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Tanzania Introduces Beneficial Ownership Reporting: A Game-Changer for Transparency and Accountability
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Tanzania has made a significant move towards enhancing transparency and accountability by introducing beneficial ownership reporting, requiring companies to disclose their true owners’ information. This new regulation aims to combat corruption, money laundering, and illicit financial flows by identifying individuals with significant economic interests in or receiving substantial benefits from entities registered in the country.
Who is a Beneficial Owner?
According to the Companies Act, 2002 as amended, a beneficial owner is an individual who has a substantial economic interest in or receives a substantial economic benefit from an entity or arrangement. This can include:
- Individuals with a share of profits
- Those conducting arrangements on behalf of others
- Those exercising significant control or influence over entities
Direct and Indirect Ownership
Beneficial ownership can be direct, where an individual owns shares directly, or indirect, where ownership is held through a chain of ownership or business engagements. In the latter case, it’s essential to identify all individuals with an ownership stake in the company.
Politically Exposed Persons (PEPs)
The regulations also require companies to determine whether a beneficial owner is a PEP, defined as an individual entrusted with prominent public functions, including:
- Heads of state or governments
- Judicial or military officials
- Senior politicians
- Senior executives of state-owned corporations
PEPs are subject to enhanced due diligence and reporting requirements.
Reporting Requirements
All companies registered in Tanzania must submit accurate and up-to-date records of beneficial owners’ information using Form No. 14b, which includes details such as:
- Full name
- Date and place of birth
- Telephone number
- Nationality
- National identity number
- Passport number or other identification
- Residential address
- Email address
- Place of work
- Position held
- Nature of interest
- Oath or affirmation regarding PEP status
Changes to Beneficial Ownership
Companies must report any changes to beneficial ownership within 30 days of the change, using:
- Form No. 14f for additions
- Form No. 14c for cessation of a person’s beneficial owner status
- If an individual appears on the registry but does not hold the beneficial interest in shares, a declaration must be submitted via Form No. 14d.
Conclusion
The introduction of beneficial ownership reporting in Tanzania marks a significant step towards enhancing transparency and accountability in the country’s business sector. By uncovering the true owners of companies, the regulations aim to prevent corruption, money laundering, and illicit financial flows, while promoting trust and accountability in the management of entities registered in Tanzania.
Important Notice
This article is for general guidance only and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice.