applicable legal regime
There are two separate legal jurisdictions in Tanzania – one for the mainland and one for Zanzibar – each with its own legal system. However, both systems are subordinate to the Appeals Court of Tanzania.
There are four sources of law: English common and case law, Islamic law and customary law.
A dispute between a foreign investor and the Tanzania Investment Centre (“TIC”) or the government, which is not settled through negotiations, may be submitted to arbitration in accordance with any of the following methods, agreed on by the parties:
- in accordance with arbitration laws of Tanzania for investors;
- in accordance with the rules of arbitration of the ICSID;
- within the framework of any bilateral or multilateral agreement on investment protection agreed to by the Government of Tanzania and the government of the country from which the investor originates.
The commercial court, a division of the High Court of Tanzania, is exclusively intended for the speedy adjudication of commercial disputes.
In the case of disputes concerning natural resource wealth (mining and petroleum) in particular, the government is prohibited, pursuant to the Natural Wealth and Resources (Permanent Sovereignty) Act, from submitting itself to foreign courts or arbitral bodies.
land acquisition, planning and use
All land is owned by the state and is governed by the Land Act, which, besides providing a basic framework for the ownership of land other than village land and the management of land, offers guidance for the settlement of disputes and related matters.
There are two ways to acquire land:
- as sublet property from the private sector; or
- on a lease directly from the government, with long-term leases ranging from 33, 66 and 99 years.
Land may be owned by foreigners only for purposes of investment.
The acquisition of industrial-zoned land around Dar es Salaam requires the additional measure of negotiating with local villagers after government approval has been gained.
|The Fair Competition Act regulates merger control in Tanzania.|
The Competition Act defines a merger as an acquisition of shares, a business or other assets, whether inside or outside Tanzania, resulting in the change of control of a business, part of a business or an asset of a business in Tanzania.
In calculating merger thresholds, Tanzania uses financial thresholds based on a combined turnover of the merging firms. Mandatory notification applies to mergers where the turnover or asset value is above a threshold amount of TZS3.5-million (approximately USD1.5-million).
Merger filing fees are payable on a sliding scale ranging between TZS25-million and TZS100-million.
The Fair Competition Commission will take public interest considerations into account in making a determination on the merger.
Tanzania is a pre-implementation regime, therefore approval must be sought from the Tanzanian competition authorities prior to implementation of the proposed transaction.
Any person who implements a merger in contravention of the Competition Act commits an offence. The Tanzanian competition authorities may impose a penalty of not less than 5% and not more than 10% of the annual turnover (during the preceding year) in Tanzania of the undertaking or undertakings in question.
Tanzania is a member of a regional competition body, the EAC. The EAC is not, however, operational yet.
| prohibited practices|
The Competition Act prohibits horizontal and vertical agreements between undertakings if the object, effect or likely effect of the agreement is to appreciably prevent, restrict or distort competition. It must be presumed that an agreement does not have the object, effect or the likely effect of appreciably preventing, restricting or distorting competition if none of the parties to the agreement has a dominant position in a market affected by the agreement and either of the following applies:
- the combined market shares of the parties to the agreement of each market affected by the agreement is 35% or less; or
- none of the parties to the agreement are competitors.
Cartel conduct (such as price fixing and collusive tendering) is prohibited by the Competition Act.
The Competition Act prohibits abuses of dominance.
Any person who commits an offence under the Competition Act is liable to a fine of not more than 10% but not less than 5% of the offender’s annual turnover. Where a person charged with an offence under the Fair Competition Commission is a corporate entity, every person who, at the time of the commission of the offence, was a director, manager or officer of the corporate entity, may be charged jointly in the same proceedings with such corporate entity and where the corporate entity is convicted of the offence, every such director, manager or officer shall be deemed to be guilty of that offence unless he/she proves that the offence was committed without his/her knowledge or that he/she exercised all due diligence to prevent the commission of the offence.
Every business enterprise granted a certificate of investment under the Investment Act shall be entitled to an initial automatic immigrant quota of up to five persons.
Any application for additional permits may be submitted to the TIC, which shall, in consultation with the immigration department, authorise any additional person that it shall deem necessary, taking into consideration the availability of qualified Tanzanians, the complexity of the technology employed by the business enterprise and agreements reached with the investors.
Employers of non-citizens must submit a plan showing when the position will be assumed by a citizen.
A recent directive from the Labour Department provides that for every expatriate, 10 local employees should be employed.
|local employment vs secondment|
While it is possible to second an employee to Tanzania, a Conducting a Temporary Assignment work permit requires that a local entity’s company documents be submitted in order for the application for the permit to be considered.
|typical employment – fixed term contracts and temporary employment services|
Fixed-term contracts may be entered into staff for specific tasks and specific duration. Such contracts will terminate on their expiry unless renewed by agreement between the employer and employee.
The law treats fixed-term contracts during their pendency in the same way as long-term contracts, and termination prior to expiry other than as prescribed under the law may be termed as unfair in terms of the employment and labour laws.
There is currently a ban on labour broking in Tanzania.
|participation in statutory schemes|
Employers and expatriate employees must make contributions to the National Social Security Fund or other security schemes.
Expatriates may apply for exemption from contributing if such employee is contributing to a similar state scheme in another country (any scheme run by the government of that country and which provides similar benefits).
|payment in local currency||There is no requirement for remuneration to be paid in local currency.|
|restraint of trade agreements||In Tanzania, any agreement that prohibits one from exercising a lawful profession, trade or business is void unless the restraint is in the interest of the parties involved and the public.|