Regent Tanzania Ltd. Dar-Es-Salaam, Tanzania Freight, Logistics, Financing, Clearing & Forwarding

Setting up a Company in Tanzania:
The advantages, disadvantages and the forms that will have to be filled in to set up a branch of a foreign company in Tanzania

Advantages

Foreign Branch	Locally Incorporated Company

1) Easy to register with the company's registrar. Similarly it is easy for the company to be struck off the register kept by the Registrar of Companies.	1) Once witholding tax is paid interest, royalty, management and technical fee charged by the parent company these charges will be allowable in computing the local company tax liability in Tanzania
2) No witholding tax is payable on the interest, royalty, management and technical fees charged by Head Office to the Branch. However, these expenses will not be allowed for tax purposes when calculating tax liability for the BRANCH in Tanzania.	2) Local company can raise funds locally without the Bank of Tanzania's approval.
4) Branch can without prior approval of Bank of Tanzania operate current account with Head Office.
5) Branch accounts need not be audited by external auditor for tax purposes. However, under the prevailing : "LAW REVIEW COMMISSION" established by the Government this exemption from having accounts no audited will be REVOKED soon.
6) Head Office can charge its administration expenses to the Branch which will be allowable for tax purposes so long as they are considered reasonable by the Commissioner of Income Tax.

Disadvantages

Foreign Branch	Locally Incorporated Company

1) Any interest, royalty, management and technical fee is charged by Head Office to the Tanzanian Branch will not be allowed expenses in computing the Branch's tax liability in Tanzania.	1) The registration of a company is a long winded process. Similarly winding up of a company is also a long winded process.
2) Branch can only raise funds locally for its trading activities after obtaining prior approval from Bank of Tanzania, and by producing counter-guarantee from a REPUTABLE bank in their home country.	2) Witholding tax is payable on interest, royalty, management and technical fees charged by the parent company to the local company.
3) The Branch will have ti pay witholding tax at the rate of 20% ON ITS PROFIT AFTER TAXATION. The Branch can only avoid paying witholding tax if it can convince the Commissioner of Income Tax that it requires funds for business expansion purposes. With the present chronic DEFICIT in budget, the Commissioner will always force the Branch to pay witholding tax on the surplus whatever its business circumstances.	3) Local company must get it's accounts audited by an external auditor for tax purposes.
	4) Local Company must obtain prior approval from the Bank of Tanzania before reimbursing any expenses incurred by the parent company on its behalf. Under present existing Exchange Control, this is just a formality.

Establishment of a Branch of a Foreign Company in Tanzania

To establish a Branch of a foreign company in Tanzania, you will have to complete the following forms : -

a) FORM 1F		Application to the Registrar of Companies for the registration of a branch of a foreign company in Tanzania.
b) FORM 4F		The form under which you will have to give the following details about TWO PEOPLE who are residing in Tanzania on whom "legal" notices can be served : - NAME SURNAME CHRISTIAN NAME ADDRESS IN TANZANIA DESCRIPTION OR OCCUPATION
c) FORM 3F		The form under which you will have to provide the following details of all the directors of your company who are registered with the Registrar of Companies : - PRESENT CHRISTIAN NAME FORMER CHRISTIAN NAMES (IF ANY) NATIONALITY NATIONALITY OF ORIGIN (IF OTHER THAN PRESENT NATIONALITY) USUAL RESIDENTIAL ADDRESS OTHER BUSINESS OCCUPATION OR ANY DIRECTORSHIP (IF ANY)
d) FORM 1F		The form under which you will have to give the full address of Registered Office of your Branch here in Tanzania
e)		TWO COPIES of the "Constitution" of your company duly translated into English by the Tanzanian High Commission Office.
f)		TWO COPIES of "Certificate of Incorporation" or "Certificate of Compliance" which you must have obtained from the Authorities on registration of your company there.

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