Table of contents
Company Registration in the United Republic of Tanzania
Company registration and Formation in the United Republic of Tanzania is not a Union matter as such companies are registered and monitored under two different laws, The Companies Act Cap 212 of 2002 and The Companies Act NO. 15 OF 2013, in Tanzania Mainland and in Zanzibar respectively, hereinafter referred as the Acts. Hence, the company which is registered under the laws of Zanzibar will be treated as a foreign company in Tanzania Mainland, and vice versa.
The Acts provide for the requirements and procedures to be adhered to before, during, and after the Registration of the Company in Tanzania.
The Acts recognizes the following types of companies; Private & Public Companies and Limited and Unlimited Companies.
A Private Limited Company is one that has limited the liability of its members only to the extent of subscribed shares or guaranteed amount and which does not allow members of the public to subscribe to its shares. The Company Law of Tanzania Mainland requires that the company shall have at least two shareholders and two directors and not more than 50 shareholders, WHILE the Company law of Zanzibar allows a Single shareholder company.
A Public Limited Company is one that allows members of the public to subscribe to its shares, and raise its capital by issuing shares to the public. The law requires that the company should have at least 7 members, and the company’s memorandum should state the company is a Public company. The company can be limited by share or guarantee but must have a share capital.
Procedure for Company Registration.
There are two main types of Company registration in both jurisdictions;
- Incorporation of a new Company under the laws of Tanzania or Zanzibar
- Registration of a foreign company as a branch in Tanzania or Zanzibar
Incorporation of a new Company under the laws of Tanzania or Zanzibar
Currently, Company registration in Tanzania is conducted through an online system where all the documents are submitted electronically through Business Registration and Licensing Agency’s Online Registration System and Zanzibar Property and Business Registration Online Registration System which are government agencies for business registration in Tanzania Mainland and Zanzibar, respectively.
Firstly, the one who wishes to register a company must conduct a name search, to be sure that the proposed name is available for registration. The name search is made through the BRELA online system. If the name is available for registration, and in case the registration will take place in a few days after the search, it is advised to file an application for reservation of the said name, the registry will reserve the name by granting exclusive rights over the said name and will not allow other people to register the same.
Secondly, once the name has been cleared for registration the next step will be the preparation of the Memorandum and Articles of Association, together with the compliance declaration, Form 14B and Form No.2 in Tanzania Mainland and Zanzibar respectively, declaring that all the requirements relating to the formation of the company have been complied with.
The forms are filled in and signed by either a proposed director, company secretary, or an Advocate of the High Court engaged in the formation of the company, and they must be attested by the Commissioner for Oaths. All these documents are to be filed with the registrar of companies and pay all necessary registration fees.
However, in order to be able to register a company in the United Republic of Tanzania, one is required to have copies of National Identification Cards/Zanzibari Residence Card or the passport for all local and foreign prospective shareholders, respectively. In addition to that, in Tanzania Mainland, the Local Directors are required to have Tax Identification Number (TIN), obtained from Tanzania Revenue Authority.
Thirdly, the registrar will examine the application and all the documents accompanying it, and if the application has complied with all the requirements then the registrar will go on to issue the Certificate of incorporation consisting of the incorporation number (same will act as Tax Identification Number of the Company, in Tanzania mainland only, however, the company will need to finalize registration with Tanzania Revenue Authority for issuance of Tax Identification Number Certificate), the date of incorporation, signed by the Registrar of Companies or his designated officer and sealed by the Seal of the Registrar of Companies.
Registration of a foreign company as a branch/Subsidiary Company in Tanzania or Zanzibar
A foreign company can be registered in Tanzania or Zanzibar if such a company has an established place of business in Tanzania or Zanzibar. A foreign company is not deemed to have a place of business in Tanzania or Zanzibar solely on account of its doing business through an agent in Tanzania at the place of business of the agent.
A foreign company seeking to establish a place of business in Tanzania or Zanzibar must deliver the following documents to the Registrar of Companies:
- Certified copy of memorandum and articles of association or other instrument constituting or defining the constitution of the company. If the instrument is not in English, a certified translation is required.
- A list of directors and a company secretary of the company.
- A statement of all subsisting charges created by the company.
- Names and addresses of one or more persons, resident in Tanzania authorized to accept on behalf of the company service of process and any other notice required to be served on the company, and to represent the company as its permanent representative at its place of business (with a statement as to the extent of its authority).
- Full address of registered principal office of the company and full address of the place of business in Tanzania.
- Statutory declaration made by the director or secretary of the company stating the date on which the company’s place of business in Tanzania was established, the business that is to be carried on, and if different from the registered name of the company, the name under which that business is to be carried on.
- A copy of the most recent accounts and related reports of the company, if not in English, a translation of the same.
