Where is Tanzania?
The United Republic of Tanzania lies on the eastern coast of Africa, along the Indian Ocean, between latitutes 1° and 12° south of the Equator and longitudes 29° and 41° east. It is bordered by Mozambique, Malawi and Zambia to the south and south-west, the Democratic Republic of the Congo to the west, the Democratic Republic of the Congo to the west, Rwanda and Burundi to the north-west, and Uganda and Kenya to the north.
Explain the Tanzanian constitutional system?
Tanzania is governed by the Constitution of the United Republic of Tanzania, 1977. The Constitutional system of Tanzania is based on the principle of separation of powers between the Government, Judiciary and the Legislature. Tanzanians elect their President and Vice President every five years by universal suffrage. At regional and district levels, Regional Commissioners and District Commissioners respectively are the representatives of the central government. Local government consists of City, Municipal, Town and District Councils. The Parliament is the Union's unicameral parliament. It enacts laws that apply to the entire United Republic of Tanzania, and laws on non-union matters that apply only to the mainland. In Zanzibar, a House of Representatives legislates on Zanzibar matters. There are about 13 registered political parties of which the Chama Cha Mapinduzi (CCM) is the largest and is currently the ruling party.
Explain the Tanzanian legal system?
The legal system in Tanzania has evolved largely from the basis of British common law, in consequence of British rule over Tanganyika (now mainland Tanzania) from 1919 up to the time of independence in 1961. In the case of the islands of Unguja and Pemba, now referred to as Zanzibar, the legal system has evolved from both British common law and Islamic law. Tanzania's legal system is sourced from English common law, statutes, case law, sharia and customary law. English common law applies only in the absence of statutory law, and where commercial law has largely being enacted, common law does not apply. Sharia is applied only in matters of marriage and succession to Tanzanians of Islamic faith, while customary law applies generally to matters of ancestral land ownership and inheritance.
Explain the Tanzanian court structure?
The judiciary in Tanzania is headed by the Court of Appeal, which has jurisdiction over the whole of the United Republic of Tanzania. Under the Court of Appeal are two High Courts - one for mainland Tanzania and the other for Zanzibar. The High Court of Tanzania is headed by a Principal Judge and operates in 12 zones in mainland Tanzania, each under a Judge-in-charge. There is, in addition, a Resident Magistrate's Court for each of the country's districts where the regional centres are located. There are also District Courts for each of the 130 districts, each under a District Court Magistrate and, at the lowest level, the Primary Courts under Primary Court Magistrates, of whom there are a total of 653. The official language of the courts is English, although Kiswahili, the national language, is also used, especially in the lower courts.
Explain the general legal framework for guarantee against nationalization and expropriation of foreign investments in Tanzania?
The Constitution is the fundamental law in Tanzania, overriding all other legislation. Chapter 24 of the Constitution guarantees the right to own property and to protect it in accordance with the law. There is full recognition of private property and protection against any non-commercial risks. Tanzania is an active member of the Multilateral Investment Guarantees Agency. Tanzanian is also a member of The International Centre for Settlement of Investment Disputes and has ratified the New York Convention.
The incentives available to investors under Tanzania Investment Act, 1997 include guarantee against nationalization and expropriation and unrestricted right to international arbitration in the case of disputes with the Government. In addition, Tanzania has signed bilateral investment treaties with Germany, United Kingdom, Sweden, Denmark, Switzerland, Egypt, South Korea, Mauritius, Malawi and Zimbabwe. Most of these bilateral investment agreements have provisions which guarantee foreign investors from contracting countries against nationalization and expropriation.
What is the general framework for recognition of foreign arbitral awards and foreign judgments in Tanzania?
