The Zanzibar Business and Property Registration Agency (BPRA) has introduced Practice Directive No. 2 of 2025, fundamentally changing the capital structure requirements for companies in the Isles. This directive mandates a minimum share capital of TZS 100,000,000 for high-impact sectors and all foreign-owned entities.
Who is Affected by the TZS 100 Million Threshold?
The new requirement applies to two major categories of businesses operating in Zanzibar:
1. Any Company with Foreign Shareholding
Regardless of the company’s business objects or the number of foreign investors involved, any company with a foreign shareholder must maintain a minimum share capital of at least TZS 100,000,000.
2. Companies in High-Value Economic Sectors
Any company (whether local or foreign-owned) whose objects include the following activities must meet the new capital requirement:
- Real Estate & Infrastructure: Property development and construction.
- Logistics & Trade: Import/export, transportation, and large-scale wholesale.
- Industry: Manufacturing and industrial operations.
- Tourism: Hospitality, leisure, and tourism-related services.
- Financial Services: Investment services and corporate projects.
- Resources & Energy: Mining, natural resources, and energy.
- Technology: Telecommunications and tech infrastructure.
Note: The Registrar holds the discretion to apply this requirement to any other trade deemed to involve transactions of large financial magnitude.
Checklist: Steps to Compliance
If your company falls under the scope of Directive No. 2 of 2025, use this checklist to ensure your registration remains valid:
[ v ] Evaluate Shareholding: Confirm if any current or incoming shareholder is a foreign national.
[ v ] Review Business Objects: Check your Memorandum and Articles of Association for any of the regulated activities listed above.
[ v ] Pass a Corporate Resolution: Formally resolve to increase the company’s share capital to at least TZS 100,000,000.
[ v ] Secure Proof of Capital: Obtain a bank confirmation letter or statement showing the funds, or an auditor’s/accountant’s certification confirming the capital payment.
[ v ] File with BPRA: Register the change of share capital with the Registrar of Companies to avoid regulatory action.
Consequences of Non-Compliance
Failure to adhere to these requirements renders a company liable to regulatory action under the Companies Act No. 15 of 2013, including:
- Refusal of registration.
- Suspension of business operations.
- Other appropriate measures deemed necessary by the Registrar.
Here is a comprehensive FAQ section designed to address common client concerns regarding the new BPRA capital requirements.
Frequently Asked Questions: BPRA Practice Directive No. 2 of 2025
1. Why has the BPRA introduced this new requirement?
The Registrar has observed that certain sectors involve substantial financial transactions and capital investment. The directive aims to ensure business credibility, protect stakeholders, and maintain compliance with international regulatory standards, especially for companies involving foreign investment.
2. My company has only one foreign shareholder with a 1% stake. Do we still need TZS 100 Million?
Yes. The directive applies to any company that involves a foreign shareholder, regardless of the number of shareholders or the percentage of their holding.
3. Does this apply to existing companies or only new ones?
It applies to both. Companies already incorporated before July 30, 2025, must ensure compliance by increasing their share capital to the minimum requirement.
4. What happens if I don’t increase the capital?
Failure to comply can lead to serious regulatory actions. This includes:
- Refusal of any new registrations or filings.
- Suspension of your business operations.
- Any other measures deemed appropriate under the Companies Act No. 15 of 2013.
5. Can I state my share capital in USD or other foreign currencies
No. Pursuant to Regulation 13(1) of the Companies Regulations 2017, the amount of share capital must be stated in Tanzanian Shillings.
6. Is “Share Capital” the same as “Paid-up Capital”?
While the directive focuses on the registered share capital, the Registrar has the power to request documentary proof of paid-up share capital. This means you must be prepared to show that the TZS 100,000,000 has actually been injected into the company.
7. What documents serve as proof of payment?
The Registrar may require:
- A bank confirmation letter or bank statement.
- A certification from a registered auditor or accountant confirming the payment of capital.
8. Are there any sectors exempt from this if they are locally owned?
Only if the business activity is not listed in the directive. If a locally owned company is engaged in sectors like tourism, construction, or manufacturing, it must still meet the TZS 100,000,000 minimum.
Download here the order : https://www.rive.co.tz/wp-content/uploads/2026/02/PRACTICE-DIRECTIVE-NO.2-OF-2025-BPRA-RIVE-LIBRARY.pdf
Author: Sunday Ndamugoba, Partner at RIVE&Co. He is reachable at sunday@rive.co.tz for further queries and assistance.
Disclaimer: This article is for general informational purposes only and does not constitute formal legal advice. While it is based on Practice Directive No. 2 of 2025 issued by BPRA, laws and regulations are subject to change and interpretation. Please consult with a qualified legal professional regarding your specific business circumstances.