News and Publications on 2025 – Vemma Consult Attorneys

THE DRAFT CAPITAL MARKETS AND SECURITIES (PRIVATE EQUITY AND VENTURE CAPITAL) REGULATIONS, 2024, REGULATING PRIVATE EQUITY AND VENTURE CAPITAL FUNDS IN TANZANIA, A NEW ERA FOR STARTUPS, SMALL, MEDIUM SIZE ENTERPRISES AND INVESTOR PROTECTION

February 22, 2025/in News and Publications on 2025 /by amicidesign-veema

INTRODUCTION TO THE REGULATIONS

The Capital Markets and Securities Authority (CMSA) of Tanzania, in collaboration with various stakeholders has developed the Draft Capital Markets and Securities (Private Equity and Venture Capital) Regulations, 2024. These regulations aim to provide a structured framework for the establishment and operation of private equity and venture capital businesses in Tanzania, the regulations will oversee Private Equity Funds (“PEFs”) and Venture Capital Funds (“VCFs”) within the financial sector in Tanzania.

OBJECTIVES

Subject to Regulation 3 of the Draft Capital Markets and Securities (Private Equity and Venture Capital) Regulations, 2024 (the “Draft Regulations”), the primary objectives of these regulations include the guidance for Establishment and Operation, providing clear guidelines for the establishment and operation of private equity and venture capital businesses. The Regulations aim to Regulate Venture Capital Business, regulating venture capital businesses including equity and debt securities.

Further the draft Regulations aims to protect the Investors by ensuring public awareness about venture capital businesses.

Also the draft Regulations aims at promoting financial inclusion by diversifying financial products and enhancing market liquidity, further the draft Regulations foster to promote and encourage innovations in capital markets through innovative business models, the same will strengthen the ecosystem for startups and small to medium-sized enterprises to drive economic growth.

KEY PROVISIONS

According to Regulation 6 of the Draft Regulations, any person who wishes to operate as PEF or VCF must obtain a Fund Management Licence (the “Licence”) from the CMSA. The Licence shall be provided to the applicant with eligibility of the required minimum paid-up capital, one-third of independent directors, and focus on small and medium-sized businesses.

The application for a licence certificate to the CMSA should be made in a prescribed form provided in the First Schedule to the Draft Regulations.

LICENCE REVOCATION AND SUSPENSION

The Licence can be canceled or suspended under regulation13 of the Draft Regulations by the CMSA if, among others, the directors, or employees have not performed their duties honestly and fairly in the opinion of the CMSA and contravene or fail to comply with any condition of the Licence.

REQUIREMENT FOR APPROVAL

Regulations 14, 15, 16, 17, 23, 24, and 27 of the Draft Regulations, require PEFs and VCFs, through their fund managers, to apply for an approval from the CMSA prior to the raising or collection of funds from investors. The application must be submitted using the form indicated in the Second Schedule to the Draft Regulations. Before issuing the approval letter, the CMSA will assess the fund pools’ eligibility, to ensure that they protect investor interests, in accordance with the applicable regulations.

AN OVERVIEW OF PEF AND VCF

The Draft Regulations provide a clear description of PEFs, defining them as investment vehicles that pool capital from sophisticated investors to invest in private companies, to generate returns from their growth. Their primary purpose is to collect capital from investors, such as, banks, insurance companies, or corporate bodies, and invest it in private companies, either by acquiring shares or providing debt financing.

On the other hand, VCFs are defined under the Draft Regulations as investment funds that manage the money of investors who seek equity stakes in startup and small to medium-sized enterprises with strong growth potential and characterized with high risk or high-return opportunities.

The difference between PEF and VCFs is that the former pools capital from sophisticated investors to invest in private companies, while the latter focus specifically on start-up companies, primarily by investing in or acquiring stakes in these businesses, often becoming shareholders by purchasing equity.

PROTECTION OF INVESTORS’ (INVESTMENTS ALLOCATION IN PEFS AND VCFS)

Subject to Regulations 20 and 26 of the Draft Regulations, the regulations limit the usage of pooled funds for PEFs and VCFs. One significant limitation is that PEFs can only engage in large, emerging unlisted enterprises, with interests in a single unlisted company capped at 75% of the fund. Meanwhile, VCFs can only invest up to 25% in a single unlisted firm, with investments limited to small and medium-sized businesses.

