The Tanzanian mergers and acquisitions market has entered a transformative phase in 2026, characterised by significant regulatory reforms, heightened cross-border activity, and increasing consolidation across key economic sectors. As East Africa’s third-largest economy continues to position itself as a premier investment destination, understanding the nuanced legal and regulatory framework governing M&A transactions has never been more critical for investors, corporate leaders, and their advisors.
Tanzania’s strategic location, abundant natural resources, and growing consumer market have long attracted foreign direct investment. However, the landscape has shifted dramatically in the past eighteen months with the establishment of new institutional frameworks, the activation of regional competition oversight, and the government’s concerted efforts to streamline investment processes while maintaining robust regulatory safeguards .
This comprehensive guide examines the current state of M&A in Tanzania, providing detailed analysis of recent landmark transactions, the evolving regulatory architecture, step-by-step procedural requirements, sector-specific considerations, and the practical strategies that can mean the difference between transaction success and failure.
Part One: The Current M&A Market in Tanzania
1.1 Market Overview and Key Drivers
The Tanzanian M&A market in 2026 is being shaped by several interconnected forces. Economic stability under the current administration has restored investor confidence, while legislative reforms have addressed long-standing concerns about bureaucratic inefficiency and regulatory predictability .
Several sectors are experiencing particularly robust M&A activity:
Financial Services: Tanzania’s banking sector remains significantly underdeveloped compared to regional peers, with total banking assets equivalent to approximately 30% of GDP . This presents substantial growth opportunities, and regional banking groups are moving decisively to consolidate their positions. Private-sector credit averages just 12.5% of GDP since 2007, substantially below levels in Kenya and Rwanda, indicating significant room for expansion in retail banking and SME financing .
Extractive Industries: As Africa’s fourth-largest gold producer, Tanzania continues to attract international mining companies and investors. The country hosts world-class gold deposits in the Lake Victoria Greenstone Belt, including fully developed mines operated by major international players such as Barrick’s Bulyanhulu and North Mara operations, AngloGold Ashanti’s Geita Gold Mine, and various other significant operations . Beyond gold, Tanzania possesses substantial deposits of nickel, copper, cobalt, gemstones including the famous Tanzanite, coal, uranium, and increasingly sought-after rare earth minerals .
Infrastructure and Energy: Major regional infrastructure projects, including the East African Crude Oil Pipeline from Uganda to Tanzania, continue to drive investment and related corporate activity. The Public Private Partnership framework has been strengthened through recent amendments, expanding tax incentives and mandating international arbitration for dispute resolution .
Telecommunications and Technology: The digital transformation of the Tanzanian economy has attracted significant investment, with tower infrastructure, fintech platforms, and connectivity providers seeing substantial M&A activity. The consolidation of telecommunications infrastructure has been particularly notable, with major tower transactions reshaping the sector .
1.2 Major Recent Transactions
The I&M Group Consolidation: A Strategic Masterclass
In January 2026, East African financial holding company I&M Group Plc completed the acquisition of an additional 15% stake in its Tanzanian subsidiary, I&M Bank Tanzania (IMTZ), increasing its ownership to 95.5% . This transaction, which saw the exit of private equity funds Proparco and Microfinance East Africa Ltd (MEAL) after a 15-year investment cycle, exemplifies several key trends in the current market.
The deal’s significance extends beyond its immediate financial terms. For I&M Group, the increased stake provides stronger control over governance, commercial strategy, and capital allocation in a market identified as core to its East African growth strategy . The transaction also improves visibility and transparency for shareholders of the Nairobi-listed group, simplifying reporting structures and eliminating minority governance complexities.
For the broader market, this transaction signals the maturation of private equity investment in Tanzania. The successful 15-year holding period demonstrates that patient capital can achieve profitable exits through strategic sales to operating companies seeking consolidation .
The deal received all required regulatory approvals, navigating the complex multi-agency framework that governs banking sector M&A, including clearance from the Bank of Tanzania and competition authorities .
PakTak International’s Potential Entry into Tanzanian Gold
In a development that underscores continued international interest in Tanzania’s mineral wealth, Hong Kong-listed PakTak International (Baide International) signed a non-binding memorandum of understanding in January 2026 to potentially acquire a Tanzanian company owning an operational gold processing plant and engaged in gold exploration and production .
This proposed transaction, though at an early stage, reflects a strategic pivot by the Hong Kong company to diversify its existing business through entry into a sector described as possessing “巨大增长潜力” (significant growth potential) . The target company’s assets include both production capacity through its processing plant and exploration upside, offering immediate cash flow combined with growth optionality.
For foreign investors, this potential acquisition highlights both the opportunities and challenges in Tanzanian mining M&A. The transaction will require navigating the Mining Commission’s approval processes, meeting local content requirements, addressing environmental compliance through the National Environment Management Council, and structuring the investment to satisfy both Tanzanian and Hong Kong regulatory requirements .
1.3 Private Equity Activity and Exit Trends
The I&M transaction is not an isolated case. Private equity activity in Tanzania has matured significantly, with several funds now executing exits after successful holding periods. The presence of development finance institutions and specialised Africa-focused funds has deepened the market, bringing sophisticated deal structuring expertise and international best practices.
