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 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 a 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 the 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 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 vivid in the whole process of purchasing land from the locals 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, before 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 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 the 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 African Community states and USD 250 for East Africans and the diaspora. The qualifying conditions for such a Golden Visa are; that 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, and 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 the permit covers, for how long the permit remains 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 the 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 the 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 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 specify the duration of the residence permit class C-11 to be granted to foreigners who are buyers of real estate.
7. The recommendation letter and procedure for obtaining the same from the 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 pre-empt the aforesaid challenges.  For instance, the land regulations or practices from the Commissioner for Lands 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 as 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 to ensure the 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.

Article by:

Benedict Ishabakaki, Rayson Elijah Luka & Fredy Mushi

Victory Attorneys & Consultants,

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