Tanzania has ratified the ICSID Convention and the Convention establishing the Multilateral Investment Guarantee Agency. Tanzania has also signed bilateral investment treaties with Germany, United Kingdom, Sweden, Denmark, Switzerland, Egypt, South Korea, Mauritius, Malawi and Zimbabwe. Accordingly, any dispute arising between the Government and investors may be settled amicably through negotiations or may be submitted for arbitration under the international agreements or any other forum and rules agreed in the relevant contract. In addition, Tanzania has ratified the New York Convention. A foreign arbitration award is therefore enforceable in Tanzania using the mechanism provided under New York Convention.
A foreign arbitration award is generally enforceable in the High Court of Tanzania. Any foreign arbitral award which would be enforceable under Arbitration Act, Cap. 15 is treated as binding for all purposes on the persons as between whom it was made and may be relied on by any of those persons by way of defence, set-off or otherwise in any legal proceedings. In order for a foreign arbitration award to be enforceable, it must be final. A foreign arbitration award is not deemed to be final if any proceedings for the purpose of contesting the validity of the award are pending in the country in which it was made.
Generally, a foreign judgment is conclusive except where it is otherwise not conclusive in a manner prescribed under sections 11 and 12 of the Tanzanian Civil Procedure Code. Unless the decree handed down by a foreign court falls under the exceptions stipulated in sections 11 and 12 of the Civil Procedure Code, that judgment will, generally, be conclusive and, without new evidence and facts, it cannot be easily discharged. The enforcement can be done by way of registering a foreign judgment with the High Court of Tanzania. There is also a special legislation governing enforcement of foreign judgments from specified countries which have agreed with Tanzania on reciprocal enforcement of judgments.
What forms of business structures are allowed in Tanzania?
The most common business entity is limited liability entity. For foreign companies, it is possible to establish a branch or subsidiary. In certain sectors, businesses can only be established in a form of a local company. All businesses operating in Tanzania, whatever their legal form, must register with the Business Registration and Licensing Agency (BRELA), which is under the Ministry of Industries and Trade. The first step is to obtain name clearance from BRELA. Incorporation of companies in Tanzania is done under the Company's Act, Chapter 212 of the laws of Tanzania. Investors wishing to establish a limited liability company must first clear the name for the proposed company before filing an application with BRELA. To register a company with BRELA, investors must file an application with the appropriate registration fees (denominated in dollars in the case of foreign investors and Tanzania shillings in the case of local investors), the proposed name of the company, certified copies of the Memorandum and Articles of Association, a notice of the situation of the registered office in the country of domicile and a list of the directors of the company and persons resident in the country who are representatives of the company. Companies, both local and foreign, are treated equally under the law.
Explain briefly the system of intellectual property rights protection in Tanzania?
The Patents Act, 1987, governs the protection of patents. Tanzania has also ratifiedWorld Intellectual Property Organization Convention, 1967 (effective for Tanzania as from 30 December 1983); Paris Convention (International Union) 1883–1967 (effective for Tanzania as from 16 June 1963); Patent Cooperation Treaty (PCT) 1970 (effective for Tanzania as from 14 September 1999); Agreement on the Creation of the African Regional Industrial Property Organization (ARIPO), 1979 (effective for Tanzania as from 12 October 1983); (effective for Tanzania as from 01 September 1999); and Agreement on Trade Related Aspects of Intellectual Property Rights (Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization), 1994. The kinds of patents that can be protected in Tanzania are patents of inventions and utility models.
A patent may be registered for inventions (other than a discovery, scientific theory, mathematical method, aesthetic creation, computer program or presentation of information) meeting specified requirements relating to novelty, utility and inventiveness. Registered patents endure for twenty years, subject to the payment of annual fees. The duration of protection is 20 years for patent of invention and 7 years for utility models. Absolute novelty is required for patents of inventions. An invention is new if it is not anticipated by prior art. Utility model must not form part of the state of the art, that is to say, not made available to the public by means of a written description anywhere in the world or by public use in Tanzania before the filing or priority date.
