In response to the growing public outcry over the increasing presence of non-citizens in business sectors traditionally reserved for Tanzanians, the Ministry of Industry and Trade issued on 28 July 2025 the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order of 2025, under the authority of the Business Licensing Act (Cap. 101), [R.E 2023]. Coming into effect immediately, the Order restricts non-citizens from participating in a range of specified business activities across the country. Positioned as a strategic move to safeguard local businesses and promote Tanzanian participation in key economic sectors, the Order underscores the government’s commitment to prioritizing inclusive growth and national economic sovereignty.

AN OVERVIEW OF THE ORDER

Upon the order’s effective date, licensing authorities are barred from issuing or renewing licenses for non-citizens to engage in prohibited activities. The Order proposes to interpret “non-citizen” based on the Citizenship Act of Tanzania. Non-compliance with this Order by non-citizens can result in fines of not less than TZS 10 million, imprisonment for up to six months, and the revocation of their visas and resident permits. Tanzanian citizens who assist or aid a non-citizen to carry out any of the business activities prohibited under this Order also commit an offense and are liable to a fine of TZS 5 million or imprisonment for a term not exceeding three months.

In addition, a transitional provision states that non-citizens holding a valid license for any of the prohibited activities may continue their operations up to the time when the license expires.

The schedule to the Order lists 15 prohibited business activities for non-citizens, including:

• Sale of goods on a wholesale and retail basis (excluding supermarkets, specialized product outlets, and wholesale centers for local producers);
• Mobile money transfers;
• Repair of mobile phones and electronic devices;
• Salon businesses (unless conducted in a hotel or for tourism purposes);
• Home, office, and environmental cleanliness services;
• Small-scale mining;
• Postal activities and parcel delivery within the country;
• Tour guiding within the country;
• Establishment and operation of radio and television;
• Operation of museums or curio shops;
• Brokerage or agency in businesses and real estate;
• Clearing and forwarding services;
• On-farm crop purchasing operations;
• Ownership or operation of gambling machines or devices (except within casino premises);
• Ownership and operation of micro and small industries;

CRITICAL ANALYSIS OF THE ORDER

While the Order is timely in addressing public concerns about local businesses being taken over by non-citizens, it brings several advantages and concerns that warrant closer examination. On the one side of the coin, the Order may help preserve national economic sovereignty, protect local entrepreneurs and maintain cultural and community values tied to domestic business ownership. It could also reassure citizens who feel economically marginalized or threatened by foreign competition, potentially strengthening social cohesion and public trust in government action.

However, on the other side, significant concerns arise from the coming into operation of this Order as discussed below:

1. 1. Definition of “non-citizen”: the Order does not directly define who is a non-citizen unless when but directs one to consult the Citizenship Act, Cap. 357 [R.E 2023]. Unfortunately, the Citizenship Act also does not define the term “non-citizen.” The Act only defines who is considered a citizen of Tanzania. This is a person who has acquired citizenship through birth, descent, or naturalisation. Impliedly, the Order considers non-citizens as persons who fall outside of these criteria of citizenship.

      Without a statutory definition, administrative bodies and enforcement agencies may differ in their interpretation of who qualifies as a non-citizen, undermining legal predictability and possibly infringing procedural fairness.

   2. Ambiguous scope: it is not clear whether the Order applies solely to non-citizen individuals or also extends to foreign companies. The Literal and ordinary meaning of the term non-citizen as used in the Order, and its context from the Citizenship Act suggests that it applies only to natural persons. It is a well-established legal principle that citizenship is a status attributable only to natural persons and not to legal entities such as corporations. As Matten, Moon, and Crane (2005) affirm, corporations cannot be considered citizens. Based on this interpretation, we believe the Order applies exclusively to the activities of non-citizen individuals.

      The problem with this narrow approach, however, is that foreign individuals could circumvent the Order’s restrictions by establishing companies in Tanzania. Through these entities, they could engage in prohibited businesses, effectively undermining the purpose of the Order and failing to protect local businesses as intended.

