Franchising Tanzania: Contract, Brand, Competition, Tax and Royalty Rules for Foreign Brands
Is there a franchise law in Tanzania? We found no franchise-specific Act. A franchise runs on the Law of Contract Act, Cap. 345, with the brand protected under the Trade and Service Marks Act, Cap. 326 on the Mainland and separately in Zanzibar. Section 10A of the Fair Competition Act bans resale price maintenance. Royalties paid abroad carry 15% withholding tax unless a treaty cuts it.
This guide to franchising Tanzania covers the contract, trade mark registration, competition limits, reserved activities, licensing, withholding tax, VAT, transfer pricing, Bank of Tanzania remittance rules, food and data permits, and Zanzibar. A worked example runs a South African fast-food master franchise in Dar es Salaam through the numbers.
Who should read this
- Foreign brand owners granting a master franchise or unit franchises in Mainland Tanzania or Zanzibar.
- Tanzanian investors buying a franchise, who will pay the fees, withhold the tax and carry the licences.
- Finance teams remitting royalties, initial fees and marketing contributions through a Tanzanian bank.
- Advisers drafting territory, pricing, supply and non-compete clauses that must survive Tanzanian competition law.
The US Commercial Service country guide of 19 May 2026 says most franchises operating in Tanzania are in food and beverage.
What the law says
No single statute regulates franchising. Six bodies of law apply to a franchise at once, and each has its own authority.
| Area | Instrument | Authority | What it decides |
|---|---|---|---|
| Contract | Law of Contract Act, Cap. 345 | Courts and arbitrators | Validity, restraint of trade, remedies |
| Brand | Trade and Service Marks Act, Cap. 326 (Mainland); Zanzibar Industrial Property Act, 2008 | BRELA; BPRA | Who owns the mark and who may use it |
| Competition | Fair Competition Act, Cap. 285, as amended in 2024 | Fair Competition Commission | Pricing, territory, supply ties, mergers |
| Tax | Income Tax Act, Cap. 332; VAT Act, Cap. 148; Stamp Duty Act, Cap. 189 | TRA (Mainland); ZRA for Zanzibar VAT | Withholding, VAT, transfer pricing, stamping |
| Money out | Foreign Exchange Act, Cap. 271; Foreign Exchange Regulations, 2022 | Bank of Tanzania, through banks | Documents for each remittance |
| Trading | Business Licensing Act, Cap. 101; GN 487A of 2025; sector permits | BRELA, councils, TBS, PDPC | Who may trade and from which premises |
The Law of Contract Act is on TanzLII in its 2019 consolidation. Section 10 makes an agreement a contract when made by free consent, for lawful consideration and a lawful object. Section 27(1) voids any agreement restraining a lawful trade or business, unless the restraint is reasonable for the parties and the public. Under section 27(2), a restraint is unreasonable between the parties if it goes beyond what protects the promisee's proprietary interest.
That rule governs every non-compete in a franchise. The franchisor carries the burden of proving the restraint reasonable, under section 27(3).
Is there a franchise law in Tanzania?
We found none. There is no franchise Act, no franchise registry and no mandatory disclosure document. The US Commercial Service guide describes the sector without naming any franchise statute. Nixon Peabody's international franchising reference lists franchise rules for Nigeria, South Africa and Tunisia, and none for Tanzania.
So the parties write their own disclosure and termination rules, and statutes written for other purposes reach into the deal.
The Business Licensing Act Schedule does name franchises in two places. Part A item 9 has a "representative franchise holder" row at TZS 500,000 principal and TZS 200,000 per branch (register line BLA058). Part A item 23 covers motor vehicle dealership or franchise at TZS 400,000 and TZS 200,000 (BLA125). These are licence fee rows, not a franchise regime.
Our status for the "no franchise Act" point is verify: it rests on absence in the sources searched.
How do you protect the brand before signing a franchise?
