If
you aspire to invest in Tanzania economic zones, there are two
investment schemes readily available for you—the Export Processing Zones
(EPZ) and Special Economic Zones (SEZ). Both schemes provide conducive
environment for profitable operations.
The incentives offered to operators in both schemes compare favorably with
the most attractive elsewhere in the world and are the best in the region.
Export Processing Zones
The EPZ programme in Tanzania was established in 2002 following the
enactment of the Export Processing Zones Act, 2002. The scheme provides for
the establishment of export oriented investments within the designated zones
with the views of creating international competitiveness for export led
economic growth.
The objectives of the program are to:
• Attract and encourage transfer of new technology,
• Attract and promote investment for export-led industrialization,
• Create and expand foreign exchange earnings,
• Create and increase employment and development of skilled labour,
• Foster linkages of the local economy with the international market end,
• Promote processing of local raw materials for export (value addition).
EPZ incentives
If you invest in any of Tanzania’s EPZ you automatically get privilege to
benefit from the incentives which have been intentionally designed by the
Government of Tanzania to create a business-friendly environment and
profitable operations.
The incentives, as provided under the EPZ Act 2002 (amendments), include:
• Remission of customs duty, VAT and any other tax charged on raw materials
and goods of capital nature.
• Exemption from payment of corporate tax for an initial period of 10 years.
• Exemption from payment of withholding tax on rent, dividends and interest
for first 10 years.
• Exemption from payment of all taxes and levies imposes by local government
authorities for goods and services produced in the EPZs for the period of 10
years.
• Accessing the Export credit guarantee scheme.
• Exemption from pre-shipment or destination inspection requirements.
• On site customs inspection of goods in the EPZs.
• Provision of temporally visas at point of entry to key technical,
management and training staff for a maximum period of 60 days.
• Remission of customs duty, VAT and any other tax payable in respect of
importation of one administrative vehicle; ambulances; firefighting
equipment vehicles; and up to two buses.
• Treatment of goods destined into EPZs as transit cargo.
• Exemption from VAT on utility and wharfage2q charges.
• Access to competitive, modern and reliable services available within the
EPZs.
Investors wishing to join EPZ programme may be classified into three
categories depending on the nature of business they undertake. The
categories cover Developers, Operators and Service Providers.
Developer’s license
This is provided to investors who are investing in infrastructure
development like Construction of Industrial buildings and warehouses,
development of internal roads, landscaping and fencing, as well as provision
of utilities like power, water, sewerage systems and telecommunications.
Operator’s license
This is provided to investors who are undertaking manufacturing operation in
EPZ. Operations may include manufacturing or processing commercial
activities like breaking bulk, repackaging, re-labelling and trading;
export-oriented services including brokerage, information, consultancy and
repair services.
Service Provider’s license
This is offered to investors who wish to provide services and utilities to
EPZ and SEZ investors within the zones. They are called service provider and
they are given service provider license, with the services they offer
ranging from banking, insurance, IT to ICT services.
Under EPZ scheme we have two set ups from which an investor may choose to
operate: EPZ Industrial Parks where investors locate their operation within
the designated zone together with other investors and share common
infrastructure facilities and utilities. There are about six EPZs industrial
parks in Tanzania—Benjamin William Mkapa Special Economic Zone, Hifadhi EPZ,
Millenium Business Park, Kisongo EPZ, Kamal Industrial Park and Global
Industrial Park.
Another set up is EPZ stand Alone where EPZA allows single factory units not
located within the zones but want to operate their businesses elsewhere
outside the EPZ industrial parks. EPZA facilitates declarations for those
areas.
Criteria for EPZ investments approval
Setting up operational criteria in Tanzania’s EPZs is simple, transparent
and quick, all an investor should do is to adhere to these simple
requirements:
• The investment must be new
• At least 80% of goods produced/processed should be for export
• Annual export turnover should not be less than US$ 500,000 for foreign
investors and US$ 100,000 for local investors
• Adequate environmental protection systems
• Utilization of modern production process and new machinery.
Procedures for joining the EPZ program are short, simple and streamlined to
make it easier for prospective investors to begin operations within the
shortest time possible. The investor should follow the following steps;
-
Make an inquiry on the program and how it operates, either through visiting our headquarters offices or via online through our website
-
Submit an investment proposal detailing the type of business to be conducted, type of goods to be produced or processed, production volume, volume of exports, location from where the business is expected operate and production process intended to be used
-
EPZA evaluates the project and provides to investor a letter of approval within 14 days.
-
Incorporate EPZ Company, locate a zone, obtains environmental approval certificate if required
-
For stand alone and Zone developers, EPZA facilitates declaration of land by Minister for Industry, Trade and Marketing
-
Investor pays license fees and gets license, once the company posses an EPZ license he does not require any additional paper works to start operations.
- Investor begins operations.
