Investment framework and opportunities in Tanzania
Procedures Relative to Foreign Investment
- Freedom of Establishment
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The Tanzania Investment Act of 1997 provides for payment of fair, adequate, and prompt compensation to foreign investors. The law also guarantees access to the court or arbitration for the determination of adequate compensation; and prompt repatriation of benefits in convertible currency where applicable.
- Acquisition of Holdings
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Foreigners can acquire interests in a domestic company through purchase of its shares and assets. However, there are certain sector-specific restrictions. These include:
- Telecommunications and media: Foreign capital participation in the telecommunications can be up to 75% maximum. Tanzanian TV stations can be owned up to 49% by foreigners. Foreign investors are barred from acquiring shares in nationwide newspapers. Telecommunication companies are required to list 25% of their shares on the Dar es Salaam Stock Exchange.
- Mining: Foreign mining firms must have at least 5% equity from an 'indigenous Tanzanian company' (indigenous Tanzanian company is defined as a firm owned at least 51% by Tanzanians and with 100% of its non-managerial positions held by Tanzanians). Foreign firms are also required to grant the government a 16% carried interest. Foreign companies that provide goods or services to the mining sector must incorporate a joint venture company in which an indigenous Tanzanian company holds equity of at least 20%.
- Obligation to Declare
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The Tanzania Investment Centre (TIC) operates as a one-stop shop for foreign investors. Foreign companies are not required to register with the TIC; however, registering is the only way to be eligible to benefit from investment incentives (through investment incentives), including VAT and import duty exemptions. Registering with the Zanzibar Investment Promotion Authority (ZIPA) in the semi-autonomous region of Zanzibar provides access to similar investment incentives.
- Requests For Specific Authorisations
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Foreigners need to meet certain conditions in order to be recognised as "strategic" or "special strategic investors": The minimum investment capital to obtain "strategic investor" status is USD50 million for wholly owned foreign companies and joint ventures with Tanzanians. The threshold is USD300 million for the "special strategic investor" status. The status is granted by the National Investment Steering Committee (NISC).
Foreign investors are barred from most tourism activities: Mountain guiding, travel agency, car rental and tour guiding are not open to foreigners. Port services licences are only granted to Tanzanian companies. Furthermore, there are various restrictions in fisheries: Foreign-owned ships cannot engage in local trade. Only Tanzanians can be licenses as shipping agents. Fishing and fish export licenses cost three times the local ones, exclude several operations and collection of specified fish and fish products.
Gemstone mining licenses are granted exclusively to Tanzanians (a minister waiver is available).
Pursuant to the Zanzibar Investment Promotion and Protection Act, the government can restrict foreign investment in Zanzibar in order to provide better terms to Zanzibaris engaged in businesses requiring natural resources.
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Latest Update: May 2024
Tanzania: Investing in Tanzania
