Introduction To Establishing A Business in Tanzania

Introduction to establishing a business in Tanzania
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Introduction to establishing a business in Tanzania, Practical Law UK Articles w-017-1099
Introduction to establishing a business in Tanzania

by Nicholas Zervos, Janet Ndyetabura, Clara Mramba, Geoffrey Gasper, Habyalimana Mayeye
and Edmund Temu, VELMA Law
Law stated as at 01 Mar 2017 • Tanzania
This article looks at the legal environment in Tanzania and identifies the key legal risks to be considered
and managed in the course of establishing a business in specific industries in Tanzania (such as PPPs
generally, transport, water, power, mining, ICT, building and environmentally sensitive industries).
This article is part of the global guide to establishing a business worldwide. For a full list of contents,
please visit global.practicallaw.com/ebi-guide.
Introduction to Tanzanian law

Statute
Common law
Investment in Tanzania
Public-private partnerships (PPPs) and procurement
PPPs
Public procurement regime
Interface between PPPs and the procurement regime
Local participation requirement
Big Results Now (BRN) initiative
Water projects
Power projects
Mining projects
Information and communication technology (ICT) projects
Residential and commercial building projects
Contributor profiles
Nicholas Zervos, Partner
Janet Ndyetabura, Senior Associate Lawyer
Clara Mramba, Senior Associate Lawyer
Geoffrey Gasper, Associate lawyer
Habyalimana Mayeye, Associate lawyer
Edmund Temu, Junior Associate lawyer
© 2021 Thomson Reuters. No claim to original U.S. Government Works. 1

Introduction to Tanzanian law

Tanzania is a republic with multi-party democracy and a constitution with a federal system of government. The President is the
head of state and government. However, the mainland and the island of Zanzibar have their own executive, legislative and judicial
institutions with defined spheres of authority. There is a union legislature, which comprises members of both the mainland and
island legislatures, and 11 presidential appointees (such as the Attorney General).
The national language of Tanzania is Kiswahili (a Bantu language, which is heavily influenced by Arabic, Persian, Portuguese
and other languages). English is commonly used in business, education and government. The language of record in the courts
is English. However, Kiswahili is used in the lower courts.
The Constitution is the fundamental law prevailing over all legislation. It contains a justiciable Bill of Rights. The final draft of a
revised Constitution, which was prepared by the Constitutional Assembly, was released to the general public in late 2014. The
government was expected to hold a referendum to approve the proposed constitution in early 2015. However, since then the
process has stalled and the matter is still pending.
The Tanzanian courts exercise their jurisdiction in conformity with, among other things:
• The Constitution
• All written laws.
• Common law.
• Doctrines of equity.
• International law (treaties and conventions).
• Customary law, including Islamic Law.
However, the application of common law and doctrines of equity is subject to any statutes enacted by Parliament, which override
the common law or equitable doctrines, and is applicable only so far as there is no presiding authority with regards to the matter
in question. The application of international laws relies on the ratification of treaties and conventions to which Tanzania is a party.
Statute
Statutes regulate most commercial activities and dealings, to some degree. Therefore, when considering legal issues arising in
Tanzania, it is advisable to establish whether it is governed by statute, before relying on common law principles. For example,
there are statutes governing, among other matters:
• Companies.
• Banking and insurance business.

• Capital markets.
• Land law.
• Taxation.
• Local government.
• Shipping.
• Competition law.
• Environmental issues.
• Mining.
• Occupational health and safety measures.
• Intellectual property.
Most statutes are available in English, however, some are in Kiswahili.
Common law
The Tanzanian legal system has evolved largely in accordance with English common law because of British presence in the
country from 1919 until Tanzania's independence in 1961. In Zanzibar, the legal system has evolved from both English common
law and Islamic law.
The legal system of Tanzania has several tiers. There are high courts on the mainland and in Zanzibar and a system of district
courts and resident magistrates' courts for each of the 130 districts, under the jurisdiction of a district court magistrate. The
high courts have separate divisions dealing with land and commercial matters. Primary courts are the lowest courts in the legal
system. The Kadhi Court and Kadhi's Appeal Court operate only in Zanzibar and deal with matters arising out of Islamic law.
There are also specialised tribunals dealing with land, housing, tax and labour disputes.
The highest court is the Court of Appeal, which has appellate jurisdiction over the whole of the Republic of Tanzania, the High
Court of Tanzania mainland and High Court of Zanzibar, Resident Magistrate Court, District Court, Primary Court and Tribunal
(only in Zanzibar).
Under the proposed revised Constitution (not yet in force), companies will be able to appeal against decisions of the Court of
Appeal by filing a memorandum of appeal to a Supreme Court.
The case reporting system in Tanzania lacks organisation, making it difficult to ascertain whether or not there is a specific
Tanzanian authority on a particular point. Therefore when dealing with a case under Tanzanian law, it is advisable to obtain as
many authorities as possible.

