Choosing the Right Type of Business in Tanzania: What You Need to Know 

• In the blooming business environment, there present various different types of business in Tanzania to cater to various operational requirements. As of 2025, there exist around 1.5 million registered businesses that are seen sprouting in entrepreneurial spirit. Common business structures will include sole proprietorships, partnership, LLC, public companies, and branches of foreign corporations.  

• With various type of business in Tanzania are having different advantages and regulatory requirements, entrepreneurs can decide on the appropriate structure that fits their goals best so that they can proceed to register company in Tanzania. Understanding the options is necessary for navigating the legal framework in order to fully maximize business potential in Tanzania’s dynamic economy. In this blog, we at Tetra Consultants will outline you about various types of business in Tanzania so that you can choose what is best for you and comply with your operational requirements. 

Types of business in Tanzania 

Sole Proprietorship 

• A sole proprietorship is owned and operated by one person. 

• It is the most basic business entity, demanding minimal registration and legal formalities. 

• The owner controls the business completely and gets all the profits. 

• However, the owner has unlimited liability, hence personal assets are at risk if the business incurs debts. 

Partnership 

• A partnership involves two or more individuals who share ownership and responsibilities. 

• The partnerships can be general or limited. General partners have unlimited liability, while the liability of limited partners is restricted to their investment. 

• Such structure permits sharing the same resources as well as competence, though causing friction between the partners. 

• Each partner is personally liable for the debts of the partnership. 

Private Company Limited by Shares 

• This is the most common type of company in Tanzania, where liability is limited to the amount unpaid on shares held by members. 

• The basic structure allows raising capital more conveniently through share issue while protecting the personal assets against business liabilities. 

• Regulatory requirements are much more rigid than sole proprietorship. 

• Various statutory requirements are as follows: 

• Minimum of 2 shareholders and maximum of 50 shareholders of any nationality. 

• Minimum of 2 directors of any nationality. 

• Before registration, a name search must be conducted through the Business Registration and Licensing Agency (BRELA) online system to ensure the proposed name is available. 

• A local registered office is required. 

• A declaration (Form 14B) must be completed, confirming that all requirements for forming the company have been met. 

Limited Liability Company (LLC) 

• An LLC is one of the most popular business structures due to its unique legal personality and the limited liability protection that the LLC provides for its shareholders. It is a separate legal entity from its owners (shareholders) and, as such, may own property, enter into contracts, and incur debts in its name. It is governed by Companies Act No. 2 of 2002. There are various regulatory requirements which are as follows: 

• Minimum of 2 shareholders of any nationality. 

• Minimum of 2 directors of any nationality. 

• No minimum share capital required. 

• A company secretary is mandatory. 

• A local registered office is required. 

Company Limited by Guarantee 

• Usually applied to non-profit organizations, wherein members commit a specified amount to be paid in case of a winding up. 

• The members have limited liability but cannot distribute the profits. Any income must be used to further the organization’s objectives. 

• This architecture applies to charities and NGOs that need legal recognition. 

Branch 

• A branch is an extension of a foreign company operating in Tanzania and does not form a separate legal entity. 

• It grants foreign companies the ability to conduct business locally while retaining direct control from the parent company. 

• The parent company is responsible for all debts of the branch, which poses a risk to its assets. 

Subsidiary 

• A subsidiary refers to a foreign parent company having a separate legal entity under the Tanzanian law. 

• This structure affords the parent corporation limited liability protection against liabilities based in a locality. 

• It has more operational independence than a branch and is the most popular for foreign investors. 

Public Company Limited by Shares 

• A public company can raise capital from the public and needs to have various statutory requirements fulfilled. 

• It requires more stringent regulatory compliance and disclosure requirements than private companies. 

• This structure is very suitable for businesses that want to raise significant capital from public investment. 

• Statutory requirements for this business entity are as follows: 

• Minimum of 7 shareholders among which 1 must be Tanzanian citizen holding a minimum of 40% of shares. To comply with such requirements, we provide nominee director and shareholder services. 

• Minimum of 2 directors of any nationality. 

• A minimum paid-up share capital of US$300,000. 

• A local registered office in Tanzania is required for official communication. 

• A declaration confirming compliance with all formation requirements must be submitted alongside the registration documents. 

• The company must obtain a TIN from the Tanzania Revenue Authority. 

Representative office 

• It is a foreign company’s representative office, established solely for marketing and liaison purposes but not for conducting direct commercial activities. 

• It cannot make profits but can easily communicate the parent company to the local stakeholders. 

Conclusion 

• Understanding the type of business in Tanzania plays a crucial role for entrepreneurs venturing into the dynamic market of this country. The landscape consists of sole proprietorships, partnerships, limited liability companies, and public companies each with its strengths and regulatory features. Working with experts like Tetra Consultants could make the whole process of registration easier and thus ensure compliance with local laws before entering the market. From company registration to obtaining all the necessary licenses, they offer one-stop, all-inclusive services-a perfect companion for businesses seeking its success in Tanzania’s productive economy. 

• Contact us to know more about Types of business in Tanzania and our team will revert back in 24 hours.