Introduction
On 28th July 2025, the Government of the United Republic of Tanzania introduced a major regulatory reform through the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, issued under the Business Licensing Act, Cap 101.
This new Order significantly restricts foreign nationals (non-citizens) from engaging in specific business activities within Tanzania. The regulation reflects growing national concerns about protecting local businesses and economic opportunities for citizens.
This article provides a comprehensive guide to the restricted business activities in Tanzania, legal implications, penalties, and how foreign investors can remain compliant.
Definition of a Non-Citizen in Tanzania
The Order adopts the definition of a non-citizen under the Tanzania Citizenship Act, Cap 357.
Although the Act does not explicitly define a “citizen,” it explains citizenship through:
- Birth
- Naturalization
- Descent
Anyone who does not qualify under these categories is considered a non-citizen in Tanzania.
Prohibited Business Activities for Foreigners
The 2025 Order introduces a clear list of businesses that non-citizens are not allowed to operate in Tanzania.
Key Restricted Sectors
Foreigners are prohibited from engaging in:
- Retail and wholesale trade (except supermarkets, specialised outlets, and wholesale centres for local producers)
- Mobile money transfer services
- Repair of mobile phones and electronic devices
- Salon businesses (unless within hotels or tourism sectors)
- Cleaning services (home, office, environmental)
- Small-scale mining
- Local postal and parcel delivery services
- Tour guiding within Tanzania
- Radio and television operations
- Curio shops and museum operations
- Real estate brokerage and agency services
- Clearing and forwarding services
- On-farm crop purchasing
- Gambling machine operations (outside casinos)
- Micro and small industries
Scope and Application of the Law
Under Order 3(2), licensing authorities are prohibited from issuing or renewing licenses for non-citizens in restricted sectors.
Key Licensing Authorities Include:
- Business Registrations and Licensing Agency
- Local Government Authorities
- Gaming Board of Tanzania
- Energy and Water Utilities Regulatory Authority
Important Clarification
- Existing licenses remain valid until expiry
- Renewal is not allowed if the activity falls under restricted categories
This means foreign investors must restructure or exit restricted sectors before license expiration.
Legal Penalties and Offences
The Order introduces strict penalties for violations:
For Non-Citizens
- Minimum fine: TZS 10,000,000
- Minimum imprisonment: 6 months
- Possible cancellation of visa and residence permit
For Tanzanian Citizens Assisting Foreigners
- Fine: TZS 5,000,000
- Imprisonment: Up to 3 months
These penalties highlight the government’s commitment to enforcing compliance.
Impact on Foreign Investors
This law significantly impacts foreign investors operating in:
- Small and medium enterprises (SMEs)
- Informal and retail sectors
- Service-based businesses
However, it also creates clear boundaries, encouraging foreigners to invest in:
- Large-scale industries
- Manufacturing
- Tourism
- Technology and infrastructure
Recommended Actions for Foreign Businesses
To remain compliant and avoid penalties, non-citizens should:
- Conduct Legal Review
Assess whether your business falls under restricted categories.
- Restructure Business Activities
Shift to legally permitted sectors such as:
- Industrial investment
- Export-oriented businesses
- Tourism-related ventures
- Monitor License Expiry
Do not continue operations after license expiration if prohibited.
- Seek Professional Advice
Engage legal and business experts for compliance strategies.
Investment Opportunities Still Open to Foreigners
Despite restrictions, Tanzania remains one of Africa’s top investment destinations.
Foreigners can still invest in:
- Manufacturing industries
- Real estate development (non-brokerage)
- Tourism and hospitality
- Agriculture (large-scale projects)
- Mining (large-scale licensed operations)
Conclusion
The Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025 marks a significant shift in Tanzania’s investment landscape.
While it restricts certain sectors, it also promotes sustainable economic growth by empowering local businesses.
Foreign investors must take proactive steps to adapt, comply, and reposition their investments into permitted sectors to continue operating successfully in Tanzania.
Should you require assistance, kindly reach out to our team directly at www.gerpatsolutions.co.tz info@gerpatsolutions.co.tz, Mob: +244 742 826 955