Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Tanzania. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
|No.||Procedure||Time to Complete||Associated Costs|
|1||Apply for clearance of the proposed company name at the Business Registration and Licensing Authority "BRELA"||1 day||no charge|
|2||Obtain a notarized declaration of compliance||1 day||Notaries do charge at the range of TZS 10,000-50,000, for notarial services to normal documents such as form No. 14 b.|
|3||Apply for incorporation of a company and obtain certificate of incorporation||4 days||TZS 206,200|
|4||Apply for taxpayer identification number (TIN) with the Tanzania Revenue Authority||1 day||no charge|
|5||Obtain taxpayer identification number (TIN)||1 day||no charge|
|6||Apply for business license from the regional trade officer (depending on the nature of business)||6 days||TZS 1,000|
|7||Apply for VAT certificate with the Tanzania Revenue Authority||4 days||no charge|
|8||Register for the workmen’s compensation insurance at the National Insurance Corporation or other alternative insurance policy||1 day||no charge|
|9||Obtain registration number at the National Social Security Fund (NSSF)||7 days||no charge|