Where there is no local judicial authority, the Tanzania courts can consider case law from other jurisdictions, including England
and other Commonwealth countries. As a matter of practice, English case law and cases from other Commonwealth countries
are often cited in court proceedings. Judicial authorities from outside Tanzania are generally of only persuasive authority and
are not binding.
Arbitration in Tanzania is governed by the Arbitration Act, Cap 15 (Arbitration Act), which grants parties the discretion to determine
the number of arbitrators and the manner in which the arbitration will be conducted. Where there is no agreement the Arbitration
Act mandates one arbitrator and requires that the arbitrator must make rules for the arbitration. International arbitration is usually
the preferred choice for major contracts. Arbitration and judicial proceedings in Tanzania are not usually conducted efficiently
and can be much slower compared to other jurisdictions.
Tanzania is a signatory to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 and is a
member of several international organisations, including the:
• International Centre for the Settlement of Investment Disputes.
• Multilateral Investment Guarantee Agency.
Disputes between the government and investors can therefore be settled or arbitrated under various international agreements,
and arbitral judgments given in other member states can be enforced in Tanzania if the required procedures are followed. Similarly,
foreign judgments can be enforced in Tanzania, if the required procedures are followed.
Investment in Tanzania
Investment is actively promoted and encouraged under the Tanzania Investment Act by Tanzania Investment Centre (TIC). Under
the Act:
• All government departments and agencies are required by law to co-operate fully with TIC in facilitating investment.
• Property belonging to an enterprise holding an incentives certificate cannot be compulsorily acquired (whether fully or in
part) by the state unless under a due process of law and for fair and adequate compensation.
• A number of tax and other incentives are provided to foreign investors who register their investments with TIC.
• There is also a right to court or arbitration for the assessment of the compensation.
Tanzania has entered into a number of bilateral investment treaties, including with the UK. Tanzania has also entered into double
taxation agreements with a number of countries, but not with the UK. The Companies Act 2002 contains provisions for both local
and foreign companies that have established a place of business in Tanzania.
The Export Processing Zones Act establishes the Export Processing Zones Authority (Authority) that aims to initiate, develop and
manage the operations of publicly owned export processing zones with incentives. The Act establishes the export processing
zones, which deal with export-oriented investments within the designated zones to create international competitiveness for
export-led economic growth. The Special Economic Zones Act creates special economic zones provided with special business
environments and incentives and exemptions that are granted by the Authority (such as for withholding tax and corporate tax)

to promote priority economic activities, such as agricultural, agro-industrial, industrial, tourism, commercial, forestry, information
and communication technology and banking and financial sectors.
Public-private partnerships (PPPs) and procurement
PPPs
PPPs are governed by the Public Private Partnership Act 2010 (PPP Act), as amended by the Public Private Partnership
(Amendment) Act 2014 (2014 Act) and the Public Private Partnership Regulations 2015 (PPP Regulations). The 2014 Act
replaced the coordination and finance units with a single PPP centre supported by a PPP technical committee and clarified that
all PPP projects (including unsolicited projects) must be procured through an open and competitive bidding process under the
PPP Regulations. The 2014 Act also introduced the facilitation fund, to finance feasibility studies and assist PPP projects with
limited financial viability and high economic benefit. The Minister of Finance and Economic Affairs is authorised under the PPP
Act to determine projects that may be undertaken by the public sector in partnership with the private sector. Approved projects
are published in the Government Gazette. Sectors that have been identified for implementation in partnership with the private
sector include:
• Agriculture.
• Industry and manufacturing.
• Exploration and mining.
• Energy.
• ICT.
• Health and education.
• Trading and marketing.
• Natural resources.
• Tourism.
PPP agreements must also endeavour to provide opportunity for the empowerment of the citizens of Tanzania. The criteria for
government participation in any PPP project include:
• Approval of the project by the PPP centre, the PPP technical committee and the Minister of Finance before
commencement of the bidding process.
• A compliant feasibility study.

• A competitive bidding process resulting to a minimum of two compliant tenderers as a condition precedent (if a solicited
proposal).
• Any other criteria as prescribed by PPP guidelines.
Once a contracting authority has identified a PPP project and received approval for the project from the relevant authorities, it
must prepare an agreement with the private party for implementation of the project. Both the Ministry of Finance and the Attorney
General must approve the draft PPP agreement before it is finalised.
In vetting the draft PPP agreement, the Attorney General must have regard to factors such as:
• The legality of the project.
• Approvals by the PPP centre, PPP technical committee and the Minister for Finance.
• Compliance with the existing laws.
• Anything that may have an impact on the PPP agreement.
In the past, PPP projects were subject to the guidelines provided under the Public Procurement Regulations 2013, however the
application of this to PPP projects was revoked by the PPP Regulations 2015.
Public procurement regime
The public procurement regime is governed by the:
• Public Procurement Act 2011 (Procurement Act).
• Public Procurement Regulations 2013 (Procurement Regulations).
• Public Procurement (Amendment) Act 2016 (Amendment 2016).
• Procurement guidelines.
The basic principle of procurement is that all public procurement and disposal by tender must be conducted in accordance with
the basic principles set out in the Public Procurement Act. The Public Procurement Regulatory Authority (PPRA) was set up under
the Act to ensure the application of fair, competitive, transparent, non-discriminatory and cost-efficient procurement standards
and practices. The functions of the PPRA include monitoring the award and implementation of public contracts to ensure that:
• Such contracts are awarded impartially and on merit.
• The circumstances in which each contract is awarded (or terminated) do not involve impropriety or irregularity.

