What you need to do when you want to own a business?
In Tanzania a Business can be started and owned by an individual (Citizens and Non-Citizens), partners, Company, Corporation, Trust and Charitable Organization.
An individual whether resident or non-resident is required to visit TRA regional or district office and fill Tax Identification Number (TIN) application form to apply for Taxpayer Identification Number. The application can also be made online, however the applicant must physically visit TRA offices for biometric scanning which involves taking photograph, finger prints and signature.
After obtaining TIN certificate the applicant will be required to apply for business license from the Trade Licensing office in District, Municipal, City and the Ministry of Trade and Industry depending on the type of business.
Who is a resident individual?
A person qualifies to be a resident in the United Republic of Tanzania when: -
- Has a permanent home in the United Republic and present in any part of the year of income.
- Is legally present in the United Republic during the year of income for a period or periods amounting in aggregate to 183 days or more.
- Is present in the United Republic during the year of income and in each of the two preceding years of income for periods averaging more than 122 days in each of such year of income.
- Is an employee or an official of the Government of the United Republic posted abroad during the year of income.
Registered Business Name:
An individual may opt to register the Business Name to the Agency commissioned by Government through the Ministry of Industry, Trade and Investment known as Business Registration and Licensing Authority (BRELA). The registered name can be obtained before or after application for TIN. The registered business name shall be indicated on the TIN certificate together with an individuals’ name showing the owners name trading as (T/A). Registration of Business Names and Partnership is Regulated by Business Names Registration Act No. .....of ........(Attach Pdf)
- Individuals may opt to operate their business in the form of partnership. Partners have to register for the firm at Business Registration and Licensing Agency (BRELA) and acquire the certificate of registration which shows the number and names of partners with their respective business activities. Registration of Business Names and Partnership is Regulated by Business Names Registration Act No. .....of ........(Attach Pdf)
- In applying for TIN the partnership firm shall apply for its certificate by submitting the copy of certificate of registration obtained from BRELA and the Partnership deed.
- Each individual partner shall apply for TIN, in case any partner has already issued with TIN certificates for other purpose he/she cannot make another application. The same TIN number will be used.
Limited Liability Company (LLC)
A limited liability company is neither a partnership nor a corporation, but it has some characteristics of both. The owners are able to participate in business decisions, as in a partnership, but an LLC offers some protection of the individual assets of its owners.
Starting a Limited Liability Company requires persons to apply for the Registration at Business Registration and Licensing Agency (BRELA) after submitting the Memorandum and Articles of Association to the Agency after Name clearance.
A corporation is a business entity that legally exists separately from its owner(s). The owners of a corporation are shareholders; their percentage of ownership in the business is represented by their corporate stocks or shares. Shareholders can choose a board of directors to manage business operations, or they can create a shareholders' agreement, which will allow them to manage the business directly.
Starting a corporation requires a person to apply for the Certificate of incorporation from Business Registration and Licensing Agency (BRELA). The promoters of the company are required to draw and submit the Memorandum and articles of association to the Agency after Name Clearance approval.
Note: Incorporation of Company is Regulated by The Companies Act No. 12 of 2002.
The Agency (BRELA) Register the Company by issuing Certificate of incorporation and the Signed Memorandum and Articles of Association submitted by the applicant.
The Company (LLC or Corporation) shall apply for TIN certificate to Tanzania Revenue Authority (TRA-www.tra.go.tz) by filling TIN application forms as follows:
- Application for the company.
- Application for each shareholders/directors, in case any director has already issued with TIN certificates for other purpose he/she cannot make another application. The same TIN number will be used.
- For non-citizen directors or shareholders are required to fulfil all immigration procedure and obtaining business permit from the Immigration Department working under Ministry of Home Affairs.
Trust is an arrangement under which the trustees (third parties) hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.
A trust has to Register for the firm at Business Registration and Licensing Agency (BRELA) and acquires the certificate of registration which shows the names and addresses of trustees.
Each trustee shall apply for TIN; in case any trustee has already been issued with TIN certificate for other purpose he/she cannot make another application. The same TIN number will be used.
An entity will be recognized as charitable organization for tax purposes after been issued with a ruling by the Commissioner. The applicant has to apply for Registration and to acquire all necessary documents from the Commissioner at Ministry of Home Affairs.
Declaration of estimated income/turnover
All Businesses are required to declare the estimated income or turnover for the provision tax assessment for the particular year of applying for Tax Identification Number (TIN). At the TRA office the tax officer may interview you and record your business and personal particulars for appropriate tax assessment.