      Previous precedents in the Tanzanian legal interpretation suggest that companies with foreign majority shareholders are treated as non-citizens.  If employed, this approach could lead to confusion and unpredictability. A good example are sections 19 and 20 of the Land Act, Cap. 113 [R.E 2023]. These provisions prohibit non-citizens from owning land in Tanzania unless it is for investment purposes under the Investment Act (now the TISEZA Act). Section 20(4) explicitly states that a body corporate whose majority shareholders or owners are non-citizens shall be deemed a non-citizen.

      Section 59(2) of the Tourism Act, Cap. 65 [R.E 2023] also seems to take this approach that a non-citizen cannot engage in the business of travel agency, mountain climbing or trekking, tour guiding, or car rental. Although the wording refers to individual non-citizens, the practice shows that companies with a majority of foreign ownership are also prohibited.

      The lack of specificity in the Order regarding its applicability to legal entities creates legal uncertainty and potential loopholes. If the interpretative standards applied in the Land Act and Tourism Act are adopted in this context, companies with significant foreign ownership may fall within the ambit of the Order despite the literal text suggesting otherwise. Therefore, the ambiguity in the Order’s scope warrants clarification to avoid inconsistent enforcement and to ensure legal certainty.

   3. Criminal liability for aiding or assisting: if non-citizen is interpreted to include local but non-citizen companies, the provision prohibiting Tanzanian citizens from assisting or aiding non-citizens in conducting any of the business activities restricted under the Order becomes legally and practically problematic. A person found guilty of such conduct is liable to a fine of five million Tanzanian shillings or imprisonment for a term not exceeding three months.

   The concern is whether there could be criminal liability when Tanzanian citizens engage in bonafide business ventures with non-citizen companies, particularly in prohibited business activities. Would for example holding shares in a non-citizen company amount to “assisting or aiding” non-citizens in conducting restricted business activities? These critical questions remain unanswered and highlight the need for clarification to avoid legal ambiguity.

   Additionally, concerns arise regarding how authorities would differentiate between genuine and bona fide shareholder arrangements between citizens and non-citizens, and those that are merely nominal or designed to circumvent the Order. Consider a scenario where a Tanzanian citizen is made a nominee majority shareholder solely for compliance purposes, so that the company appears local, while the real control remains with non-citizens. What would be the legal implications in such a case, especially in light of the provision prohibiting Tanzanian citizens from aiding or assisting non-citizens?

   What is the legal threshold for determining when a citizen is “assisting or aiding” a non-citizen? Does the Order completely ban all forms of collaboration or business ventures between Tanzanian citizens and non-citizens in the restricted sectors? Is there room for structured ventures in which Tanzanian citizens are the majority shareholders, allowing the company to lawfully engage in otherwise restricted business activities? If such arrangements are permitted, how do they reconcile with the prohibition on aiding and assistance?

   4. Prohibited businesses and their scope: The Order provides a list of businesses in which non-citizens are prohibited from engaging in Tanzania. However, it fails to offer clear definitions or explanations of the scope of these prohibited activities.

   For example, “tour guiding within the country” is a prohibited business for non-citizens in Tanzania. This prohibition may lead to confusion and invite multiple interpretations. Referencing section 59(1) and (2) of the Tourism Act, Cap. 65 [R.E 2023] and Regulation 3(3) of the Tourism (Tour Guides) Regulations, 2015, GN. No. 270, there are clear restrictions on who can serve as a tour guide in Tanzania. The law states that only Tanzanian citizens licensed by the Ministry of Natural Resources and Tourism are permitted to work as tour guides. However, subsection (3) of the same section clarifies that this restriction should not be interpreted as prohibiting a foreign tour leader from accompanying or leading foreign tourists or tourist groups visiting Mainland Tanzania.