A patent granted by ARIPO designating Tanzania is protected once the Patent Office is notified about the grant. Since Tanzania has also ratified PCT, patents granted through PCT designating Tanzania are also protected. The time limit for entering national phase for PCT patents is 21 months from priority date and the time limit for filing translation is 31 months from priority date. In order to ensure that there is interaction between the ARIPO and PCT system, Harare Protocol incorporates the PCT by inclusion of the provision to the effect that a PCT application which designates PCT Contracting State which has also ratified Harare Protocol, such PCT application is automatically considered to be an application for the grant of a patent under Harare Protocol. The provisions of PCT apply to such international application in addition to the provisions of Harare Protocol and in case of conflict, the provisions of PCT apply.
The Trade and Service Marks Act, 1986, govern protection of trademarks. Tanzania has also ratified World Intellectual Property Organization Convention, 1967 (effective for Tanzania as from 30 December 1983); Paris Convention (International Union) 1883–1967 (effective for Tanzania as from 16 June 1963); Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice Union) 1957–1977 (effective for Tanzania as from 14 September 1999 ); Agreement on the Creation of the African Regional Industrial Property Organization, 1979 ((effective for Tanzania as from 12 October 1983); The Protocol on Marks within the Framework of African Region Industrial Property Organization (the Harare Protocol), 1993) (effective for Tanzania as from 01 September 1999); and Agreement on Trade Related Aspects of Intellectual Property Rights (Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization), 1994.
Registration of a trademark is for a period of seven years and may be renewed for further periods of ten years in perpetuity. Unregistered trademarks are also offered protection under common law provided that it can be shown that the proprietor has established goodwill associated with its mark. Trademark applications must be filed with the Tanzanian Trademark Office in a prescribed form. Currently, it is not possible to make online filing. The rights granted after registration dates back to the date of filing of the application. Trademarks are allotted goods or services for which the mark will be used. As pointed out above, both Tanzania and Zanzibar apply International Classification of Goods and Services (Nice Classification).
Since Tanzania is member of ARIPO, trademarks registered by ARIPO are protected in Tanzania. The application for a mark can be filed either directly at the ARIPO Office in Harare, Zimbabwe or via the Tanzanian Trademark Office. In both cases, the filing date is the date of receipt of the application in that respective Office. The application may be filed by the applicant or his authorized representative. The duration of registration of a mark at ARIPO is ten years from the date of registration. A mark is registered as of the date of filing of the application for registration, and such date is deemed for all purposes to be the date of registration. Registration of a mark may be renewed for consecutive periods of ten years on payment of the prescribed fee.
There is no local system for registration of designs in Tanzania mainland. However,Tanzania has ratified Agreement on the Creation of the African Regional Industrial Property Organization, 1979 (effective for Tanzania as from 12 October 1983); and the Protocol on Patent and Industrial Designs within the Framework of African Region Industrial Property Organization (the Harare Protocol), 1982) (effective for Tanzania as from 01 September 1999). In Zanzibar, industrial designs can be registered under the Zanzibar Industrial Property Act, 2008. Designs registered by ARIPO designating Tanzania are protected initially for ten years from the date of filing. Design protection can be renewed at ARIPO for further periods and the maximum duration of protection may be 25 years from the date of application.
With regard to copyright, the main legislation in Tanzania is the Copyright and Neighboring Rights Act, 1999. Tanzania is also member of the Berne Convention for the Protection of Literary and Artistic Works of 1886 as revised at Paris in 1971. Under Tanzanian law, copyright is recognized as a property right which vests in the authors of original literary, dramatic, musical and artistic works. Copyright also vests in authors of sound recordings, films, broadcasts, cable programs and typographical arrangements of published editions. Several copyrights can exist in one work. The copyright law in Tanzania protects ‘neighboring rights’ as well. Neighboring rights are secondary rights of copyright that the performers are entitled. Performers are defined under the Tanzanian copyright law to include singers, musicians, dancers, producers of sound recording (for example cassette recordings and compact discs) in their recordings, broadcasting entities in their radio and television programs, etc.
