Tanzania: Construction Industry In Tanzania

Last Updated: 21 April 2017
Article by Amne Suedi Kagasheki

The construction industry in Tanzania is composed of a myriad of stakeholders and regulations.

In our next paper, we will talk about partnerships with the Government of the United Republic of Tanzania, joint ventures with various executive government agencies and the regulations and policies surrounding the Public Private Partnerships.

This article will look at the dynamics within the private sector of Mainland Tanzania and, our expertise being investment law in Tanzania, we will examine legislations in the field of construction that may impact foreign investors in Tanzania.

Like any developing economy, the informal sector which is comprised of mainly small to medium companies with a turnover of a maximum of Tshs 250,000,000, makes up a significant number of potential local partners that a foreign investor may have in Tanzania. Most legislations that regulate the professions in the construction industry contain a number of protectionist provisions in favour of the local professionals and companies in Tanzania (ie majority authorised/ voting shareholders should be citizens in accordance to the Tanzania Citizenship Act in Tanzania (Cap 357 RE 2002). Therefore, foreign investors can partner with local companies and professionals in Tanzania and get through the legislative hurdles more easily.

The construction professionals in Mainland Tanzania are the Contractors, Engineers, Architects all of which must register in their respective professional bodies namely the Contractors Registration Board (the "CRB"), the Engineer Registration Board (the "ERB") and the Architects and Quantity Surveyors Registration Board (the "AQSRB") in order to work in Tanzania.

Contractors

The Contractors Registration Act 1997 and Contractors Registration Amendment Act No. 15 of 2008 provide that there are five (5) types of contractors recognised in Tanzania: building contractors, civil works contractors, mechanical contractors, electrical contractors and specialist contractors.

The CRB, in its policies, laws and regulations, differentiates between two categories of contactors: the local contractor and the foreign contractor. The foreign contractor at a premium fee can either choose a permanent registration and undertake as many contracting projects as possible as per its registration class or it can pursue the route of a temporary contractor, registered only to undertake one specific project.

The Business Names (Registration) Act Cap 213 as amended allows a local contractor to register its business name and trade as a sole proprietor. While this law does not explicitly prohibit foreigners from registering a business name and trading on the same, the practice in Tanzania shows reluctance in local authorities to allow foreigner to trade as sole proprietors. Hence a foreign contractor must register a limited company under the Companies Act. In order to meet some of the requirements for registration as a foreign contractor, a company must demonstrate that:

  • It has the minimum technical qualifications and skills as prescribed by the CRB for the type of registration contemplated.
  • It has the necessary experience and track record as prescribed by the CRB
  • It has the necessary financials of the Company to be able to carry out a project
  • Its professional and general conduct is such that it makes it a fit and proper person to be registered by the CRB; and
  • It has the necessary plants and equipment for the work it intends to carry out.

A foreign company can apply for a temporary registration at the CRB by registering its company as a branch and obtaining a certificate of compliance allowing the foreign entity to trade in Tanzania. It must demonstrate a track record of performance as contractor prior to its entrance in the Tanzania market. Likewise, a foreign company can enter into a Joint Venture Agreement with a local contractor for the purpose of carrying out a specific project. However, in both these cases once the project is finished the Company must wind up and leave the country or opt for permanent registration if they wish to pursue more projects.

Engineers

Foreign engineering companies or individual engineers can register as "temporary" however, unlike the contractors, this does not mean that there is a limitation in time or projects. The registration can be renewed for as long as the company or individual wishes to stay in the country and complies with the Engineers Registration Act 1997 as amended. The foreign company must have its principal engineer registered at the ERB as a professional and consulting engineer and the principal engineer must have practiced in a specialised engineering field as a registered engineer.

By law, foreign engineering consulting firms are required to grant the resident principal engineer a Power of Attorney to make all engineering decisions in Tanzania.

A foreign national wishing to be registered as an engineer in Tanzania must hold academic and professional qualifications from engineering institutions that are recognised by the ERB, must be registered as an engineer in his or her home country and must be employed in Tanzania by a registered company

Architects

Foreign architects are allowed to practice in Tanzania provided that they are registered in at the AQSRB and that they are registered architects in their home countries, that there is proof of experience as an architect immediately prior to moving to Tanzania and that they have a degree in architecture from a recognised university. Other conditions are that the individual is seeking for a work and residence permit. The foreign architect must be here for a specific project/ express purpose.

In the case of a foreign firm that has expatriates, the firm must demonstrate that the skills that the expatriates have are not available in Tanzania. Furthermore, the foreign firm must enter into a joint venture with local architect firm for the specific project that is to be carried out. The costs for registration of a foreign architectural firm or a foreign individual architect are significantly higher than a local architect/ architecture firm.

Conclusion

Tanzania is the second largest market for construction in Eastern Africa, following Ethiopia. The country's underdeveloped banking sector means that there is an opportunity for investors to come into the market and propose projects with their own financing from foreign financial services or banks, on top of donor aid or multilateral financial assistance. As such, project companies can choose their own contractors, engineers and architects however they must comply with the various registration bodies and legislations as discussed above. It is a pre-requisite that the firm which a project company wishes to work with is registered in Tanzania. By experience we have seen that, where investments in the construction industry are structured as joint ventures between foreign companies and local companies or where a company has taken as principal contractor, engineer or architect a qualified Tanzanians into the said company, the process for registration is smoother and less time consuming.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.