Since the late 1990s, the Tanzanian government has improved the country's investment climate significantly with assistance from international donors. Markets have been liberalised and a number of public companies have been privatised with participation of foreign investors, contributing to greater inflows of FDI. Tax free export processing zones (EPZs) have been established and the country's membership to the East African Community (EAC) provides for low tariff trade of certain products between member countries. Nevertheless, cumbersome bureaucracy is a major constraint on business operations in Tanzania, presenting opportunities for rent-seeking and encouraging corruption. Thus, corruption remains a major concern for foreign companies and investors in Tanzania. According to the US Department of State 2011, corruption is economy-wide, and measures to combat it are applied impartially to foreign and domestic investors.

Positive developments in relation to corruption and investment:

• A positive step towards circumventing the regulatory burden faced by companies investing in Tanzania has been the establishment of the Tanzanian Investment Center (TIC).
• Tanzania has a comprehensive body of laws, regulations and oversight agencies intended to prevent, investigate and sanction corrupt practices.
• The government has dismissed some corrupt civil servants and a few senior officials, and is strengthening some anti-corruption regulations and institutions.
• In April 2011, the central committee of Tanzania's ruling CCM urged its members linked to corruption scandals to resign to help improve the party's image among voters. As a result, a number of the committee's members resigned.

Risks of corruption:

• Corruption persists in government procurement, privatisation, taxation, and customs clearance.
• It is particularly petty corruption in dealings with traffic police and customs and immigration officers that has been identified by foreign companies as an obstacle to investment. 
• The government's commitment to strengthening integrity has been seriously questioned given the extent of corruption within the country and corruption scandals involving ministers and leading members of political parties.
• It is reported that profitable and fast growing companies operating in the formal economy seem to attract the attention of corrupt government officials and are thus more vulnerable to corruption.