Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
The main point of entry for imports is the port of Dar es Salaam which is also the biggest and busiest port in the country. The city of Dar es Salaam is the commercial hub of the country and is the key entry and distribution point for imported goods.
From the port, goods are then sent to the warehouses where they await to be transported upcountry. The transportation is mainly through roads but there is a government effort to revive the railway sector through the standard gauge railway project, which, after completion, should allow more goods to move into the interior of the country. Other ports of entry in Tanzania are Tanga, Mtwara and Zanzibar.
Goods also imported through cargo planes that land at Dar es Salaam Airport, Kilimanjaro Airport and Zanzibar Airport.
Distributors play a key role when wanting to sell U.S. goods in Tanzania. Distributors sell products in wholesale or directly to the consumer through retail. The Commercial Service highly recommends using a quality distributor to be successful in the market.
Using an Agent to Sell US Products and Services
Agents can be very useful for U.S. firms who want to get into the Tanzania market. Agents have the local knowledge and experience needed to break into the market. Using agents is also a cost-effective way of reaching a wide variety of markets saving the company overheads on office expenses.
The U.S. Commercial Service (USCS) at the U.S. embassy in Dar es Salaam can assist U.S companies interested in finding local agents through an Initial Market Check, Contact List, Gold Key Service (GKS) or International Partner Search (IPS) service.
The USCS office can also arrange a physical meeting for U.S. companies to meet with local agents where they can enter into a formal agreement once they have agreed to do business.
Establishing an Office
An overseas company can establish a representative office/branch by registration of an established place of business in the country. The company is not deemed to have a place of business in Tanzania solely on account of its doing business through an agent in Tanzania at the place of business of the agent.
The body entrusted for company registration in Tanzania is the Business Registration and Licensing Agency (BRELA). The registration procedure of a branch includes the submission of the following documents:
- Certified copies of Memorandum and Articles of Association.
- Evidence of the situation of the registered office in the original country.
- Details of Directors of the company.
- Details about representatives of the company in the country.
- Copy of most recent accounts of the company.
Upon submission of the above-mentioned documents and paying the registration fee, a certificate of compliance is then issued by BRELA and the company can begin its business.
Once registered, a branch has the same powers as if it were a company incorporated in the country and is therefore subject to the national legislation.
For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.
Over 170 franchise companies are currently operating on the territory of Tanzania, a majority being the food and drink chains. The franchise market of Tanzania is a developing one, with the growing number of franchisors coming into the market coupled with the growth of the consumer demand.
The increase use of the internet in Tanzania makes it ideal for direct marketing through social media channels. There are estimated to be 15 million internet users in the country as of 2021 which is an increase of 435,000 (3%) from 2020.
There are 5.4 million social media users in Tanzania as of January 2021. The number of social media users in Tanzania increased by 900,000 (+20%) between 2020 and 2021. The number of social media users in Tanzania was equivalent to 8.9% of the total population in January 2021.
Twitter is leading site with most users in Tanzania with 56.62 % of internet users on it followed by Facebook 21.23%, Pinterest 11.43%, YouTube 5.9%, Instagram 3.18% and Tumblr 1.2%.
Joint ventures (JVs) in Tanzania are formed using a special purpose limited liability company. The joint venturers hold shares in the company as governed by a shareholders’ agreement and the constitution of the company. In some sectors such as gas, investors use traditional international market methods, such as unincorporated JVs.
The government of Tanzania encourages JVs between foreign and local companies and their partnership is governed by the public procurement laws when the agencies want to procure goods through national and international tendering process. Preferences are given under the procurement regulations to encourage foreign firms to team up with Tanzanian contractors, suppliers or consultants in forming joint ventures or sub-contracting arrangements. JV agreements are required under public procurement laws where a tenderer submits a bid as part of a JV.
Some sectors such as mining, oil and gas may require foreign companies that want to provide goods and services to adhere to local content requirements when forming a joint venture.
There are several international companies which offer express delivery services in Tanzania. These include DHL, FedEx and TNT Express. The average express time it takes for goods from the U.S. to reach Tanzania is 3 to 5 business working days.
U.S. firms may contact the Embassy for referral to local business consultants that can evaluate the performance and credibility of firms in Tanzania. In some cases, the U.S. Embassy can carry out an International Company Profile on a local firm. Dun & Bradstreet Credit Reference Bureaus Tanzania Limited and CREDIT INFO Tanzania Limited offer credit bureau services.