Register the mark first. A company name gives no right in a brand, as our note on trade mark registration at BRELA explains. On the Mainland, the mark is registered under Cap. 326 at BRELA, class by class.
The franchisee's use should then be recorded. Clyde & Co's note of 15 January 2024 explains the registered user provisions. It cites section 42 of the Act, under which use by a registered user is permitted use. Section 47 bars the registered user from assigning or sub-licensing that right. The proprietor and user apply jointly, attaching the licence or describing the control.
| Step (Mainland) | Government fee | Register ID |
|---|---|---|
| Search of the marks register | TZS 10,000 | F0055 |
| Application, per class | TZS 50,000 | F0028 |
| Advertisement in the Journal | TZS 15,000 | F0070 |
| Registration, per class | TZS 60,000 | F0035 |
| Registered user entry | TZS 60,000 first mark; TZS 20,000 each other | F0061 |
| Recordation with the FCC against counterfeits, per class | TZS 200,000 | NEW-01-44 |
| Renewal | TZS 30,000 | F0037 |
A fast-food brand usually files at least class 43 for restaurant services and class 29 or 30 for packaged foods. FCC recordation runs under GN 352F of 2025, in force 1 July 2025.
The Mainland register changed on 2 October 2026. Our guide to the 2026 Trade and Service Marks amendment covers new section 28A on ARIPO marks and section 19A on well-known marks. A foreign franchisor relying on an ARIPO filing should read it before signing.
Zanzibar is separate. Cap. 326 stops at the Mainland, and island marks are filed at BPRA under the Zanzibar Industrial Property Act, 2008. Our guide to registering a trade mark in Zanzibar sets out that second filing.
Which franchise clauses can the Fair Competition Act strike down?
Three kinds of clause need checking against the Fair Competition Act, 2003 and its 2024 amendment, Act No. 13 of 2024. The amending Act was assented to on 2 October 2024 and gazetted on 11 October 2024.
Section 9 of the amending Act inserts a new section 10A. It forbids any agreement that involves:
- Resale price or condition maintenance, defined as fixing a minimum selling price or condition for the reseller.
- Foreclosure of customers or competitors from sources of supply or from outlets.
- Restricting the movement of goods or services between different geographical areas.
Section 10A(2) allows a recommended minimum resale price only if the supplier makes clear it is not binding. The product must also carry the words "recommended price" next to the stated price. Breach of section 10A(1) is an offence under section 10A(3).
| Typical clause | Competition risk | Safer drafting |
|---|---|---|
| Franchisee must sell at the franchisor's menu prices | High: s.10A(1)(a) | Recommended prices, stated as non-binding; maximum prices for promotions only after advice |
| Franchisee may not sell outside its territory | Uncertain: s.10A(1)(c) | Limit active selling only; consider an exemption under s.12 |
| All inputs bought from the franchisor or named suppliers | Medium: s.10A(1)(b) | Tie only items that carry the brand's quality, and allow approved alternatives |
| Non-compete during the term | Low if limited to the franchised concept | Tie scope to the concept and territory |
| Non-compete after termination | Cap. 345 s.27 reasonableness | Short period, the same territory, the same concept |
The older section 8 still applies. It bars agreements that appreciably prevent, restrict or distort competition, and section 8(2) makes such an agreement unenforceable. The 2024 Act raised the section 8 market share presumption from 35% to 40%. Whether that presumption shields a section 10A clause is not settled; we treat it as unknown.
Clyde & Co's review of 25 November 2024 describes section 10A as a new prohibition on anti-competitive vertical arrangements. A franchisor wanting firm territories can apply to the Commission for an exemption. The fee is TZS 8,000,000 plus TZS 2,000,000 for each year requested (NEW-01-39).
Can a foreign franchisor or franchisee trade in Tanzania?
It depends on the activity, not on the franchise. The Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, GN 487A, closes fifteen activities to non-citizens from 28 July 2025. A Tanzanian company with more than 50% non-citizen shareholding counts as foreign-owned (Cap. 101 s.2; NEW-08-13).
