Global Upside helps businesses expand into Tanzania by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Tanzanian laws and regulations.
The hiring and incorporation processes in Tanzania are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Tanzania. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.
Tanzania, officially the United Republic of Tanzania, is an East African country and is south of the Equator. The population of the nation is ethnically and linguistically varied. Tanzania is also rich in mineral resources, especially diamond, gold, gypsum, and tin. The major industries are textiles, brewing, food processing, and tobacco, with a few paper and pulp processing units and steel mills.
- Even though only 14% of the land is arable, agriculture is the mainstay of the Tanzanian economy.
- Tanzania main exports are household products, toys, furniture, lime, vehicles, accessories for machine tools, bran, etc.
- The main imports are petroleum oils, palm oil, medicines, ferrous derivatives, and motor vehicles.
A limited liability company is the most preferred form of a legal entity set up in Tanzania. It requires at least two investors and the liability is limited to their shared contributions. An LLC is best suited for the incorporation of a small business with a simple shareholding system.
A representative office is a form of an entity set up that cannot engage in any activities which involve commercial activities It can only engage in market research and advertising purposes.
It takes a minimum of seven to ten weeks to establish a legal entity set up in Tanzania.
Employment contracts may be for an unspecified period, for a specified period for professionals and managers, or a specific task. Contracts for a specified period cannot be for less than 12 months. A contract with an employee must be in writing if the employee is to work outside Tanzania.
When an employee commences work, the employer must supply the employee with the following particulars in writing:
- Name, age, gender, and permanent address of the employee
- Job location
- Job description
- Date of commencement
- Form and duration of the contract
- Place of recruitment
- Working hours
- Remuneration, the method of its calculation, and other benefit details
- Any other prescribed matter
Employees receive time off with regular pay during public holidays. Tanzania recognizes the following public holidays:
- Jan. 1: New Year
- Jan. 12: Zanzibar Revolutionary Day
- Apr. 7: Karume Memorial Day
- Apr. 26: Union Day
- May 1: Workers Day (Labor Day)
- Jul. 7: Saba Saba Day (Industrial Day)
- Aug. 8: Peasants Day (Farmers Day)
- Oct. 14: Nyerere Day
- Dec. 9: Independence Day
- Dec. 25: Christmas Day
- Dec. 26: Boxing Day
- the religious festivals of Eid el Fitr, Id ul Haji, Maulid Day, Good Friday, Easter, and Easter Monday (days vary year to year)
The payroll frequency, in Tanzania, can be hourly, daily, weekly, or monthly.
An employer is required to pay an employee remuneration during working hours at the place of work on the agreed pay day and in cash unless the employee agrees otherwise, in which case the payment is made by check or direct deposit into an account designated by the employee in writing.
Both domestic and foreign public interest entities require International Financial Reporting Standards (IFRS). Government businesses are required to use International Public Sector Accounting Standards (IPSASs).
The corporate tax rate in Tanzania is 30%.
A reduced CIT rate of 25% applies for 3 consecutive years for newly listed companies on the Dar es Salaam Stock Exchange (DSE).
Reduced corporate tax rates apply as follows:
- 10% for new assemblers of fishing boats, vehicles, and tractors for the first five years from the start of operations.
- 20% for new producers of leather or pharmaceutical products who have a work contract with the Tanzanian government for the first five years from the start of operations.
- 25% for new shareholders in the production of sanitary pads who have a work contract with the Tanzanian government for the first two years (2019/20 to 2020/21).
Value Added Tax (VAT)
The VAT rate in Tanzania is 18%.
Anti-Bribery & Anti-Corruption Law
The main law that governs anti-bribery and anti-corruption is the Prevention and Combating of Corruption Act (PCCA), 2007.
The other anti-corruption laws are:
- Anti Money Laundering Act, 2006
- Economic and Organized Crimes Control Act, (Cap 200 R.E 2002)
- Criminal Procedure Act, (Cap 20 R.E 2002)
- Public Procurement Act, 2011
- Public Finance Act, 2004
Penalty for corruption offenses:
i) Imprisonment for 3 to 7 years
ii) Monetary fine
iii) Confiscation of the earnings
iv) Asset freezing