Companies Act (2002)

Upon registration, a company acquires an independent legal existence regulated by the law, which imposes certain requirements with which the company and its officials must comply. These include:

-The filing of annual returns, which consist of all the relevant particulars of the company, including information on shareholding, directorship, debentures, and other charges;

-The filing of audited accounts

-The filing of any changes in the particulars of the company, such as change in the name of the company, its aims and objectives, the Board of Directors, the nominal share capital, the classes of shares, address of registered office, debentures and other charges in relation to the company, appointment of receivers, managers, and administrative officers, and winding up proceedings;

-Payment of various taxes to the central and local government

A company (and its officers) that does not comply with the above and other requirements may be penalized by way of payment of monetary penalties, and sometimes even by criminal action. Compliance will give credibility to the company, make it more creditworthy when such status is at issue, and will generally render the company in good standing both in business and in social circles.

Employment and Labour Relations Act, 2004

An Act to make provisions for core labour rights, to establish basic employment standards, to provide a framework for collective bargaining, to provide for the prevention and settlement of disputes, and to provide related matters. The Act applies to all employees including those in the public service of the Government of Tanzania in mainland Tanzania but shall not apply to members, whether temporary or permanent, in the service of the Tanzania Peoples Defence Force, the Prisons, and or National Service.

The Act governs the relations between the business (as employer) and its workers (as employees). It also creates a procedure for dealing with labour disputes and their settlement, and matters of pensions and other benefits for employees. A positive labour relation is an important aspect in an enterprise of any type, SMEs being no exception. MSMEs are also required to comply with the terms and conditions of the contracts to which they are a party. If the legal requirements are not complied with, the contract becomes either void or voidable, depending on the legal consequences of the specific failure, in order to do this MSMEs are advised to get professional legal consultation.

Business Activities Registration Act, 2007

This Act provides for the establishment of a business activities registration system, business registration centres, and to provide for matters related. The Act applies to only Mainland Tanzania, and explains the role of Minister and Chief Registrar in the matter concerned. Local Authority has been given the role of establishing other business registration centres and function of those business registration centres listed are listed. The Act also gives direction on compliance of all regulated and un-regulated business and the registration requirements and procedures, and validity of the business registration certificate and how it should be used.

It further stipulates that local authority, its agent, or any other person has no legal rights to issue a business license. Apart from that it also give an explanation on certificate of registration’s suspension, revocation, de-registration and cancellation, and gives the right to appeal for the cancelled, revoked, suspended and or de-registered license. Any registered business owner has an obligation to notify the registrar if the registered business cease to operate, placed in liquidation, changed business premises, changed core activities, or if the business registration certificate is misplaced, destroyed or lost.

Land Law

The main land legislation in Tanzania is the Land Act, 2004 Cap 113. It is the basic law in relation to land in Tanzania, it governs the management of land and the settlement of land disputes and related matters. Based on the fact that every enterprise business has a location. For that reason, it must either own its land or property or rent it or part of it from an owner. Thus, the business enterprise will either be a landlord or a tenant. Land law determines this relationship. To raise capital, a business may need some form of security to act as collateral. Mortgages in land are the most common form of security. Land law provides for the creation, registration, and enforcement of such arrangements.

Intellectual Property Law

Under the Patents Registration Act, Cap 217, a patents register of patentable inventions is maintained at the office of the Registrar of Patents. An invention is a solution to a specific problem in the field of technology and may relate to a product or process. An invention is patentable if it is new, involves an inventive step, and is industrially applicable. The right to a patent belongs to the inventor. Patent laws enable MSMEs inventions to legally remain theirs and exclude others from copying or using them without a prior business agreement.

Banking and Financial Institutions Act, 2006

The Act provides comprehensive regulation of banks and financial institutions; to provide for regulation and supervision of activities of savings and credit co-operative societies and schemes. With a view to maintain the stability, safety and soundness of the financial systems aimed at reduction of risk of loss to depositors; to provide for repeal of the Banking and Financial Institutions Act, (Cap.342) and to provide for other related matters. It applies to all banks and financial institutions of Tanzania mainland and Zanzibar.