As mentioned above, inventions concerning plants can also be protected under the New Plant Varieties Act, 2012 if plant breeders' right with respect to any plant variety is new, distinct, uniform and stable. A variety is deemed to be distinct if it is clearly distinguishable from any other variety whose existence is common knowledge at the time of the filing of the application for the granting of plant breeders' rights or for the entering of another variety in the official register of varieties in any country.The duration of protection for plant variety is 20 years and 25 years for variety of vine and tree). In order to maintain the plant breeders’ rights, the holder must pay an annual fee in advance, starting with the second year after the date of filing of the application. The holder who fails to pay annual fees on the due date may, upon payment of a surcharge, pay the fee at any time in the following six months without affecting the plant breeders’ rights. If the fee is not paid within this period, the plant breeders’ rights will lapse, and the Registrar will cancel the right.
What is the legal framework for environmental management in Tanzania?
The main legislation is Environmental Management Act, 2004 (‘Act’). This legislation establishes National Environmental Management Council (‘NEMC’) which is national environmental protection agency responsible for administration of the Act and other environmental laws. It also provides for legal and institutional framework for impact and risk assessments, prevention and control of pollution, waste management, environmental quality standards, public participation, compliance and enforcement, and implementation of international instruments on environment. This legislation also lays down the procedure for conducting Environmental Impact Assessment (‘EIA’).
The list of project requiring mandatory EIA include projects in the areas of agriculture, forestry, fisheries, wildlife, energy, petroleum, leather industry, chemical industries, extractive industries (including mining), non-metallic products industries, tourism and recreational development, transport and infrastructure, food and beverage industries, textile industries, building and civil engineering industries, metal and engineering industries, waste treatment and disposal, water supply, land planning and development and wood, paper and pulp industries. If the project does not fall under mandatory EIA requirement, it must be registered with NEMC for screening. If, after project screening, NEMC finds that the project has no significant impact on the environment, it will approve the project without requiring the developer to undertake EIA. If NEMC finds that the project will have significant impact on environment and the project report discloses no mitigation measures, NEMC will require the project developer to undertake EIA.
Are foreign employees allowed in Tanzania?
The Non-Citizens Employment (Regulation) Act, 2015 provides, among other things that all foreign nationals intending to work in Tanzania must obtain work permits. After obtaining the work permit, there is a requirement to obtain a resident permit under the Immigration Act, 1995.
Which exchange control restrictions are relevant to foreign investors in Tanzania?
The applicable restrictions and controls are explained in the Foreign Exchange Act, 1992, regulations issued under this Act and ad hoc the circulars issued by the Bank of Tanzania. If a transaction is not explicitly allowed under these instruments, one must assume that it is prohibited and must obtain approval from the Bank of Tanzania.
Outward capital transfer
Outward capital transfers for purposes other than repatriation of capital and income to foreign shareholders in respect of direct investments and servicing foreign loans are generally restricted. Outward portfolio investments, foreign lending operations in favor of non-residents, acquisition of real estates, outward direct investment, operation of offshore foreign currency accounts by residents and participation of non-residents in domestic money and capital markets are also restricted. This means that foreign based project sponsors can only raise finance in Tanzania by way of issuing corporate bonds to local markets after getting approval from the Bank of Tanzania.
Repayments for foreign loans, overdrafts, financial facility, deferred payments or guarantees by residents’ individuals or companies are generally allowed. The applications by a project company for foreign loans, overdrafts, financial facility, deferred payments or guarantees may be processed and approved by commercial banks.
Repatriation of capital
Payments relating to repatriation of capital and income to foreign shareholders in respect of direct investments are allowed. However, authorizing banks must demand audited accounts and authenticated tax clearances from Tanzania Revenue Authority confirming payments of all relevant taxes.