PENALTIES FOR NON-COMPLIANCE

Subject to Regulation 41 (1) (a) (b) (c) (d) and (e), the CMSE, as the regulating authority may reprimand, suspend or de-register venture capital company or private equity company where; the registered venture capital company or registered private equity company ceases to meet the requirements for registration or fails to comply with the Act, any reports or other information filed by the registered venture capital or registered private equity company or fund manager are found to contain false or misleading information, or the registered venture capital or registered private equity company fails to take such corrective action in respect of a breach as indicated by Authority within the time prescribed, or the Authority becomes aware of any facts or circumstances, which in the opinion of the Authority, warrant deregistration of the registered venture capital or private equity company in the public interest; and if the board of directors of the registered venture capital company or registered private equity company requests in writing that the venture capital company or private equity company be deregistered.

CONCLUSION

The Draft Capital Markets and Securities (Private Equity and Venture Capital) Regulations, 2024, represent a significant step towards fostering innovation, attracting capital, and promoting financial inclusion in Tanzania. By providing a clear regulatory framework, these regulations are poised to enhance the country’s economic growth and development. This will be done through clear guidelines for the establishment, operation, management of funds, and fostering of conducive environment for investment in both established businesses and emerging startups.

Further Information:

This editorial is intended to give you a general overview of the Law. If you would like further information and clarification on any issue raised in this editorial, please contact.

Patrick Sanga
Partner
E: p.sanga@vemmaattorneys.co.tz

Bernard Nkwabi
Senior Associate
E: b.nkwabi@vemmaattorneys.co.tz

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THE PROTECTION OF WELL-KNOWN TRADEMARKS IN TANZANIA

January 31, 2025/in News and Publications on 2025 /by amicidesign-veema

Trademark registration aims to protect traders and consumers by ensuring that brands and products are clearly distinguishable in the marketplace.

For traders, it provides exclusive rights to use a particular mark, helping to prevent unauthorized use by competitors and for consumers, it ensures they can identify the source of goods and services, offering assurances of quality and helping to avoid confusion or misleading representations in the market.

Trademarks are designed to distinguish your goods or services from those of others. However, some third parties may attempt to exploit your trademark for their own benefit, using it to capitalize on the reputation and recognition you have built through time and investment. This allows them to benefit from your brand’s success without the effort of creating their own identity.

Protecting your trade mark is crucial to maintaining the integrity and reputation of your brand. When third parties try to exploit your trade mark, it can dilute your brand’s uniqueness and potentially confuse consumers.

REGISTRATION

In Tanzania Trade and Service mark are protected under Trade and Service Mark Act Chapter 326 (TSMA). In Tanzania, it is not compulsory to register a mark in order to use it. However, the exclusive legal right to use a trademark is acquired with registration under section 32 and 14 of TSMA.

A trademark well known globally enjoys local protection in the event it is recognized locally in order to seek protection against any infringement, the proprietor has to abide to local laws by registering the said trademark. Early registration of a trade or service mark is paramount for one to successfully maintain a suit on infringement.

INFRINGMENT
Trademark infringement occurs when someone uses a trademark that is identical or confusingly similar to a registered trademark without permission, in a way that is likely to cause confusion among consumers. This could happen in various ways, like/example, A well-known company, “ABC Beverages,” has registered a trademark for their logo and name in Tanzania. A new, smaller company called “AB Beverages” starts selling a similar line of drinks using a very similar logo, font, and colour scheme that resembles “ABC Beverages.” Consumers might confuse “AB Beverages” with the well-established brand “ABC Beverages,” leading them to believe the products are from the same company. In this case, the new company’s use of a confusingly similar trademark could be considered an infringement of “ABC Beverages'” registered trademark, as it creates confusion in the marketplace and could damage the reputation of the original brand.

A common question that arises is how one can prevent trademark infringement in Tanzania, well the law does afford your protection if the circumstance warrants it.

OPPOSITION

Opposition systems offer third parties the opportunity to oppose the registration of a trademark within a certain period of time. Applicable laws provide details and sometimes exhaustive lists of grounds for opposition

Section 27 of the TSMA allows for third parties to oppose the registration of a trademark during the initial registration procedure and within the time limit as prescribed from the date of advertisement of an application.

For a proprietor to seek the protection of the acquired reputation, the trademark usage must be upon registration. A well known trademark globally, automatically acquired protection is not the correct position in our jurisdiction A trademark well-known globally enjoys local protection in the event it is recognized locally. In order to seek protection against any infringement, it is incumbent on the proprietor to abide by our local laws and by registering the said trademark.

CONCLUSION

Protecting well-known trademarks in Tanzania is essential for maintaining the integrity and value of a brand. While trademark registration is not mandatory for use, it provides exclusive legal rights and safeguards against infringement, ensuring that traders and consumers are protected.

