Proving Foreign Capital Landed in Tanzania: The Evidence Chain

This page is the inward capital evidence operating file: how a company shows that money from abroad became its share capital, and keeps that proof usable when a dividend, an exit or a permit depends on it. It is not a minimum-capital chooser and not a source-of-funds questionnaire.

• Where it came from: evidencing source of funds
• Equity or debt, decided first: shareholder loan versus equity
• The receiving counter: Bank of Tanzania foreign-exchange rules
• Getting the account open: what corporate KYC tests

As at 14 September 2026. Confirm the live position on bot.go.tz, ors.brela.go.tz, tiseza.go.tz and tra.go.tz; this file rests on the Foreign Exchange Act Cap. 271, Companies Act Cap. 212, Income Tax Act Cap. 332 and the 2025 investment statute cited below.

Who records an injection, and who merely reads it afterwards

Only the receiving bank creates a contemporaneous record of the money. It is licensed under the Banking and Financial Institutions Act Cap. 342, authorised to deal in foreign exchange, and answerable to the Bank of Tanzania for what it reports. The central bank stamps nothing for you: it takes that bank’s returns, and separately samples companies in the annual foreign private investment survey. Your file must agree with what was reported, because that is the version the regulator holds.

BRELA records the consequence, not the cash. The Registrar of Companies registers shares allotted and says nothing about which correspondent moved funds. TRA meets the money later, when it leaves as a dividend, a repayment or an interest deduction. TISEZA measures size against a threshold and does not audit provenance.

Mainland and the isles diverge at the registry, not the counter. Banking and foreign exchange are Union matters, so identical authorised-dealer discipline applies in Unguja. A Zanzibar company registers with BPRA under the Zanzibar Companies Act, 2013, and its investment file belongs to ZIPA. Dividend tax stays Union with TRA; ZRA takes the non-Union heads.

Screen GN No. 487A of 2025 before the money moves

Capital is not permission. GN No. 487A of 2025 lists activities reserved or restricted for citizens, and incorporating a Tanzanian subsidiary does not cure a reservation attaching to the activity itself. Land compounds it: a non-citizen cannot hold land for occupation except for investment purposes, and that route runs through a derivative right granted on an investment certificate, not a share subscription. Several sector statutes carry local-shareholding floors above company law.

Screen the object clause first. Funds wired into a company barred from its activity become a refund problem with an exchange loss.

The authorised-dealer bank is the gateway that leaves a record

The instruction that matters is the remitter’s. A clean inward payment names the ordering customer exactly as that person or entity appears in the subscription documents, states amount and currency, carries a value date, and narrates the purpose as subscription for shares. The Anti-Money Laundering Act Cap. 423 obliges the bank to identify that ordering party and understand the underlying purpose before releasing funds, so a thin narration triggers a query rather than a credit.

Three habits break the chain permanently. Cash across a counter proves receipt and nothing else. Payment by a third party (a trading company, a friend, a group treasury vehicle that is not the subscriber) leaves the register naming one person and the bank naming another. A credit into a director’s personal account, moved internally afterwards, reads to every later reviewer as a director’s loan.

Which desk accepts which proof

The narration on the wire decides the tax years later

Label the instrument before payment leaves: the accounting entry follows the narration, and the tax follows the entry. Equity produces dividends; debt produces interest and a repayment obligation. A dividend paid by a resident company to a non-resident shareholder carries withholding tax at 10% under Income Tax Act Cap. 332, reduced to 5% where the recipient is a resident corporation holding at least 25% of the shares, or where the payer is listed on the Dar es Salaam Stock Exchange. Interest to a non-resident is withheld at 10%.

Debt is also capped. The same Act restricts interest an exempt-controlled resident entity may deduct once its debt-to-equity ratio passes 7:3, so a group funding its subsidiary almost entirely by shareholder loan loses the deduction it was reaching for. Settle that choice on the loan-versus-equity file before the wire.

USD 500,000 is TISEZA’s test, not a company-law minimum

Mainland company law sets no minimum issued capital for a private limited company; incorporate at a nominal figure and increase later. The binding threshold sits elsewhere. Part III, section 19 of the Tanzania Investment and Special Economic Zones Act, 2025 requires minimum investment capital of at least USD 500,000 for a project wholly owned by foreign investors or held as a joint venture, and at least USD 50,000 where wholly owned by Tanzanian citizens.

The certificate application carries a fee of TZS 4,000,000 where the majority shareholder is local and TZS 6,000,000 where the majority is foreign or the holding is joint. Its pack asks for evidence of sufficient finance capital available to implement the project, alongside a certified certificate of incorporation, memorandum and articles, a board resolution, the business plan and evidence of the project location. That line is where bank advices earn their keep, and where a small shortfall surfaces.

