1.0 Introduction

In the wake of June 30, 2023, the Minister of Home Affairs caused to be published the Immigration (Amendment) Regulations, 2023 vide GN. No. 428 of 2023 , hereinafter “the Regulations”. The amendment has made tremendous changes on different matters relating to immigration, but notably, the changes on the issuance of resident permits stand out as a matter of special concern. For that reason, this article will discuss the legal implications posed by the aforesaid regulations. Although the regulations apply to both Mainland Tanzania and Zanzibar, this practical analysis will focus on Mainland Tanzania, while Zanzibar  will be used as a case study.

2.0 Changes

The Second Schedule to the Regulations has brought into existence residence permit class C-11 which provides that a foreigner can acquire residence permit class C if he acquires a house in real estate worth USD 100,000 in Tanzania.

Ordinarily, residence permit class C is granted  to foreigners who do not qualify for residence permits class A and B. Residence permit class A is issued to investors, while residence permit class B is issued to employees only. Residence permit class C is issued to students, interns, researchers, parties and witnesses in courts and tribunals, people attending medical treatments, NGO’s employees, retired persons, volunteers, and artists.

To the list of persons qualifying to obtain residence permit class C, the regulations have added another category of “buyers of real estate”. The changes are provided  under Regulation 2 which has amended similar regulations in the principal regulations.   This means that a foreigner who does not qualify for  either residence permit class A or B and is not a student, intern, researcher, witness or patient attending medical treatments, or possessing any other qualifications for residence permit class C, can obtain residence permit class C-11 by only buying a house worth USD $100,000.

3.0 Legal implications on immigration and investment laws

Deductively, under the Regulations, a foreigner can currently stay, acquire, and own land in Tanzania through residence permit class C-11 without being an investor (shareholder) with a resident permit class A and a certificate of incentives from the Tanzania Investment Centre (TIC).

The Regulations have set out requirements for the grant of a residence permit class C-11 to  a foreigner. Among others, the  applicant is required to have;

• Police clearance form from the country of origin or place of residence
• Tax clearance from relevant institutions
• A recommendation letter from the Tanzania Investment Center (TIC) in Mainland Tanzania and Zanzibar Investment Promotion Authority (ZIPA) in the case of Zanzibar.
• Proof that the value of the purchased property is not less than USD 100,000
• Title deed or certificate of occupancy must be submitted

Paradoxically, Section 20(1) of the Land Act, which is the principal legislation governing land matters, limits ownership of land to Tanzanian citizens only and allows ownership of land by foreigners for investment purposes only through derivative rights granted  by the Tanzania Investment Center (TIC) or the Export Processing Zones Authority (EPZA). This is the only permissible way for a foreigner to own land in Tanzania.

To get a certificate of incentives from TIC, for projects wholly owned by foreign investors or in the case of a joint venture, the minimum fixed investment capital required for a new, rehabilitation or expansion of the existing project  is US $500,000, while  those under EPZA require a minimum capital of  US $ 500,000. In addition to that, the investment must be within special economic zones parks and at least 80% of goods produced must be exported.

Coming back to the regulations, there is a legal  implication in the fact that a foreigner/non-citizen does not currently need a certificate of incentives from TIC or EPZA and a residence permit class A (investor’s permit) to own land in Tanzania, contrary to the principal legislation (the Land Act, Cap 113). In other words,  under the current regulations, a foreigner may own a landed property and legally stay in Tanzania without passing through TIC or EPZA as it was the case before. This is an apparent conflict between the regulations and the principal legislation on land matters.

From the foregoing observations, it  is clear that the regulations appear to be inapplicable to some extent and in apparent conflict with the principal legislation, specifically sections 20(1) of the Land Act and 19 of the Tanzania Investment Act.  We are of this view because there is a fog obscuring the clear requirements or qualifications for a foreigner to own land in mainland Tanzania. It is not clear which requirements will take precedence, those under the amended regulations or the principal legislation? The regulations seem to be confined within certain limitations, particularly concerning the transfer of land to a foreigner in Tanzania.  That being the case, then it becomes challenging for the regulations to facilitate a successful transfer of land without violating principal legislation, skipping necessary procedures, or  facing an objection from the Commissioner for Land on such a transfer.

To acquire land in  mainland Tanzania, a foreign investor typically uses one of three available avenues; obtaining derivative rights from the Tanzania Investment Centre (TIC), securing a government-granted right of occupancy, or sublease. It should be noted that the standard process for obtaining derivative title through land purchasing and transfer of ownership to the foreigner involves  filing specific forms outlined in the Land Regulations of 2001,  which are  Form No. 29, Form No. 30, and Form No. 35. Subsequently, the title of the purchased land is surrendered, and the land is designated for investment purposes through Form No. 1. Thereafter, the  National Land Allocation Committee then allocates the land to TIC,  and the land in question is registered in the name of TIC, then TIC issues a derivative right to the respective investor.

The hardship that most practitioners have encountered and foresee is vividly in the whole process of purchasing land from the locals in order  to transfer the same  to a foreigner before he/she processes the recommendation letter from the Tanzania Investment Centre as provided under the regulations. There are some issues that are not addressed under the Land Act and its regulations, such as

1. Whether  the Commissioner for Land will accept the transfer of land to a non-citizen for a purpose of  residence  without the same passing through  the National Land Allocation Committee, which is a common practice  in granting derivative rights.
2. What category of tenure will the Commissioner for land  grant  to the non-citizens who purchased land for purposes of residence only. As it is commonly understood ,  the Granted Right of Occupancy (GRO) and Customary Right of Occupancy (CRO) are enjoyed   by citizens only while Derivative rights are  issued  to investors either  through the Tanzania Investment Centre or Export Processing Zone Authority. In both,  prior to issuance,  the investor  is required to be registered with those Authorities,  while under the amended regulations, the foreign real estate buyer requires only a mere recommendation letter in order to obtain the Residence permit .
3. The silence of the regulations  on which purpose of acquisition of land can give a foreigner a residence permit C-11,  is it for residential only or any other usage.

