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Tanzania
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Tanzania with efficiency and assurance.
WHY TANZANIA?
Tanzania, officially the United Republic of Tanzania, is a country in East Africa within the African Great Lakes region. It is bordered by Uganda to the northwest; Kenya to the northeast; the Indian Ocean to the east; Mozambique and Malawi to the south; Zambia to the southwest; and Rwanda, Burundi, and the Democratic Republic of the Congo to the west. According to a 2024 estimate, Tanzania has a population of around 67.5 million, making it the most populous country located entirely south of the equator. Tanzania is home to Mount Kilimanjaro, the highest mountain in Africa and the highest single free-standing mountain above sea level in the world.
Tanzania is known for its robust economy, rich natural resources, and increasing foreign investment. The African country has a fairly strong GDP, reaching $79.14 billion in 2023. Tanzania’s economic stability is attributed to its monetary policies that have reduced inflation and food prices. Structural reforms and a business-friendly environment have further contributed to stable financial performance. Tanzania is a favourable choice for doing business in Africa because of its mineral and metal resources, including gold, tanzanite, copper, and iron ore. The country offers investment opportunities in the energy, agricultural, and tourism sectors. Another attractive feature is the low labour costs, making it more affordable for businesses to hire a workforce and expand in Africa.
Tanzania’s economy experienced year-on-year growth over the last 20 years, increasing by an average of 6%. The country’s economic success is attributed to its agricultural, mining, and services sectors. In the tourism industry, around 1.8 million people visit Tanzania annually, with attractions including the Serengeti and Mount Kilimanjaro. Tourism accounts for 17% of its GDP, while the services sector contributes to 40% and improved productivity and employment rates, further strengthening the economy. Tourism in Tanzania is among its fastest-growing industries offering investment opportunities for global companies. The mining sector is another major economic contributor, with the government aiming for the sector to reach 10% of GDP in 2025. Along with the tourism sector, businesses can venture into mining, manufacturing, renewable energy, agriculture, and communication technology.
ADVANTAGES
- Strategic Regional Gateway: Tanzania’s location on the Indian Ocean serves as a vital trade hub for six landlocked neighbours (Uganda, Rwanda, Burundi, DRC, Zambia, and Malawi).
- Broad Market Access: Membership in the East African Community (EAC) and the Southern African Development Community (SADC) provides preferential access to a regional market exceeding 450 million people.
- Abundant Natural Resources: The country is rich in minerals (gold, diamonds, and unique tanzanite), natural gas, and has vast arable land for agribusiness.
- Political Stability: Tanzania is recognized for its long-standing political stability and peaceful transitions of power, which provides a predictable environment for long-term investment.
- Attractive Investment Incentives: The Tanzania Investment Centre (TIC) offers a “one-stop facilitation centre” for permits. Incentives include 0% import duty on capital goods for priority sectors and the ability for foreign investors to own 100% of their business.
- Investment Protection: Tanzanian law guarantees protection against nationalization and expropriation, and ensures the unrestricted repatriation of profits and dividends.
- Emerging Infrastructure: Ongoing large-scale projects, such as the Standard Gauge Railway (SGR) and port upgrades, are significantly reducing logistics costs and improving connectivity.
TAX REGIME
Corporate Income Tax (CIT):
The standard rate is 30% for both resident and non-resident companies.
- Reduced Rates: Newly listed companies on the Dar es Salaam Stock Exchange (DSE) pay 25% for three years. Special rates apply to new vehicle assemblers (10%) and pharmaceutical/leather manufacturers (20%) for their first five years.
- Alternative Minimum Tax (AMT): Companies with unrelieved losses for three consecutive years pay 1% of their turnover.
Personal Income Tax (PAYE):
Resident individuals are taxed on a progressive scale up to 30% for income exceeding TZS 1,000,000 per month. Non-resident individuals generally pay a flat 15% on employment income.
Value Added Tax (VAT):
The standard rate is 18% in Mainland Tanzania and 15% in Zanzibar.
- New for 2025/2026:
A 16% rate applies to certain B2C electronic payments, and new VAT withholding rates of 3% (goods) and 6% (services) have been introduced for designated agents.
Withholding Tax (WHT):
Rates vary by payment type:
- Dividends: 10% (standard) or 5% (DSE-listed).
- Interest: 10%.
- Royalties: 15% (residents).
- New Measure: A 10% deemed withholding tax now applies to undistributed profits not shared within 12 months of the financial year-end.
TANZANIA COMPANIES
Sole Proprietorship:
Owned by one individual, simple setup, but owner has unlimited personal liability.
Partnership:
Two or more people share profits/losses; can be General (shared liability) or Limited (some partners have limited liability).
Private Limited Company (LLC) (Ltd.):
A separate legal entity with limited liability for shareholders (typically min 2), restricting share transfers to the public; popular for small to medium businesses.
Public Limited Company (PLC):
Can raise capital from the public, suitable for large businesses, requires more shareholders (min 7) and capital.
Company Limited by Guarantee:
Members guarantee a set amount; ideal for non-profits, charities, and social organizations.
Branch Office:
A presence for foreign companies, not a separate legal entity in Tanzania.
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Contact Us
Get in touch with the right people to get the right help in setting up your business in Tanzania.
enquiries@chandrawatpartners.com.