Sequence from instruction to registered extract

1. Minute the instrument: directors record whether incoming funds are subscription monies or a loan, and sign the subscription letter first.
2. Open the receiving account first: in the company’s exact registered name, so no credit ever rests in a personal one.
3. Instruct charges on the remitter: the OUR charge option, so deductions in transit cannot cut the credited sum below a threshold you rely on.
4. Collect both bank documents: the SWIFT copy and the credit advice are separate papers, and branches rarely volunteer the first.
5. Allot within the directors’ authority: the resolution names subscriber, class, share count, amount per share and the credit reference it answers.
6. File the return of allotment: through BRELA’s online registration system, within one month of the allotment under Companies Act Cap. 212, updating the register of members and beneficial ownership particulars in the same pass.
7. Draw the fresh extract: increased issued capital on the extract is what a future bank, buyer or lender reads.
8. Bind the pack once: advice, resolution, return, extract and certificates in one file, indexed by tranche.

Papers the file is built from

Name each document when you ask; “the bank proof” returns whichever page prints fastest.

• Inward SWIFT message and credit advice for every tranche, with the statement page showing each credit
• Subscription letter, board minute, allotment resolution and share certificates
• Return of allotment, register of members, register of allotments and the updated company extract
• Beneficial ownership particulars as filed, matching the shareholding on that extract
• Subscriber identity file: passport, proof of address, and for a corporate subscriber its ownership chain down to natural persons
• TISEZA application forms, business plan, board resolution and evidence of the project site
• Immigration pack: work permit application under the non-citizens employment statute, and the residence permit file quoting the same capital figure

Illustrative arithmetic: USD 500,000 in, a dividend out

Illustrative arithmetic, not a quotation. A foreign parent instructs USD 500,000 as subscription monies. The correspondent deducts USD 250 and the receiving bank USD 150, so USD 499,600 is credited. At an illustrative conversion of TZS 2,600 to the dollar, the company receives TZS 1,298,960,000 and the board allots 1,298,960 ordinary shares of TZS 1,000 each.

Two consequences follow at once. The certificate file shows USD 499,600 of realised capital against a test set at USD 500,000, and the gap must be closed by a second tranche before assessment, not explained afterwards. A later dividend of TZS 400,000,000 to that parent bears withholding of TZS 40,000,000, leaving TZS 360,000,000 remitted: about USD 138,461 at the same illustrative rate. The bank releases that outward payment only against the inward chain.

Where this file stalls

• Charges deducted in transit. The threshold is tested on what landed, not what was sent, and a few hundred dollars of difference pauses assessment.
• Money before the account. Funds arrive while onboarding is incomplete, sit in suspense or bounce, and the value date eventually shown falls months after the resolution.
• Ordering party mismatch. The parent pays from a treasury entity with a slightly different legal name, and neither bank will write the letter reconciling register to credit.
• An allotment never registered. Directors minute it, the return is never filed, and the extract still shows incorporation capital at diligence.
• Tranches never reconciled. Five payments over eighteen months, one lump allotment, no schedule tying each credit to a share block.
• Narration drift. The wire says “working capital support”, the accounts show a director’s current account, and repatriation is refused because nothing arrived as capital.

What changed, and what to re-read

The investment desk has been consolidated. The 2025 statute brought the investment centre and the export-processing zones authority under one body, so the certificate of incentives, the special economic zone licence and the capital assessment now sit at a single counter. The reserved-activity list is screened separately from all of it.

Thresholds, fees and checklists move by Government Notice and portal revision. Confirm the live schedule on tiseza.go.tz and the withholding position on tra.go.tz.

Mandate-holders this file does not replace

The bank’s compliance officer decides whether a credit is released and on what narration. The Bank of Tanzania sets the foreign-exchange framework that bank applies. The Registrar of Companies decides whether an allotment is registered. TRA assesses tax on what leaves. TISEZA grants or refuses the certificate. The Labour Commissioner and the immigration desk read capital evidence rather than create it.

Zatra Consultants Limited prepares, structures and coordinates these files. It does not practise law, audit or issue approvals, and no adviser can promise a regulatory or banking outcome.

What to confirm before you act

• That the intended activity is clear of the reserved list, and any sector floor met, before funds are instructed
• That the receiving account is open in the registered name and every onboarding query closed
• That the ordering customer on the payment instruction matches the subscriber character for character
• The minimum investment capital and application fee published by the investment authority on the day you apply
• That the allotment return goes in within the statutory window and the extract is redrawn
• The withholding rate on your dividend route, including any treaty position, with TRA before promising a net figure