Tanzania Market Entry

Tanzania Market Entry
Basic data
Capital At home
Population 6million
Language Swahili language
Religion Islam 35%, Christianity 35%
State system parliamentary democracy
Head of State Samia Suluhu Hassan
Head of government Kassim Majaliwa Majaliwa
Currency name Tanzanian shilling
Travel
Time shift +1h CET (summer time), +2h CET (winter time)
Economy 2021
Nominal GDP (billion USD) 179.1
Economic growth (%) 5
Inflation (%) 3.7
Unemployment (%) ON

Tanzania is a politically and to a large extent security stable country. Although a pluralistic political system is formally established, the same party has been in power in the country for 60 years.

Tanzania has regular elections, presidents (the candidates of the ruling party) hand over power constitutionally, and the country has never had a civil war. On the other hand, even after the end of the socialist experiment and one-party rule in the early 1990s, the level of democracy did not increase significantly, on the contrary, it continued to suffer during the administration of President John Pomba Magufuli (2015 – March 2021). The October 2020 elections were formally free, but the opposition was harassed in various ways, was not allowed to campaign and did not have equal access to the media. Magufuli’s government has also been criticized for restrictions on journalists, a harsh policy towards the LGBT community and above all for the complete denial of the covid-19 pandemic and the boycott of international cooperation in this area; as of April 2020, there was no official infection in the country. Check smber for agriculture and fishing facts of Tanzania.

President Samia Suluhu Hassan, who took over after Magufuli’s sudden death, has taken more realistic political positions in various areas and is also showing much more openness towards foreign countries. Her term of office will end in 2025.

The country managed to avoid political instability after the sudden death of an authoritarian president, the handover of power went largely smoothly – despite the existence of various factions in the ruling CCM party.

Basic conditions for the use of Czech goods on the market

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

The basic regulation governing import and export conditions in Tanzania is a regional law adopted by the East African Legislative Assembly, the East African Community Customs Management Act, 2004 (EACCMA), i.e. the East African Community Customs Tariff of 2004. Tanzania’s average MFN tariff is 16%. Agricultural products face more barriers (22%) compared to non-agricultural products (14%). As a member of the EAC (East African Community), Tanzania also participated in the negotiations on the Comprehensive Regional Economic Partnership Agreement with the EU. The Tanzania Bureau Of Standards is responsible for standards and quality control and for ensuring that they are applied to imports.

Technical regulations are developed by several ministries. According to the WTO Trade Policy Review, 530 Tanzanian standards have been harmonized with EAC standards. The Competition Act prohibits horizontal and vertical agreements between businesses if the aim, effect or likely effect of the agreement is to significantly prevent, restrict or distort competition. On the other hand, agreements are permitted if their object, effect or likely effect does not significantly hinder, restrict or distort economic competition and if none of the parties to the agreement has a dominant position.

The following applies to these agreements:

  • the combined market shares of the parties to the agreement do not exceed a market share of more than 35%; or
  • none of the parties to the agreement is in direct competition. Cartel conduct (such as price fixing and secret bidding) is prohibited by the Competition Act.

The Competition Act also prohibits the abuse of a dominant position on the market. Any person who commits an offense under the Competition Act must pay a fine of not more than 10% but not less than 5% of their annual turnover in Tanzania. If a legal entity is charged with a criminal offense under the Competition Act, any natural person who was a director in the given company at the time of the offense is criminally liable, unless he proves that he did not participate in the violation of the law and was not even aware of it.

Tanzania does not apply exchange controls. The local currency is freely convertible.

In terms of transfer pricing rules, transactions between related companies must be concluded at arm’s length.

The following companies are considered related:

  • one of the companies directly or indirectly participates in the management, control or has a capital share in the other company; or
  • a third party directly or indirectly participates in management, control or has a capital share in both companies

Forms and conditions of operation on the market

The Tanzania Investment Act governs investment in Tanzania. Established by the government, the Investors Single Point of Contact (TIC) acts as a place to coordinate, support and facilitate investment in Tanzania. Registration with the TIC is not mandatory, but a foreign investor intending to invest in Tanzania is eligible to apply to the TIC for an Incentive Drawing Certificate if, among other things, they intend to invest at least US$500,000 or the equivalent in any currency.

Incentives include:

  • initial investment contribution in the amount of 50% of the cost of some equipment;
  • 10-year tax holidays and other incentives provided to investors in export zones (EPZs);

Investors in the mineral and oil sectors cannot register with the TIC, but the provisions of the Tanzanian Investment Act relating to the protection of investments, guaranteeing repatriation of profits and proceeds from the sale of a company, also apply to these businesses.

