How to start an online business in Tanzania
Online businesses are certainly nothing new. However, with every passing year, the shift towards trading on the internet continues at a rapid pace. By 2040, it is estimated that 90% of purchases will be made via an e-commerce platform.
When you start an online business in Tanzania, not only do you benefit from access to a worldwide audience, but you can also take advantage of its excellent trading location in the heart of East Africa.
And, with the right guidance, starting an online business out here is easy. Want to know more? Keep reading.
How to start an online business in Tanzania
If you’re looking to start an online business in Tanzania with minimal fuss, you’ll need the help of a company setup expert. The team at Afrilink Consultants can provide complete and expert support with every step of the Tanzanian business registration application process. We’ll work with you to outline your business activities, choose a company name and apply for the necessary license.
You’ll need to decide on your business structure and activities, as this will dictate the type of license you require. You must be specific as to the type of business you intend to run. Making this clear upfront will make the rest of the process much more straightforward.
Next is to choose your company name. At this stage, you will need to abide by a few naming conventions. These include:
- Only full names are allowed, no abbreviations.
- Cannot include any potentially offensive or blasphemous words.
- Must be available to register.
At this point, we’ll help you apply for your business license. We can manage this process for you, ensuring that your application is complete and correct to prevent delays.
Tax requirements for online businesses in Tanzania
Before starting an online business in Tanzania, keep these key tax requirements in mind:
1. Tax Identification Number – All businesses in Tanzania, including online businesses, are required to obtain a Tax Identification Number from the Tanzania Revenue Authority.
2. Corporate income tax – The corporate income tax rate for businesses incorporated in Tanzania is 30% on taxable profits.
3. Value added tax – Businesses are required to register for Value Added Tax, which is at 18%.
4. Withholding tax – Certain payments made by businesses are subject to withholding tax, which the payer must deduct and remit to the TRA. These payments include:
o Dividends: Withholding tax on dividends is 10% for residents and 15% for non-residents.
o Royalties: A 15% withholding tax is applicable on royalty payments to non-residents.
- Consultancy and professional fees: A 5% withholding tax applies to payments made to resident professionals, while 15% applies to non-residents.
5. Pay as You Earn – If your online business employs staff, you are required to deduct Pay as You Earn from employee salaries and remit it to the TRA.
6. Social Security Contribution – Online businesses that employ staff must also contribute to the National Social Security Fund.
7. Exercise Duty – Certain digital services and telecommunications-related businesses, such as mobile money services, online gaming, and digital advertising, may be subject to excise duty.
8. Stamp Duty – Stamp duty applies to specific documents, such as legal contracts, leases, and company share transfers. If your online business takes part in activities that require such documents, stamp duty may be applicable.
10. Filing and Compliance – Businesses are required to submit annual corporate income tax returns to the TRA. The tax year in Tanzania runs from January 1 to December 31, and tax returns are typically due within six months after the end of the financial year.
Online business opportunities in Tanzania
When it comes to starting an online company, the world is your oyster. There are very few industries that aren’t thriving online. Need a little inspiration? Here are potential business ideas.
Digital marketing agency
Provided you have the skills to make it a success, starting a digital marketing agency is quick and simple. All you need is a trade license, a website, and a place to work. And once you have a process in place, there’s little need for further investment.
Job search portal
Tanzania’s recruiters are almost always in demand. Dar es Salaam is home to thousands of businesses with aspirations of growth, and they all need new hires to achieve those aims. The rewards can be considerable for the businesses that can connect those online job hunters with Tanzania’s growing businesses.
Food and grocery delivery
Like starting a job board, starting a food delivery app is a case of connecting supply and demand; in this case, connecting Tanzania’s many eateries with its hungry residents. If you already have coding and development skills, you can design and build the app yourself. If not, many businesses in the country will build and maintain your app for you.
Online activity booking platform
With visitor numbers on the rise, there’s never been a better time to get into Tanzania’s tourism market. You could sell tickets to local attractions, activities such as skydiving, or packages at local hotels, restaurants and bars. In most cases, you’ll earn a commission on every successful booking.
Tutoring
More people than ever are learning online. Whether supplementing their education, revising for exams, or learning a new skill, there is plenty of demand for tutoring services. And the best part is, you’ll likely already have all that’s required to start this business.
Agri-tech Platforms
Online platforms have recently been connecting farmers with buyers, both locally and internationally, which is in demand, making it a lucrative online business in Tanzania.
Telemedicine and online health services
Given the challenges of accessing healthcare in rural areas, there are opportunities to offer telemedicine services that connect patients with doctors for virtual consultations.
Logistics and delivery services
As e-commerce grows, so does the need for reliable logistics and delivery services, particularly in delivering products from local warehouses to customers’ doorsteps. This is a profitable business venture.
Online Real Estate platforms
Real estate platforms that allow users to search for rental properties, land, and homes for sale have a growing market in urban areas. Providing transparency and ease of search.
Start your online business with Afrilink Consultants
Whatever online business you wish to start in Tanzania, there is no better base than Afrilink Consultants.
Start your business with us, and we’ll handle every step of the process for you – helping to outline activities, registering your company name, applying for your license and visas, and supporting you once you’re up and running. Reach out to our experts at +254707280366 or email us at clientservice@afrilinkconsultants.com to start an online business in Tanzania.