   This suggests that while non-citizens may not be licensed as tour guides, they may still play the role of tour leaders under certain conditions. Furthermore, the law does not expressly prohibit non-citizens from owning tour guide companies.

   The current structure of the Order creates a potential contradiction between the Tourism Act and the Order. While the Act provides nuanced limitations, allowing limited participation by foreign tour leaders, the Order appears to impose a blanket prohibition on “tour guiding within the country” without further clarification. The absence of such detailed explanations in all 15 listed businesses, as those found in the Tourism Act, leads to ambiguity and confusion regarding the actual intent and scope of the Order.

   5. Diplomatic and economic uncertainties: there appears to be a potential conflict between this Order and Tanzania’s Bilateral Trade Agreements (BTAs).

      The bilateral and multilateral trade relations Tanzania has with numerous countries allow non-citizens to enter the country to conduct business activities just like Tanzanians may do the same abroad. The implementation of this Order may interfere with these relationships, particularly because most bilateral and multilateral agreements emphasize principles such as national treatment and most-favored nation (MFN) treatment. These principles require Tanzania to treat foreign investors no less favorably than domestic investors or investors from other countries.

      For instance, under its 15 bilateral trade agreements with China, signed in 2022, Tanzania committed to cooperation in several sectors, including trade and business. Despite its intention to protect Tanzanian interests, this Order risks undermining such agreements and potentially straining diplomatic and economic ties. It could also adversely affect Foreign Direct Investment (FDI) by creating an unpredictable and restrictive investment environment.

      Importantly, Tanzania is a member of the East African Community (EAC). Under the Treaty Establishing the EAC, particularly the Common Market Protocol, EAC nationals have the right of establishment across member states and are entitled to equal treatment with the nationals of the host country. A blanket ban on non-citizens, including EAC nationals, could therefore be seen as a violation of the Protocol. Such a move may expose Tanzanians living and doing business in other EAC countries to reciprocal measures or sanctions, thereby harming regional integration and cooperation.

   CONCLUSION

   While the Order reflects a commendable effort by the Government of Tanzania to protect local businesses and ensure that economic opportunities in certain sectors are reserved for citizens, it also presents certain challenges as this article has identified. The Order has the potential to empower local entrepreneurs, reduce unfair competition, and promote inclusive economic growth. However, the lack of clarity regarding the definition of “non-citizen,” the scope of its application, and the absence of alignment with existing laws and international obligations may lead to legal uncertainty, discourage foreign investment, and risk unintended breaches of regional and global trade agreements. A balanced approach that safeguards national interests while maintaining a welcoming and predictable investment environment will be essential for ensuring the long-term success and credibility of the Order.

   RECOMMENDATION

   To enhance the effectiveness, legal clarity, and investor confidence in the Order, we recommend the following measures:

   1. The Order should clearly define “non-citizen” to prevent ambiguity and inconsistent interpretation. Unclear definitions may cause confusion and discourage foreign investment. The definition should align with legal and practical intent to avoid misapplication.
   2. The Order must specify whether it applies to non-citizen individuals, foreign companies, or both. It should clarify whether non-citizens are fully barred or may participate indirectly, such as through local entities or minority shareholding. If allowed, the ownership thresholds must be defined. Clear guidance is necessary to ensure legal certainty and a consistent enforcement.
   3. Each restricted business category should include a clear and detailed description of the specific activities it covers to minimize ambiguity and ensure consistent enforcement with existing sector regulations.
   4. The Order should be reviewed to ensure alignment with Tanzania’s international trade and investment commitments, including the WTO, EAC, and bilateral agreements. These frameworks require equal treatment of foreign and domestic investors. A legal review is recommended to uphold Tanzania’s obligations under regional and international law, for economic and diplomatic purposes.

   AUTHORS

   Benedict Ishabakaki, Executive Partner

   Rayson Elijah Luka, Partner

   Joseph Isaac Masangula, Associate Trainee