Registration of Mainland Companies in Zanzibar
February 09, 2023

COMPANIES IN TANZANIA MAINLAND TO NOW REGISTER A BRANCH COMPANY IN ZANZIBAR TO OPERATE

By Catherine Mkama

 

On 22nd of December 2022 the President of Revolutionary Government of Zanzibar assented the Written Laws (Miscellaneous Amendment) Act No. 10 of 2022 which amended various laws to make a better provision thereof. In tandem with that Amendment the Companies Act No. 15 of 2013 (hereinafter “the Act”)  was amended by repealing subsection 3 of Section 238 of the Act. The amendment removed the requirement introduced in 2021 for the companies originating in mainland Tanzania that intend to operate in Zanzibar to register subsidiaries.

 

The Position of the Law Prior Amendment.

On 24th June 2021, the Government of Zanzibar published the Finance (Public Revenue Management) Act, 2021 which amended various laws including the Act. Section 238 of the Act was amended by introducing subsection 3 which read as follows;

“…a company incorporated under the law applicable in Mainland Tanzania shall register a foreign subsidiary company under the law applicable in Zanzibar if it establishes a place of business in Zanzibar”

Note that, prior this amendment, Companies registered in Tanzania Mainland were issued with a certificate of Compliance upon registering a place of business in Zanzibar. Thus, this amendment removed the ability of the companies incorporated in Tanzania mainland to operate business as a branch in Zanzibar.

In line with the above amendment, the Minister for Trade and Industries Development issued a Public Notice on 21 September 2021, requiring all companies incorporated in Mainland and issued certificate of compliance by virtue of their operations in Zanzibar, to incorporate subsidiaries in Zanzibar within 90 days from the date of the Notice. The companies which failed to comply with the Notice were to be struck off the Register.

To briefly explain a subsidiary company is a separate legal entity from its parent company and operating under its authority with separate finances, operations and management. A branch company, on the other hand, is not a separate legal entity from its parent company and operates as an extension of the parent company.

 

The new position

The current amendment repealed Section 238(3) of the Act which required Companies incorporated in Tanzania wishing to operate in Zanzibar to register subsidiary companies.

Due to this amendment, companies incorporated in Tanzania Mainland now have the avenue to operate in Zanzibar only as a branch company.

Noticeably, the recent amendment has left most businesses that obtained certificate of incorporation following 2021 amendment in a dilemma on whether they now have to obtain a certificate of compliance or what will happen. It is also imperative to highlight that companies from Tanzania Mainland will no longer be required to prepare separate set of audited account for their Zanzibar operations.

 

Victory Attorneys and Consultants are experts in legal advisory and  have advised several multinational companies in incorporation, compliance and commercial transactions. Victory Attorneys & Consultants can be reached through info@victoryattorneys.co.tz  or through +255 752 089 685

Victory Attorneys & Consultants © 2024

Augustine Dominic Shio

Managing Partner

Augustine Dominic Shio is also known as Mr Shio is a highly sought-after and widely recognized criminal law expert with more than 30 years of experience advising and assisting corporations and individuals charged with white-collar crimes.

Overview

Before founding the firm Mr Shio held several positions in the public sector, he served as a Principal State Attorney at the Attorney General’s Chambers, Legal Advisor at the President’s Office (Commission for Enforcement of the Leadership Code), Director of Legal Services and Complaints at the Ministry of Home Affairs and retired as a Deputy Director of Public Prosecutions at the Directorate of the Public Prosecutions.

Mr Shio is a recipient of the Presidential Medal for his distinctive public services and ethics of the highest order. His distinguished aptitude in handling complex criminal cases, particularly money laundering, economic and organized crimes has enabled the firm to handle high profile criminal cases in Tanzania.

Practice Focus

As the firm’s head of the Financial & Organized Crimes Department, Mr Shio represents corporations and individuals in the telecoms, media & ICT, mining, oil & gas and banking sectors in high profile criminal cases. He has advised and prepared legal compliance models and for large scale agribusiness operators, public listed companies and securities dealers and brokers in line with sector-specific laws.

He possesses vast experience in advising multinational corporations on money laundering and tax evasion throughout the life span of their commercial transactions.

Mr Shio has represented clients in major plea bargaining negotiations at the office of the Director of Public Prosecutions. He is renowned for closing some of the best pleas deals in the country on behalf of many locals and expatriates charged with money laundering, economic and organized crimes and cybercrimes. Additionally, Mr Shio consults and assists criminally charged individuals to secure pre-trail and post-trial bail on serious criminal charges.

Education

Mr Shio holds a Bachelor’s Degree (LL.B Hons) from the University of Dar es Salaam, Certificate in Criminal Justice and Treatment of Offenders from the United Nations Institute (Fuchu, Japan). He is a certified criminal law expert in Money Laundering and Terrorism.

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