We advise clients on exchange controls, loan documentation, registration of foreign loans, and the granting and enforcement of security in Tanzania.
The Bank of Tanzania (BoT) maintains a supervisory role over banking and finance activities in the country. Foreign lenders are not required to establish a presence in Tanzania in order to lend within the country. Foreign loans must however be registered with the BoT for statistical purposes. Investors wishing to set up financial institutions are required to comply with banking regulations, that provide amongst others, for minimum capital requirements.
Security interests that are recognized in Tanzania include mortgages, fixed and floating charges over a company’s assets (including book debts, accounts and shares), assignments over contractual rights, and liens.
The most common form of enforcement of security in Tanzania is for the appointment of a receiver or a receiver manager either under the security documents, or under the legislation such as the Land Act and the Companies Act. A creditor can also apply for a court order requesting the company be put into administration or wound up, where a company fails to pay its debts.
Relevant legislation in Tanzania includes:
- Banking and Financial Institutions Act CAP 342
- Companies Act 2002
- Mortgage Finance (Special Provisions) Act 2008
- Land Act CAP 113
- Finance Leasing Act 2008