All taxpayers must register with the TRA (Tax Administration) and obtain a Taxpayer Identification Number within 15 days of starting business in Tanzania. Every private sector employer must register with the NSSF (National Social Insurance Fund). Every employee must also be registered with the fund. In addition, every employer is required to register with the WCF (Workers’ Compensation Fund) as soon as they start taking on staff.

Foreign companies can use the following legal entities to do business in Tanzania:

  • public trading company (joint stock company);
  • limited liability company
  • a registered branch of a foreign company.

Companies are required to register with the Business Registrations and Licensing Agency (BRELA). Registration takes approximately one month to complete once all required documents are submitted.

If a Czech natural or legal person is interested in establishing an office, representation or joint venture in Tanzania, it is recommended to contact the state agency, Tanzania Investment Center (TIC), which is able to communicate the current conditions for the implementation of the investment plan.

Marketing and communication

Marketing requirements are usually negotiated with the relevant local representative, who often asks for financial support to introduce a certain product to the market. The aspect of promotion as such, as well as its form, which does not differ from the form common in developed countries, are often underestimated by Czech exporters. On-site promotion cannot be done without English and Swahili brochures and technical descriptions. For consumer goods, but also for some equipment, promotion in the media, especially in the press, is usual.

Sales exhibitions and fairs are a good opportunity to meet potential customers or company representatives. However, it is necessary to carefully consider whether the advertised trade fair is really large enough to be interesting for Czech companies, the level of trade fairs varies greatly.

From the field of digital promotion, it is advisable to have your FB page. A number of Tanzanian companies use FB exclusively for their promotion and do not even have their own website. It is necessary to monitor the implementation of the promotional campaign. It is not uncommon for the local partner to use these funds completely inappropriately and for their own enrichment.

Issues of intellectual property protection

Tanzania, like many developing countries, is a member of the WTO. The protection of intellectual property is still minimal at the legislative level, and its practical application is even worse. Anglo-Saxon show-business suppliers are primarily at risk, but the threat is limited by the very limited purchasing power of the population, for whom even clean data carriers and playback devices are no longer available. Another group in which Czech companies could appear to a limited extent are software manufacturers. However, copying mainly concerns consumer and entertainment software.

The following international agreements are legally binding in Tanzania:

  • African Regional Intellectual Property Organization (Banjul Protocol)
  • Harare Protocol
  • Nice Union
  • Paris Convention for the Protection of Industrial Property
  • Trade-Related Aspects of Intellectual Property Rights
  • World Intellectual Property Organization

Provisions for protection are envisaged for the trademark area:

  • service marks;
  • series marks;
  • color or combination of color marks;
  • associated brands;
  • certification marks;
  • collective marks

Public procurement market

Public contracts are generally awarded in the form of tenders. The first step, especially in the case of tenders for construction work or consultancy activities, is the pre-qualification and registration of interested parties, who, if they are evaluated as suitable for the given purpose, are then approached directly by sending tender conditions. Tenders are published in the daily press. However, the deadlines for submitting bids tend to be very short, so only those companies that are physically present at the location or that have their representatives have a real hope of success.

The formal system and legal framework for tenders is set out in the Public Procurement Act (PPA) of 2004 and regulations supplementing the PPA. The Public Procurement Act (PPA) established The Public Procurement Regulatory Authority (PPRA) as the main regulatory body for public procurement and the management of public assets in Tanzania.

Amendments to the PPA Act introduced changes that strengthened the PPRA’s role in carrying out its regulatory mandate.

Contact for PPA:

HEAD OFFICE The Chief Executive Officer Public Procurement Regulatory Authority PSPF

Dodoma Plaza, 9th Floor, Jakaya Kikwete Road, PO. Box 2865 Dodoma – Tanzania. Phone: +255 (0)26 296 3854 email: [email protected]tz

In the case of tenders that are financed by certain banks or agencies where the Czech Republic is not a member (e.g. African Development Bank), it is necessary for the Czech supplier to use a company based in a country that is a member country of the given bank or agency for its offer.

Payment terms, payment ethics and resolution of commercial disputes

The Tanzanian legal system is based on statute law supplemented by common law, customary law and aspects of Islamic law.

In the event of a dispute between a foreign investor and the government in relation to a registered investor, efforts shall be made to resolve the dispute through amicable settlement negotiations. If the dispute is not settled through negotiations, it may be submitted to arbitration.

The new Act established an Arbitration Center in Tanzania to conduct and administer arbitration in Tanzania in accordance with the Arbitration Rules of the International Center for Settlement of Investment Disputes.