On completion of the registration, the foreign company will be issued with a Certificate of Compliance from Business Registration and Licensing Agency in Tanzania Mainland or Zanzibar Property and Business Registration in Zanzibar
Once a foreign company is issued with a certificate of compliance in Tanzania or Zanzibar, it has the same obligation and rights as if it were a company incorporated in Tanzania or Zanzibar, and is therefore subject to the laws of that Region.
A foreign company that has established a branch in Tanzania must file, among other things, annual accounts in respect of that branch in every calendar year.
Post-Registration Compliance.
Being ready to start operations after registration is not an approval to conduct company business activities, companies are supposed to be compliant with the post-registration requirements, which include:
Tax Registration with TRA
In Tanzania’s mainland, upon a company’s registration and acquisition of its incorporation number, this number also serves as the company’s Tax Identification Number (TIN). Nonetheless, for the process to be fully completed and to obtain the original TIN Certificate, the company must submit the requisite forms and documentation to the relevant tax authorities. This step is crucial for ensuring compliance and formalizing the company’s tax registration status.
In contrast to the mainland, the process in Zanzibar differs significantly. Following the acquisition of an incorporation certificate, companies in Zanzibar are required to submit a distinct application for a Tax Identification Number (TIN) to the Tanzania Revenue Authority (TRA). This application undergoes a thorough review by the TRA before a TIN Certificate is granted. Notably, the TIN issued in Zanzibar will have a different number from the incorporation number, emphasizing the separate procedural requirements in this region.
Further, the company will also need to be registered with Zanzibar Revenue Authority and secure the Registration Number and VAT registration Number
VAT Registration Number (VRN) by Tanzania Revenue Authority and Zanzibar Revenue Authority
Registration for VAT is made by TRA in Tanzania mainland and ZRA in Zanzibar and is required by companies providing professional services, such as Lawyers, Accountants, Engineers, and the like, and also the companies with an annual turnover of at least TZS200 million or 100 million, in Tanzania Mainland and Zanzibar, respectively.
Securing Business License
Prior to making an application for a business license a Tax Clearance Certificate for the business shall be obtained from the Tanzania Revenue Authority, and/or Zanzibar Revenue Authority.
Depending on which industry/sector, the company has intended to operate in, it will have to apply for a business license from the relevant authority such as the Trade office in the District, Municipal, City, and the Ministry of Industry, Trade, and Investment, ZIPA, TIC, or ZCT, depending on the type of business activity the company has intended to run.
Filling of Annual Returns
It is a statutory duty for every company incorporated in Tanzania mainland and in Zanzibar to file their Annual Returns with the Registrar of Companies, accompanied by Audited Accounts, which are made up to a date not later than the return date. The return date is the date of the anniversary of the company’s incorporation. Every annual return date shall state the date to which it is made up and shall contain the following information:
- The address of the company’s registered office;
- The type of the company whether it is public/private and its principal business activities;
- The name and address of the Company Secretary;
- The name and address of every director of the company, and for each individual director, his nationality, physical address and postal address, date of birth, business occupation and such particulars of other directorships as are required to be kept in the company’s register of directors;
- In the case of a corporate director, such particulars of other directorships he holds would be required to be kept in the company’s register;
- The register of members and if it is not kept at the company’s registered office, the address of the place where it is kept;
- The register of the debenture holders and if it is not kept at the Company’s registered office, the address of the place where it is kept;
- The names of the of the present and past shareholders together with their current shareholding or any changes that have been made to their shareholding up to the date of the return;
- Any change that has been made up to the date of the return; and
- Every annual return of the prescribed year should be signed by either a director or the secretary of the company.
Keeping of Books of Accounts
It is a requirement of the law that every company shall keep in English or Swahili proper books of account, which are sufficient to show and explain the company’s transactions. The accounts shall disclose with reasonable accuracy at any time, the financial position of the company and enable the directors to ensure that any balance sheet, profit and loss account, and cash flow statement prepared complies with the law. The books of account shall be kept at the registered office of the company or at such other place in Tanzania as the directors think fit, and shall at all times be open to inspection by the directors and shareholders.
Immigration Permits and Business Visas
If the directors of the company are foreigners and they intend to personally run the company here in Tanzania or Zanzibar, or in case the company needs to employ expert(s), then they are required by the law to obtain from the relevant authorities, the work and resident permit for their safe stay and working in Tanzania or Zanzibar. However, if they do not intend to reside in Tanzania, there will be no need to acquire such permits they can apply for a Business Visa which lasts for a shorter period than the permits.
FURTHER INFORMATION:
At Eden Law Chambers, we assist Clients with the registration of companies and provide Company Secretarial services, which often include, the provision of Legal advice/opinion, Compliance Audit, and Spot Checking with Clients aiming at ensuring that, Clients are complying with the law in their business affairs.
This article is intended to give you a general overview of Company Law in the United Republic of Tanzania. If you would like further information and clarification on any issue raised in this article, please contact us.
