Law Articles

With a view to meeting modern business demands, Tanzania has recently undergone a spate of significant legal reforms designed to clarify and ease the process by which investment can be made into the country. The two most common approaches of investors are to either incorporate a local subsidiary or establish a branch in Tanzania. In addition, in the event the investment meets certain criteria, investment incentives will be available.

 With a view to meeting the demands of modern business practice and catering for the needs of the local and international banking sector, the government of Tanzania repealed the Banking and Financial Institution Act 1991, Cap 342 (the “BFIA ‘91”) and replaced it with the Banking and Financial Institutions Act 2006 (the “BFIA ‘06”).

Prior to the 1^st of March earlier this year, the main legislation relating to companies in Tanzania was the Companies Act Cap. 212 which was enacted in 1929. This legislation regulated trading companies and other associations including the imposition tax on nominal capital, regulation of dividends and surpluses and related matters. This legislation was in force for over 77 years which period covered not only the tail end of the colonial period but also the period of state-planned economy through to liberalisation in the 1990s. Clearly it was time for reform to cover an increasingly sophisticated market and the dramatic changes to the Tanzanian economy.

The new reforms are contained in the Companies Act 2002 (the “CA 2002”), an act on the shelf for almost three years which came into force as from the 1^st of March, 2006.