A GUIDE TO COMPANY REGISTRATION IN ZANZIBAR

Zanzibar, an archipelago off the coast of Tanzania, has been experiencing significant economic growth and attracting both local and international investors. As a semi-autonomous region of Tanzania, Zanzibar has its own legal framework for company registration distinct from mainland Tanzania. This article provides a comprehensive guide to registering a company in Zanzibar, including recent legal updates and current data.

Legal Framework and Regulatory Bodies.

The regulatory framework for businesses in Zanzibar is governed by a combination of local and national laws. The key legislation includes the Zanzibar Companies Act No. 15 of 2013, the Zanzibar Investment Promotion and Protection Act, and the Zanzibar Revenue Board Act. These laws are designed to create a conducive environment for business operations while ensuring compliance with legal and fiscal obligations.

Coming across the regulatory bodies, Zanzibar has the following regulatory bodies which guides the registration of Companies in Zanzibar.

1. Zanzibar Business and Property Registration Agency (BPRA): This is the primary agency responsible for the registration and regulation of businesses in Zanzibar. It oversees the incorporation of companies, maintenance of statutory records, and ensures compliance with the Companies Act.
2. Zanzibar Revenue Board (ZRB): This handles tax registration, collection, and compliance for businesses operating in Zanzibar. Companies must register with the Zanzibar Revenue Board (ZRB) to obtain a Tax Identification Number (TIN) and, if applicable, register for Value Added Tax (VAT).
3. Zanzibar Investment Promotion Authority (ZIPA): This facilitates investment in Zanzibar by providing a range of services, including investment licensing, advisory services, and investment promotion. Zanzibar Investment Promotion Authority (ZIPA) also offers various incentives to investors, such as tax holidays, duty exemptions, and simplified procedures for obtaining work permits.

Types of Business Entities

In Zanzibar, investors can choose from various types of business entities, including:

1. Private Limited Company (Ltd): Private limited companies are the most common business entities in Zanzibar. They offer limited liability protection to shareholders, meaning their personal assets are not at risk if the company incurs debt. This structure is suitable for small to medium-sized enterprises (SMEs) and is preferred for its flexibility and ease of management.
2. Public Limited Company (PLC): These are larger entities that can raise capital by issuing shares to the public. This structure is suitable for businesses with significant growth potential and those looking to attract large-scale investments. Public Limited Companies (PLCs) are subject to stricter regulatory requirements and must adhere to high standards of corporate governance.
3. Branch Office: Foreign companies looking to establish a presence in Zanzibar can set up branch offices. A branch office operates under the name and organizational structure of the parent company but is registered to do business in Zanzibar. This option allows foreign businesses to enter the Zanzibar market without creating a separate legal entity.
4. Sole Proprietorship: Sole proprietorships are businesses owned and operated by a single individual. This structure is the simplest form of business entity and is ideal for small businesses and startups. The owner has full control over the business but is also personally liable for all its debts and obligations.
5. Partnership: This form of business is formed by two or more individuals or entities, sharing profits and liabilities.

Key Steps for Company Registration in Zanzibar

1. Name Reservation: The first step is to reserve a unique company name with theZanzibar Business and Property Registration Agency (BPRA). The name should not be similar to existing registered names or trademarks.
2. Preparation of Incorporation Documents: After reserving a business name, preparation of Incorporation documents follows. The required documents include the Memorandum and Articles of Association which among other things states the name of the company, the objects of the company, liability of its members, share capital and the division of shares among shareholders. These mandatory documents must be attested by legal practitioner, and it may be in English or Kiswahili language.
3. Filing with BPRA: The next step is submitting the incorporation documents, along with the prescribed fees to the Zanzibar Business and Property Registration Agency (BPRA). The agency will review the application and issue a Certificate of Incorporation if all requirements are met.
4. Tax Registration: Companies must register for tax purposes with the Zanzibar Revenue Board (ZRB). This includes obtaining a Tax Identification Number (TIN) and registering for Value Added Tax (VAT), if applicable.
5. Business License: Depending on the nature of the business, companies may need to obtain a business license from the relevant authorities.
6. Investment License (if applicable): Foreign investors may need to obtain an investment license from ZIPA, which provides various incentives and benefits.

Recent Legal Updates and Reforms

In recent years, the government of Zanzibar has undertaken several reforms to improve the business environment and streamline the company registration process. Key updates include:–

1. Digitalization of Registration Processes: The Zanzibar Business and Property Registration Agency (BPRA) has introduced an online registration system, making it easier for businesses to register and access services. This move aims to reduce the time and cost associated with company registration.
2. Revised Minimum Capital Requirements: The government has revised the minimum capital requirements for certain business entities, making it more accessible for small and medium-sized enterprises (SMEs) to set up operations.
3. Incentives for Foreign Investors: The Zanzibar Investment Promotion Authority (ZIPA) has introduced a range of incentives for foreign investors, including tax holidays, duty exemptions, and simplified procedures for acquiring work permits.

Current Data and Statistics

Currently Zanzibar has seen a steady increase in company registrations, with a notable rise in the number of Limited Liability Companies (LLCs) and branch offices established by foreign investors. The tourism, agriculture, and real estate sectors continue to attract significant investment, reflecting Zanzibar’s growing appeal as a business destination.

Conclusion

It is undisputed that registering a company in Zanzibar offers numerous opportunities to locals and foreigners due to its strategic location, vibrant economy, and investor-friendly policies. With recent legal reforms and a streamlined registration process, Zanzibar is well-positioned to attract both local and international businesses. Prospective investors are encouraged to familiarize themselves with the relevant laws and consult with local experts to navigate the registration process successfully.

Looking forward to investing in Zanzibar?

Reach out directly to our esteemed team at (info@gerpatsolutions.co.tz)

 

 

 

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