Current trends in private equity M&A include:
- Growth capital investments in consumer-facing sectors benefiting from Tanzania’s expanding middle class
- Infrastructure-focused funds targeting energy, logistics, and transportation assets
- Buy-and-build strategies consolidating fragmented industries such as healthcare, education, and retail
- Secondary transactions where one private equity investor sells to another, indicating market depth
Part Two: The Regulatory Revolution of 2025-2026
2.1 The Establishment of TISEZA: A New Era for Investment Facilitation
The most significant institutional development in recent years is the enactment of the Investment and Special Economic Zones Act, No. 6 of 2025, which establishes the Tanzania Investment and Special Economic Zones Authority (TISEZA) . This new super-agency consolidates the functions of the former Tanzania Investment Centre (TIC) and the Export Processing Zones Authority, creating a comprehensive one-stop centre for investors.
Key Features of TISEZA:
- Mandate Consolidation: TISEZA now handles all functions previously distributed between TIC and EPZA, eliminating the need for investors to navigate multiple agencies for investment approvals and incentives .
- Digital Transformation: The Authority is mandated to digitise services, enabling online applications, tracking, and approvals for qualifying investments .
- Enhanced Incentives: The new legislation provides for streamlined and potentially enhanced incentive packages for investors meeting strategic criteria, including those in priority sectors or special economic zones .
- Strategic Investment Oversight: Strategic investment projects having significant impact on the national economy based on capital amount, employment generation, and technology transfer require approval from the National Steering Committee, with qualifying strategic investors eligible for fiscal incentives approved by the Minister for Finance .
For M&A practitioners, TISEZA’s establishment simplifies the post-transaction integration phase for qualifying investments. Investors can now obtain investment certificates, work permit facilitation, and incentive approvals through a single window rather than coordinating across multiple agencies .
2.2 The EACCA Mandate: Regional Competition Oversight Begins
Perhaps the most consequential regulatory development for cross-border M&A is the commencement of operations by the East African Community Competition Authority (EACCA) . Effective from 1 November 2025, the EACCA now has the mandate to receive, review, and approve M&A transactions with a cross-border effect within the East African Community .
Understanding Cross-Border Effect:
A transaction is considered to have a cross-border effect if it involves undertakings operating in two or more EAC partner states. The EAC currently includes Burundi, the Democratic Republic of Congo, Kenya, Rwanda, Somalia, South Sudan, Tanzania, and Uganda .
Notification Thresholds:
A transaction is notifiable to the EACCA when:
- The combined turnover or asset value of the merging parties within the EAC is at least USD 35 million; and
- At least two of the merging parties have turnover or assets exceeding USD 20 million within the EAC .
The “One-Stop” Benefit:
A critical feature of the new regime is the principle of supremacy: once the EACCA approves a merger transaction with cross-border effect, notification to national competition authorities is not required . This means that for qualifying transactions, parties need not also file with Tanzania’s Fair Competition Commission (FCC) for Mainland Tanzania or the Zanzibar Fair Competition Commission (ZFCC) for Zanzibar.
This streamlining represents a significant efficiency gain for large, region-wide transactions, potentially reducing both the time and cost of multi-jurisdictional merger control compliance.
2.3 Currency Regulations and Investor Protection
In March 2025, the Bank of Tanzania introduced new foreign currency regulations mandating that all domestic transactions be conducted in Tanzanian Shillings (TZS) . This policy aims to reduce dollarisation of the economy and stabilise the local currency, but it introduces important considerations for M&A transactions.
Impact on M&A:
- Valuation and Consideration: Purchase price considerations must be structured with currency risk in mind. While the transaction itself may be denominated in foreign currency, the underlying business generates revenues in TZS, creating potential mismatches.
- Contract Renegotiation: Existing contracts denominated in foreign currencies may require renegotiation or restructuring to comply with the new regulations .
- Exemptions: The regulations provide exemptions for foreign loans, diplomatic entities, and specific categories of international transactions, but these must be carefully documented .
Investor Protection Signals:
Balancing the currency regulation, the government has demonstrated commitment to investor protection through concrete action. The USD 27 million settlement with Montero Mining in late 2024 over the Wigu Hill expropriation dispute signals willingness to resolve conflicts amicably and uphold investor rights . This settlement, reached after international arbitration proceedings, provides comfort to foreign investors concerned about political risk.
2.4 The Public Private Partnership Framework
The Public Private Partnership (PPP) framework has been strengthened through the PPP (Amendment) Act, 2023, which introduced several investor-friendly provisions :
- Expanded Tax Incentives: PPP projects now qualify for enhanced tax benefits, improving project economics
- Mandatory SPVs: Projects must be undertaken through special-purpose vehicles, ring-fencing liabilities and clarifying governance
- International Arbitration: Dispute resolution options now explicitly include international arbitration, addressing a long-standing investor concern
These reforms are particularly relevant for infrastructure and energy sector M&A, where PPP structures are common.
Part Three: The M&A Regulatory Framework in Detail
3.1 Competition Law and Merger Control
The Fair Competition Act (Cap 285) administered by the Fair Competition Commission (FCC) constitutes the primary legal framework for merger control in Tanzania .
