Tanzania, officially the United Republic of Tanzania, is an East African country located just south of the Equator. The country’s people are ethnically and linguistically varied.
Tanzania is the largest country in East Africa, encompassing both the mainland and the Zanzibar Archipelago, and borders Kenya to the north, Rwanda, Burundi, and the Democratic Republic of Congo to the west, and Zambia, Malawi, and Mozambique to the south.
Tanzania’s economy is predominantly agrarian, with agriculture accounting for over 40% of the country’s GDP. Tanzania also has abundant mineral resources, particularly gold, diamonds, tin, and gypsum. Food processing, textiles, beer, and tobacco are the main sectors, with a few steel mills and paper & pulp processing plants thrown in for good measure. Tourism has recently gained a lot of traction in the service sector. Mount Kilimanjaro, Africa’s tallest peak, is a popular tourist destination, as are the country’s forest reserves, national parks, and conservation zones, which cover roughly a quarter of the country’s geographical area.
Company structures in Tanzania
You can choose from one of the following company kinds to start a business in Tanzania.
Limited Liability Company
In Tanzania, a limited liability company (LLC) is a separate legal entity from its shareholders. Each shareholder’s liability for an LLC’s debts and liabilities is limited to their respective share capital contribution. The minimum requirements for forming an LLC in Tanzania are two shareholders and two directors, all of whom can be of any nationality. There is no requirement for a minimum paid-up share capital. An LLC is the most frequent legal entity used by foreigners to register their businesses, and it is best suited for small businesses with simple shareholder structures.
Public Company
In Tanzania, a public corporation is one whose shares are available for public trading. A minimum of two directors and seven shareholders (one of whom must be a Tanzanian national with a minimum of 40% shareholding in the company) are necessary to start such a corporation. To form a public business, a minimum share capital of $300,000 must be placed. Someone wishing to raise cash or list their company on the Tanzanian national stock exchange should form a public corporation.
Branch
A foreign corporation may establish a branch office in Tanzania that is 100 percent foreign-owned. It could be used to conduct business within the country.
A foreign company’s branch must register with the Registrar of Companies. The following paperwork is required:
- Certified copy of the Memorandum and Articles of Association (or similar) of the foreign firm, including an English translation if necessary
- Contact information of the director(s) and secretary
- The names and addresses of two residents who are authorized to accept legal notices and business communications.
- The registered or principal office address of the foreign corporation.
The Registrar will provide a certificate of compliance after receiving this information. It is important to know that there are no restrictions on money repatriation. All funds repatriated, however, will be subject to Tanzanian taxes.
Representative Office
A representative office is a corporation established solely for market research or promotion. It is forbidden to engage in commercial or business activity.
Benefits of Company Incorporation in Tanzania
There are numerous benefits to registering a business in Tanzania:
- One of the most appealing aspects of forming a business in Tanzania is the low cost of doing business, as the country has one of the lowest consumer cost indices in Sub-Saharan Africa.
- Tanzania has signed double tax treaties with more than 20 nations, including the United Kingdom, Canada, Germany, Norway, and India. As a result, Tanzanian-incorporated firms avoid unnecessary expenses.
- Tanzania is also a part of Africa’s regional trade blocs, giving businesses access to a large African market as well as trained and unskilled labor.