• The implementation of each contract does not prejudice the functions of any public body.
The PPRA has wide scope for investigations, which includes, among other things, access to all books, records, documents,
or other property belonging to the public body or a contractor or a supplier or a consultant, whether in the possession of any
officer of the public body or a contractor, supplier, consultant or any other person. The Procurement Act provides a procedure
for dealing with complaints of candidates who claim to have suffered loss or damage due to the breach of a duty imposed on
the procuring entity.
There are some inconsistencies between the Procurement Regulations and the PPP Act as amended by the Finance Act 2013,
regarding unsolicited proposals. It is expected that revised regulations will be introduced to address these inconsistencies. The
Amendment 2016:
• Places more emphasis on local persons, goods or firms, the use of local experts and goods and the capacity of local
businesses. A local firm is categorically defined as the one with share capital, which is wholly owned by citizens of
Tanzania.
• Introduces provisions relating to procurement directly from manufacturer, dealers or service providers and approved
standards for the procurement of goods for Government.
• Removes the provisions on standards of equity.
Interface between PPPs and the procurement regime
Under the PPP Act, a public body procuring entity (PE) must not proceed with the procurement phase of solicited or unsolicited
public-private partnership before obtaining approval of the project concept by the relevant authorities (unsolicited) and carrying
out a feasibility study (solicited).
The selection of a private party must be in accordance with the competitive bidding procedures specified in the PPP Regulations,
and must be based on the "best value" to the public for the duration of the partnership, as opposed to the lowest bidder. Factors
that contribute "value" to a project include, but are not limited:
• Project design.
• Project delivery schedule.
• Technological capacity and innovation.
• Technical and managerial skills and access to expertise.
• Project financing.
• User fee schedule (if applicable).

The PE is prohibited from proceeding with the procurement phase of a PPP or private sector participation project if the feasibility
study indicates that the proposed project will not provide value for money or improve the quality of the public service.
Local participation requirement
The National Economic Empowerment Council was established under the National Economic Empowerment Act 2004 to provide
general guidelines to ensure that Tanzanians have access to opportunities to participate effectively in economic activities in
all sectors of the economy (that is, the National Economic Empowerment Policy). The legislation also empowers the Council
to establish business enterprises and schemes consistent with these guidelines. There are numerous provisions under the
Procurement Act, Procurement Regulations, PPP Act and PPP Regulations that encourage the use of local participation in
procurement processes and in public private partnership projects.
Although, one of the key principles of public procurement is that tenderers of all nationalities can participate in procurement
proceedings, tenderers who are either Tanzanian citizens or Tanzanian firms that form associations with foreign firms, are eligible
to be granted a margin of preference, if they meet the criteria set out under the Procurement Act, and are registered with the
PPRA, or any other statutory body acceptable to PPRA. Under the Procurement Act, incentives are used by PEs to encourage
foreign firms to team up with Tanzanian tenderers in either joint ventures, or subcontracting arrangements, during the tender
process, and execution of contracts.
PEs must grant a margin of preference (of up to 10%) to local firms or associations between local and foreign firms, when
procuring goods, works or services through international and national competitive tendering, for:
• The benefit of local firms or associations between local and foreign firms.
• Certain goods manufactured, mined, extracted or grown in Tanzania.
The revised 2013 Model Production Sharing Agreement, which was released in November 2013, contains explicit local
participation provisions for international oil companies. Under the provisions, the companies must:
• Employ Tanzanian nationals.
• Purchase Tanzanian goods, services and materials,
• Use Tanzanian service companies.
• Give preference to Tanzanian service companies by ensuring access to all tender invitations and by including high
weighting on local value added in the tender evaluation criteria.
The government released a draft local content policy in 2014 (expected to become law in 2017) for the oil and gas industry,
which sets out the following key objectives:
• Enhancement of local capacity building and technology transfer.
• Creation of employment opportunity for both skilled and unskilled Tanzanian citizens

