Zanzibar is paving the way for transformative economic growth, inviting both local and international investors to participate in sustainable development projects that align with the Zanzibar Development Vision 2050. To support this ambitious vision, the archipelago welcomes investments by providing opportunities for land acquisition, enabling investors to establish and expand their ventures. Spanning 2,643 square kilometers (Unguja: 1,658 km²; Pemba: 985 km²), alongside an extensive Exclusive Economic Zone (EEZ) of 223,000 square kilometers, Zanzibar offers a wealth of potential for business and investment. The following guide outlines the key legal framework and procedures for securing land in Zanzibar.
Legal Framework: Land Ownership in Zanzibar
Under the Land Tenure Act of 1992, all land within Zanzibar—whether occupied or unoccupied—is classified as public land, managed by the Minister responsible for land affairs on behalf of the President. However, land within the Free Economic Zones falls under the administration of the Zanzibar Investment Promotion Authority (ZIPA). Both locals and foreigners are granted access to land ownership for investment purposes, categorized as either registered or unregistered land. The process for acquiring land depends on its classification and intended use.
Land Acquisition Process
Zanzibari citizens have the inherent right to own land. Once a Zanzibari landowner secures legal rights over a piece of land, they are free to sell, lease, gift, or bequeath it to others, including foreign investors. Foreigners can, therefore, purchase land directly from Zanzibari owners for investment purposes. After completing the purchase, the land must be registered in the investor’s name under the leasehold system, with lease terms of up to 99 years. This streamlined process ensures that land acquisition in Zanzibar is accessible, straightforward, and investor-friendly.
Seize the opportunity to take part in Zanzibar’s economic transformation. With its welcoming investment climate and strategic location, Zanzibar is ready to empower your business ambitions.
Key Considerations During the Land Acquisition Process
Acquiring land is a significant investment, and ensuring a smooth and credible process requires careful attention to the following steps:
1. Conduct an Official Search to Verify Ownership
An official search is essential to confirm that the seller is the rightful owner of the land and that it is free from any encumbrances. For unregistered land, this report must be obtained from the Sheha of the area where the land is located. For registered land, the Commissioner for Land provides the report. If the land is within a free economic zone, the Zanzibar Investment Promotion Authority (ZIPA) is the relevant authority to consult.
2. Prepare, Sign, Attest, and Register the Sale Agreement
Once ownership is verified and the land is confirmed to be free of encumbrances, a sale agreement should be drafted and signed by both parties. To make the agreement legally binding, it must be attested and registered with the appropriate authorities.
3. Survey the Land and Place Beacons
For unregistered land, a survey must be conducted, and a site plan prepared. Boundary markers (beacons) should also be placed to clearly demarcate the property. This step is unnecessary for registered land, as it already has defined boundaries.
4. Obtain Land Transfer Approval
The transfer of land ownership must be approved by the Land Transfer Board, as mandated by the Land Transfer Act of 1994. No permanent transfer or long-term lease can occur without this approval. Once the transaction is reviewed and approved, the buyer will receive a Transfer Certificate.
5. Apply for a Government Lease
The Land Commission issues government leases, certifying the buyer as the legal owner of the land. These leases typically range from 33 to 99 years and are renewable. Once the lease is granted, the buyer is free to develop, sell, assign, sublease, subdivide, inherit, or mortgage the property, provided it complies with the approved investment plan.
6. Secure a Building Permit Before Development
No construction can begin without a building permit issued by the Development Control Unit (DCU), established under the Building Regulation Act of 2015. The DCU ensures compliance with construction standards and prevents unauthorized developments.
Requirements for a Building Permit:
To apply for a building permit, the following documents must be submitted:
- A completed Building Permit Technical Form (issued by DCU).
- Ten sets of project drawings, including architectural plans, topographic maps, site layout, structural details, and elevations.
- Five copies of the Bill of Quantities (BOQ).
- Two copies of the land lease agreement.
- Two copies of the Environmental Impact Assessment (EIA) report.
- Proof of payment for the building permit fee.
- Full details and contact information of registered contractors.
- An investment certificate (if the project is registered with ZIPA).
- Passport-sized photos of all shareholders.
- Any additional documents requested by the DCU.
The DCU will review the application and issue a building permit or provide feedback within seven working days.
Applying for a Business License or Investment Certificate
If the project is registered with ZIPA, an Investment Certificate replaces the need for a business license. This step must be completed before applying for a building permit.
Steps to Obtain an Investment Certificate:
1. Submit an Intention to Invest
The investor must prepare and submit a concept note using the Investment Intention Form, available from ZIPA. Once the concept note is approved, the investor will receive an Application Form.
2. Prepare and Submit a Business Plan
The completed application form must be submitted alongside a detailed business plan, which should include:
- Proof of available capital for the project.
- Passport copies, passport-sized photos, and CVs of all directors.
- Police clearance certificates from the directors’ country of residence and origin.
- Certificate of Incorporation.
- Memorandum and Articles of Association.
- Receipt of the application fee payment.
- Any additional supporting documents requested by ZIPA.
Minimum Capital Requirements:
- For hotels and real estate:
- Foreign companies: USD 2,500,000
- Domestic companies: USD 300,000
- For other businesses:
- Foreign companies: USD 300,000
- Domestic companies: USD 100,000
A company is classified as domestic if at least 55% of its shares are owned by Tanzanian citizens.
Issuance of the Investment Certificate:
Once ZIPA approves the investment proposal, the investor will receive an Investment Certificate. An annual Investment Service License fee must be paid until the approved capital is fully invested.
What Happens if the Capital Requirement is Not Met?
If the investor does not meet ZIPA’s capital requirements, they may apply for a license from the Commission of Tourism. If the application is approved, the Commission will issue a confirmation letter allowing the investor to proceed with project activities while fulfilling other requirements. However, one condition for this approval is that at least 70% of the company must be owned by Tanzanian citizens.
By following these steps and meeting the outlined requirements, investors can ensure a seamless process for acquiring land and starting their projects.