  • The Commercial Court, within the High Court of Tanzania, is exclusively for the speedy resolution of commercial disputes.
  • For disputes involving natural resources (mineral and oil extraction), the government has prohibited, in accordance with Tanzania’s Natural Resources and Natural Resources Act, the submission of disputes to foreign courts

. Subject to this Act, only Tanzanian laws shall apply to disputes relating to natural resources and disputes shall be resolved only through Tanzanian dispute resolution forums.

Tanzania has adopted the following international conventions and agreements for the resolution of international disputes:

  • Convention on the Settlement of Investment Disputes (ICSID Convention)
  • United Nations Commission on International Trade Law (“UNCITRAL”)
  • United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention)

In the case of international trade with Tanzania, it is advisable to use an irrevocable documentary letter of credit, opened with a reputable bank. It is not uncommon for smaller orders to be paid in advance for new customers.

Visas, fees, specific conditions for traveling to the territory

There are two ways to apply for a Tanzanian visa for business, tourism or visit purposes:

  1. by submitting an electronic application online from the website https://eservices.immigration.go.tz/visa
  2. at airports and land border crossings (only a 1-entry visa is issued; the passport control officer may ask for a return ticket)

The fee for applying for a one-time tourist visa valid for up to 90 days for citizens of the Czech Republic is USD 50.

The fee for applying for a multiple-entry visa for citizens of the Czech Republic is USD 100. Individual stays with this type of visa may not be longer than 90 days.

Online visa applications (e-visa) are paid electronically (by credit card). When applying for a visa at the border crossing, payment must be made in US dollars in cash (ie no credit card payment option is offered).

After processing, the approved online visa is sent to the applicant’s email. The applicant must print both the Approved Visa Grant Notice and the Visa Application Notification letter before travel. These documents must be submitted to Tanzanian immigration upon arrival in the country together with the completed Tanzania Entry Arrival Declaration Form and the same passport that was used to apply for the visa.

It is generally recommended to obtain an online visa before traveling to Tanzania as it ensures relatively quick clearance at the border.

The Embassy of Tanzania accredited to the Czech Republic does not accept visa applications and only refers to the electronic application.

For detailed information on Tanzanian visas, see the page of the Immigration Department of the Ministry of Interior of Tanzania Unofficial detailed information on obtaining a Tanzanian visa: https://www.onlinevisa.com/visa-policy/tanzania/

With regard to frequent questions from the public, we emphasize that the Embassy of the Czech Republic in Nairobi does not take part in the procedure for issuing Tanzanian visas. We recommend addressing any questions to either the Tanzanian Embassy in Berlin (e-mail: [email protected]) or the Principal Commissioner of Immigration Services of Tanzania (e-mail [email protected] or consular @immigration.go.tz )

Mainland Tanzania and Zanzibar have a common visa policy, i.e. the visa is valid for the entire territory of the United Republic of Tanzania.

Employment of citizens from the Czech Republic

Foreign workers working in Tanzania must hold a valid work permit issued by the Labor and Residence Permit Office under the Directorate of Immigration Services or a valid exemption certificate.

The work permit is valid for two years and can be extended, the total validity even after renewal cannot exceed five years.

The Non-Citizens (Employment Regulation) Act of 2015 allows an investor whose investment has a significant contribution to the Tanzanian economy to extend the validity period of the work permit to ten years.

Any foreign business that has obtained a foreign investment permit under the Tanzania Investment Act 1997 is entitled to an initial automatic foreign employee quota of up to five people. Any application for additional authorization is made to the TIC, which, in consultation with the Immigration Department, authorizes the employment of additional persons deemed necessary, taking into account the availability of skilled Tanzanians, the complexity of the technologies employed, etc.

Employers of foreign nationals must submit a succession plan that will determine when the position held by the foreign employee will be filled by a Tanzanian national

Local employment vs. posting Subject to Tanzanian labor regulations, an employee may be temporarily assigned to Tanzania. In this case, there is no legal requirement for local or foreign employees to be employed by a local entity. However, from the point of view of Tanzanian immigration legislation, employment with a local employer is a prerequisite for applying for a work permit.

Fixed-term contracts. Fixed-term contracts can be concluded with employees for specific tasks and a specific duration. These contracts are terminated after their validity period has expired, unless the agreement between the employer and the employee is renewed. The law treats fixed-term contracts on a similar basis to long-term contracts. Termination of a contract before the expiry of its validity period, if not stipulated in the law, can be described as illegal from the point of view of Tanzanian labor law.

Remuneration for work Remuneration for work is not required to be paid in local currency, however payroll must be kept in Tanzanian shillings.

