Which legal structure can I choose?

For entrepreneurs in Tanzania, there are the following forms of companies:

• Sole proprietorship

• Partnership

• Private/Public company

• Non Profit Company

The common forms of companies are here below explained in more detail:

Sole Proprietorship

• Owned by 1 person

• No distinct existence from owner, so profit regarded as income of owner.

• Owner is accountable for company’s debts and may affect properties of owner (personal possessions may be used as a guarantee in case of financial difficulty)

• Must be registered and obtain a business license

• Owner has the freedom to plan and develop his business at a desired pace

​Partnership

• Consist of 2 or more people (not more than 20)

• Each partner is bonded to the business; and all of them are liable to the business debts

• Lower tax rates in comparison to a sole trade (look at the example in section seven)

• The partners have to register for the firm at Business Registration and Licensing Authority (BRELA) and acquire the certificate of registration which shows the number and names of partners with their respective distribution ratio.

​Private/Public Company

• Company is bonded to the enterprise and its debts and the business transactions have no relationship to the individual property of its owners

• In case of bankruptcy, and if the debts exceed the company property, the liquidator will have no mandate to seize individual property of the directors or shareholders.

​Non Profit Company

• Incorporated for public benefit or social activities

• Income and property is not distributable

• Must have must have at least three incorporators and three directors

• Need separate registration if the company wishes to receive grants or donor-funding  

​For more information on the various forms of businesses and their establishment, please refer to the Companies Act, 2002​

How do I set up a company in Tanzania?

Each entity has to be legally registered with the relevant institution and government department. All receipts and necessary documents should be provided during the registration process. Make sure to have them prior registering the business to avoid unnecessary future delays. The owner is required to visit the Tanzania Revenue Authority (TRA) regional or district office and fill TIN application form to apply for the Taxpayer Identification Number. The application can also be made online, however the applicant must physically visit TRA offices for biometric scanning which involves taking photograph, finger prints and signature.

The act of doing business without a trading license is an offence and upon conviction the licensee is liable to a fine of TZS 50,000 but not more than TZS 100,000 or imprisonment for a term of not more than two (2) years or both fine and imprisonment. In order to be considered for issuance of trading license must possess the following qualifications:

• Your age should be not less than 18 years old

• Ensure that you have an authorized place of business

• Should be sane

• Should be a good citizen without criminal offences and if not a citizen you must have Class A permit from Immigration Department.

For a successful business the entrepreneur should ensure that the product that is trading with must have a certification of its specifications approved by a recognized government institution or authority. This is purely for healthy/safety, social, and economic and for security reasons. For example locally produced products should be certified with the Tanzania Bureau of Standards and/or Tanzania Food and Drugs Authority. For exports of agricultural products they should conform with the Sanitary and Python-Sanitary Standards, or should have Product Certification/Quality Standards such as ISO, Organic Product Certification Schemes.

Below is a quick summary of steps of setting up a company in Tanzania, provided by Doing Business of World Bank: 

1. Apply for clearance of the proposed company name at the Business Registration and Licensing Authority (BRELA)

2. Obtain a notarized declaration of compliance

3. Apply for company incorporation and obtain the certificate of incorporation

4. Apply for taxpayer identification number (TIN) at the Tanzania Revenue Authority by clicking here

5. Obtain taxpayer identification number (TIN) from the Tanzania Revenue Authority

6. Apply for a business license from the regional trade officer (depending on the nature of business)

7. Apply for the VAT certificate at the Tanzania Revenue Authority by clicking here

8. Register for the workmen’s compensation insurance at the National Insurance Corporation or an alternative insurance policy provider

9. Obtain the registration number at the National Social Security Fund (NSSF)

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Useful Links

• Tanzania Revenue Authority – Staring a business

• Tanzania Revenue Authority

• Business Registrations and Licensing Agency