The first item is wholesale and retail trade in goods. It excepts supermarkets, specialised product outlets and wholesale centres for local producers (F0868, NEW-08-14). A foreign-owned franchisee running clothing or phone shops must fit an exception or stay out. Our pages on the restricted list and wholesale and retail trade work through the edges.
Restaurants and catering are not on the list (F0871). A foreign-owned company may hold a restaurant franchise, subject to the ordinary licence. Salon services, phone repair and cleaning are reserved, so a beauty or repair franchise needs a citizen-owned franchisee. A citizen who fronts for a non-citizen in a reserved activity faces a TZS 5,000,000 fine or up to three months' imprisonment (F0890).
The franchisee needs its own company and licences:
- Company: a BRELA registration fee by share capital, for example TZS 400,000 for nominal capital between TZS 50 million and TZS 100 million (F0001).
- Business licence: a restaurant takes the Part B catering row, TZS 100,000 for the principal outlet and TZS 50,000 for each other outlet, issued by the council on TAUSI (BLB142).
- Renewal: every 12 months, with a TRA tax clearance certificate (NEW-08-01, NEW-08-02).
Our business licensing desk maps each outlet to its row before the lease is signed.
How are franchise fees and royalties taxed in Tanzania?
The Income Tax Act, Cap. 332 R.E. 2023 defines a royalty in section 3. It covers payments for the use of a trade mark, secret formula or process, and for the supply of know-how. It also covers assistance ancillary to those rights. Initial fees and running royalties for a brand and an operating system fit that definition.
The franchisee withholds tax from each payment and pays it to TRA by the 7th of the next month. TRA's Taxes and Duties at a Glance 2025/26 sets that deadline.
| Payment | Resident franchisor | Non-resident franchisor | Status |
|---|---|---|---|
| Royalty, including the initial fee | 15% per register; TRA Glance prints 10% | 15% (F0210) | Non-resident settled; resident verify |
| Training or support billed as a service | 5% (F0212) | 15% (F0212) | Settled |
| South African resident beneficial owner, royalty | n/a | 10% treaty cap | Settled, with residence evidence |
The resident rate is the open point. The Zatra fee register (F0210) and PwC's withholding table, last reviewed 9 September 2026, show 15% for residents and non-residents. TRA's Glance prints 10% resident and 15% non-resident. Confirm with TRA before withholding from a Tanzanian franchisor.
A treaty can lower the non-resident rate. The South African Revenue Service royalty summary shows the Tanzania treaty in force from 15 June 2007, capping royalties at 10% under article 12(2). PwC notes that this treaty has no technical or service fee article, and withholding is still usually deducted on service fees. Our double tax treaty guide covers the residence certificate TRA asks for.
Transfer pricing applies where the parties are associates. Section 33 of Cap. 332 requires associates to price their dealings at arm's length. EY's alert of 6 December 2018 reports the 2018 transfer pricing regulations and a TZS 10 billion threshold for filing documentation with the return. The penalty for a transfer pricing adjustment is the higher of 30% of the adjustment or 100% of the tax shortfall (NEW-02-12). See our transfer pricing guide.
How TRA treats a one-off initial fee in the franchisee's own accounts, deducted at once or spread, is a point to confirm.
Does VAT apply to royalties paid to a foreign franchisor?
Usually not, for a fully taxable franchisee. Under section 4(c) of the VAT Act, Cap. 148, the buyer accounts for 18% on imported services (F0239). That applies only where the buyer could not recover at least 90% of the VAT as input tax.
A restaurant selling standard-rated meals normally recovers in full, so it books no reverse charge. A franchisee with exempt supplies, such as a school or clinic brand, may owe it. Our guide to VAT on imported services sets out the 90% test, the return entries and the six-month input rule.