• Procurement of local goods and services.
• Maximisation of fabrication, welding, assembling and manufacturing works in Tanzania.
Big Results Now (BRN) initiative
The BRN initiative was launched by the former President of Tanzania in February 2013 as part of the Government's effort to
transition the country from a low to middle-income economy. It aims to adopt new methods of working under a specified timeframe.
The Presidential Delivery Bureau (PDB) is an independent department under the President's Office, which closely observed the
implementation of projects under the BRN initiative and focuses the attention of top leadership in monitoring investment in the
prioritised areas. The PDB can provide high level intervention if needed by discussing challenges in the identified projects at
ministerial level.
The Government has selected six national key results areas that it believes require intervention to achieve the BRN aims. The
priority sectors identified under the BRN are known as the following National Key Results Areas (NKRAs):
• Agriculture.
• Education.
• Energy.
• Water.
• Transport.
• Resource mobilisation (including PPP projects).
In 2014, the Government of Tanzania identified additional NKRAs, which include:
• Realigning regulations and institutions.
• Access to land and security of tenure.
• Taxation.
• Multiplicity of levies and fees.
• Curbing corruptions.
• Labour laws and skills sets.

• Contract enforcement.
• Law and order.
Water projects
All water resources in mainland Tanzania are vested in the President of Tanzania as trustee for and on behalf of all citizens of
Tanzania. The development and funding of water infrastructure in Tanzania is controlled under the following laws:
• Water Resources Management Act 2009.
• Water Resources Management (Water Abstraction, Use and Discharge) Regulations 2010.
• Water Supply and Sanitation Act 2009.
• Energy and Water Utilities Regulatory Authority Act Cap 414.
Water authorities, such as the Dar es Salaam Water and Sewerage Authority that is mandated to provide water supply and
sanitation services within Dar es Salaam, have powers to appoint an operator to carry out any of their functions.
An owner or occupier of any land can construct a shallow hand dug well of a limited depth and use the water for domestic
purposes, without having to apply for a ground water permit. Holders of a mining licence or a licence granted under the Petroleum
Exploration and Production Act that encounter groundwater during their exploration activities must notify the relevant Basin Water
Board and take necessary measures to protect the groundwater against pollution.
No person can divert, block, store, abstract or use water or for any other purpose construct or maintain any works without a water
use permit granted by the principal water officer, subject to such terms and conditions specified in the grant.
Power projects
The electricity sector in Tanzania is dominated by the Tanzania Electric Supply Company Limited (TANESCO) in a vertically
integrated structure, carrying out generation, transmission, distribution and supply. However, the Government announced
intentions to restructure TANESCO under the Electricity (Market Re-organization and Promotion of Competition) Regulations,
2016 which unbundle the public utility's activities and encourage increased investment from the private sector in the electricity
industry.
The statutes that govern the energy sector in Tanzania are:
• The Electricity Act 2008.
• The Energy and Water Utilities Regulatory Authority (EWURA) Act.

The EWURA Act created the EWURA to regulate the issuance, renewal and revocation of the relevant licences in electricity,
petroleum, natural gas, water and sewage sectors. The EWURA has the power to determine the rates and charges of the services
and monitor the performance of investment, quality and efficiency of the services in the sectors that it regulates. The EWURA
can grant to any person, a licence to supply electricity within any area in Tanzania.
Under the Electricity Act, licences are required for the generation, importation or exportation, transmission, distribution or supply
of electrical energy, which can only be performed in the manner and period specified in the licence. Licences can also contain
restrictions transfer provisions.
Where a licensee requires the compulsory acquisition of land for any of the purposes specified in the licence, the licensee can
apply to EWURA, requesting that the President declare that the acquisition of the land is for a public purpose, in accordance with
the relevant law. Where electrical generation activities are carried out using natural resources obtained in mainland Tanzania,
the licensee must participate in development projects initiated by communities located near the generation point (Electricity Act
2008).
The Electricity (Initiation of Public Procurement) Regulations 2014 published in April 2014 requires a power purchaser to obtain
approval from EWURA before initiating a power procurement process for both solicited and unsolicited projects. Additionally, a
power purchaser that seeks to procure power on an emergency basis must apply to EWURA. The application must contain a
summary of the purchase rationale and the type of procurement process that it seeks to undertake.
Mining projects
The principal statute governing mining in Tanzania is the Mining Act 2010, (Mining Act) and the related Regulations. A person
cannot undertake any mining operations without a prospecting or mining licence, issued by the Commissioner for Minerals. The
forms of licence under the Mining Act include:
• Primary mining licences for small-scale mining, which can only be given to Tanzanians.
• Prospecting licences to carry out prospecting operations.
• Retention licences for a holder of a prospecting licence who cannot immediately develop the deposits because of
temporary technical, market or economic constraints.
• Mining licences for medium-scale mining operations.
• Special mining licences for large-scale mining operations with a capital investment of not less than US$100 million.
A company needs written consent of the Commissioner for Minerals to register a transfer of shares or enter into an agreement,
if the effect is to give the person control over the company. "Control" is defined as 50% or more of the equity shares (excluding
preference shares) or if entitled to appoint half or more than half of the directors in the company.
There are mandatory local shareholder participation requirements for special mining licences and on-going discussions between
the Ministry of Energy and Minerals and Capital Markets and Securities Agency on the minimum percentage of shares required,
and on the procedure for the selling of these shares to Tanzanian citizens by listing the shares on the Dar es Salaam Stock
Exchange.

