TIC Certificate of Incentives is a certificate issued to the investor by the Tanzania Investment Center (TIC) which provides tax exemptions, concessional tax rates or any benefits that may be available to the investor under any law for the time being in force.

The certificate once granted will be valid for a period not exceeding five years from the date of issuance for fiscal incentive. This period may be extended upon application for a further period as the TIC may determine.

In respect of non-fiscal incentives, be valid for the entire period of the project implementation.

Who is an Investor

T he law recognizes two groups of investors. Local and foreign investors.

Local Investor

Can be either

i. a natural person who is a citizen of Tanzania;

ii. a company incorporated under the laws of Tanzania in which the majority of the shares are held by a person who is a citizen of Tanzania and

iii. a partnership in which the partnership controlling interest is owned by a person who is a citizen of Tanzania

Foreign investors

Can be either

i. a natural person who is not a citizen of Tanzania,

ii. a company incorporated under the laws of any country other than Tanzania,

iii. a company incorporated under the laws of Tanzania in which more than fifty percent of the shares are held by a person who is not a citizen of Tanzania,

iv. a partnership in which the partnership controlling interest is owned by a person who is not a citizen of Tanzania

Investment Size Thresholds and Requirements.

Not every natural person, company or partnership qualifies to be called an investor. In order to qualify to be an investor, you must reach the investment thresholds which are categorised into three i.e. normal, strategic and special strategic investors.

i. Normal Investors:

- Foreign investors USD 500,000,

- Local investors USD 50,000

ii. Strategic Investors:

- Foreign investors or a joint venture USD 50,000,000;

- Local investors USD 20,000,000

Apart from the above thresholds, a business enterprise must meet the following requirement for it to be regarded as strategic investment: --

- at least one thousand local employment is created with satisfactory number of senior positions in projects that do not require high and sophisticated technology;

- capability to export at least fifty percent of goods produced or produce import substitution goods

- capability of stimulating production by establishing industrial parks in various social and economic sectors

- enhances technical know-how by imparting new technology to the Tanzanians;

- Spe capability to produce goods or render services necessary for development in the social and economic sectors considering priorities for the time being.

iii. Special Strategic Investors: USD 300,000,000 Other condition for this category is as follows: -

- investment capital transaction should be undertaken through a registered local financial and insurance institution;

- at least one thousand five hundred direct local employment is created with satisfactory number of senior positions in projects that do not require high and sophisticated technology &

- capability to significantly generate foreign exchange earnings, produce significant import substitution goods or supply of important facilities necessary for development in the social, economic or financial sector.

Investment Incentives scheme.

The followings are the incentives available to a business enterprise with TIC Certificate of Incentives:-

i. Exemption on Project Capital goods

- Zero Import Duty on capital goods.

- Zero Import Duty on raw material.

ii. Tax Relief on Deemed Capital Goods - Import Duty exempted by 75%

iii. Reduced corporate tax to 20% for the first 5 consecutive years on Manufacturing of pharmaceuticals, Textile or leather products.

iv. Capital Allowance on Agriculture (100%), Mining - first 5 years (20%), Hotels (50%), Fish farming (50%), Tourist services (50%);

v. Reduced corporate tax to 10% for the First 5consecutive year on Assembly of motor vehicles, tractors, fishing boats or out boat engine;

vi. Depreciation Allowance (37.5% - 5%)

Other Non-Fiscal Incentives includes the followings

- Automatic Immigration Quota: Initially 10 expatriates during project implementation. Additional, one expatriate for every 10 jobs created;

- Unconditional (Free repatriation) transferability of funds of any currency of: Net profits, Repayment of foreign loans, Royalties, Fees charges in respect of foreign technology, Remittance of proceeds; and Payment of emolument.

How to obtain TIC Certificate of Incentives.

Certificate of incentives is issued to new investment or to rehabilitate or expand an existing enterprise or both. The application is made to the Tanzania Investment center.

Application for new investment

The application should contain the following information

i. A dully filled TIC application forms;

ii. Project’s Business Plan/Feasibility Study;

iii. Company’s Memorandum and Articles of Association.

iv. A certified Certificate of company Incorporation

v. Evidence of sufficient finance capital available to implement the project

vi. Evidence of land ownership for the location of the project (depending on the project, certified lease agreement of minimum of 3 years or certified copy of title deed).

vii. Company Board Resolution to register the project with TIC.

viii. TIC Receipts as evidence of payment of $1,100 cost of the Application form and Certificate of Incentives.

ix. An overall covering letter to which all the above are attached.

Application for new investment

The application should contain the following information

i. A dully filled TIC application forms;

ii. Project’s Business Plan/Feasibility Study;

iii. Company’s Memorandum and Articles of Association.

iv. A certified Certificate of company Incorporation

v. Evidence of sufficient finance capital available to implement the project

vi. Evidence of land ownership for the location of the project (depending on the project, certified lease agreement of minimum of 3 years or certified copy of title deed).

vii. Company Board Resolution to register the project with TIC.

viii. TIC Receipts as evidence of payment of $1,100 cost of the Application form and Certificate of Incentives.

ix. An overall covering letter to which all the above are attached.

Application for rehabilitate or expand an existing enterprise

i. A dully filled TIC application forms

ii. Certified copy of Articles of Association

iii. A certified Certificate of company Incorporation

iv. Project’ Business Plan

v. a statement of audited accounts for three previous years or any other prescribed period for a business enterprise which has not attained three years since its establishment

vi. the nature of rehabilitation or expansion;

vii. Evidence of sufficient finance capital available to implement the project

viii. Company Board Resolution to register the project with TIC.

ix. an undertaking that the expansion or rehabilitation shall be implemented as indicated in the projection

x. TIC Receipts as evidence of payment of $1,100 cost of the Application form and Certificate of Incentives.

xi. An overall covering letter to which all the above are attached.

If you need more information/assistance on certificate of incentives in Tanzania, please do not hesitate to contact us.

Contact