VAT is not a Union tax. Zanzibar charges 15% under ZRA (F0246), and its treatment of imported services other than electronic services is not confirmed in our sources. Ask ZRA before an island franchisee pays a foreign franchisor.
How do franchise royalties leave Tanzania?
Through a bank, with a document pack. The Foreign Exchange Regulations, 2022, GN 294, made under Cap. 271, govern remittances for services. Regulation 16(2)(f) lists what a bank must collect before remitting consultancy, management or royalty payments:
- The contract, executed by the parties.
- The invoice or fee note.
- A tax clearance certificate from the revenue authority.
The Foreign Exchange (Amendment) Regulations, 2026, GN 206 of 17 July 2026 changed the export, import and securities rules. They did not amend regulation 16. Our note on Bank of Tanzania foreign exchange rules covers how banks apply them.
The franchisor named in the contract, invoice, withholding receipt and SWIFT instruction must be the same legal person, or the payment stalls.
Does a master franchise need Fair Competition Commission merger clearance?
A grant of franchise rights alone is not normally a merger. A master franchise deal that also buys an existing chain, its outlets or a controlling stake may be one. Section 11 of the Act requires advance notice of a merger above the threshold, and section 11(5) bars giving effect to it before notification.
The threshold is a combined market value of assets or turnover in Tanzania of TZS 3,500,000,000 (F0173). The filing fee starts at TZS 25,000,000 (F0172). The Legal 500 merger control chapter by Hilton Law Group says the detailed review runs 90 days, extendable once by 30. It adds that the question for franchise or licence deals is whether control of a Tanzanian business or asset changes.
Our FCC merger notification guide sets out the form and arithmetic.
Food, data, staff and stamp duty: what else does the franchisee need?
Food standards. On the Mainland, the Tanzania Bureau of Standards registers food premises and certifies food products under the Standards Act, Cap. 130. A central kitchen that prepares and packs food for outlets is a TBS premises file. Each outlet serving customers answers to the council's environmental health officer. Fees are assessed by TBS on filing (F0365). See our food business licensing guide and confirm forms at tbs.go.tz.
Customer data. Loyalty apps, delivery platforms and card data make the franchisee a data controller under the Personal Data Protection Act, 2022. DLA Piper's summary, updated 24 March 2026, says the Act came into force on 1 May 2023. Controllers and processors register with the Commission, and transfers abroad need a permit. Registration costs TZS 100,000 to TZS 1,000,000 by size (F0719). Register at pdpc.go.tz and read our data protection guide.
Staff. The franchisee is the employer, not the franchisor. Contracts follow ELRA, Cap. 366, as our employment contracts guide explains. A foreign general manager needs a work permit, USD 1,000 for Class C (F0415), and a residence permit.
Stamp duty. A franchise agreement is an agreement under the Stamp Duty Act, Cap. 189, at TZS 2,000 per instrument (F0267). Each signed counterpart is stamped within 30 days of execution, or of arrival on the Mainland if signed abroad. A premises lease pays 1% of annual rent (F0265). Our stamp duty guide explains why an unstamped agreement is inadmissible in court.
How does franchising differ between Mainland Tanzania and Zanzibar?
A franchise covering the whole United Republic needs two sets of filings. Income tax, including royalty withholding, is a Union tax administered by TRA on both sides.
| Point | Mainland | Zanzibar | Status |
|---|---|---|---|
| Franchisee company | BRELA, Cap. 212 | BPRA, Zanzibar Companies Act, 2013 | Settled |
| Trade mark | BRELA, Cap. 326; seven-year term | BPRA, Industrial Property Act, 2008; ten-year term | Settled |
| Royalty withholding | TRA, 15% non-resident | TRA, 15% non-resident | Settled |
| VAT | 18%, TRA | 15%, ZRA | Settled |
| Reverse charge on imported royalties | s.4(c), 90% test | Not confirmed | Confirm with ZRA |
| Competition law | Fair Competition Act, Cap. 285; FCC | Separate regime and regulator | Verify the island instrument |
| Reserved activities | GN 487A of 2025 | Mainland Order; island rules separate | Verify with BPRA and ZIPA |
| Food premises | TBS and council | Zanzibar Food and Drug Agency | Settled |
Legal 500 notes that Zanzibar has a separate competition regime and regulator. Company and marks filings start at BPRA; see our note on registering a company in Zanzibar.