A mining licence for mining gemstones can only be granted to applicants who are Tanzanians, regardless of the size of the
operation. However, where the Minister determines that the development is most likely to require specialised skills, technology
or a high level of investment, the licence can be granted to an applicant, but only if the non-Tanzanian participation element is
no more than 50%. Payment of royalties to the Government of the United Republic of Tanzania is calculated on the gross value
of minerals produced, which is different depending on the type of mineral.
Information and communication technology (ICT) projects

The principal statute governing telecommunications in Tanzania is the Electronic and Postal Communications Act 2010 (EPOCA)
as amended from time to time, and the Electronic and Postal Communications Regulations, which are published from time to
time. Other recent statutes governing telecommunications include the Cybercrimes Act 2015, the Electronic Transactions Act
2015 and other associated statutes such as:
• Tanzania Broadcasting Services Act 1993.
• Tanzania Communications Act 1993.
• Tanzania Communications Regulatory Authority Act 2003.
• The Universal Communications Service Access Act 2006 with its relevant regulations of 2009, as amended from time to
time.
The telecommunications industry is regulated by the Tanzania Communications Regulatory Authority (TCRA), which licenses
operators in each class of telecommunications. The operation of unlicensed services is an offence. The TCRA applies a
converged licensing framework under which there are the following four main types of licences:
• Network facility licence. This authorises ownership and control of electronic communication infrastructure, such as earth
stations, public payphone facilities, radio communication transmitters and links and satellite hubs.
• Network service licence. This authorises the operation of electronic communication networks for the delivery of services
including bandwidth services, broadcasting distribution services, cellular mobile services, access applications services
and space segment services.
• Applications service licence. This authorises reselling or procurement of services from network service operators, but
not the ownership or operation of services. This licence would apply in the case of, for example payphone services and
public switched data services.
• Content service provider licence. This authorises the provision of content services such as satellite broadcasting or
terrestrial free to air TV and broadcasting and radio services.
These four types of licences are divided further into four market segments as follows:
• International market segment, where the licensee is authorised to offer services from one or more of the four types of
licences to the international market.

• National market segment, where the licensee is authorised to offer services from one or more of the four types of
licences to the national market.
• Regional market segment, where the licensee is authorised to offer services from one or more of the four types of
licences to an administrative region within the country.
• District market segment, where the licensee is authorised to offer services from one or more of the four types of licences
to an administrative district within the country.
The procedure for the issuance of licences is governed by the Electronic and Postal Communications (Licence Procedure) Rules
2014, which applies to network facilities, network services and content services. Licences are issued with respect to different
market segments, each defined by the territorial extent of the authority to provide the relevant service.
Further rules with regards to the above licenses are:
• Local shareholders must own at least 51% in the case of a contents service provider licence.
• Local shareholders in respect of a network facilities licence, network services licence or an application services licence
must hold a minimum of 25% of its authorised share capital, which was obtained by public offering in accordance with
the Capital Markets and Securities Act.
• The Finance Act 2016 directed all persons holding a network facilities licence, network services licence or an application
services licence either:
• before 1 July 2016, to ensure that their shares were offered to the public and subsequently listed on the stock
exchange in Tanzania within six months; or
• after 1 July 2016, to offer shares to the public and subsequently list its shares on the stock exchange in Tanzania
within two years.
Regulations that are applied by the TCRA to regulate the ICT industry under EPOCA include but are not limited to the following:
• EPOCA (VAS) Regulations 2015.
• EPOCA (Electronic Communications Equipment Standards) Regulations 2014.
• EPOCA (Telecommunications Traffic Monitoring System) Regulations 2013.
• EPOCA (Quality of Service) Regulations 2011.
• EPOCA (Central Equipment Identification Register) Regulations 2011.
• EPOCA (Computer Emergency Response Team) Regulations 2011.