Definition of a Merger:
Under Tanzanian law, a merger occurs when:
- Two or more formerly independent undertakings amalgamate or merge
- One or more individuals or undertakings acquire direct or indirect control over the whole or part of another undertaking
- One or more individuals or undertakings acquire the assets of another undertaking
The Dominance Test:
Section 11(1) of the Fair Competition Act prohibits mergers that would create or strengthen a dominant position in any market. “Dominance” is defined as a situation where an undertaking can “profitably and substantially restrict or lessen competition in that market for a considerable period” and holds a market share exceeding 35% .
Where a merger would create or strengthen dominance, the parties must apply for an exemption. In evaluating exemption applications, the FCC considers whether the merger enables the undertaking to achieve necessary economies of scale to compete more effectively in domestic, regional, or international markets .
Notification Thresholds:
A merger is notifiable to the FCC when the combined assets or turnover of the merging parties exceeds TZS 3.5 billion (approximately USD 1.35 million) .
Important Note: This threshold applies based on the merged entity’s total market asset value or turnover. Critically, even acquisitions of non-controlling minority shareholdings are notifiable if they meet the specified thresholds .
Filing Fees:
Merger application fees are calculated on a sliding scale based on the higher of total annual turnover or total assets value from the merging companies’ most recent audited financial statements. Fees range from TZS 25 million to TZS 100 million (approximately USD 10,000 to USD 45,000) .
3.2 The FCC Merger Review Process
The FCC merger review process follows a structured timeline with specific procedural requirements :
Step 1: Assessing Notifiability
Parties must first assess whether the transaction meets the notification criteria, considering transaction size, market shares, and other specified thresholds.
Step 2: Preparing the Notification
The required notification form (Form FCC 8) demands detailed information including:
- Full description of the transaction
- Information on all relevant parties
- Definition of relevant markets
- Analysis of potential competitive effects
- Supporting documentation (originals or certified copies)
Step 3: Submission and Completeness Check
Within five days of submission, the FCC issues either:
- Form FCC 11 (complete submission), or
- Form FCC 12 (incomplete submission) requiring additional information
Step 4: Initial Review
Upon receiving a complete submission, the FCC has 14 working days to conduct an initial review and communicate its decision in writing .
Step 5: Full Investigation (if required)
If the FCC determines within the 14-day period that the merger requires further investigation, it notifies the parties through Form FCC 14A that the merger will be reviewed within 90 working days . This period may be extended by an additional 30 days, with the FCC issuing Form FCC 14B to confirm the extension .
Step 6: Final Decision
Following its investigation, the FCC may:
- Approve the merger unconditionally
- Approve the merger with conditions or remedies
- Prohibit the merger if it determines the transaction would substantially lessen competition
Step 7: Appeal Rights
Parties dissatisfied with an FCC decision may appeal to the Fair Competition Tribunal under the provisions of the Fair Competition Act and Competition Rules .
3.3 Consequences of Non-Compliance
Failure to comply with merger control requirements carries severe consequences :
- Transaction Invalidity: Mergers implemented without required approval may be declared void
- Financial Penalties: Substantial fines may be imposed on the merging parties
- Civil or Criminal Prosecution: Directors, managers, or officers may face personal liability
- Administrative Sanctions: Business licenses may be suspended or revoked
- Future Restrictions: Parties may be prohibited from participating in future mergers
Critically, where an offence is committed by a corporate entity, every director, manager, or officer in office at the time is deemed to have committed the offence unless they prove the offence occurred without their knowledge or that they exercised all due diligence to prevent its occurrence .
3.4 Sector-Specific Regulatory Approvals
Beyond competition clearance, M&A transactions frequently require approvals from sector-specific regulators :
| Sector | Regulator | Key Considerations |
| Banking & Finance | Bank of Tanzania (BOT) | Change of control approval; fit and proper tests for directors and senior management; capital adequacy review |
| Insurance | Tanzania Insurance Regulatory Authority (TIRA) | Transfer of insurance portfolios; solvency margin requirements; policyholder protection |
| Mining | Mining Commission | Transfer of mineral rights; local content compliance; environmental rehabilitation obligations |
| Energy & Petroleum | EWURA / TPDC | Production sharing agreement approvals; licence transfers; local participation requirements |
| Telecommunications | Tanzania Communications Regulatory Authority (TCRA) | Spectrum licence transfers; universal service obligations; competition in relevant markets |
| Tourism | Ministry of Natural Resources and Tourism | Tourism facility licensing; conservation area compliance |
| Listed Companies | Capital Markets and Securities Authority (CMSA) | Takeover regulations; mandatory offer thresholds (35%); disclosure requirements; insider trading prohibitions |
3.5 Tax Authority and Corporate Registry Approvals
Tanzania Revenue Authority (TRA):
Tax implications of M&A transactions require careful management. Key considerations include :
- Capital Gains Tax: Applicable on gains from transfer of capital assets
- Stamp Duty: Payable on transfer documents at prescribed rates
- Withholding Tax: Applicable on certain cross-border payments
- Value Added Tax: May apply to asset transfers depending on structure
- Transfer Pricing: Cross-border transactions must comply with arm’s length principles
Business Registrations and Licensing Agency (BRELA):
Following transaction completion, changes must be registered with BRELA, including :
- Changes in shareholding structure
- Director appointments and resignations
- Amendments to Memorandum and Articles of Association
- Updates to registered address
- Filing of annual returns reflecting new ownership
Part Four: Transaction Structures and Strategic Considerations
4.1 Common Transaction Structures
The choice of transaction structure significantly impacts regulatory requirements, tax consequences, and post-completion integration .