Worked example: a South African fast-food master franchise in Dar es Salaam
A South African brand owner grants a master franchise for Mainland Tanzania to a Dar es Salaam company owned by Tanzanian investors. The franchisor has no office or registration in Tanzania. The deal carries an initial fee of USD 50,000 and a 6% royalty on gross sales. First-year sales are TZS 2.4 billion across three outlets.
We use TZS 2,500 to USD 1 for illustration only. The parties are unrelated, so transfer pricing documentation is not engaged. The franchisor provides a South African residence certificate, so the treaty cap of 10% applies to royalties.
| Line | Initial fee | Royalty (6% of TZS 2.4bn) | Total |
|---|---|---|---|
| Gross amount | TZS 125,000,000 (USD 50,000) | TZS 144,000,000 | TZS 269,000,000 |
| Withholding at treaty 10% | TZS 12,500,000 | TZS 14,400,000 | TZS 26,900,000 |
| Net remitted to South Africa | TZS 112,500,000 (USD 45,000) | TZS 129,600,000 (USD 51,840) | TZS 242,100,000 (USD 96,840) |
| Withholding without the treaty, at 15% | TZS 18,750,000 | TZS 21,600,000 | TZS 40,350,000 |
| Net remitted at 15% | TZS 106,250,000 | TZS 122,400,000 | TZS 228,650,000 (USD 91,460) |
| VAT reverse charge, fully taxable franchisee | Nil | Nil | Nil |
| Reverse charge if credit fell below 90% | TZS 22,500,000 | TZS 25,920,000 | TZS 48,420,000 before any credit |
The royalty is paid monthly. At TZS 200 million of monthly sales, each month's royalty is TZS 12,000,000. Withholding of TZS 1,200,000 goes to TRA by the 7th of the following month, and TZS 10,800,000 goes to the bank with the contract, invoice and tax clearance.
Now suppose the contract says the franchisor must receive a full 6% net of tax. The franchisee grosses up: TZS 144,000,000 divided by 0.90 is TZS 160,000,000. Withholding becomes TZS 16,000,000. The effective royalty rises to 6.67% of sales.
Year-one government charges include the BRELA registration (F0001), catering licences of TZS 100,000 for the principal outlet and TZS 50,000 for each other outlet (BLB142), marks in two classes (F0028, F0035) and stamp duty (F0267). Zatra's fee is quoted separately.
What to do now
- Screen the activity. Check the franchised business against GN 487A before choosing a foreign-owned or citizen-owned franchisee.
- Register the marks. File in every class used, on the Mainland at BRELA and in Zanzibar at BPRA if outlets will open there.
- Record the franchisee. Enter the franchisee as a registered user and record the marks with the FCC against counterfeits.
- Test the restraints. Review price, territory, supply and non-compete clauses against section 10A and Cap. 345 section 27.
- Fix the tax mechanics. Classify each payment as royalty or service fee, decide on gross-up, and obtain the treaty residence certificate.
- Build the remittance pack. Align names across contract, invoices, withholding receipts and SWIFT, and keep a current tax clearance.
- Stamp and license. Stamp every counterpart within 30 days, then license each outlet and register food premises and data processing.
- Diary the renewals. Set reminders for licences, marks, PDPC registration and the annual FCC recordation renewal at TZS 50,000 (NEW-01-45).