• EPOCA (Digital and Other Broadcasting Networks) Regulations 2011.
• EPOCA (Competition) Regulations 2011.
• EPOCA (Tariffs) Regulations 2011.
• EPOCA (Mobile Number Portability) Regulations 2011.
• EPOCA (Postal) Regulations 2011.
• EPOCA (Radio Communications and Frequency Spectrum) Regulations 2011.
• EPOCA (Account Separation) Regulations 2011.
• EPOCA (Consumer Protection) Regulations 2011.
• EPOCA (Electronic Communication Numbering and Addressing) Regulations 2011.
• EPOCA (Access, Co-location and Infrastructure Sharing) Regulations 2011.
• EPOCA (Licensing) Regulations 2011.
• Tanzania Broadcasting Services (Content) Regulations 2005 (TBR). The TBR remain in use, pending the enactment of
new regulations under the EPOCA 2010 that relate to broadcasting services. Draft regulations are now in the process of
being reviewed by different stakeholders of the industry.
The Cyber Crimes Act 2015, which came into force on 1 September 2015, governs criminal offences relating to computer systems
and information communication technologies (ICT) and provides for the investigation, collection, and use of electronic evidence
and for related matters. It also gives power to the police force to seize and search electronic devices and disclose data without
a court order.
The Act applies to both Mainland Tanzania and Zanzibar. Regulations were recently passed in 2016, however the Ministry of
Communications Science and Technology is in the process of drafting further Regulations to provide more specific enforcement
of the Cybercrimes Act.
The Electronic Transactions Act 2015 provides for the legal recognition of electronic transactions, e-Government services, the
use of ICT in the collection of evidence, the admissibility of electronic evidence, the facilitation of secure electronic signatures;
and other related matters.
Residential and commercial building projects

The following laws and regulations are applicable for land owning and development:

• Land Act.
• Village Land Act (Cap 114).
• Land Registration Act.
• Unit Titles Act.
• Environmental Management Act, 2004.
• Town and Country Planning Act (Cap 355).
• Contractors Registration Act 1997.
• Engineers Registration Act 1997.
• Hotels Act (Cap 105).
All land in Tanzania is public land and remains vested in the President as trustee for and on behalf of all citizens of Tanzania.
Public land falls into three categories:
• General land.
• Village land (such as land occupied by Tanzanians of African descent under customary law).
• Reserved land (such as conservation areas and land for public utilities).
A person can have a legal right to land under a long-term lease (right of occupancy) from the Government for terms of 33, 66
or 99 years. Generally, only 99-year rights of occupancy are currently issued. Foreign nationals and foreign companies cannot
own land in Tanzania except as shareholders of a Tanzanian company with a certificate of incentives after registration with the
Tanzania Investment Centre (TIC).
The law also allows for exclusive ownership of units in a development, and for joint ownership of the common areas in the
development. A certificate of title can be issued for an acquired unit and the owner of the unit is permitted to sell, lease or charge
their unit.
Where any land required for a project falls under village land, the land must be converted to general land in accordance with
the procedure laid down in the Village Land Act Cap 114 and corresponding regulations. Payment of compensation to affected
villagers must be agreed before the conversion to general land occurs. After the village land is converted to general land, a right
of occupancy can then be granted. If a foreign investor acquires land, the right of occupancy is granted to the TIC, which will
then issue a derivative title to the investor.
Title documents in respect of leasehold properties normally indicate the permitted uses of the land in accordance with the Town
and Country Planning Act (Cap 355). For example, the title document can indicate that the permitted use of the land is "residential"
and if a purchaser intends to use it for commercial purposes, it must apply for a "change of use" prior to the property being used

for this purpose. It is also crucial to confirm the actual use of the land to ensure that there has been no contravention of the
permitted use of the land.
A developer may need to undertake an environmental and social impact assessment (ESIA) study if the proposed project is
likely to have a negative environmental impact. The developer of a residential or commercial building project must apply for a
building permit for the project from the relevant local government authority. It is important to adhere to the condition of the permit
as there have been many recent cases where newly constructed buildings have been scrutinised by government agencies for
non-compliance.
Foreign contractors/subcontractors cannot carry out any construction works unless they are registered with the Contractors
Registration Board (CRB). However, a foreign contractor can obtain a temporary registration with CRB if it has been engaged to
carry out a specific contract. Any foreign engineers that are part of a construction company are similarly restricted from engaging
in professional engineering work or services, unless they are registered with the Engineers Registration Board (ERB).
Under the Hotels Act, any person undertaking a hotel business must obtain a licence from the Hotel Board. Every person operating
a hotel business is required to pay a levy to the Permanent Secretary to the Treasury of 20% of the hotel charges in respect
of every client.
Contributor profiles
Nicholas Zervos, Partner
VELMA Law
T +255 752 667766

E nzervos@velmalaw.com
W www.velmalaw.com
Professional qualifications. England and Wales, Solicitor, 1985; Hong Kong Bar 1995; Tanzania Bar, 2011
Areas of practice. Commercial transactional law; project finance; PPP; infrastructure; mining; oil and gas;
finance; corporate.