What Mainland Tanzania can learn from  Zanzibar and other jurisdictions

By drawing lessons from other jurisdictions where similar kinds of residence permits are issued , it  is evident that the  residence  permits for real estate ownership are well-articulated in a sense that the areas where such permits apply have been specifically mentioned, these may include prime areas, special economic zones, or any other areas designated by the responsible authorities.

• In Zanzibar, an investor who purchases real estate in the country can obtain a residence permit for two years, famously known as the “Golden Visa.” The investor will receive a residence  permit Class C visa for a fee of USD 500 if not a citizen of the East Africa Community states and  USD 250 for East Africans and the diaspora. The qualifying conditions for such a Golden Visa are; the value of the purchased property should be above USD $ 100,000, and the application shall be coupled with an endorsement by the Zanzibar Investment Promotion Authority (ZIPA). The granted permit covers the investor(s), their spouse, and up to four children below 18 years of age.  It is  worth mentioning that, this applies only to the designated projects approved by ZIPA.
• In Greece, to obtain a residence permit, an investor is required to buy a modern apartment worth €250,000 near the sea and not far from Thessaloniki
• In Malta, one can acquire a permanent residence  permit by buying an apartment worth €310,000 – €750,000, with the condition that the apartment must be in a new residential project with panoramic views
• In Portugal, a residence  permit, also known as a Golden Visa, can be obtained for buying commercial premises in a residential complex worth €500,000–€1,375,000.
• In the United Arab Emirates (Dubai), a Golden Visa can be obtained with a real estate investment of at least AED 2, equivalent to USD $ 545,000, in one of the country’s designated zones for foreign investment. Notable areas include Arabian Ranches, Downtown Dubai, Emirates Hills, Burj Khalifa, Old Town, Jumeirah Lake Towers, Palm Jumeirah, to mention a few.

In Mainland Tanzania, the regulations have not well articulated issues surrounding the grant of the residence  permit class C-11.  It is not clear as to where the house or real estate must be located, how many dependents does the permit cover, and for how long does the permit remain in force and whether the permit’s duration runs subsequently with the life of the certificate of occupancy/title deed.

What needs to be done

From practitioner’s view and our experience, we recommend the following;

1. The Government  should amend  the Tanzania Investment Act to accommodate  all necessary changes, thereby simplifying the applicability of the regulations.  For instance, the Act  must clearly  define the word “buyer of real estate “as used  in the regulations.
2. The regulations should set clear targets to boost real estate investment in certain areas which must be declared and designated as special investment zones or special residential projects where the regulations shall apply.
3.  The government must harmonize other related laws and regulations, such as the Land Act and its accompanying regulations, to ensure alignment with the new regulations. This will facilitate the entire process of purchasing and transferring land to non-citizens or foreigners.
4. Section 20 of Land Act should be revised to explicitly indicate that non-citizens/foreigners can acquire land in Tanzania not only for investment purposes, subject to approval from the Tanzania Investment Centre. Additionally, such land must be located  within a designated area or  an approved housing project  specified by the  Tanzania Investment Centre. The Land Act shall be amended to create a special GRO/CRO for the foreigners who are buyers of real estate under the regulations. This is because,  a derivative title through TIC is not possible since, under the regulations  TIC only issues an approval letter  and does not hold the land on behalf of the foreigners.
5. The law should also specify the category of tenure that will be granted  to non-citizens in the certificate of title upon approval from the Commissioner for Land.
6. The regulations should  be amended to clearly specify  the duration of the residence  permit class C-11 to be granted to the foreigners who are buyers of real estate.
7. The recommendation letter  and procedure of obtaining the same from Tanzania Investment Centre must be established and incorporated into the Tanzania Investment Act.  This should include clear guidelines outlining the circumstances under which TIC may grant such a letter of recommendation.
8. The procedure for  land transfer and associated forms must undergo revision  to preempty the aforesaid  challenges.  For instance,  the land regulations or practice from  the Commissioner for land  should specify that non-citizens should use their passports instead of National Identity Card (NIDA) non -citizen should use passport. Moreover, alternatives to the Taxpayer Identification Number (TIN) for non-citizens should be clearly outlined.

The Government of Tanzania’s efforts in introducing the Golden Visa trend in our jurisdiction is highly appreciated and has been widely applauded. In Zanzibar, this mechanism of granting resident status to foreigners who invest in specified  ZIPA projects has attracted a lot of foreigners to buy condominium property  and similarly attracted mega-real estate investment projects such the Fumba Town project.  Nevertheless, as real estate practitioners and advisors to investors, we call upon the government authorities to formalize and harmonize the applicability of these changes in order to ensure smooth and swift execution of the intended objectives,.

In summary, the regulatory framework needs clarification to align the immigration process with land acquisition procedures, ensuring a clear and legally sound path for foreign investors seeking residence  in Tanzania.

Victory Attorneys & Consultants,
IT Plaza Building, 1st Floor,
Ohio Street/Garden Avenue,
P. O. Box 72015, Dar es Salaam.
Mobile No: 0752089685/0682197331
Email: info@victoryattorneys.co.tz