As global brands seek protection locally, adherence to Tanzanian laws is key to securing trademark rights and preventing misuse in the marketplace and Our trademark litigation team can help enforce your trademark and copyright rights in Tanzania and throughout Africa.

Further Information:

This editorial is intended to give you a general overview of the Law. If you would like further information and clarification on any issue raised in this editorial, please contact.

Haika-Belinda John Macha
Partner
E: hb.macha@vemmaattorneys.co.tz
M: +255 717 307 999

Haika Allen Mrango
Associate
E: h.mrango@vemmaattorneys.co.tz
M: +255 746 716 191

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THE ARUSHA PROTOCOL FOR THE PROTECTION OF NEW VARIETIES OF PLANTS THAT HAS COMES INTO FORCE: IMPLICATIONS FOR AFRICAN AGRICULTURE

January 15, 2025/in News and Publications on 2025 /by amicidesign-veema

The Arusha Protocol for the Protection of New Varieties of Plants officially came into force on November 24, 2024, nearly 10 years after its adoption in Arusha, Tanzania, in July 2015. This Protocol creates a harmonized system for the protection of plant variety rights (PVRs) across the member states of the African Regional Intellectual Property Organization (ARIPO). It allows applicants to apply for protection through ARIPO, ensuring uniform protection in the contracting states that participate.

Under the Protocol, PVR protection is granted for 25 years for trees and vines and 20 years for all other plant varieties.

The system closely follows the 1991 Act of the International Convention for the Protection of New Varieties of Plants (UPOV 1991), which has faced both support and criticism worldwide. Critics argue that the Protocol will mostly benefit multinational seed companies, potentially threatening local farmers’ rights, particularly their ability to save, replant, and exchange seeds. However, the Protocol allows for a limited exception where farmers can save and replant certain agricultural and vegetable varieties, but they must pay remuneration to the PVR holder.[1]

Supporters of the Protocol argue that it could lead to the development of more sustainable and climate-resilient plant varieties, improve farmers’ access to better seeds, and ultimately enhance food security and stimulate economic growth across the continent.

The Protocol also provides a safety net. According to Article 4(1), PVR protection will have uniform effect in all contracting states unless a state refuses the grant within six months of receiving the application, provided the state offers specific grounds for refusal.

So far, only Four (4) of ARIPO 22 member states—Cape Verde, Ghana, Rwanda, and São Tomé and Príncipe, have ratified the Protocol. Given the ongoing debate surrounding the Protocol’s potential impact, it will be interesting to see whether more ARIPO member states choose to adopt it in the future. The success of the Protocol will depend on balancing the interests of multinational companies and local farmers, as well as ensuring the protection of Africa’s agricultural diversity.

Further Information:

This editorial is intended to give you a general overview of the Law. If you would like further information and clarification on any issue raised in this editorial, please contact.

Haika-Belinda John Macha
Partner
E: hb.macha@vemmaattorneys.co.tz
M: +255 717 307 999

Haika Allen Mrango
Associate
E: h.mrango@vemmaattorneys.co.tz
M: +255 746 716 191

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THE ESTABLISHMENT OF THE PERSONAL DATA PROTECTION COMMISSION WHAT YOU NEED TO KNOW

October 31, 2024/in News and Publications on 2025 /by amicidesign-veema

Tanzania has recently launched Personal Data Protection Commission (PDPC), a significant development for privacy and data security, following the enactment of Landmark Legislation “the Personal Data Protection Act of 2022.

The introduction of the establishment of the Personal Data Protection Commission (PDPC) marks a pivotal shift, placing greater emphasis on individual privacy and data security and align Tanzania with global standards in data protection and privacy.

Overview of the Personal Data Protection Commission (PDPC)

Purpose and Role:

Regulation and Enforcement: The PDPC is responsible with ensuring compliance of the Data Protection Act, 2022. It monitors how personal data is handled and processed by organizations and takes action against non-compliance.
Register Controller and processors: It oversees the registration of data controllers and processors.
Research and Corporation: The PDPC monitors development of technology and collaborates with other countries in managing personal data protection.
Complaint Handling: The Commission handles complaints from individuals regarding data breaches or misuse of personal data. It investigates these complaints and enforces remedies where necessary.

The establishment of the Personal Data Protection Commission is a critical step in implementing and enforcing Tanzania’s data protection laws. By having a dedicated authority, Tanzania ensures that there is a structured approach to managing personal data, addressing privacy concerns, and fostering a culture of data protection within the country.

As the PDPC becomes fully operational, it will play a key role in shaping data protection practices in Tanzania and enhancing confidence among consumers and businesses in the handling of personal data.

