Operating a Business

flag Tanzania Tanzania: Operating a Business

In this page: Setting Up a Company | The Active Population in Figures | Working Conditions | Cost of Labour | Social Partners

 

Setting Up a Company

Limited Liability Company
Number of partners: 2 directors and 2 shareholders minimum, maximum 50
Capital (max/min): TZS 20,000
Shareholders and liability: The liability of the owner is limited to the initial investment
Public Limited Company
Number of partners: 2 directors and 7 shareholders (1 of them being a Tanzanian national and holding at least 40% of shares)
Capital (max/min): Around USD 300,000
Shareholders and liability: The liability of the owner is limited to the initial investment
Limited partnership
Number of partners: 2 shareholders minimum
Capital (max/min): no minimum capital required
Shareholders and liability: limited partners who do not participate in management have limited liability. However, general partners or managing partners have joint and unlimited liability
Sole Proprietorship
Number of partners: 1 shareholder
Capital (max/min): no minimum capital required
Shareholders and liability: Unlimited liability
The Competent Organisation
The Business Registrations and Licensing Agency (BRELA) is the competent organisation that handles the incorporation procedure.
 
Setting Up a Company Tanzania Sub-Saharan Africa
Procedures (number) 10.0 7.5
Time (days) 29.5 21.3

Source: Doing Business.

 
Business Setup Procedures
Consult Doing Business Report on Tanzania, to know about procedures to start a Business in Tanzania.

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The Active Population in Figures

201820192020
Labour Force 26,301,71327,172,94628,039,322

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 84.75%84.65%84.52%
Men activity rate 88.33%88.16%87.95%
Women activity rate 81.20%81.16%81.10%

Source: International Labour Organization, ILOSTAT database

 

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Working Conditions

Legal Weekly Duration
According to Employment and Labour Relations Act of 2004, an employee works for a maximum of 45 hours in any week and nine hours on any day. Employees can work up to six days a week. It is prohibitied for an employer to require or permit a pregnant employee to work at night two months before the expected date of delivery and a mother for a period of two months after the date of birth (night hours run between 20:00 and 06:00).
Retirement Age
The voluntary retirement age is 55 whereas the compulsory retirement age is 60.
Working Contracts
The Employment and Labour Relations Act of 2004 regulates conditions of employment in Namibia. The law provides for three types of contract: a contract for an unspecified period of time; a contract for a specified period of time for professionals and managerial executive, a contract for a specific task.
The employment contract must include the following items: name, age, permanent address and sex of the employee; place of recruitment; job description; date of commencement; form and duration of the contract; place of work; hours of work; remuneration, the method of its calculation, and details of any benefits or payments in kind, and any other prescribed matter.
Labour Laws
Consult Doing Business report on Tanzania, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labour

Minimum Wage
Set minimum wage categories cover 12 employment sectors. The minimum wage varies between TZS 100,000 per month for agricultural workers to TZS 400,000 per month for workers employed in the mineral sector (companies with mining and prospecting licenses).
Average Wage
The majority of citizen employees earn between TZS 500,000 and 900,000 (Tanzania Formal Sector Employment and Earning Survey 2016).
Social Contributions
Social Security Contributions Paid By Employers: 10%
Social Security Contributions Paid By Employees: Social security contribution is split equally between employer and employee, both amounting to 10% of earnings (20% in total). Employers are also required to contribute to workers compensation fund at 1% (private sector) or 0.5% (public sector) of cash sums paid to employees. The contribution is payable on a monthly basis.

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Social Partners

Social Dialogue and Involvement of Social Partners
The roots of trade unions in Tanzania date back to colonial times as the first union, the Motor Drivers' Union, was founded in 1927. Trade unions sided with the Tanganyika African National Union (TANU), in its fight for the nation's independence from the United Kingdom. However, soon after the independence, trade unions were brought under the control of the government and they only became independent in 1998 with the Trade Union Act. The Trade Union Congress of Tanzania is the umbrella organisation that gathers unions of the mainland Tanzania. Trade unions in Zanzibar are part of the Zanzibar Trade Union Congress.
Unions
Trade Union Congress of Tanzania (TUCTA)
Zanzibar Trade Union Congress (ZATUC)
Unionisation Rate
The Trade Union Congress of Tanzania (TUCTA) is by far the largest organisation and has around 350,000 members. Zanzibar Trade Union Congress (ZATUC), which is operational in the islands of Zanzibar, has around 15,000 members (International Trade Union Confederation, 2018).
Labour Regulation Bodies
Ministry of Labour and Employment

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Latest Update: July 2022