Share Purchase:
For private companies, share purchases are the most frequently used structure. The buyer acquires the target company’s shares, assuming ownership of the entire business including all contracts, licences, employees, and liabilities . Advantages include:
- Relative simplicity in transferring ownership
- Preservation of existing contracts and relationships
- Continuity of employment relationships
- Retention of operating licences and permits
Asset Purchase:
Asset purchases involve acquiring specific business assets while avoiding unwanted liabilities. This structure is particularly useful where :
- The buyer seeks to cherry-pick specific assets
- There are concerns about historical liabilities
- Only part of a business is being acquired
- The target has complex or contingent liabilities
Amalgamation:
Statutory amalgamation (merger) combines two or more companies into a single surviving entity. This structure requires compliance with Companies Act procedures and is typically used for group reorganisations or where full integration is desired .
Minority Investment:
Share subscriptions or purchases of minority equity interests are common for growth capital transactions, joint ventures, or strategic partnerships. While requiring fewer regulatory approvals, these transactions demand robust shareholder agreements addressing :
- Board representation and veto rights
- Information and inspection rights
- Exit mechanisms (tag-along, drag-along)
- Pre-emptive rights on new issuances
- Dividend policies
4.2 Factors Influencing Structure Selection
Several key factors guide the choice of transaction structure :
Regulatory Approvals: Different structures may trigger different approval requirements. Asset purchases, for example, may avoid change-of-control provisions in certain licences but may require new licensing for the acquired assets.
Tax Considerations: Share purchases and asset purchases are treated differently for capital gains, stamp duty, and VAT purposes. Structuring advice from qualified tax advisors is essential .
Liability Transfer: Share purchases transfer all liabilities (known and unknown) to the buyer, while asset purchases allow selective assumption of liabilities .
Contractual Continuity: Share purchases preserve existing contracts, while asset purchases may require counterparty consent for assignment.
Employee Relations: Share purchases maintain continuous employment, preserving service continuity and avoiding redundancy costs. Asset purchases may require transfer of employees under applicable labour laws.
4.3 Due Diligence: The Critical Foundation
Experienced practitioners emphasise that inadequate due diligence is among the most common causes of transaction failure . Comprehensive due diligence in Tanzania must extend beyond basic corporate record review to include:
Corporate and Legal Due Diligence:
- BRELA records verification (shareholder registers may not reflect all changes)
- Memorandum and Articles of Association review
- Board and shareholder resolution verification
- Litigation history and pending disputes
Asset Due Diligence:
- Land title verification (critical given risks of double allocation and boundary disputes)
- Intellectual property registrations
- Material contract review (change-of-control provisions)
- Insurance coverage adequacy
Financial and Tax Due Diligence:
- Audited financial statements analysis
- Tax compliance status (which may diverge significantly from representations)
- Transfer pricing documentation review
- Tax audit history and open assessments
Regulatory Due Diligence:
- Licence and permit validity
- Sector-specific compliance (mining, banking, telecoms etc.)
- Environmental compliance and NEMC approvals
- Local content compliance
Operational Due Diligence:
- Key customer and supplier relationships
- Employee contracts and benefits
- IT systems and data protection compliance
- Health and safety records
4.4 Hidden Risks in Tanzanian M&A
Experienced practitioners identify several recurring pitfalls :
Pitfall #1: Incomplete Corporate Records
Corporate records at BRELA may not reflect all shareholder changes or encumbrances. Share transfers may have occurred without proper registration, or shares may be pledged as security without public record. This necessitates going beyond registry searches to review internal company records and obtain appropriate warranties and indemnities .
Pitfall #2: Land and Property Complications
Land titles linked to the business may have disputes, double allocations, or pending acquisition orders by government authorities. Given the complexity of Tanzania’s land tenure systems (including granted rights of occupancy, residential licences, and customary rights), specialised land due diligence is essential .
Pitfall #3: Tax Compliance Gaps
Tax compliance status can be far from what is declared in negotiations. Hidden tax liabilities, unreported transactions, or aggressive filing positions may create significant exposure for an unwary buyer. Comprehensive tax due diligence, including review of TRA correspondence and audit history, is critical .
Pitfall #4: Sector Regulator Gatekeeping
Sector regulators possess substantial discretion and are not mere formalities. We have seen cases where :
- Foreign buyers acquired majority stakes without meeting local ownership thresholds, forcing deal restructuring
- Regulators declined to approve change of control because buyers lacked necessary operational licences
- Licence transfers were delayed for months due to incomplete applications or regulatory concerns
Pitfall #5: Immigration Oversights
In cross-border deals involving foreign executives or technical staff, immigration compliance is often treated as an afterthought. Critical considerations include :
- Residence permits may not automatically transfer after merger
- Key staff may be unable to work until new permits issue
- Immigration authorities may reject applications if local expertise could fill roles
4.5 Post-Merger Integration and Governance
Closing the transaction marks the beginning, not the end, of the M&A journey. Post-merger integration requires careful attention to :
Corporate Secretarial Matters:
- Updating shareholder registers
- Filing change of directorships with BRELA
- Aligning board structures with new ownership agreements
- Amending constitutions or articles of association
Governance Alignment:
- Establishing new board committees as required
- Implementing revised reporting lines
- Integrating compliance and risk management frameworks
Operational Integration:
- Merging systems and processes
- Harmonising employment terms
- Consolidating supplier and customer relationships
Failure to address these matters can invite shareholder disputes or regulator intervention months or years after completion .
