business and investments blog

STARTING BUSINESS IN TANZANIA

BASIC INFORMATION

Tanzanian businesses can be registered as a business name, a local company or a foreign company. Business Registration and Licensing Agency (BRELA) is responsible for business registration in Tanzania. BRELA issues certificates of compliance for foreign companies, certificates of incorporation for local companies and certificates of registration for single proprietorship. Firms must then register their businesses with the Tanzania Revenue Authority (TRA), the National Social Security Fund (NSSF) and, depending on their business activities, with the Ministry of Industry and Trade (" Schedule A") or the Municipality (" Schedule B").

No.	Procedure	Time to complete	Associated Costs
1	Apply for clearance of the proposed company name at the Business Registration and Licensing Authority (BRELA)	1 day	No charge
2	Obtain a notarized declaration of compliance	1 day	Notaries do charge at the range of TZS 10,000-50,000, for notarial services to normal documents such as form No. 14 b.
3	Apply for company incorporation and obtain the certificate of incorporation   Business trade names (Cap 213) and companies (Cap 212) can be registered only in Dar es Salaam. A lawyer is not required, but using one is common practice. To apply for a certificate of incorporation, a subscriber, secretary, or a person named in the articles of association as a director must submit the following to the Registrar of Companies, along with the registration application form (form no. 1): ·         14a (First Directors and Secretary and Intended situation of Registered Office) ·         14b (Declaration of Compliance on Application for the Registration of a Company) The Memorandum and Articles of Association are also filed with the forms. After the forms are filed, the certificate of incorporation is usually processed within 2-3 days. Registration forms are free, and applicable registration fees (according to the New Companies Act 2002) are shown below. Although there are no standard articles of association, Table A of the Schedules to the Companies Ordinance may be adopted. The fee for incorporating companies with capital below TZS 1 million is 10% but is negotiable. Company registration fee (based on share capital): - Share capital from 20,000 to 500,000: TZS 50,000. - Share capital from 500,000 to 1,000,000: TZS 80,000. - Share capital from 1,000,000 to 2,000,000: TZS 100,000. - Share capital from 2,000,000 to 3,000,000: TZS 120,000. - Share capital from 3,000,000 to 5,000,000: TZS 150,000. - Share capital from 5,000,000 to 10,000,000: TZS 180,000. - Share capital from 10,000,000 to 30,000,000: TZS 200,000. - Share capital 30,000,000 and over: TZS 300,000. Filing fee: TZS 45,000: 15,000 per document Stamp duty fee: - Original memorandum and articles of association: TZS 6,200. - Additional copies: TZS 5,000.	4 days	TZS 236,200
4	Apply for taxpayer identification number (TIN) at the Tanzania Revenue Authority	1 day	No charge
5	Obtain taxpayer identification number (TIN) All the directors of the company must be physically present at the tax office to give their fingerprints (biometric data). The applicant must visit TRA offices to pick up the TIN number in person. The company will be required to declare its estimated income or turnover for the provision tax assessment for the particular year. At the TRA office, the tax officer may interview the company founders/directors and record their business and personal particulars.	1 day	No charge
6	Apply for a business license from the regional trade officer (depending on the nature of business) The business license automatically registers the company for various taxes imposed by the Dar es Salaam City Commission (for example, the development levy). The application is free of charge for companies with a turnover of less than TZS 40 million and certain health providers.   The business license is either issued by the Ministry of Industry and Trade or the Local Authorities depending on the nature of business. Together with the application, the following documents must be submitted: 1) Certificate of incorporation 2) Memorandum and Articles of Association 3) Proof of Tanzanian Citizenship  4) Proof of a suitable company premises  5) Taxpayer Identification Number (TIN)	6 days	The charges vary depending on the nature of business
7	Apply for the VAT certificate at the Tanzania Revenue Authority   VAT registration takes 3–5 days if the proposed company will have a threshold income of TZS 40 million.	4 days	no charge
8	Register for the workmen’s compensation insurance at the National Insurance Corporation or an alternative insurance policy provider   To register for workers’ compensation insurance, employers must complete the Workmen’s Compensation Tariff Proposal Form. This form should be completed once the firm begins hiring employees and just before the firm becomes operational. However, because the insurance industry is privatized in Tanzania, employers may opt to take an insurance policy instead of the workmen’s compensation claims.	1 day	No charge
9	Obtain the registration number at the National Social Security Fund (NSSF)   It takes a week to obtain the registration number at the National Social Security Fund. According to Section 30 of the Social Security Regulatory Authority Act, every employer in the formal sector is required to register his/her employees with at least one of the mandatory schemes, provided that it shall be the right of the employee to choose the mandatory scheme to register under. These mandatory schemes are established by law and guaranteed by the Government to provide social security benefits to employees.	7 days	No charge