LION CONSULTING: IMPROVED BUSINESS ENVIRONMENT IN TANZANIA

The Tanzania Government has pledged to improve the business environment and ease of doing business in Tanzania. This pledge and commitment is aimed at increasing the levels of foreign direct investments into Tanzania^[1]. In a show of commitment to this pledge, the government tabled an Amendments Bill for several laws in the on going House session, including the Companies Act and the Non-Citizens (Employment Regulation) Act. The proposed changes are contained in the Written Laws (Miscellaneous Amendments) Bills numbers 2 and 4.  In the proposed amendments by the Written Laws (Miscellaneous Amendments) (No 4) Bill 2021 includes the following:-

1. Proposed to amendments to extend the time limit for non-citizens willing to work in Tanzania from five (5) years to eight (8) years;
2. The Amendment to allow any company that has been registered with the Tanzania Investment Centre or Export Processing Zone Authority to employ up to ten non-citizens without the need of complying with the rigorous requirements of the Non-Citizens (Employment Regulations) Act;
3. Amendment to entitle an investor to employ any number of non-citizens for as long as he complies with the quota of 1 non-citizen employed to 10 locals employed, and further justifies to the Labour Commissioner that the nature of his business requires the employment of a large number of non-citizens;
4. Amendment to ensure that there is a simplified and improved manner of issuing work permits to non-citizen workers as an incentive to foreign and local investors who have decided to employ non-citizens; and
5. Amendment to enable the Minister to make Regulations which shall regulate the manner and processes of issuing work permits and incentives to investors.

As noted in the Objects and Reasons attached in the Schedule of Written Laws (Miscellaneous Amendments) (No 4) Bill 2021, the proposed changes are explained by the Government as follows:-

Part VIII proposes for Amendment of the Non-Citizens (Employment Regulations) Act. Cap. 436 with a view to ensuring that there is a simplified and improved manner of issuing work permits to non-citizens worker as incentive to foreign and local investors who have decided to utilize non-citizen employees. It is proposed to amend section 12 in order to extend time limit for applicants willing to work in the Country from the current five years to eight years, which, the applications have to be done on a renewal basis from every twenty-four months. Further to that, the proposed amendments empower the Labour Commissioner to attach conditions to work permits with finality effect depending on a number of circumstances, one being the request by the applicant to stay in the country for a specific period of time. It is proposed to repeal and replace section 19 of the Act in order to provide special incentives to investors. The proposed amendments extend the immigrant quota from the current five employees to ten employees who shall stay in the country working during the whole period of investment. Further that the investor employing ten local employees shall also be entitled to employ one non-citizen employee. It is proposed to amend of section 22 of the Act to enable the Minister to make Regulations that shall regulate the manner and processes of issuing work permits and incentives to investors”.

Lion Consulting does commend the Government of taking this initiative in improving the business environment in Tanzania. We believe that these proposed amendments if passed shall lead to more foreign direct investments in Tanzania.

^[1] http://www.xinhuanet.com/english/2019-02/07/c_137805184.htm