. It's essential to work with a local tax advisor to navigate Tanzania’s tax system.


9. Export and Import Procedures


If your business involves imports or exports, you’ll need to deal with the Tanzania Revenue Authority (TRA) for customs clearance, tariffs, and other related processes.


How TCI Consultants Can Help Investors and the Diaspora


TCI Consultants specializes in assisting investors, particularly Tanzanians in the diaspora, to start and grow businesses in Tanzania. Here’s how TCI can support:


1. Market Research & Business Strategy

TCI Consultants can help investors understand the Tanzanian market, identify viable business opportunities, and develop a strategy tailored to the local context.


2. Legal and Regulatory Guidance


Navigating Tanzanian business laws can be complex, especially for foreign investors. TCI Consultants assist with:

  • Business registration and legal compliance.

  • Advising on the best business structure for your needs.

  • Assisting with permits, licenses, and tax registration.

  • Ensuring your business complies with local regulations.


3. Investment Facilitation


For Tanzanian Diasporas and foreign investors, TCI can provide facilitation with the Tanzania Investment Centre (TIC) and other government bodies, ensuring smooth entry into the market and access to available incentives, such as tax breaks and land allocation.


4. Business Plan Development & Financial Structuring


TCI helps create comprehensive business plans, including financial forecasts, to present to potential investors or financial institutions.


5. Support with Setting Up Operations


From finding the right location to establishing supply chains, TCI can help you manage the practical aspects of setting up a business.


6. Access to Local Networks


Leveraging TCI’s network can help diaspora investors connect with local partners, suppliers, and clients, accelerating their business success.


Important Links for Starting a Business in Tanzania


By working with TCI Consultants, Tanzanian Diasporas and international investors can navigate the complexities of setting up a business in Tanzania, ensuring a smooth and successful entry into the market.

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