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Investing in Tanzania: advantages for the investor

Twin Towers bank of Tanzania in Dar Es Salaam

The advantages coming from investments can be resumerd as following:

For mining activities, these subtraction could be indefinitely reported:

Investment Opportunities

The areas that appear most attractive for investment are: agro-industrial and canning industry, machine tools for the textile industry for the manufacture of leather, construction materials, machines for working wood, marble and ornamental stone and packaging, equipment and machinery for jewellery, computer equipment and telecommunications, supplies and sanitation facilities, water treatment plants.
In recent years there has been a constant flow of Italian investment in tourism.
In the mining sector and services can be reported rather small operations by owners of small businesses and midsize companies.
Investment opportunities arising from the programs of modernization of roads, construction of bridges, the new government development programs in energy and agriculture and the exploitation of natural resources for the development of products for the pharmaceutical and cosmetics industries.

Problems Related to Investments

Parliament outside

Tanzania is open to foreign direct investment in all sectors of the economy.
The relevant legislation, as regards foreign investment, was enacted in 1996 with the drafting of the National Investment Promotion Policy. "
In 1997, as required by that law, you created the Tanzania Investment Center (TIC), which serves as a focal point for investors with the aim to facilitate, coordinate and promote investments in the country and provide support to the Government in terms of " policy ". In particular, the central issue of certificates for approved projects involving a minimum investment of 300.000 dollars if foreign owned, and 100.000 dollars, if the property is national. These certificates provide a series of tax incentives for investors.
The investor who wants to operate in the country has taken to the registration of his business (both branches owned 100% of both new business space in partnership with another local firm or not) at BRELA (Business Registrations and Licensing Agency).
Registration with the BRELA should ensure greater protection for the new company as the opportunity to register trademarks and inventions and the protection of intellectual property.
The Investment Law guarantees unconditional transferability through approved banking channels, and net profits of all other financial income in convertible currency associated with foreign direct investment even though the transfer process can be lengthy and bureaucratic.
Italy and Tanzania in 2001 signed a bilateral agreement on protection and promotion of mutual investments.
It is also in force, since 1983, the Convention against double taxation on income and / or wealth.
Tanzanian law guarantees the right of private ownership and establishment, except for the right to the land which remains the exclusive property of the Tanzanian State. In fact, the occupation of land, including for investment in Tanzania is granted only on the basis of lease contracts with a duration of 33, 66 or 99 years.
Finally it was recently approved by Parliament a law establishing the so-called "Special Economic Zones, located in 25 parts of the country in which force a preferential tax regime, in addition to exemption from customs duties and which would in future be given adequate infrastructural facilities to facilitate investment.

Tariff Barriers

Tanzania is still widely used tariff barriers to protect local industry, although the recent reform has simplified and liberalized the trade regime and reduced the average customs duties applied to goods entering the country.
Tanzania is a part, with Kenya and Uganda, the East African Community, established on 30 November 1999. The founding Treaty provided for the establishment of a Customs Union, which has been created March 2, 2004 and became effective from 1st January 2005.
The Customs Union has created an integrated market potential of about 92 million people, with a GDP of around 30 billion dollars. On 1st July 2007, he joined also Rwanda and Burundi.
As a member of the Customs Union, Tanzania applies the common external tariff value CIF (cost, insurance, freight) of imported goods.
The structure of duties provides for three rates (0% for raw materials and some inputs for agriculture and industry, 10% for semi-finished products and parts industry, 25% on final goods consumption).
In addition to the duty, it applies the value added tax whose rate is 20%. Tax exemptions are warranted for the importation of goods and services associated with projects funded by donors, NGOs or religious projects that fall under an investment incentive agreement, etc..
On textiles, food and electronics imported to Zanzibar we apply a lower tax than the mainland. E 'but in an effort to measure uniformity of tariffs, opposed by the Government of Zanzibar.
There remains the dilemma of Tanzania concerning the choice of continuing to be part of the community of regional integration SADC (Southern African Development Community) or opt to re-join the Common Market of West Africa and Southern Africa (COMESA), from which it withdrew in 2001 , and how it should integrate the two options involving current EAC Customs Union.
Tanzania benefits from preferential trade treatment under the AGOA (Africa Growth and Opportunity Act) for exports to the U.S. market and the Everything But Arms (EBA) European Union.

Non Tariff - Barriers

Tanzanian money shilingi shilling

Tanzania is among the founding countries of the WTO. In recent years it has implemented a process of reform and trade liberalization that led to the elimination of most non-tariff barriers. In the past, Tanzania extensively used non-tariff barriers to protect local industry and its market. As a result of liberalization, many of these barriers have been eliminated, though not completely.
Considerable progress has been made by the country as regards the gradual abolishment of the prohibition of quotas and licensing and the substantial reduction of red tape, administrative controls, along with the facilitation and simplification of procedures.
The import and export licenses were abolished except for those on sensitive products for the health and public safety. There are no special requirements for standards other than those in use for specific categories of products.
The Tanzania Bureau of Standards is the national body responsible for standardization, recognized by the ISO (International Standards Organization.) It usually adopt international standards and issue certificates of quality, especially for manufactured goods.
Most of the standards in Tanzania is voluntary. Tanzania follows the ISO standards regarding the labeling of imported products and does not impose special requirements on the subject.
The Ministry of Agriculture shall issue import permits for all agricultural products and imported animals. All products are imported with a value over 5.000 dollars, with certain exceptions, must be subject to a pre-shipment inspection. Importers of these products must complete an Import Declaration Form submit to a bank with the payment of 1,2% of FOB value of the goods.
Despite the virtual absence of non-tariff barriers, the customs agency and port authorities are the main barrier to entry for importers because of delays and inefficiencies.