Non-professional qualifications. LLB Honours, University of Nottingham, 1983; LLM Transnational Oil, Gas &
Energy Law (pending).
Recent transactions
• PPP for bus rapid transit project in Dar es Salaam.
• MOU for PPP railway project to upgrade and enhance operation of railway for network international
mining company.
• Agricultural PPP fund in Tanzania.
• Large gas power generation facility under PPP framework.
• Gas regulatory framework and general local issues in Tanzania for international oil supply company
operating and supplying gas in Tanzania.
• Due diligence on production sharing agreements and other corporate documentation for raising finance
on foreign stock exchange for junior oil and gas explorer.
• Mining licence acquisitions, sales and transfers in Tanzania.
Professional associations/memberships. Tanganyika Law Society; Law Society of England and Wales
Publications. Extensive seminar presentations and publications, most recently:
• PPP framework speaker with World Bank representatives at Tanzanian Ministers Workshop in
Bagamoyo (2012).
• Public Private Partnerships in the Power Sector, workshop presentation for East African Community
delegates, Kampala, December 2011.
• Foreign Investment in Tanzania, American Chamber of Commerce presentation, Dar es Salaam, January
2012.
• Wind Energy PPA: similarities and differences with thermal and hydro PPAs, Wind Power Contracting
Workshop presentation, Dar es Salaam, November 2011.
• An overview of the existing regulatory framework for investors in Tanzania, Tanganyika Law Society, Half
Annual General Meeting presentation, Dodoma, August 2011.
Janet Ndyetabura, Senior Associate Lawyer

VELMA Law
T +255 755 481 554

E jndyetabura@velmalaw.com
W www.velmalaw.com
Professional qualifications. Tanzania Bar 2010
Areas of practice. Commercial transactional law; corporate; company law; land law.
Non-professional qualifications. LLB, Tumaini University, Iringa University College, Tanzania; Postgraduate
Diploma in Legal Practice, Law School of Tanzania; Postgraduate Diploma on Management of Foreign Relations,
Centre for Foreign Relations, Tanzania
Recent transactions. Acting on commercial transactions, company formation, restructuring, mergers and
acquisition, land acquisition and transfer, conducting due diligence on corporate, share acquisition and business
restructuring and handling company secretarial matters.
Languages. English, Swahili
Professional associations/memberships. Tanganyika Law Society; East Africa Law Society.
Publications. Extensive seminar presentations and contribution to various publications including:
• Tax training seminar on VAT, Transfer Pricing Regulations, Employment & Withholding Taxes and
Corporate Income Tax, March and April 2015.
• Course on Company Secretarial Master Class by Precision Professional Services and Engineering/
Precision Events Centre, July 2014.
• Seminar on Oil and Gas Exploration in Tanzania, by Tanganyika Law Society, CLE Seminar, Dar es
Salaam, September 2012.
• Course on Mediation, Negotiation and Advocacy skills organised by the International Lawyers Project
(ILP) in co-operation with Tanganyika Law Society, Clifford Chance LLP and Herbert Smith LLP, February
2009.

• Contribution to publications such as:
• Doing Business 2016: Measuring Regulatory Quality and Efficiency.
• Women, Business and the Law 2016: Getting to Equal.
• IFLR1000: 2015 Project Finance Report: Tanzania.
• Establishing a business in Tanzania, Practical Law Global Guide, 2014-15 edition.
Clara Mramba, Senior Associate Lawyer
VELMA Law
T +255 754 237 200
E cmramba@velmalaw.com
W www.velmalaw.com
Professional qualifications. Tanzania Bar 2010.
Areas of practice. Commercial transactional law; corporate; telecommunications; banking; ICT; labour.
Non-professional qualifications. LLM Taxation University of Dar es Salaam; LLB, Tumaini University, Iringa
University College, Tanzania; Postgraduate Diploma in Legal Practice, Law School of Tanzania; Postgraduate
Diploma on Insurance and Risk Management, Institute of Finance Management, Tanzania.
Recent transactions
• Project finance transactions for foreign loan to local companies.

• Restructuring of trusts.
• Transfer and acquisition of shares in specialised industries.
• PPP transactions involving government and international organisations.
• Land matters (including leases, sale and transfer, change of use and so on).
• Companies restructuring in share capital and shareholding structure.
• Interconnection Agreements for provision of voice services in the country with other mobile network
operators.
• Capacity/infrastructure sharing agreements between mobile network operators.
• Telecommunications company funding activities with the group (multinational operating countries).
• Applications and renewal of licences and permits.
• ICT regulatory framework and general local issues in Tanzania (2011).
• General contractual disputes in Tanzania.
• General services agreements in Tanzania.
• Banks syndicated financing.
• Telecom and internet companies on all aspects of activities in Tanzania.
• Employment issues in Tanzania.
• Credit Risk Control in wholesale/corporate borrowers.
Publications. Extensive seminar presentations and contributions to various publications, including:
• Course on Mediation, Negotiation and Advocacy skills organised by the International Lawyers Project
(ILP) in co-operation with Tanganyika Law Society, Clifford Chance LLP and Herbert Smith LLP, February
2009.
• Young International Council for Commercial Arbitration (ICCA) Arbitration Skills Training Workshop Dar
es Salaam, May 2016.