Most Tanzanian health facilities can only provide basic medical services, and buildings often lack basic necessities such as running water and electricity. Health facilities often do not have enough staff to run the center. In addition, more complex treatment and diagnostic methods such as MRI and CAT scans are not available. More serious illnesses such as cancer, stroke and heart disease can be difficult to treat in the country. General surgery is available, but with a shortage of doctors, waiting times can be weeks to months. Foreigners working in Tanzania should purchase international health insurance before arriving in Tanzania. Furthermore, it is strongly recommended that foreigners have insurance that covers the costs of emergency evacuation and transportation. In the event of serious injury,

Fairs and events

22-24 September 2022 International Trade Exhibition “Tanzania East Africa 2022” – https://www.expogr.com/tanzania/general/

 

Practical telephone numbers (emergency services, police, firemen, information lines, etc.)

  1. Police (Tanzania Police Force)

Telephone numbers for the public – help in an emergency 112 or 999

Airport +255 (0) 222 844 010

Central Station +255 (0) 222 117 362

Oyster Bay Station +255 (0) 222 667 322

Selander Station +255 (0) 222 120 818

Dar es Salaam Traffic Police +255 (0) 222 111 747

  1. Fire Department (Fire Department)

Main emergency number: 112 (the number cannot be guaranteed to work throughout Tanzania)

Other emergency number: Tel: +255 (0) 652 356 406

  1. Medical emergency service and medical emergency (Ambulance / Emergency Medical Services) 112 114 (it cannot be guaranteed that the numbers work throughout Tanzania)

Although these are the official emergency numbers in Tanzania, there is currently no public emergency service available in any area of ​​Tanzania. It is therefore necessary to secure transport in the event of an emergency with a private carrier. Most private companies operate only in larger centers such as Dar es Salaam and Arusha.

Knight Support Emergency Ambulance Tel. +255 (0) 222 618 612/3/4/6 emergency mobile numbers +255 (0) 754 777 100 or +255 (0) 784 555 911

air ambulance +255 (0) 755 911 911 or +255 (0) 787 555 150

Dar Es Salaam Flying Doctors Tel. +255 (0) 787 747 464 Arusha Medivac Air Ambulance Service Tel. +255 (0) 767 996 996 Tel. +255 (0) 683 996 996

The Aga Khan Hospital, Dar es Salaam Tel.: +255 222 115 151 Tel.: +255 222 115 153

Important web links and contacts

Office of the President website: https://www.ikulu.go.tz/ E-mail: [email protected] or from the page https://www.ikulu.go.tz/contactus

Office of the Vice-President website: https://www.vpo.go.tz/ E-mail: [email protected]

Office of the Prime Minister website: http://www.pmo.go.tz/ E-mail: [email protected]

Tanzania Government Portal https://www.tanzania.go.tz/

  1. Ministry of Agriculture website: https://www.kilimo.go.tz/ E-mail: [email protected]
  2. Ministry for Communications and ICT website: http://www.mawasiliano.go.tz/ E-mail: [email protected]
  3. Ministry of Constitutional and Legal Affairs website: https://www.sheria.go.tz/ E-mail: [email protected] E-mail: [email protected]
  4. Ministry for Defense and National Service website: http://www.modans.go.tz E-mail: [email protected]
  5. Ministry for Education, Science, Technology and Vocational Training website: http://www.moe.go.tz E-mail: [email protected] or from the site http://www.moe.go.tz /en/contact_us
  6. Ministry for Energy website: https://www.nishati.go.tz/ E-mail: [email protected]
  7. Ministry for Finance and Planning website: http://www.mof.go.tz/ E-mail from https://mof.go.tz/index.php/contact
  8. Minister for Foreign Affairs and East African Cooperation website: http://www.foreign.go.tz Email: [email protected] Email: [email protected]
  9. Ministry for Health, Community Development, Gender, the Elderly, and Children website: http://www.mcdgc.go.tz E-mail: [email protected]
  10. Ministry for Industry and Trade website: http://www.mit.go.tz E-mail: [email protected]
  11. Ministry for Information, Culture, Arts, and Sports website: www.habari.go.tz E-mail: [email protected]
  12. Ministry for Lands, Housing, and Human Settlements website: http://www.lands.go.tz Email: [email protected] or from https://www.lands.go.tz/ feedbacks/create
  13. Ministry for Livestock and Fisheries website: http://www.mifugouvuvi.go.tz Email: [email protected]
  14. Ministry for Minerals website: www.madini.go.tz Email: [email protected]
  15. Ministry for Natural Resources and Tourism website: http://www.mnrt.go.tz Email: [email protected] Email: [email protected]
  16. Ministry for Water and Irrigation website: http://www.maji.go.tz Email: [email protected]
  17. Ministry for Works and Transport website: http://www.mow.go.tz Email: [email protected] Email: [email protected] or from https://www .mwt.go.tz/contactus
  18. Ministry of Home Affairs website: https://www.moha.go.tz

Tanzania Market Entry