Payments for imports are also allowed. If payment is to be made directly in respect of imports, banks and financial institutions must demand production of invoices and shipping documents and report from an authorised pre-shipment inspection firm.
Transfer of foreign currency in respect of advance payments for imports, remittance may be made against properly authenticated advance payment guarantee and proforma invoice/supply contract. The customer must have an account relationship with the bank. If the payment relates to imports that require import licence, it must be produced. If payment is to be made for deferred payments for imports or any financial facilities tenure of which do not exceed 365 days, the interest rate and other charges if any should reflect the prevailing market conditions for the relevant currency of borrowing at the time of signing the relevant agreement. Borrowings are required to be arranged in the same currencies in which repayments for imports are required to be settled.
Emoluments, consultancy fees and royalties
If the payment relates to remittance by employed expatriates, banks making remittance are required to sight relevant employment contract, resident permit, and getting details of the purposes for remittances. If the payment is for fees related to consultancy, management and royalty agreements, the project company should furnish duly executed contractual documents duly executed by parties, relevant invoice/fees notes and tax clearances from Tanzania Revenue Authority certifying that tax obligations have been settled.
There are no special fees and taxes which are specifically dedicated on foreign exchange transactions. However, interest amount payable to foreign creditors, payments in respect of services rendered by foreign entities and payment of dividends to foreign shareholders are subject to income tax.
How the anti-competitive behaviors are regulated in Tanzania?
Fair Competition Act, 2003 is the main legislation which regulates unfair competition in Tanzania and the administering authority is FCC. Under section 5(6) of the Fair Competition Act, 2003, a person is regarded to have a dominant position in a market if acting alone, can profitably and materially restrain or reduce competition in that market for a significant period of time and that person’s share of the relevant market exceeds 35 per cent. Section 10 of the Fair Competition Act, 2003, prohibits a person with a dominant position in a market to use his position of dominance with the object, effect or likely effect of appreciably preventing, restricting or distorting competition.
A merger is prohibited if it creates or strengthens a position of dominance in the market. A merger is notifiable if it involves turnover or assets above the threshold set out by FCC. Currently, a merger must be notified to FCC if the combined turnover of the two undertakings involved in the transaction is above Tshs 800 million. A notification has to be made by any person who is a party to an agreement on merger or acquisition of assets, shares or business inside or outside Tanzania resulting in the change of control of a business, part of a business or an asset of business in Tanzania. The notification can be submitted on the basis of a draft agreement, letter of intent, memorandum of understanding and the heads of agreement.
The notifiable merger or acquisition must be filed with the FCC at least fourteen (14) days before the implementation of the proposed merger or acquisition. Upon receipt of the notification, FCC determines whether or not the proposed merger or acquisition should be examined. If FCC determines that the proposed merger or acquisition should be examined, such merger or acquisition will not be allowed to take place for a period of 90 days to allow FCC to complete the examination. FCC may extend the examination period for a period not exceeding 30 days if the examination process is not completed within 90 days. After completing the examination, FCC must decide whether or not the proposed merger or acquisition will create or strengthen a dominant position in the market. If the Parties delay to supply the information required by FCC, the duration for review process may be extended for a further period as FCC considers that the review process has been delayed by lack of the requested information.
Give a summary of regulatory bodies governing the conduct of business in Tanzania
There are regulatory bodies governing the conduct of business in various sectors of the economy. For example, there are autonomous regulatory bodies for banks and financial institutions, capital markets and securities, insurance, telecommunications and broadcasting, civil aviation, food, drugs and cosmetics, gaming activities, sugar industry, surface and marine transport, energy and water, etc. Several sectors such as include mining, fisheries, agriculture, livestock, tourism and forestry are regulated by respective government departments or semi autonomous regulators. There are professional bodies that regulate professional occupations such as lawyers and engineers. The most famous regulatory bodies in Tanzania include the Energy and Water Regulatory Authority (EWURA), Surface and Maritime Transport Regulatory Authority (SUMATRA), Tanzania Communications Regulatory Authority (TCRA) and Tanzania Civil Aviation Authority (TCAA).