Key dates and deadlines
| Date or period | Event | Source |
|---|---|---|
| 15 June 2007 | South Africa treaty in force; 10% royalty cap | SARS summary, art. 12(2) |
| 1 May 2023 | Personal Data Protection Act in force | DLA Piper summary |
| 11 October 2024 | Fair Competition (Amendment) Act, 2024 gazetted; section 10A added | Act No. 13 of 2024 |
| 28 July 2025 | GN 487A reserved activities in force | NEW-08-14 |
| 2 October 2026 | Trade and Service Marks amendment reported in force | Spoor & Fisher, via our amendment guide |
| 7th of each month | Royalty withholding paid to TRA | TRA Glance 2025/26 |
| 20th of each month | VAT return, with any reverse charge | VAT Act s.70 |
| 30 days from signing or arrival | Franchise agreement stamped | Cap. 189; F0267 |
| Every 12 months | Business licence renewal, with tax clearance | NEW-08-01, NEW-08-02 |
How Zatra helps
Zatra sets up the franchisee company, screens the activity against the reserved list, licenses each outlet and files the marks and registered user entries. Our foreign investor setup desk runs the entity and licences. Our tax advisory team classifies fees, applies treaty relief and builds the withholding and remittance routine. Our guide to withholding on cross-border payments shows the bank file.
Costs come in two separate buckets. Government fees, withholding tax and stamp duty are paid to BRELA, the council, TRA, the FCC or PDPC at the official amount, against each authority's control number. Zatra's professional fee is quoted on its own line and never mixed with them.
Zatra prepares and coordinates, but does not decide or guarantee any authority's outcome. The franchise agreement as a legal instrument, legal opinions, FCC exemption hearings, oppositions, seizures, prosecution and disputes go to an advocate. See our note on arbitration or litigation.
Sources and status
Accurate as at 26 October 2026.
- Law of Contract Act, Cap. 345: TanzLII consolidation current to 30 Nov 2019; ss.10, 23 and 27 read. Accessed 26 Oct 2026.
- Fair Competition Act, 2003: TanzLII, as enacted; ss.8 to 11 read. Accessed 26 Oct 2026.
- Fair Competition (Amendment) Act, 2024, No. 13: Office of the Attorney General, gazetted 11 Oct 2024. Accessed 26 Oct 2026.
- Income Tax Act, Cap. 332 R.E. 2023: TRA copy; s.3 and s.33 read. Accessed 26 Oct 2026.
- TRA Taxes and Duties at a Glance 2025/26: July 2025. Accessed 26 Oct 2026.
- VAT Act, Cap. 148 R.E. 2023: TRAB copy. Accessed 26 Oct 2026.
- Foreign Exchange Regulations, 2022, GN 294: Ministry of Finance copy, 13 May 2022; regs 16 and 17 read. Accessed 26 Oct 2026.
- Foreign Exchange (Amendment) Regulations, 2026, GN 206: Bank of Tanzania, 17 Jul 2026. Accessed 26 Oct 2026.
- SARS royalty DTA rates, Africa: version 2, June 2023. Accessed 26 Oct 2026.
- PwC Tanzania withholding taxes: last reviewed 9 Sep 2026. Accessed 26 Oct 2026.
- Clyde & Co on registered users: 15 Jan 2024; and on the 2024 competition amendments: 25 Nov 2024. Accessed 26 Oct 2026.
- Legal 500, Tanzania merger control: Hilton Law Group, 2026 edition. Accessed 26 Oct 2026.
- EY on the 2018 transfer pricing regulations: 6 Dec 2018. Accessed 26 Oct 2026.
- DLA Piper, data protection in Tanzania: updated 24 Mar 2026. Accessed 26 Oct 2026.
- US Commercial Service, Tanzania distribution and sales channels: 19 May 2026; and Nixon Peabody franchising reference, 2026. Accessed 26 Oct 2026.
- Zatra fee register, fees at 26 Sep 2026; line IDs as cited in the text. Accessed 26 Oct 2026.
