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Tanzania: New beneficial ownership regulations – What partnerships need to know

10 October 2023
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Overview

  • On 22 September 2023, the Tanzanian Minister of Industry and Trade enacted the Beneficial Ownership Regulations (Regulations).
  • The Regulations mark a pivotal step toward regulating and overseeing the realm of beneficial ownership within partnerships and establishes a clear and structured procedure for the submission of this information.
  • Any managing partner, registered partner, or individual who fails to maintain records of beneficial owners; neglects to submit a declaration containing beneficial ownership information to the Registrar; or violates any provisions within these Regulations will be deemed to have committed an offence. Upon conviction, the offender will be subject to a fine of between TZS 1 million (approximately USD 400) and TZS 5 million (approximately USD 2 000).

On 22 September 2023, the Tanzanian Minister of Industry and Trade enacted the Beneficial Ownership Regulations, officially designated as G.N No. 714 of 2023 (Regulations).

The Regulations mark a pivotal step toward regulating and overseeing the realm of beneficial ownership within partnerships and establishes a clear and structured procedure for the submission of this information. 

Definitions

A partnership is an amalgamation comprising an entity without legal personality, involving two or more individuals, or one organisation and one or more individuals, or one company and one or more individuals, or one or more organisations, engaged in profit-seeking joint ventures. 

A beneficial owner is a natural person:

  • who directly or indirectly ultimately owns or exercises substantial control over an entity or an arrangement;
  • who has a substantial economic interest in, or receives substantial economic benefit from, an entity or an arrangement directly or indirectly whether acting alone or together with other persons;
  • on whose behalf an arrangement is conducted; or
  • who exercises significant control or influence over a person or arrangement through a formal or informal agreement.

Requirements under the new Regulations

  • The managing partner is required to identify and maintain a register of all beneficial owners.
  • Existing partnerships are required to submit their register of beneficial owners to the Registrar of Companies (Registrar) within 60 days from the date the Regulations come into effect. Partnerships that are established after the Regulations come into effect must submit such information within 30 days of their formation.
  • Registered partners who are not beneficial owners, as well as beneficial owners who are not registered partners, must submit a declaration to this effect to the managing partner.
  • Registered partners, beneficial owners and managing partners of partnerships must promptly inform the Registrar of any changes in beneficial ownership within a partnership. 

Penalty

Any managing partner, registered partner, or individual who fails to maintain records of beneficial owners; neglects to submit a declaration containing beneficial ownership information to the Registrar; or violates any provisions within these Regulations will be deemed to have committed an offence. Upon conviction, the offender will be subject to a fine of between TZS 1 million (approximately USD 400) and TZS 5 million (approximately USD 2 000)

Partnerships should carefully review the Regulations to ensure that they are complying with all of the requirements.