• Emerging Issues in dealing with Cyber-crimes, case studies and procedure in admission of electronic
evidence under cyber laws in Tanzania organised by the Tanganyika Law Society, August 2016.
• Contributions to publications such as:
• Draft Electronic and Postal Communications Regulations of 2011.
• Interconnection Agreements for provision of voice services in the country with other mobile network
operators and Interconnection Determination No. 3 of 2013 by the TRCA.
• Draft Cyber Crimes Act 2015.
• Draft and signing of MOU between mobile network operators, the Central Clearing House
and Tanzania Communications Regulatory Authority for the Mobile Number Portability Project
implementation (2014 to 2015).
• Legal and regulatory harmonisation of East Africa ICT laws.
• Draft ICT Policy 2016.
• "Regulation of mobile money services Tanzania".
• "Enabling the business of Agriculture 2017 Report" by the World Bank Group.
Geoffrey Gasper, Associate lawyer
VELMA Law
T +255 765 872 674

E ggasper@velmalaw.com
W www.velmalaw.com

Professional qualifications. Tanzania Bar, 2015
Areas of practice. Corporate; company law; land law.
Non-professional qualifications. Tumaini Makumira University
Recent transactions. Acting on commercial transactions, company formation, restructuring, mergers and
acquisition, land acquisition and transfer, conducting due diligence on corporate share acquisition and business
restructuring, and handling company secretarial matters.
Habyalimana Mayeye, Associate lawyer
VELMA Law
T +255 713 420 918

Ehmayeye@velmalaw.com
W www.velmalaw.com
Professional qualifications. Tanzania Bar, 2015.
Areas of practice. Corporate; company law; land law.
Non-professional qualifications. LLB, Mzumbe University
Recent transactions. Acting on commercial transactions, company formation, land acquisition and transfer,
conducting due diligence on corporate share acquisition and business restructuring and handling company
secretarial matters.

Edmund Temu, Junior Associate lawyer
VELMA Law
T +255 657 159 311
E etemu@velmalaw.com
W www.velmalaw.com
Professional qualifications. Tanzania Bar (pending)
Areas of practice. Corporate/commercial law; employment; intellectual property; banking; public private
partnership.
Non-professional qualifications. LLB, Cardiff University, UK
Recent transactions
• Commercial transactions.
• Company formation and secretarial services.
• Land acquisition and transfer.
• Banking and finance.
• Registration of trusts, charities and NGOs.
• Registration of trademarks and patents.


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Introduction to establishing a business in Tanzania

Practical Law UK Articles w-017-1099

© 2021 Thomson Reuters. No claim to original U.S. Government Works.

Introduction to establishing a business in Tanzania

Introduction to Tanzanian law

Public procurement regime

Interface between PPPs and the procurement regime

Local participation requirement

Big Results Now (BRN) initiative

Janet Ndyetabura, Senior Associate Lawyer

Clara Mramba, Senior Associate Lawyer

Geoffrey Gasper, Associate lawyer

Habyalimana Mayeye, Associate lawyer

Edmund Temu, Junior Associate lawyer

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 1

Introduction to Tanzanian law

• All written laws.

• International law (treaties and conventions).

• Customary law, including Islamic Law.

• Banking and insurance business.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 2

• Occupational health and safety measures.

Most statutes are available in English, however, some are in Kiswahili.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 3

• International Centre for the Settlement of Investment Disputes.

• Multilateral Investment Guarantee Agency.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 4

Public-private partnerships (PPPs) and procurement

• Industry and manufacturing.

• Exploration and mining.

• Health and education.

• Trading and marketing.

• A compliant feasibility study.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 5

• Any other criteria as prescribed by PPP guidelines.

• The legality of the project.

• Compliance with the existing laws.

• Anything that may have an impact on the PPP agreement.

Public procurement regime

The public procurement regime is governed by the:

• Public Procurement Act 2011 (Procurement Act).

• Public Procurement Regulations 2013 (Procurement Regulations).

• Public Procurement (Amendment) Act 2016 (Amendment 2016).

• Such contracts are awarded impartially and on merit.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 6

• Removes the provisions on standards of equity.

Interface between PPPs and the procurement regime

• Project delivery schedule.

• Technological capacity and innovation.

• Technical and managerial skills and access to expertise.

• User fee schedule (if applicable).

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 7

Local participation requirement

• Certain goods manufactured, mined, extracted or grown in Tanzania.

• Employ Tanzanian nationals.

• Purchase Tanzanian goods, services and materials,

• Use Tanzanian service companies.

• Enhancement of local capacity building and technology transfer.

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 8

• Procurement of local goods and services.

• Maximisation of fabrication, welding, assembling and manufacturing works in Tanzania.

Big Results Now (BRN) initiative

• Resource mobilisation (including PPP projects).