Part Five: Sector-Specific M&A Considerations
5.1 Mining Sector M&A
Tanzania’s mining sector is governed primarily by the Mining Act (Cap 123, 2023) and its associated regulations . Key considerations for mining M&A include:
Mineral Right Transfers:
Mineral rights (prospecting licences, retention licences, mining licences, and special mining licences) are transferable only with prior written consent of the Mining Commission . Applications for consent must demonstrate:
- Technical capability of the proposed transferee
- Financial capacity to meet work programme commitments
- Compliance with local content requirements
- Settlement of all outstanding royalty and fee obligations
Local Content Compliance:
The mining regulatory framework includes specific local participation requirements. Foreign investors must navigate these carefully, ensuring any proposed acquisition structure complies with applicable local ownership thresholds .
Environmental Obligations:
Mining acquisitions transfer environmental rehabilitation obligations. Buyers must conduct thorough environmental due diligence, including review of:
- Environmental Impact Assessment approvals
- Compliance with environmental management plans
- Rehabilitation bond adequacy
- Pending environmental complaints or enforcement actions
State Participation Rights:
The government retains rights to participate in mining projects, typically through free-carried interests or rights to acquire shares. These rights may be triggered by transactions, requiring careful analysis.
Recent Developments:
Tanzania’s position as Africa’s fourth-largest gold producer continues to attract international investment. The Lake Victoria Greenstone Belt hosts world-class deposits, with significant exploration and development activity ongoing . Beyond gold, nickel, copper, cobalt, graphite, and rare earth minerals present growing investment opportunities .
5.2 Financial Services M&A
Banking and financial services M&A faces intensive regulatory scrutiny. Key considerations include :
Bank of Tanzania Approval:
Any person seeking to acquire a significant shareholding (typically 5% or more) in a bank or financial institution must obtain prior approval from the Bank of Tanzania. Acquisitions resulting in control (variously defined) trigger enhanced review.
Fit and Proper Assessment:
Proposed directors and senior managers of acquiring entities must undergo fit and proper assessments, demonstrating:
- Integrity and reputation
- Competence and capability
- Financial soundness
- Absence of conflicts of interest
Capital Adequacy:
Post-acquisition, the combined entity must maintain prescribed capital adequacy ratios. Transactions reducing capital below regulatory minima are prohibited.
Depositor Protection:
The primary regulatory objective is depositor protection. Transactions must not prejudice depositor interests, and any resulting entity must demonstrate capacity to serve depositors effectively.
Market Concentration:
The FCC considers banking sector concentration in merger assessments. With two private banks controlling nearly half of all banking assets, loans, and deposits, competition concerns may arise in concentrated markets .
5.3 Telecommunications and Technology M&A
The telecommunications sector presents unique M&A considerations :
TCRA Approval:
Change of control in telecommunications licensees requires prior TCRA approval. Applications must demonstrate:
- Technical capability to maintain service quality
- Financial capacity for network investment
- Compliance with licence conditions
- National security considerations
Spectrum Licence Transfer:
Spectrum licences are not freely transferable. Transactions involving spectrum rights require specific approval and may trigger spectrum reallocation or renewal requirements.
Infrastructure Sharing:
Tanzania has promoted telecommunications infrastructure sharing to reduce duplication and expand coverage. Transactions must consider existing sharing arrangements and potential competition effects.
Significant Transactions:
The sector has seen major consolidation, including the acquisition of telecommunications towers from leading mobile operators by HTT Infraco, creating the single largest tower operator in Tanzania .
5.4 Energy and Petroleum M&A
Energy sector M&A is governed by sector-specific legislation and production sharing agreements :
EWURA Oversight:
The Energy and Water Utilities Regulatory Authority regulates electricity, petroleum, and water utilities. Change of control in licensed entities requires EWURA approval.
Production Sharing Agreements:
Oil and gas exploration and production rights are governed by Production Sharing Agreements (PSAs) with the government through the Tanzania Petroleum Development Corporation (TPDC). PSA transfers require government consent and may trigger renegotiation of fiscal terms.
Local Content:
The petroleum sector has extensive local content requirements, including preferences for Tanzanian suppliers and service providers, training and technology transfer obligations, and employment of Tanzanian nationals.
Major Projects:
The East African Crude Oil Pipeline project continues to drive investment, with complex multi-jurisdictional financing arrangements and associated corporate activity .
5.5 Tourism and Hospitality M&A
Tanzania’s tourism sector, centred on Zanzibar, the northern safari circuit, and southern national parks, presents specific considerations :
Ministry Approval:
Tourism facilities (lodges, hotels, tour operators) operate under licences issued by the Ministry of Natural Resources and Tourism. Licence transfers or changes in control require Ministry approval.
