Starting a business in TZ

Good morning. There are three types of residence permits available in Tanzania. Self-employed foreigners (investors) are required to apply for a Class A permit while foreign employees must be approved for a Class B permit. Class C permits are relevant for other categories of residents such as students and missionaries. Applications for Class A and C permits should be forwarded directly to the Director of Immigration Services while applications for Class B permits should be forwarded to the Director of Immigration Services through the Labor Commissioner. The Labor Department is only involved in the issuance of Class B permits.

Residence permits can only be applied for in Dar-es-Salaam.


Application Process for Class A Permit
Application Form TIF.1 can be obtained at the Department of Immigration Services. There is no charge for the form and no processing fee. Along with a completed application form, the following items must be attached, Memorandum and Articles of association, CV of investor, verified birth Certificates plus 5 photographs passport size and a project write-up.

There is a fee of US S 1,600 for a Class A permit, which is generally valid for two years. Permits can be renewed for an additional period of two years for US $ 800.



Application Process for Class B Permits
To hire a foreign employee, a Class B permit must be applied for by the firm. The application form is available from the Department of Immigration (Form TIF. 1) at no cost and there is no processing fee. The application form should be accompanied with the following: five photographs, birth certificate, curriculum vitae, academic qualifications, proof of experience, organisational chart, offer of employment, proposed contract. The Labor Department reviews the application and makes a positive or negative recommendation to the Department of Immigration.

Class B residence permits have a fee of US $ 600 for two years. There is a renewal fee of US $ 300.


Note:
TIC Certificate holders will process their immigration and work permits through the Centre.

IMMIGRATION PASSES: Residence Permit Class A:
(i) For large capital investors in Companies, Industries, Fishing, Mineral and Transportation

First Issue

US $ 1,600

Renewal

US $ 800

(ii) For small scale business, retailers, consumer shops, butcheries

First Issue

US $ 600

Renewal

US $ 300

(iii) For peasants

First Issue

US $ 50

Renewal

US $ 50



2. Resident Permit Class B
For employees in industries, private companies, public corporation and musical bands.

First Issue

US $ 600

Renewal

US $ 300


3. Resident Permit Class C
For missionaries Research and students

First Issue

US $ 100

Renewal

US $ 50


4. Dependant Pass
First Issue

US $ 100

Renewal

US $ 50

5. Special Pass

US $ 400

6. Visitors Pass

US $ 200

7. Re-entry Pass

US $ 20

In Tanzania the Income Tax Act, 2004 came into effect in July 2004. This act restructured the income tax system in line with modern requirements and repealed the previous Income Tax Act, 1973. Tax is levied on income from employment, income from business and income from investment. Taxable persons include entities and individuals. An entity can be a corporation or a trust, and a corporation is loosely defined to mean any incorporated or unincorporated body of persons or association. For partnerships the individuals within the partnership are taxed on their share of the income. Taxation is on worldwide income for residents (or for individuals, of residents of more than two years) while taxation of non-residents is on Tanzanian source income only. The corporate tax rate is 30%. The individual tax threshold is Tsh 1,200,000 per annum, and the rates are from 15% to a top rate of 30%. Various provisional and final withholding taxes are applied to ease the collection of tax.

Both the Income Tax Act, 2004 itself and a comprehensive interactive guide to income tax for Tanzanian residents is provided on the website of the Ministry of Finance and Economic Affairs of Tanzania (see guide).[1]

In Tanzania the Income Tax Act, 2004 came into effect in July 2004. This act restructured the income tax system in line with modern requirements and repealed the previous Income Tax Act, 1973. Tax is levied on income from employment, income from business and income from investment. Taxable persons include entities and individuals. An entity can be a corporation or a trust, and a corporation is loosely defined to mean any incorporated or unincorporated body of persons or association. For partnerships the individuals within the partnership are taxed on their share of the income. Taxation is on worldwide income for residents (or for individuals, of residents of more than two years) while taxation of non-residents is on Tanzanian source income only. The corporate tax rate is 30%. The individual tax threshold is Tsh 1,620,000 per annum, and the rates are from 14% to a top rate of 30%. Various provisional and final withholding taxes are applied to ease the collection of tax.

Both the Income Tax Act, 2004 itself and a comprehensive interactive guide to income tax for Tanzanian residents is provided on the website of the Ministry of Finance and Economic Affairs of Tanzania.