Figures to confirm before you act
- No franchise Act: based on absence in the sources searched; confirm no sector rule applies to the franchised activity
- Resident royalty rate: 15% per the register and PwC, 10% per TRA's Glance; confirm with TRA
- Registered user sections: ss.42 and 47 as cited by Clyde & Co; confirm in the current Cap. 326 text
- Section 10A reach: whether territorial clauses fall within s.10A(1)(c), and the penalty for breach
- Initial fee: whether TRA treats any part as a service fee, and how the franchisee deducts it
- Transfer pricing threshold: TZS 10 billion per EY's 2018 report; confirm the current regulation
- Zanzibar: the island competition instrument, the reverse charge on imported royalties, and any island reserved-activity rule
- Exchange rate: the example uses TZS 2,500 to USD 1 for illustration; use the rate TRA prescribes on the day
This article is general information based on official sources available at the date of publication. It is not legal, tax or financial advice. Laws and notices change. Verify with the issuing authority or consult Zatra before acting.
Frequently asked questions
Does a franchisor have to give the franchisee a disclosure document?
Tanzanian law sets no franchise disclosure duty that we found. The franchisee should still ask for audited unit economics, litigation history and the full fee schedule in writing. Misstatements made to induce the contract can support a claim under the general law of contract.
Can the franchise agreement be governed by South African or English law?
The parties may choose a foreign governing law, but Tanzanian rules still apply locally. Competition law, tax, stamp duty, licensing and trade mark registration attach to the Tanzanian business whatever the contract says. An advocate should check how a foreign judgment or award would be enforced here.
Is a marketing fund contribution treated as a royalty?
It depends on what the payment buys. A contribution held and spent in Tanzania for local advertising may be treated differently from a fee paid to the franchisor for using the brand. Document the fund separately, and confirm the withholding position with TRA before the first payment.
Who owns customer data collected through the franchise app?
The agreement should say. The person deciding why and how data is processed is the controller and registers with the PDPC. Where the franchisor's servers abroad receive Tanzanian customer data, a transfer permit is needed. Termination clauses should state what happens to the data.
What happens to the registered user entry when the franchise ends?
The proprietor should apply to cancel the entry. The register fee for cancelling a registered user entry is TZS 6,000 (F0063). Leaving it in place lets a former franchisee point to the register while it keeps trading under the old brand.
Can a franchisee pay royalties in US dollars from a Tanzanian account?
A bank may remit dollars against the regulation 16 pack, whichever account the funds come from. Withholding tax is still calculated in shillings at the rate TRA prescribes. The invoice currency does not change the tax or the documents the bank requires.
Do unit franchisees under a master franchisee also withhold tax?
Yes, if they pay royalties. A unit franchisee paying a Tanzanian master franchisee withholds at the resident rate, which needs confirming with TRA. The master franchisee then withholds on its own payments abroad. Each layer keeps its own receipts.
Is a trade mark registered in South Africa protected in Tanzania?
No. A South African registration has no effect in Tanzania. The brand needs a Mainland filing at BRELA, or an ARIPO registration recognised under new section 28A, plus a separate Zanzibar filing at BPRA for island outlets.
Sources & regulators
Verify before filing: Rates, forms and thresholds move by Finance Act, Government Notice and portal revision. Confirm the live schedule on the mandate-holder portal before you budget or submit. Law-firm alerts and Big Four notes are discovery only.
- Law of Contract Act, Cap. 345 (TanzLII consolidation): TanzLII consolidation current to 30 Nov 2019; ss.10, 23 and 27 (restraint of trade) read 26 Oct 2026; primary text. Accessed 2026-10-26.
- Fair Competition Act, 2003 (TanzLII): TanzLII, Act No. 8 of 2003 as enacted, 31 Dec 2003; ss.8 to 11 read 26 Oct 2026; primary text. Accessed 2026-10-26.
- Fair Competition (Amendment) Act, 2024, No. 13 of 2024: Office of the Attorney General, assented 2 Oct 2024, gazetted 11 Oct 2024; new s.10A, s.8 presumption 40% and s.60(2) read 26 Oct 2026; primary source. Accessed 2026-10-26.
