Laws governing business and investments in Tanzania: The Tanzania Investment Act, 2022

SUMMARY: The Tanzania Investment Act, 2022 is a pivotal piece of legislation that shapes the investment landscape in Tanzania. Enacted on November 1, 2022, this act replaces the previous Tanzania Investment Act of 1997 and introduces several significant changes to promote investment and enhance investor-friendly conditions.

Main highlights of the Act

1. Tanzanian investor’s investment capital reduced;
2. National Investment Steering Committee (NISC) and the Tanzania Investment Centre (TIC) endowed with additional functions;
3. Implementation of an integrated electronic system;
4. Elimination of the automatic immigration quota incentive;
5. Abolition of the time limit for appealing to the Minister of Investment, Industry, and Trade (the Minister);
6. Defined timeframe for the issuance of a certificate of incentive;
7. Additional requirements imposed on investors involved in strategic investment or special strategic investments;
8. Increased fines for non-compliance;
9. Provision of access to international arbitration;
10. Safeguarding of existing certificates of incentives.

Key Provisions of the Tanzania Investment Act, 2022:

1. Investment Framework: The act establishes an institutional framework for the coordination, protection, attraction, promotion, and facilitation of investment. It aims to create a conducive environment for both local and foreign investors.
2. Repeal of the 1997 Act: The new act repeals the outdated act of 1997, streamlining regulations and aligning them with current economic realities.
3. Minimum Investment Capital: Notably, the minimum investment capital required for locally owned businesses has been reduced from $100,000 to $50,000. This change encourages small and medium-sized enterprises (SMEs) to participate actively in the Tanzanian economy.
4. Favorable Conditions: The act seeks to provide more favorable conditions for investors, ensuring that their interests are safeguarded while contributing to Tanzania’s economic growth.

In summary, the Act, 2022 represents a progressive step toward attracting investment, fostering economic development, and creating a business-friendly environment in Tanzania. Its provisions aim to strike a balance between investor protection and sustainable growth.