This article provides a concise overview of the country’s investment regime, highlighting key aspects such as the Tanzania Investment Act, 2022, and the Tanzania Investment Regulations, 2023.
Foreign direct investment continues to flow into Tanzania. According to the Tanzania Investment Centre’s (Centre’s) Monthly Investment Factsheet for January 2024 (accessed on 25 March 2024), the centre registered over USD 300 million worth of projects in 2023 alone.
To assist potential investors, we have prepared a concise overview of the country’s investment regime, highlighting key aspects such as the Tanzania Investment Act, 2022 (Act), and the Tanzania Investment Regulations, 2023 (Regulations).
Highlights of the Act and its Regulations
Application scope: Foreign investors require a minimum investment capital of USD 500 000, while Tanzanians require USD 50 000. The Act does not apply to business enterprises in the mining, petroleum, or hazardous chemicals industries.
Centre’s role: The Centre facilitates investments, assists in obtaining necessary permits, and oversees compliance.
National Investment Steering Committee: This committee oversees investment policies, approves incentives, and oversees significant projects.
The Centre’s functions: The Centre is mandated to promote private sector participation in the provision of public services. It does this through facilitating public-private partnerships, assisting with site identification and attending to all investor requirements including obtaining permits and monitoring projects.
Electronic integrated investment window: This organisation aims to integrate key authorities issuing permits and approvals thereby streamlining and facilitating investment.
One-stop facilitation centre: The Centre provides a one-stop facilitation service for investor approvals and licences by ensuring cooperation among government entities.
Application procedures: Investors can now apply for strategic investment and related benefits and other investment matters, through specific forms and procedures outlined in the Regulations. This streamlined process aims to make it easier for investors to navigate the regulatory landscape.
Certificate of incentives: Business enterprises can apply for certificates of incentives through the procedure highlighted in the Regulations. The Certificate of Incentives serves as conclusive evidence of compliance with investment requirements. One of the fiscal incentives offered is a 75% import duty relief on capital goods, that is, the investor will only pay 25% of the import duty.
Monitoring and evaluation: The Centre will monitor and evaluate registered projects. Business enterprises are required to submit annual reports on the development of their projects, ensuring transparency and accountability.
Guarantee against modification of benefits: A business enterprise that has been conferred is entitled to enjoy such benefits for a period of five years from the date of issuance, without amendments at the detriment of the investor being made.
Transfer of capital, profits and dividends: Business enterprises, including mineral rights and petroleum licence holders, are guaranteed unconditional transferability of various financial aspects through authorised dealer banks in freely convertible currency. These include net profits or dividends from the investment, payments for foreign loans, proceeds from sales or liquidation of the enterprise, and emoluments for foreign personnel employed in Tanzania.
Guarantee against nationalisation or expropriation: A business enterprise shall not be nationalised or expropriated by the Government, and owners of such enterprises cannot be compelled to cede their capital. Any acquisition of a business enterprise by the State must be done through due process of law, ensuring fair compensation and providing access to the Court or arbitration for dispute resolution. Compensation must be paid promptly, and authorisation for repatriation of funds is required.
Appeals and reviews: The Regulations outline procedures for appealing decisions related to certificate rejections or revocations, as well as procedures for reviewing decisions of the National Investment Steering Committee. This provides investors with a mechanism to address any issues or concerns regarding their investments.
Dispute resolution: The Centre establishes mechanisms for settling disputes between investors and the Government, including negotiation for amicable settlements and arbitration in accordance with Tanzanian arbitration laws or international arbitration rules.
--
Read the original publication at Bowmans