IMPACTED SECTORS

Financial Services

Banks and Financial Institutions: These entities handle sensitive personal and financial information, such as account details, transaction records, and credit information. They must ensure stringent data protection measures to prevent breaches and misuse of customer data.
Insurance Companies: They collect personal and health information for policy underwriting and claims processing, requiring robust data protection practices.

Healthcare

Hospitals and Clinics: Medical institutions manage sensitive health records, patient histories, and other personal health information, which must be protected to ensure privacy and comply with data protection regulations.
Pharmacies: Pharmacies handles personal data related to prescriptions and patient health information, necessitating careful management and protection.

Telecommunications

Mobile and Internet Service Providers: These companies process vast amounts of personal data, including communication records, browsing histories, and customer identification details. Ensuring the security and confidentiality of this data is critical.

Retail and E-Commerce

Online Retailers: E-commerce platforms collect and store personal information such as payment details, addresses, and purchase histories. They must implement strong data protection measures to safeguard Client’s data.
Physical Retail Stores: Retailers that collect customer information for loyalty programs or marketing purposes also need to adhere to data protection requirements.

Education

Educational Institutions: Schools, colleges, and universities manage personal data related to students, faculty, and staff, including academic records, contact details, and health information. They must ensure that this data is securely managed and protected.

Public Sector

Government Agencies: Various government bodies handle personal data related to citizens, such as tax records, social services information, and identification details. Data protection regulations require them to manage this information securely and transparently.

Technology and IT Services

Software Providers: Companies that develop or provide software solutions, including cloud storage services, must ensure their platforms comply with data protection standards to safeguard user data.
Data Processors: Entities that process personal data on behalf of other organizations need to adhere to strict data protection measures to ensure compliance and protect data.

Marketing and Advertising

Marketing Agencies: These organizations handle customer data for targeted advertising and promotional activities. They must ensure that they collect, process, and store data in compliance with data protection laws.

Legal Services

Law Firms: Legal professionals, manage sensitive personal information related to clients, including case details, personal history, and legal documentation. They must maintain strict confidentiality and security measures.

Travel and Hospitality

Travel Agencies: These businesses collect personal data related to travel bookings, including passport information, travel itineraries, and payment details, which must be securely managed.
Hotels and Resorts: Hospitality establishments handle personal information such as guest records, booking details, and payment information, requiring adherence to data protection standards.

Across these sectors, the Data Protection Act, 2022 mandates that organizations implement robust data protection measures to ensure the confidentiality, integrity, and security of personal data. By doing so, they are not only comply with legal requirements but also build trust with their customers and stakeholders in an increasingly privacy-conscious environment.

REGISTRATION

The registration process for data protection in Tanzania is a vital and mandatory step for organizations to comply with the Data Protection Act 2022 and its Regulation. Any collection or processing of personal data without being registered is unlawful.

Failure to register is an offence, whereas upon conviction one may be liable to fine or imprisonment to a term of five (5) years or both.

STEP BY STEP GUIDE TO PDPC REGISTRATION

The Act has put into place several key steps to ensure that organisations adhere to the requirements of handling personal data. These steps are as follows:

Prepare your Documents;
Submit your Application with fees;
Application Verification within 7 days;
Application Decision; and
Maintaining Your Registration

The Data Protection Act, 2022, and the establishment of the Personal Data Protection Commission represent a pivotal advancement in safeguarding personal data in Tanzania. It is imperative for organizations to act swiftly and diligently.

Registering with the Commission not only ensures compliance with the newly enacted Act but also underscores a commitment to upholding the highest standards of data protection and privacy.

By proactively assessing and refining data handling practices, businesses can avoid potential penalties and build stronger trust with customers and stakeholders. This registration is not merely a regulatory obligation but an opportunity to demonstrate organizational responsibility and dedication to protecting personal information in today’s increasingly privacy-conscious environment.

Ultimately, the Personal Data Protection Commission will play a crucial role in guiding, monitoring, and enforcing compliance, thereby contributing to a secure and transparent data management landscape. Embracing these changes and meeting the registration requirements will position organizations to thrive in a digital age where data protection is paramount.

Further Information:

This editorial is intended to give you a general overview of the Law. If you would like further information and clarification on any issue raised in this editorial, please contact.

Haika-Belinda John Macha
Partner
E: hb.macha@vemmaattorneys.co.tz
M: +255 717 307 999

Haika Allen Mrango
Associate
E: h.mrango@vemmaattorneys.co.tz
M: +255 746 716 191

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