Land Tenure:
Tourism facilities often occupy prime locations with complex land tenure arrangements, including granted rights of occupancy, leases from village councils, or concessions in conservation areas. Thorough land due diligence is essential.
Conservation Compliance:
Facilities in or near conservation areas must comply with specific environmental and conservation requirements. Change of control does not relieve compliance obligations.
Part Six: Practical Guidance for Foreign Investors
6.1 Minimum Investment Requirements
To qualify as an investor with TISEZA (formerly TIC), foreign-owned businesses must meet minimum capital requirements :
- Wholly Foreign-Owned Investment: Minimum initial capital of USD 500,000
- Joint Venture with Tanzanian Partner: Minimum initial capital of USD 500,000
These requirements apply to the initial investment and must be evidenced through capital importation certificates obtained from authorised banks.
6.2 Business Entity Options
Foreign investors may establish various business forms, each with distinct characteristics :
Private Limited Company (Ltd):
The most common choice for foreign investors, offering:
- Separate legal personality
- Limited liability for shareholders
- Minimum two shareholders (maximum 50)
- Minimum two directors
- No public share offering permitted
- 30% corporate tax rate
- Flexible governance structure
Public Limited Company (PLC):
Suitable for larger enterprises or those seeking public capital:
- Minimum two directors and seven shareholders
- At least one director must be Tanzanian (approximately 40% shareholding requirement)
- Minimum share capital USD 300,000
- Stricter governance and disclosure requirements
- Ability to list on Dar es Salaam Stock Exchange
Branch Office:
Foreign companies may establish branch offices by obtaining a Certificate of Compliance from BRELA. Branches are not separate legal entities; the foreign parent remains liable for all branch obligations. Branches pay 30% tax on Tanzanian-source income .
6.3 Company Registration Procedure
Company registration through BRELA’s Online Registration System (ORS) follows a structured process :
Step 1: Name Search and Reservation (2-3 days)
- Submit proposed name(s) to Companies Registry
- Fee approximately USD 20
- Reserved name valid for 30 days
Step 2: Document Preparation
- Prepare Memorandum and Articles of Association (Memarts)
- Draft incorporating documents
- Obtain director and shareholder identification
Step 3: Online Registration
- Submit documents through ORS
- Pay prescribed fees
- Receive Certificate of Incorporation (typically within 5-7 working days)
Step 4: Post-Incorporation Registrations
- Taxpayer Identification Number (TIN) from TRA (immediate online)
- VAT registration if applicable
- Business license from relevant local authority
- Social security registrations (NSSF, WCF) (3-5 days)
- Occupational Safety and Health Authority (OSHA) registration (3-5 days)
6.4 Work Permits and Immigration
Foreign executives and specialists require work permits and residence passes. Key considerations :
Permit Types:
- Class A: For specific approved projects (typically 2 years)
- Class B: For designated employers (quota-based)
- Class C: For specific professions (renewable)
Application Timeline:
Work permit processing typically requires 3-4 weeks, though timing varies with application completeness and workload .
Post-Merger Considerations:
In acquisitions where foreign executives are part of operational integration, immigration must be addressed proactively. Residence permits do not automatically transfer after mergers; new applications may be required, potentially delaying key personnel deployment .
Localisation Requirements:
Immigration authorities may reject applications if they consider local expertise available to fill the role. Employers must demonstrate efforts to train and develop Tanzanian successors .
6.5 Tax Considerations in Transaction Structuring
Tax implications significantly impact transaction value and should be addressed early in structuring discussions :
Capital Gains Tax:
Gains from transfer of capital assets (including shares in Tanzanian companies) are subject to capital gains tax. Rate depends on transferor residency and asset classification.
Stamp Duty:
Share transfer instruments attract stamp duty at prescribed rates. Asset transfer documents may also attract duty. Rates vary based on document type and consideration.
Withholding Tax:
Cross-border payments (dividends, interest, management fees, royalties) attract withholding tax at rates depending on payment type and applicable double taxation treaties.
Value Added Tax:
Asset purchases may attract VAT at 18%, though exemptions may apply for going concern transfers or specific asset categories.
Transfer Pricing:
Cross-border transactions between related parties must comply with arm’s length principles and maintain contemporaneous documentation. Tanzania has adopted OECD-aligned transfer pricing rules with specific local requirements .
Tax Due Diligence:
Comprehensive tax due diligence should review:
- Tax compliance history
- Open tax audits or disputes
- Transfer pricing documentation adequacy
- Withholding tax compliance
- VAT filing and payment history
- Tax incentive eligibility and compliance
Part Seven: Future Outlook and Emerging Trends
7.1 Legislative and Regulatory Developments
The M&A regulatory landscape continues to evolve. Key developments to monitor include:
TISEZA Implementation: The full operationalisation of TISEZA will be critical. Success in digitising services and streamlining approvals could significantly enhance investor experience .
EACCA Practice Development: As the EACCA gains experience, its approach to merger assessment, procedural requirements, and remedies will become clearer. Practitioners must monitor emerging practice .
Sector-Specific Reforms: Various sectors, including mining, energy, and telecommunications, may see regulatory updates affecting M&A activity.
7.2 Market Trends to Watch
Regional Banking Consolidation: The I&M transaction reflects broader regional trends. East African banking groups are likely to continue seeking majority control of subsidiaries to streamline governance and capital allocation .