- Income Tax Act, Cap. 332 R.E. 2023: Tanzania Revenue Authority copy, Revised Edition 2023; s.3 royalty definition and s.33 read 26 Oct 2026; primary source. Accessed 2026-10-26.
- TRA: Taxes and Duties at a Glance 2025/2026: Tanzania Revenue Authority, July 2025; royalty row 2.0(f) prints 10% resident and 15% non-resident; withholding due by the 7th; primary source. Accessed 2026-10-26.
- Value Added Tax Act, Cap. 148 R.E. 2023: Tax Revenue Appeals Board copy, Revised Edition 2023; s.4(c) reverse charge as read for our 25 Oct 2026 guide; primary source. Accessed 2026-10-26.
- Foreign Exchange Regulations, 2022, GN No. 294: Ministry of Finance copy of GN 294 of 13 May 2022 under Cap. 271; regs 16(2)(f) and 17 read 26 Oct 2026; primary source. Accessed 2026-10-26.
- Foreign Exchange (Amendment) Regulations, 2026, GN No. 206: Bank of Tanzania, published 17 Jul 2026; amends regs 2, 7, 14, 19, 20, not reg 16; primary source. Accessed 2026-10-26.
- SARS: Withholding tax on royalties, summary of DTA rates (Africa): South African Revenue Service, version 2, June 2023; Tanzania treaty in force 15 Jun 2007, royalties 10%, art. 12(2); official foreign source. Accessed 2026-10-26.
- PwC Worldwide Tax Summaries: Tanzania withholding taxes: PwC, last reviewed 9 Sep 2026; royalty 15% resident and non-resident; South Africa treaty royalties 10%; independent source. Accessed 2026-10-26.
- Clyde & Co: Registered users of trade and service marks in Mainland Tanzania: Clyde & Co, 15 Jan 2024; ss.42, 43, 46, 47 of the Trade and Service Marks Act; independent source. Accessed 2026-10-26.
- Clyde & Co: Notable amendments to the Fair Competition Act: Clyde & Co, 25 Nov 2024; s.10A vertical arrangements, s.9A leniency, s.11A; independent source. Accessed 2026-10-26.
- Legal 500: Tanzania merger control: Hilton Law Group, Legal 500 guide, 2026; TZS 3.5bn threshold, review periods, Zanzibar separate regime; independent source. Accessed 2026-10-26.
- EY: Tanzania issues new transfer pricing regulations: EY Global Tax Alert, 6 Dec 2018; TZS 10 billion documentation threshold; independent source. Accessed 2026-10-26.
- DLA Piper: Data protection in Tanzania: DLA Piper, updated 24 Mar 2026; PDPA in force 1 May 2023, registration and transfer permits; independent source. Accessed 2026-10-26.
- US Commercial Service: Tanzania distribution and sales channels: International Trade Administration, last published 19 May 2026; franchise sector mainly food and beverage; official foreign source. Accessed 2026-10-26.
- Nixon Peabody: International franchising quick reference: Nixon Peabody LLP, 2026; lists no Tanzanian franchise law; independent source. Accessed 2026-10-26.
- BRELA: Business Registrations and Licensing Agency, live site 2026; companies and trade marks, Mainland; official registry. Accessed 2026-10-26.
- BPRA: Business and Property Registration Agency, Zanzibar, live site 2026; companies and industrial property; official registry. Accessed 2026-10-26.
Disclaimer
This article is informational orientation. It is not legal, tax or investment advice and not a government decision. Tanzanian instruments move by Act, Government Notice, Finance Act and portal revision. If a sentence here disagrees with the live mandate-holder, the mandate-holder wins. Zatra Consultants Limited does not issue licences, permits, tax clearances or approvals, and gives no assurance of any regulatory or banking outcome. Professional fees are published only on /pricing/.