Explain in general the Tanzanian tax regime?
The central government taxes are administered by Tanzania Revenue Authority (TRA). TRA is a semi-autonomous agency of the Government, responsible for the administration of central government taxes as well as several non-tax revenues. Direct taxes administered by TRA include income tax, skills and development levy, income from gaming activities, etc. Indirect taxes include value added tax (VAT) stamp duty, customs duty, excise duty, fuel levy, airport service charges, port charges, motor vehicle related taxes, etc. Income tax, custom and excise duties are union taxes which are collected by TRA for both Tanzania mainland and Zanzibar. Value Added Tax is not a union tax. The Zanzibar Revenue Board (ZRB), which is a semi autonomous tax collection agency of the Government of Zanzibar, administers value added tax in Zanzibar and other internal taxes and levies. Other local taxes under the administration of ZRB are stamp duty, hotel levy, entertainment tax, excise duty on locally manufactured goods and fees from various business licenses.
To avoid double taxation, the income tax law provides for foreign tax relief scheme under which Tanzanian revenue authorities can unilaterally give tax credit to the taxpayer who has paid tax a foreign country on the same income. In addition, double tax agreements have been signed with several countries and will come into force as soon as they are ratified. Tanzania has signed bilateral investment treaties with Germany, United Kingdom, Sweden, Denmark, Switzerland, Egypt, South Korea, Mauritius, Malawi and Zimbabwe. Tanzania has also signed treaties for elimination of double taxation with Canada, Denmark, Finland, India, Italy, United Kingdom, Norway, Sweden, and Zambia. Tanzania is also in the process of negotiating treaties for elimination of double taxation with several countries including Belgium, Burundi, Iran, Lebanon, Malaysia, Mauritius, Pakistan and Rwanda.
Explain the system of stock trading in Tanzania?
The Dar es Salaam Stock Exchange (DSE) is the only stock exchange operating in Tanzania. DSE was established in 1996 as a secondary market for both equity and debt securities. DSE operates a private company limited by guarantee without share capital. DSE is generally open to foreign investors.
Explain the system of land ownership in Tanzania?
All land in Tanzania is public land vested in the president who grants (via the commissioner for lands) rights of occupancy of specified periods of 33 years, 66 years or 99 years, subject to renewal. There is a Central Land Registry in which all title deeds for granted rights of occupancies are registered. One copy of the title deed is kept at the registry and the other remains in the possession of the owner. Any mortgages or charges or similar third-party rights against the property, or transfers of the right of occupancy, are endorsed on the two copies of the title deeds and provide ready proof of the position. There are zonal land registries, which are administratively answerable to the Central Land Registry. The commissioner for lands is the principal administrative officer and adviser to the government with respect to land matters and he or she is a presidential appointee. There is also land owned under customary rights but it remains held for purposes of surface use and not otherwise. The law allows foreigners to own land for investment purposes. However, qualifying investments are those which have been approved by Tanzania Investment Centre.
Is a foreigner allowed to own shares in Tanzanian companies?
Subject to the exchange control restrictions and sector specific laws, ownership of a project by foreign persons and companies is generally not restricted. Most of business activities are open to foreign investors. In a few sectors such as mining, there foreign shareholding limitations in companies holding certain types of mineral rights under the Mining Act, 2010.
What is the general legal framework for regulation of mining activities in Tanzania?
Mining activities in Tanzania are regulated at the national level through the Mining Act, 2010 and other relevant legislation such as Environmental Management Act, 2004 and Income Tax Act 2004 (which sets out a special regime for the mining sector), the Tanzania Investment Act, 1997 (which contains provisions that guarantee profit and capital repatriation as well as access to international arbitration), etc.