REGISTRATION REQUIREMENTS FOR FIRMS OPERATING IN THE CONSTRUCTION INDUSTRY IN TANZANIA

Published by Jessy L. Kalinjuna

Most companies focus on the business licenses and other Authorities requirements on the administration of their business operations while forgetting other firms’ legal compliance to undertake and maintain their operational status in Tanzania. There are various professional boards which govern the membership of professional firms in the Tanzanian construction industry i.e.,

a.     contractor firms, there is the Contractors Registration Board (herein referred to as ‘CRB’)

b.    for engineering firms, there is the Engineer Registration Board (herein referred to as 'ERB'; and

c.    for architects and quantity surveyors' firms, there is the Architects and Quantity Surveyors Registration Board (herein referred to as 'AQRB’).

Taking note that, under Tanzanian law, a firm cannot be registered with all three boards at the same time.

This Article mainly focus on the registration requirements imposed on firms that undertake construction projects in Tanzania – specifically two types of firms i.e.

a.    a firm of engineers and separately,

b.    a firm of contractors.

A firm looking to register with either the ERB or the CRB must first be registered with the Business Registrations and Licensing Agency (BRELA) and hold either a certificate of incorporation or a certificate of compliance approved by the Registrar of Companies.

CRB REGISTRATION

The main piece of legislation for contractors in Tanzania is the Contractors Registration Act Cap 235 R.E 2002 (herein referred to as the ‘Contractors Act'). There are two categories of contractors under the Contractors Act i.e.

a.    local contractors and

b.    foreign contractors.

LOCAL CONTRACTORS

Local contractors are firms whose majority shares are owned by citizens of the United Republic of Tanzania.

FOREIGN CONTRACTORS

Foreign contractors are firms whose majority shares are owned by non-citizens.

CATEGORIES AND REGISTATION OF THE CONTRACTORS

The category in which the contractor falls in, determines the type of registration applicable to that contractor at the time of registration with the CRB. There are two main types of registration under CRB i.e.,

a.    Permanent registration.

b.    Temporary registration. Under temporary registration there are two types of registration:

i.             Temporary registration of foreign contractors; and

ii.            Temporary joint venture registration.

 

PERMANENT REGISTRATION

This would allow a firm to register to carry out works in a specific category and class without any limits on duration of the registration or the number of projects it is permitted to carry out, provided that annual fees are paid and the requirements for registration are complied with.

TEMPORARY REGISTRATION OF FOREIGN CONTRACTORS

Temporary registration is applicable where a person has satisfied the CRB that the principal of the construction firm is not a citizen of Tanzania, the firm has been incorporated outside Tanzania and the firm intends to be present in Tanzania to carry out a specific contract (with certain restrictions on the monetary value of the contract). Once the contract expires, the firm shall cease to have been registered and the certificate of registration is returned to CRB.

For foreign temporary registration, which is limited to a specified project, the CRB may use its discretion to issue the license for the entire duration of the project provided that the company is willing and able to pay the annual fees for the entire project in advance. If the project is executed in phases, the CRB may extend the duration of the CRB license as necessary to enable the firm to complete the project.

TEMPORARY JOINT VENTURE REGISTRATION

This form of registration requires each firm to be individually registered by the CRB first. This is usually applied for by construction firms that have jointly tendered for work and have been awarded a contract often on the basis of combined resources. The joint venture may only undertake works for the duration or period of contracted works.

APPLICATION FEES

Applicants whose applications have been approved by the CRB will be notified and asked to pay registration fees and annual subscription fees within sixty (60) days. The fees vary depending on the class, type and category of registration.

TIMELINES FOR REGISTRATION

Generally, once the CRB has completed its review of the application and has instructed the applicant to make the payment of fees, it can take up to Three (3) weeks to obtain a certificate of registration. The certificate is valid for up to one (1) year, unless stated otherwise e.g. in relation to foreign contractors, this may be for the duration of the project.

ERB REGISTRATION

The relevant legislation for engineering consulting firms is the Engineer Registration Act No.15 of 1997 (herein referred to as ‘the Engineers Act'). As with the CRB, there are two main categories in which engineering consulting firms can register under i.e.

a.    as a local engineering firm (herein referred to as ‘LECF’), or

b.    as a foreign engineering firm (herein referred to as ‘FECF’).

The local and foreign registration for engineering firms is differentiated in a similar way to contractor firms i.e., by the percentage of shares held in the hands of either locals or foreigners.

APPLICATION FEES

Fees vary between an application for a LECF and FECF. Notably, application fees for a FECF registration are significantly higher than one for a LECF registration.

TIMELINES FOR REGISTRATION

Like with the CRB registration, obtaining a certificate may take up to Three (3) weeks from making payment upon approval of the application. The certificate is valid in relation to the duration of the project.