How To Start A Business in Tanzania

How to Start a Business in Tanzania - Step by Step Guide

Starting a business in Tanzania involves a straightforward process for both local and foreign investors. Below is a comprehensive guide, including the necessary procedures, fees, taxes, and estimated processing times.

Step-by-Step Guide for Locals

1. Choose Your Business Structure: Common structures include Sole Proprietorship, Limited Liability Company (LLC), Partnership, or Cooperative Society.
2. Register Your Business: Local businesses must register with the Business Registration and Licensing Agency (BRELA).
   Business Registration and Licensing Agency (BRELA)
   Fees: Registration fee for an LLC: TZS 150,000 to TZS 200,000 (approximately USD 65 to USD 85).
3. Obtain a Taxpayer Identification Number (TIN): After registration, obtain a TIN from the Tanzania Revenue Authority (TRA).
   Tanzania Revenue Authority (TRA)
   Fees: Free.
4. Register for VAT: Businesses with a turnover of over TZS 100 million per year are required to register for VAT.
   Fees: Free, but monthly VAT returns are mandatory.
5. Register with the National Social Security Fund (NSSF): Employers are required to register with NSSF if they have employees.
   National Social Security Fund (NSSF)
   Fees: Contributions are 20% of the employee’s salary (10% employer, 10% employee).
6. Open a Business Bank Account: After registration, open a business bank account in any of the local banks.
   Fees: Initial deposit fee ranges from TZS 100,000 to TZS 500,000 (approximately USD 43 to USD 215).
7. Obtain Permits and Licenses: Depending on the type of business, additional permits or licenses may be required.
   Fees: Varies depending on the business type.

Step-by-Step Guide for Foreign Investors

1. Choose Your Business Structure: Foreign investors may opt for an LLC or a Joint Venture (JV) with a Tanzanian partner.
2. Register Your Business: Foreign investors must register with the Business Registration and Licensing Agency (BRELA).
   Business Registration and Licensing Agency (BRELA)
   Fees: Business registration fee for an LLC: TZS 150,000 to TZS 200,000 (approximately USD 65 to USD 85).
3. Obtain a Taxpayer Identification Number (TIN): After registration, foreign investors must apply for a TIN from the Tanzania Revenue Authority (TRA).
   Tanzania Revenue Authority (TRA)
   Fees: Free.
4. Register for VAT: Businesses with an annual turnover of more than TZS 100 million must register for VAT.
   Fees: Free, but VAT returns are mandatory every month.
5. Register with the National Social Security Fund (NSSF): If employing staff, foreign businesses must register with NSSF.
   National Social Security Fund (NSSF)
   Fees: Contributions are 20% of the employee’s salary (10% employer, 10% employee).
6. Apply for Work Permits: Foreign investors wishing to work in Tanzania must apply for work permits through the Ministry of Labour.
   Ministry of Labour, Tanzania
   Fees: Work permit application fee: TZS 200,000 to TZS 400,000 (approximately USD 85 to USD 170).
7. Open a Business Bank Account: Foreign investors must open a business account in one of the registered Tanzanian banks.
   Fees: Initial deposit fee varies from TZS 100,000 to TZS 500,000 (approximately USD 43 to USD 215).
8. Obtain Permits and Licenses: Depending on the business activity, foreign businesses must acquire the relevant permits and licenses.
   Fees: Varies depending on business type.

Estimated Duration

• For Locals: 1-2 weeks
• For Foreign Investors: 3-5 weeks (including obtaining work permits)

Useful Resources

• Business Registration and Licensing Agency (BRELA)
• Tanzania Revenue Authority (TRA)
• National Social Security Fund (NSSF)
• Ministry of Labour, Tanzania