The main legislation dealing with foreign investment and trading in Tanzania is the Investment Act of 2022. Section 3 of the act serves as an interpretation section, defining investment as “the creation or acquisition of new business assets and includes the expansion, restructuring, or rehabilitation of an existing business enterprise.” The Investment Act governs the entire process of investment in Tanzania, alongside other legislations such as the Land Act, Petroleum Act, and Environmental Management Act. These pieces of legislation work together with the Investment Act in addressing investment-related issues.
In Tanzania, investment is regulated by the Tanzania Investment Centre, in conjunction with the minister responsible for investment activities.
Tanzania Investment Centre (TIC)
Is a legal entity established by the Investment Act, with its primary function being the regulation and promotion of investment in Tanzania. The Minister responsible for investment serves as the head of the Tanzania Investment Centre.
Functions of TIC
The primary function of TIC is to coordinate all investment activities to benefit the nation in all aspects related to investment. It also collects, collates, analyzes, and disseminates information on investment opportunities and sources of investment capital. In addition to that, the Centre also provide advice to investors and the government on matters concerning investments and to monitor all activities related to investment.
The Minister’s function is to coordinate the investment Ministry with other Ministries to obtain information on investment opportunities that may exist in other Ministries.
Investment by Investors
In Tanzania, an investor can either be a native Tanzanian or a foreigner. The Act specifies that for a native to be considered an investor, their minimum investment capital should not be less than the equivalent of twenty million US dollars (US$ 20,000,000) in Tanzanian shillings. For an investment wholly owned by a foreigner or conducted as a joint venture, the minimum investment capital should not be less than the equivalent of fifty million US dollars (US$ 50,000,000) in Tanzanian Shillings. However, the government may identify and grant special status to an investment with a capital worth not less than the equivalent of three hundred million US dollars (US$ 300,000,000) in Tanzanian Shillings or if the investment capital transaction is undertaken through a registered local financial and insurance institution.
Application for Certificate and Registration
The law requires that information of the Beneficial Owner be kept confidential. Anyone who has access to Beneficial Owner information is required not to disclose them, except when required by the law. Further, any officer is bound to keep the information of the Beneficial Owner confidential even after cessation of his or her job.
Rights and Obligations of an Investors
All investors, along with their investments, shall be regulated by the government of the United Republic of Tanzania. Investors must adhere to and respect all Tanzanian laws in utmost good faith during the investment period. They must also;
- Submit all required information to any government board in a timely and proper manner.
- Conduct investments in a manner that does not contradict the surrounding environment.
- Submit an annual report on the implementation and progress of the investment to TIC.
- Use raw materials available in Tanzania.
Grant access to TIC officers to carry out monitoring activities as required by law.
Dispute settlement
Amicable settlement is the preferred method for resolving disputes when investing in Tanzania. In case of any dispute between an investor and the government of the United Republic of Tanzania, mediation and arbitration are key methods for dispute resolution in Tanzanian investment.
Conclusion
Investing in Tanzania is a legal process that requires serious attention at every stage, from the registration entities that will carry the investment to its cessation. The Investment Act of 2022, along with its regulations and other laws, covers all matters related to investment issues. AVC & Partners Advocates are here to assist you in ensuring that your investment is carried out in accordance with the laws of the United Republic of Tanzania.
Disclaimer
This legal article has been prepared by AVC & Partners Advocates to provide general guidance on foreign investment and trading in Tanzania. This article is not intended for anyone to rely on for making their decisions. AVC & Partners Advocates will not be responsible for any consequences that may arise from anyone relying on this article.
