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TANZANIA INVESTMENT CENTRE

 

PROCEDURE FOR OBTAINING TIC CERTIFICATE OF INCENTIVES

 

Shown below is some basic information to guide you intend you if you intend to invest in Tanzania and obtain TIC-Certificate of Incentives:

  1. THE TANZANIA INVESTMENT CENTRE grants certificates of Incentives under authority conferred upon it by Part III, Section 17(1-8) of Tanzania Investment Act, 1997. This Act is available on request at TIC Offices and in all Government bookshops.

Enterprises engaging or intending to engage in Mining and Petroleum sectors shall follow the approval process contained in their respective laws (Mining Act 1998 & Petroleum Act 1980). However, the Centre upon request shall assist all investor to obtain such permits and authorizations required by other laws to set up and operate investment in Tanzania.

(b) INVESTMENT OPPORTUNITIES AVAILABLE IN TANZANIA MAINLAND

Investment opportunities available in Tanzania Mainland are separated into two categories, viz: -

  1. Lead Sector:

    Agriculture and Livestock; Mining Infrastructure (e.g. Road Construction, Bridges, Airports, Railways, Generation of Electricity, Telecommunication, Water services, Back up Services to Mining and the like); and Export Processing Zones.

  2. Priority Sectors

Air Aviation, Commercial Buildings, Commercial Development and Microfinance Banks, Processing for Export, Geographical Special Development Areas, Human Resources Development, Manufacturing, Natural Resources including fishing, Rehabilitation and Expansion, Radio and Television Broadcasting, Tourism and Tour Operation; Transport and Construction.

(c) MINIMUM INVESTMENT

To qualify for and obtain TIC Certificate of Incentives minimum fixed investment cost for

New, Rehabilitation and Expansion Projects should be at least US$ 100,000 for projects, which are wholly owned by Tanzanian citizen(s) and US$ 300,000 for projects which are wholly owned by foreign investors or if a joint venture.

(d) THE INCENTIVES GUARANTEES AVAILABLE TO HOLDERS OF TIC CERTIFICATES OF INCENTIVES ARE:

  1. The recognition of private property and protection against any non-commercial risks. Tanzania is an active member of the World Bank Foreign Investment Insurance wing, MIGA (Multilateral Investment Guarantees Agency). Likewise Tanzania is a member of The International Centre for Settlement of Disputes (ICSID) also a body affiliated to the World Bank.
  2. Zero percent (0%) Import Duty on project capital goods, computers and computer accessories, raw materials and replacement parts for agriculture, animal husbandry and fishing, human and livestock pharmaceutical and medicaments, motor vehicle in Completely Knocked Down (CKD) form and inputs for manufacturing pharmaceutical products.
  3. Ten percent (10%)-Import Duty for Semi-processed input and spare parts other than for motor vehicle
  4. Fifteen percent (15%)-Import Duty for fully processed inputs and motor vehicle spares.
  5. Twenty five percent (25%)-Import Duty for final consumer goods
  6. Abolition of the mandatory pre-shipment inspection on imported raw material that have zero rate of Import Duty

    Note: Pre-shipment Inspection on commercial import with FOB value of US$5,000 and above is mandatory.

  7. Introduction of pay and refund scheme for excise duty paid on fuel purchased by eligible companies.
  8. 50% expensing of capital expenditure for all classes of assets. In subsequent years implement wear and tear allowance as classified below:

 

    1. Class I-37.5% per annum

      Computers, heavy industrial machinery, tractors, combine harvesters, heavy earth equipment, etc.

    2. Class II-25% per annum

      Other self-propelling vehicles including aircraft

    3. Class III-12.5% per annum

All other machinery including ships

 

  1. VAT exemption on ground transport run by Tour Operators, milk packaging material, computers, printers and accessories, hospital equipment and drugs used by victims of HIV/, Malaria and TB and locally produced yarn.
  2. Deferment of VAT payment on project capital assets
  3. Import Duty drawback on raw material used to produce goods for export and deemed exports. Deemed exports cover locally produced or manufactured goods, which are sold to foreign agencies or entities operating in Tanzania, which are exempt from payment of import duties.
  4. Locally procured building materials are deemed to be capital and therefore subject to VAT deferment.
  5. Zero-rated VAT on exports
  6. Straight-line depreciation allowance on capital goods.
  7. Indefinite carry forward of losses against future profits.
  8. Corporate Tax Rate of 30% and Withholding Tax Rates on dividends (10%) and (0%) on loan interest in both priority and lead sectors.
  9. The right to transfer outside the country 100% of foreign exchange earned profits and capital.
  10. The ease of obtaining other permits such as Residence/ Work Permits, industrial license, trading license etc.
  11. Automatic permit of employing 5 foreign nationals on the project holding Certificates of Incentives.
  12. Land Rent on commercial agriculture farms, Livestock ranches and forests Tshs. 200/= per acre per annum.

(e) INCENTIVES OFFERED IN PETROLEUM EXPLORATION AND PRODUCTION

Below are some of the incentives offered to companies investing in oil exploration:

 

  1. Long exploration period of 4 (initial) 4(first extension) and 3 (second extension) years, totaling 11 years
  2. Relatively large exploration areas. Normally, a license consists of 60 blocks (a block being 5*5 minutes), however each PSA can consist more than one exploration license.
  3. Fully negotiable work program and economic terms (cost oil recovery and profit oil split)
  4. Maximum TPDC participation is capped at 20% from former 50%
  5. Income Tax and Royalty paid for by TPDC on behalf of the concessionary company.
  6. No signature or production bonus payment.

Investment costs (foreign and local expected capital expenditure), how the proposed investment will be financed, specific sources(s) of finance for the project, terms and conditions of the loan if applicable, sources of technology if applicable, project financial and economic analysis, market study, project capacity, production process if applicable, environmental impact assessment, expected employment generation, proposed implementation schedule, etc.

(ii) 3 dully filled copies of TIC application forms, which are issued by the Centre at a fee of

US$ 100
  1. Incase of expansion/rehabilitation, a copy of audited account for the past three years.
  2. A copy of the company's Memorandum and Articles of Association.
  3. A certified copy of the Certificate of company Incorporation
  4. A brief profile of investors(s)
  5. Evidence of sufficient finance capital available to implement the project.
  6. Evidence of land ownership for the location of the project
  7. Project implementation schedule
  8. An overall covering letter to which all the above are attached.

All applications are officially submitted to TIC Registry Department, located in Tanzania Investment Centres Office, along Shaaban Robert Street, Plot No. A&B, Dar es Salaam

You are further advised to prepare yourself for a fee of US$ 750 for the Certificate of Incentives in the event that you have qualified and been informed that your project shall be granted the Certificate of Incentive.

Please be further advised that the Tanzania Investment Act, 1997 does not bar other bona fide investors from investing in the country in the event that TIC Certificate of Incentives conditions are not attainable.

For more information contact

The Executive Director,

Tanzania Investment Centre,

No. 9 a & b Shaaban Robert Street,

P.O. BOX 938,

DAR ES SALAAM

Phone Number: +255 22 2113365

+255 22 2116328-32

Fax Number +255 22 2118253

Email Address: information@tic.co.tz

Website: www.tic.co.tz

Or

Tanzania Foreign Mission

Issued by:

Tanzania Investment Centre

DAR ES SALAAM