Private Equity Maturation: As private equity funds mature, secondary transactions and sales to strategic buyers will likely increase, deepening the M&A market.
Infrastructure Investment: Major regional infrastructure projects will continue driving related M&A activity, including contractor acquisitions, supply chain consolidation, and associated services.
Digital Economy Growth: Technology and finch sectors are poised for growth, attracting investment and driving M&A as platforms scale and consolidate.
7.3 Investor Sentiment and Confidence
Recent reforms and the demonstrated commitment to investor protection through mechanisms such as the Montero settlement have improved investor sentiment . Tanzania’s relative political stability, economic growth prospects, and strategic location continue to attract interest.
However, challenges remain. Currency regulations introduce complexity, bureaucratic inefficiencies persist despite reforms, and certain sectors retain restrictive local participation requirements. Successful navigation requires expert guidance and careful planning.
Conclusion: Navigating Tanzanian M&A Successfully
The Tanzanian M&A landscape in 2026 offers substantial opportunities for well-prepared investors. Recent regulatory reforms have streamlined processes, enhanced predictability, and demonstrated commitment to investor protection. The establishment of TISEZA and activation of EACCA oversight represent significant steps toward a more efficient and transparent investment environment.
However, success requires more than capital and commercial vision. It demands:
- Deep understanding of the multi-layered regulatory framework, including competition law, sector-specific requirements, and tax implications
- Comprehensive due diligence extending beyond corporate records to land, tax, regulatory compliance, and hidden liabilities
- Careful transaction structuring balancing regulatory, tax, and commercial considerations
- Proactive engagement with regulators who serve as gatekeepers, not mere formalities
- Meticulous post-merger integration addressing corporate secretarial, governance, and operational matters
At RIVE&CO, we combine deep local expertise with international best practices to guide clients through every stage of the M&A journey. From initial feasibility assessment through structuring, due diligence, regulatory approvals, and post-merger integration, we provide the strategic counsel and practical support essential for transaction success.
The Tanzanian market rewards those who approach it with eyes open, respect for its regulatory framework, and commitment to thorough preparation. For investors meeting these standards, the opportunities are substantial and growing.
Frequently Asked Questions (FAQ) on M&A in Tanzania
General M&A Questions
Q1: What constitutes a merger or acquisition under Tanzanian law?
A: Under the Fair Competition Act, a merger occurs when two or more formerly independent undertakings amalgamate; one or more individuals or undertakings acquire direct or indirect control over another; or one or more individuals or undertakings acquire the assets of another undertaking .
Q2: When must we notify the competition authorities of a transaction?
A: Notification to the Fair Competition Commission (FCC) is mandatory when the combined assets or turnover of the merging parties exceeds TZS 3.5 billion (approximately USD 1.35 million). For transactions with cross-border effect within the East African Community, notification to the East African Community Competition Authority (EACCA) is required where combined turnover/assets within the EAC reach USD 35 million and at least two parties exceed USD 20 million each within the EAC .
Q3: What is the “one-stop shop” benefit of EACCA approval?
A: Once the EACCA approves a merger transaction with cross-border effect, notification to national competition authorities (including Tanzania’s FCC and Zanzibar’s ZFCC) is not required. This streamlines approval for qualifying region-wide transactions .
Q4: What are the consequences of completing a merger without required approval?
A: Consequences can be severe, including transaction invalidity, substantial fines and penalties, civil or criminal prosecution of directors and officers, administrative sanctions such as license suspension, and prohibition from future mergers .
Q5: How long does the FCC merger review process take?
A: The FCC has 14 working days for initial review. If the FCC determines further investigation is needed, it has 90 working days to complete its review, extendable by an additional 30 days. Straightforward transactions may clear more quickly, while complex mergers require the full timeline .
Transaction Structure Questions
Q6: What are the advantages of a share purchase versus an asset purchase?
A: Share purchases transfer entire businesses including contracts, licences, employees, and all liabilities, offering simplicity and continuity. Asset purchases allow buyers to select specific assets and avoid unwanted historical liabilities, but may require counterparty consent for contract assignment and new licensing for acquired assets .
Q7: Is a minority share acquisition notifiable to the FCC?
A: Yes, even acquisitions of non-controlling minority shareholdings are notifiable if they meet the prescribed thresholds (combined assets/turnover exceeding TZS 3.5 billion). The test focuses on transaction value, not control .
Q8: What should a shareholders’ agreement for a minority investment include?
A: Robust shareholder agreements should address board representation and veto rights, information and inspection rights, exit mechanisms (tag-along and drag-along rights), pre-emptive rights on new issuances, dividend policies, and dispute resolution procedures .
Sector-Specific Questions
Q9: What approvals are required for acquiring a Tanzanian bank?
A: Bank acquisitions require prior approval from the Bank of Tanzania, including fit and proper assessments for proposed directors and senior managers. The transaction must not prejudice depositor interests, and the resulting entity must maintain prescribed capital adequacy ratios .
Q10: How do we transfer mining licences in an acquisition?
A: Mineral rights transfers require prior written consent from the Mining Commission. Applications must demonstrate technical capability, financial capacity, local content compliance, and settlement of all royalty and fee obligations .
Q11: What are the local content requirements in the mining and petroleum sectors?
