Speaking at a panel on venture capital and private equity syndications during Tanzania Start-up Week 2025, Venture Associate at African Renaissance Venture, Lexi Lei, said only a small number of venture capital firms currently have teams based in the country.
Dar es Salaam. While Tanzania’s start-up ecosystem continues to grow, experts warn that attracting substantial international venture capital hinges on clearer legal and regulatory frameworks.
Speaking at a panel on venture capital and private equity syndications during Tanzania Start-up Week 2025, Venture Associate at African Renaissance Venture, Lexi Lei, said only a small number of venture capital firms currently have teams based in the country.
“There are a few VCs sitting outside Tanzania investing here, but most of our funds are deployed elsewhere,” she said, noting that the absence of specialised legal structures for venture capital and private equity funds is the main barrier.
Ms Lei welcomed the ongoing development of the Venture Capital and Private Equity (VCP) framework by the Capital Markets and Securities Authority (CMSA), highlighting that global investors favour familiar fund vehicles such as limited partnerships with pass-through taxation.
“Without these kinds of legal setups, it becomes difficult for us to operate locally, and we are forced to rely on workarounds, such as setting up offshore,” she explained.
She added that once Tanzania’s legal and tax frameworks align with global standards, capital flows would increase, enabling more funds to invest directly into local ventures and boost innovation, growth, and youth employment.
Echoing her views, Africapita CEO Burak Büyüksaraç said the Tanzanian start-up landscape has made remarkable progress over the past three years, evidenced by the rise of forums, panels, and discussions supporting entrepreneurs.
However, he warned that unresolved taxation issues continue to discourage investors.
“As long as capital gains taxes, double taxation, and exit challenges persist, funds will not come in. Simple as that,” he said.
Mr Büyüksaraç also noted that many stakeholders still lack clarity on the role of venture capital in strengthening national innovation systems. He urged regulators to improve cross-agency coordination as new investment frameworks are formalised.
“Many people don’t fully understand what venture capitalists do. I hope that even within CMSA, there will be stronger inter-agency dialogue as these frameworks are finalised so that current bottlenecks can be addressed and capital integration increased,” he said.
The discussions at Tanzania Start-up Week 2025 reflect a growing consensus that legal clarity, particularly regarding fund structures, taxation, and investment exits, will determine how quickly global capital enters the country’s promising start-up space.