The Act grants BOT the power to regulate and supervise the activities of all savings and credit cooperative societies and schemes whose deposits have surpassed an amount equivalent to the minimum core capital for a micro-finance company. Also all savings and credit cooperative societies and schemes in accordance with regulations made regarding microfinance companies.

Bank of Tanzania granted the power to give licenses; carry out inspections of all banks and other financial institutions’ operations; to require a bank to amend some information to comply with placed orders; demand periodical written reports from all banks/financial institutions.

Application of license requires:

i. Applicant’s proposed memorandum and articles of association or other charter or instrument of formation required by applicable law;

ii. A statement of the address of the head office, location of the principal and other places where it proposes to do business and, in the case of a mobile agency, the area to be served;

iii. The name and address of every subscriber, shareholder, board directors, Chief Executive Officer and any officer directly reporting to the Chief Executive Officer;

iv. Information that may be prescribed by the Bank for purposes of assessing solvency and trustworthiness of each shareholder with a significant interest; and

v. Such financial data, business plans and other documents and information as the Bank may require in order to conduct the investigation during review of the application.

NB: Within 90 days after submitting the application, the applicants have to obtain or denied the license based on the written explanation given by BOT.

License Suspension and Revoking:

The BOT may suspend the licence of a bank or financial institution if–

(a) the BOT determines that a bank or financial institution has failed to meet any of the minimum capital requirements; or

(b) the BOT is of the opinion that the affairs of the bank or financial institution are being conducted in a manner that is detrimental to the interests of its depositors.

The BOT may revoke the licence of a bank or financial institution if such bank or financial institution–

(a) voluntarily requests revocation;

(b) fails to commence operations within twelve months from the date the licence was granted unless such period is extended in writing by the BOT;

(c) fails to comply with prudential requirements;

(d) provided false or misleading information when applying for a licence;

(e) fails to comply with the terms and conditions of the licence or any remedial measures required under this Act;

(f) is engaged in a pattern of unsafe or unsound practices that threaten its financial condition or is detrimental to the interests of the depositors;

(g) has refused to permit an inspection or to provide information required by the BOT or is otherwise in breach of any of the provisions of this Act or any regulations made thereunder;

(h) ceases to do business in the United Republic;

(i) has been seized by the BOT in accordance with this Act;

(j) is insolvent as determined by the BOT; or

(k) fails to pay an assessment made under section 67(5).

Finance Act, 2003

An Act to impose and alter certain taxes and duties, also to amend certain written financial and tax laws relating to collection, and management of public revenues. Also this Act serves as an amendment for the previous business related Acts.

Finance Act, 2006

This is an Act to impose and alter certain taxes, duties, fees and to amend certain written laws relating to the collection and management of public revenues. The Act was an amendment of several previous Acts such as Cashew nut Board Act, amendment of the Excise Act (Management and Tariff) Act, and amendment of Gaming Act. Also as an amendment of Income Tax Act of 2004, amendment of the Local Government Finances Act, and as an amendment of the Mining Act. Additionally, this serves as an amendment of the Road and Fuel Tolls Act, Stamp Duty Act, Tanzania Investment Act, Tanzania Revenue Act, Tax Revenue Appeals Act, and Value Added Tax Act.


National Microfinance Policy, 2000

The policy formulated based on government’s consideration of microfinance system as an integral part of financial sector that falls within the general framework of its Financial Sector Reform Policy Statement of 1991. The policy aims at establishing a basis for the evolution of an efficient and effective micro financial system in the country that serves the low-income segment of the society so as to contribute to economic growth and reduction of poverty through:

-Establishing a framework within which microfinance operations will develop

-Laying out the principles that will guide operations of the system

-Serving as a guide for coordinated intervention by the respective participants in the system

-Describing the roles of the implementing agencies and the tools to be applied to facilitate development


The policy covers the provision of financial services to households, smallholder farmers, and small and micro enterprises in both the rural and urban sector. It covers a range of financial services, including savings, credit, payments, and other services. Financing all types of legal economic activities, like commerce, trade, manufacturing, and agriculture.


