Blue amber project zanzibar get Zanzibar strategic investment status
Pennyroyal Ltd, the developer of Blue Amber Zanzibar, is the first real estate project to be awarded strategic investment status by Zanzibar’s government. [ PHOTO / Blue Amber Twitter ]

The government of Zanzibar, one of Africa’s most prized travel destinations, has announced a new tax and residency program for foreigners seeking to live and invest in the island. The game-changing measure comes on the back of significant infrastructure and tourism-friendly initiatives that allowed the idyllic Tanzanian region to weather much of the storm brought by the Covid-19 p******c in 2020.

Until now, the Investments Act of 2018 provided procedures and criteria for Strategic Investment Status (SIS) projects with incentives and allowances to real estate developers, but not offered to those interested to buy property. The result has been that Zanzibar has not been able to attract any notable real estate development, where countries like Mauritius, Dubai, Oman, Singapore and others have thrived by implementing this strategy.

With the introduction of the new investor programme, announced by the Government on 1st July 2021, foreign buyers will now be afforded the opportunity to enjoy a number of benefits, thereby luring investment and boosting Zanzibar as well as the broader Tanzania’s economy.

A real estate investor is now able to acquire a residency permit as an investor, meaning he/she will be allowed to live in Zanzibar as a non-citizen. They are also not required to live in Zanzibar permanently.

New tax and residency benefits for real estate buyers

  • No Income tax on worldwide income and wealth
  • Resident permit for VILLA buyer plus Partner and up to four children under 20 years of age
  • First buyer pays only 50% of normal capital gains on sale of unit, at 5% instead of 10%
  • Foreign ownership allowed
  • Registration of ownership to be done by Zanzibar Investment Promotion Authority (ZIPA)
  • No VAT on unit rental or sales
  • Income tax is halved only on local income- 15% instead of 30%(applicable to foreigners only)
  • Repatriation of profit is allowed after tax
  • Residence permits are only valid for the duration the buyer owns the property (renewable every two years at $3050 for the main investor and $550 for each dependent)
  • No work permit is given, but may be applied for separately by the employer
  • No minimum stay is required to claim benefits

Business investors seeking to invest in ventures such as restaurants, bars, watersports and retail operations will receive similar benefits as real estate investors through approved “Strategic Investment” projects only.

Tax and residency benefits for business investors

  • Foreign ownership is allowed
  • No business licence fees for the first three months
  • Company tax: Income tax free for first five years. After the first five years: 50%(Income Tax is 30% so it will only be 15%)
  • Repatriation of profit allowed after tax
  • 100% exemption on withholding tax on interest paid to foreign banks
  • Deduction of depreciation rate of 100% within five years
  • Residence and work permits for investor and employees.

Pennyroyal Ltd is the long-term investor, developer and manager of Blue Amber Zanzibar, and the first real estate project to be awarded SIS (strategic investment status) by Zanzibar’s government.

Blue Amber is a luxury mixed-use, waterfront, resort development spread across 411 hectares along the Muyuni coastline in the north-eastern part of Zanzibar. It incorporates residential, hotel, tourism, and community and public amenities.

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It is the only “Strategic Investment” real estate development on Zanzibar with an untouched natural beach, offering views of pristine Muyuni Beach and Mnemba Island.

Zanzibar Strategic Investment Status
A real estate investor in Zanzibar is now able to acquire a residency permit as an investor, meaning he/she will be allowed to live in Zanzibar as a non-citizen. [ Photo / Blue Amber ]
Construction of the first villa residences and visitors centre commenced in the first quarter of 2020 and are due for completion within the next 18 to 24 months. Subsequent phases will include the development of further hotel, residential and retail sub-projects around the anchor developments.

Phase 1 of the project is expected to be completed in the next two years.

With the introduction of the new investment programme and its myriad benefits, the developers are expecting to see great interest among buyers from abroad, especially against a backdrop of Tanzania bucking global travel trends last year.

The country, and Zanzibar in particular, surpassed expected visitor numbers in 2020 despite enormously unfavourable conditions stemming from the p******c. Tanzania recorded more than 620,000 foreign tourists in the 2020/21 financial year – almost 200000 more than was anticipated.

The speedy implementation of Standard Operating Procedures requiring visitors to present medical proof of their Covid-19 status, measures that also applied to stakeholders in the local tourism sector, played a key role in the country’s success.

With the new investment programme and its benefits, developers are expecting to see great interest from foreign buyers.

The effective strategies implemented by the government caught the attention of the World Travel and Tourism Council, which awarded Tanzania a ‘Safe Travels Stamp’ in August – a major feat considering international fears around Covid-19.

From the time the p******c arrived on African shores, the country’s leaders were proactive in their approach, forging ahead with plans to make Tanzania more attractive to foreign investors. In January, Zanzibar president Hussein Ali Mwinyi signed a memorandum of understanding for the construction of a $230-million port in North Unguja.

Once completed, the project will include berths for containers, liquid bulk goods, natural gas offshore services and infrastructure for the r************n of marine vessels. On the 30thof May, Terminal 3 at Amani Karume International Airport (AAKIA) opened to improve the quality of services and customer care for visitors to the island.

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