A: Both sectors require compliance with local participation thresholds, preferences for Tanzanian suppliers, training and technology transfer obligations, and employment of Tanzanian nationals. Specific requirements vary by sector and project stage .
Q12: Can we transfer telecommunications licences in an acquisition?
A: Change of control in telecommunications licensees requires prior TCRA approval. Spectrum licences are not freely transferable and may trigger spectrum reallocation or renewal requirements upon transfer .
Foreign Investment Questions
Q13: What is the minimum capital requirement for foreign investors?
A: The minimum initial capital requirement is USD 500,000 for an investment wholly owned by a foreigner, and also USD 500,000 for a joint venture with a Tanzanian partner .
Q14: What is TISEZA and why should we register with it?
A: TISEZA (Tanzania Investment and Special Economic Zones Authority) is the new one-stop centre for investors, consolidating the former Tanzania Investment Centre and Export Processing Zones Authority. Registration provides access to investment incentives, work permit facilitation, and streamlined approvals .
Q15: What are the options for establishing a business presence in Tanzania?
A: Options include a private limited company (most common, with limited liability and flexible governance), public limited company (for larger enterprises or those seeking public capital), or branch office (foreign parent remains liable) .
Q16: How long does company registration take?
A: Name reservation takes 2-3 days. Following document preparation, registration through BRELA’s Online Registration System typically yields a Certificate of Incorporation within 5-7 working days. Post-incorporation registrations (TIN, licences, social security) require additional time .
Due Diligence and Risk Questions
Q17: What are the most common due diligence pitfalls in Tanzanian M&A?
A: Common pitfalls include incomplete corporate records at BRELA not reflecting all share changes, land title disputes or double allocations, tax compliance gaps diverging from representations, and overlooking sector regulator gatekeeping powers .
Q18: How should we approach land due diligence?
A: Land due diligence must extend beyond title search to verify boundaries, identify encumbrances, check for double allocation, investigate pending acquisition orders, and confirm compliance with land use conditions. Physical inspection and survey may be necessary .
Q19: What tax risks should we investigate in due diligence?
A: Key tax risks include unreported tax liabilities, aggressive filing positions, transfer pricing documentation gaps, withholding tax compliance failures, and unresolved tax audits or disputes. Tax due diligence should review TRA correspondence and audit history .
Q20: How do we ensure immigration compliance post-acquisition?
A: Address immigration early in integration planning. Residence permits do not automatically transfer after merger; new applications may be required. Demonstrate efforts to train Tanzanian successors where relevant. Allow sufficient processing time (typically 3-4 weeks) .
Post-Merger Questions
Q21: What corporate secretarial matters require attention after closing?
A: Critical post-closing matters include updating shareholder registers, filing change of directorships with BRELA, amending Memorandum and Articles of Association if required, and updating registered address .
Q22: How do we manage post-merger governance integration?
A: Governance integration should address board restructuring, committee establishment, reporting line alignment, and compliance framework harmonisation. For public companies, comply with CMSA Guidelines on Corporate Practices .
Q23: What are the ongoing compliance obligations for the merged entity?
A: Ongoing obligations include filing annual returns with BRELA, tax filing and payment compliance, sector regulator reporting, social security contributions, and maintaining statutory records .
Recent Developments
Q24: How do the March 2025 currency regulations affect M&A?
A: The regulations mandating domestic transactions in Tanzanian Shillings introduce currency risk considerations for valuation and consideration structuring. Exemptions apply for foreign loans and certain international transactions. Existing foreign currency contracts may require renegotiation .
Q25: What does the Montero Mining settlement signify for investor protection?
A: The USD 27 million settlement demonstrates government commitment to resolving disputes amicely and upholding investor rights. It provides comfort to foreign investors concerned about political risk .
Q26: When did EACCA merger notifications become mandatory?
A: The EACCA commenced receiving M&A notifications with cross-border effect from 1 November 2025, following a notice issued on 1 July 2025 .
Q27: What is the Investment and Special Economic Zones Act, No. 6 of 2025?
A: This Act establishes TISEZA as a consolidated one-stop centre for investors, merging the former Tanzania Investment Centre and Export Processing Zones Authority. It mandates digitised services, streamlined approvals, and enhanced incentives .
Disclaimer
This article is for general informational purposes only and does not constitute legal advice. The information presented, including regarding regulatory changes and recent transactions, may not reflect the most current legal developments and is provided without representation or warranty of any kind, express or implied. Readers should consult with qualified legal professionals to obtain advice tailored to their specific circumstances before making any investment or business decisions. Neither the author nor RIVE&CO accepts any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication.
Author: Sunday Ndamugoba
Partner at RIVE&CO
Email: sunday@rive.co.tz
Sunday Ndamugoba is a Partner at RIVE&CO, a leading corporate law firm in Tanzania. With extensive experience advising local and international clients on complex mergers and acquisitions, foreign direct investment, and regulatory compliance, Sunday has guided transactions across banking, mining, energy, telecommunications, and other regulated sectors. He brings deep understanding of Tanzania’s evolving regulatory landscape and practical expertise in navigating multi-agency approval processes. His approach combines rigorous legal analysis with commercial pragmatism, helping clients achieve their strategic objectives while managing risk effectively.