National Trade Policy, 2003

Domestic Market Considerations

The policy calls for deliberate measures for rapid trade development through widening and deepening of linkages in the domestic market and more effective participation in the global market. The primary objective of this trade policy is to enhance Tanzania’s economic growth, which addresses Tanzania’s key priority of poverty eradication. Openness to trade is positively related with growth and growth is the prime requirement for poverty eradication. However, the transmission mechanism between trade liberalisation and poverty eradication is not automatic and suitable policy interventions are necessary if desired objectives are to be attained.

The International Environment

This trade policy stimulates the adoption of trade development strategies that respond proactively to the emerging opportunities, challenges, and address divergences between supply capacity and the demands of a converging global market by introducing ICT as one of important strategy.

Re-orientation towards Trade Development

It sets new and modern rules on how to increase international competitiveness, establishes how these rules are made and implemented, elevates the role of the private sector, creates opportunities for its development, and promotes a new philosophy of economic management based on serious commitment to openness.

This policy addresses the critical issues facing the Tanzanian economy including:

  1. Consolidating consensus on trade development measures that will entrench the continuing policy shift from a protected and controlled economy towards a competitive market economy;

  2. Highlighting the central role and contribution of the trade function to the attainment of the primary goal of poverty eradication under the National Development Vision 2025;

  3. Identifying measures for the development of the domestic market as a tool of inclusion and broad-based participation in economic activity based on improved market-infrastructure, technology diffusion, and access to market information;

  4. Alignment of national development agenda with regional and international trade obligations and maximisation of the benefits of participation in regional and international trade arrangements;

  5. Adopting an appropriate framework of measures for the interim safeguarding of domestic industry and economic activity threatened by liberalisation including identification of sectors to be protected, the rationale and costs of protection, and the maximum duration for protection; and,

  6. How best to address the supply-side constraints that inhibit expansion of trade within the domestic and global market as the route towards rapid economic development

Sustainable Industrial Development Policy, 1996

This policy helps to create the overall framework for the country’s future industrial development (including SMEs). Furthermore, it provides for government support in enhancing SMEs’ capacities by improving the legal and regulatory framework and access to finance.

National Strategy for Growth and Reduction of Poverty, 2005

This policy builds on interventions in the following areas: economic growth; reduction of income poverty; improvement of social life and wellbeing as well as governance and accountability; and addressing the challenges faced by the private sector (including SMEs) with respect to access to finance. The policy further outlines initiatives to improve the investment environment and provides for the government’s intention to support innovation, product development, and quality marketing strategies by local firms, including SMEs, to make them more competitive and enhance their capacity to respond to global marketing conditions.

The Government Loans, Guarantees, and Grants (Amendment) Act, 2003

This Act may be cited as the Government Loans, Guarantees and Grants (Amendment) Act, 2003, shall be read as one with the Government Loans, Guarantees and Grants Act, 1974 referred to hereinafter as ”the principal Act” and shall come into operation on such date as the Minister may, by notice published in the Gazette appoint.

The Income Tax Act, 2004

This Act to make provision for the charge, assessment and collection of Income Tax, for the ascertainment of the income to be charged and for matters incidental thereto.

National Industries (Licensing and Registration) Act, 2002

An Act to make provisions for the orderly provision and development of Industries, to provide for the registration and licensing of certain Industries and for related matters. The Act applies to all Mainland Tanzania as well as Tanzania Zanzibar.

National Economic Empowerment Act, 2004

The Act has been passed purposely to establish the National Economic Empowerment Council for the promotion and facilitation of ownership of income generating activities and assets by Tanzanians to provide legal and institutional framework for the council. Also to establish the National Economic Empowerment Fund, and to provide for the control of the financial affairs of the Council and the Fund, and to provide for other related matters.

The Act applies only to Mainland Tanzania with the prime aim of empowering Mainland Tanzanians with the opportunity of participation in the economic activities, through savings promotion, investing, supporting and promoting Tanzanians business ventures, and managing, administering and identifying sources of grants and donations for the fund.