As an Entrepreneur looking to start a business in Africa, you need to know how to go about setting up your business in any given African country of your choice. Here, I want to take you through some of the basic rudiments of starting a business in Tanzania.
|Dar es salaam – The Tanzania commercial capital|
The United Republic of Tanzania is an East African country with a stable and strong economy. Out of 189 economies in the world, Tanzania is ranked 134th. The country shares border with Uganda, Burundi, Zambia, Malawi, Rwanda and the Democratic Republic of Congo. Her land mass is 886, 040 sq. kilometer and 59,509 sq. km of water. The estimated population of Tanzania as of the last census, held in 2002, was 34.5 million and it is estimated to be growing at 2.9% per annum.
According to US Embassy in Dar Es Salaam, Tanzania’s economy has been doing well in recent years. In 2010, Tanzania made a revenue of $1.4 billion from Gold exports while the Tourism sector made $1.3 billion revenue. The country’s GDP per capita increased from $300 in 2006 to $600 in 2010.
Recently, the government of Tanzania has made reforms on the laws that limit business activities, as well as the laws that make the cost of doing business expensive. Also, with annual GDP on an average of 6%, Tanzania economy has been on the rise in the recent years.
According to Tanzania’s Economic profile based on “Doing Business 2014”, starting a business in Tanzania requires some procedures that will take up to 26 days for completion and will cost up to 27.7% income per capita. The Tanzanian government prefers joint ventures and shared ownerships as a Business strategy. Page 21 through 23 of the “Doing Business 2014” pdf file, goes further to establish the bureaucratic and legal steps that an Entrepreneur must take when starting a business in Tanzania. Some of these steps are listed below.
The first step to take when starting a business in Tanzania is to register the business.
As An Individual
For you as a resident or non-resident individual to register your business in Tanzania, you will need to visit the regional or district office of the Tanzania Revenue Authority (TRA) to obtain the Taxpayer Identification number (TIN). You can start by applying online, after which, you will need to visit the TRA office to submit your biometric data.
When you have obtained the TIN, you also need to get a business license in the district and Ministry of trade and industry. You can decide to legalize your business through the Business Registration and Licensing Authority (BRELA), even before you apply for your TIN. The purpose of this is that, your TIN certificate will carry your business name along with your name as (T/A).
As A Corporation
If you are going to start a limited liability company in Tanzania, you need to incorporate your business. To do this, you need to apply for the Certificate of Incorporation at the Business Registration and Licensing Authority (BRELA).
The process starts with a search for the availability of the business name. After which, you will prepare to submit the Article of Association and Memorandum of Understanding. When you have successfully incorporated the business, the resulting Certificate of Incorporation will be included in your form, when applying for Taxpayer Identification Number (TIN).
The next thing to do is to get the site for your business
Inspection Of The Site By Tax Officials
The site of the business must be inspected by Income Tax officials. This will facilitate the issuance of your Taxpayer Identification Number (TIN).
Obtain The Signature of The Town-Planning Officer
After your business site has been inspected by Income Tax officials, you need to obtain the signature of the Land and Town-Planning Officer.
Get Health Officers To Inspect And Approve The Environment
You also need to have health officers to inspect the premises of the business and obtain their signature for approval. After they have inspected the location, they will then approve of the business location.
Another Thing You Need is Electricity
In order to have Electricity, you must apply to the Tanzania Electricity Supply Company Limited (TANESCO). After applying, TANESCO will carry out external inspection of the site. When the site has been inspected, you will need to pay connection fees, which will include a security deposit.
When the external inspection and connection has been done, TANESCO will do an internal inspection and connection. After which, a meter will be installed, giving you Electricity.
One of the major obstacles of doing business in Tanzania is poor Electricity. This is because, the country power supply is based on Hydro Electricity. To mitigate this situation, you may need to make arrangements for alternative power supply.
The aforementioned steps are the basic steps you need to take when starting a business in Tanzania. Some other things you can do is
- Register for “Workmen compensation Insurance” at the National Insurance compensation. This will require that you fill out the Workmen Compensation Tariff Proposal Form. You must do this before your company starts to employ workers.
- You should also to apply for pay as you earn (PAYE) and value added tax (VAT) certificate with the Tanzania Revenue Authority.
- Where your business turnover per annum is less than $20,000, you should register your business under stamp duty instead of VAT.
- Depending on the nature of the business you are doing, you may need to get a business License from the Regional Trade Officer. This will require that you submit your company documents to the Licensing Board committee for approval. You will be asked to pay two-third (2/3) of your licensing fee up-front and the balance will be due to be paid, 8 months later.
- You should also get registration number at the National Social Security Fund (NSSF).
All the procedures mentioned above may involve stress and consume time for completion. But you can be sure that when you have done everything, you will not have problems with any government agency in Tanzania as you start your business.