Ardean Law Chambers provides its legal brief on how to buy land and property in Zanzibar and highlights the procedures and steps for investing in real estate in the archipelago.
Ardean Law Chambers is a Tanzanian law firm specializing in corporate, investment, taxation and intellectual property services in Tanzania, Zanzibar, Kenya, Uganda and the rest of East African countries. This legal brief was prepared by its Managing Partner, Mr Gratian Mali.
Introduction to Land Acquisition in Zanzibar
To achieve the economic transformation and aspiration included in its Development Vision 2050, Zanzibar has opened doors to both foreign and domestic investors to acquire land for investment activities.
The two main islands of the archipelago of Zanzibar cover a land area of about 2,654 km2, of which 1,666 km2 in the largest and main island, Unguja, and 988 km2 in Pemba.
Zanzibar also hosts an Exclusive Economic Zone (EEZ) area of 223,000 km2.
Land and Legal Framework
The Land Tenure Act 1992 provides that all land within the islands of Zanzibar occupied or unoccupied is public land administered by the Minister responsible for land affairs on behalf of the President.
The land within the Free Economic Zones is administered by the Zanzibar Investment Promotion Authority (ZIPA).
In Zanzibar, both citizens and foreigners have access to land ownership, especially for investment activities.
Categories of Land for Investment Purposes
For investment activities, the land is categorized into two classes namely registered land and unregistered land.
The procedures of acquiring land depend on the category of land that the investor intends to acquire.
The Acquisition Process
Any citizen/Zanzibari of eighteen years of age or older has the right to own land in Zanzibar. The right to own an interest in land is granted through the Right of Occupancy.
Can foreigners buy property in Zanzibar?
No foreigner can be granted a Right of Occupancy, by way of acquisition or purchase.
However, once the right to own an interest over the land has been granted to a Zanzibari, the owner of such interest is free to sell, lease, bequeath or gift his interest over the land to any person including a foreigner.
Hence, a foreigner may buy any piece of land from the land owner and use it for his investment purpose.
The land owner is the holder of the Right of Occupancy, or any person owning interest over the land through other means including inheritance, or purchase.
After the purchase process is done, the (foreign) investor will have to process the registration of the land (under the lease system) in his name. The lease period is up to 99 years.
Matters to be Considered During the Acquisition Process
In order to have a credible enjoyment of the land you acquire, the following steps are very important.
The official search report guarantees the buyer that the land is actually owned by the intending seller and that it has no encumbrances.
If the land is unregistered, the search report will have to be provided by the Sheha-the government officer appointed to administer a designated area within which the land is located.
If the land is registered, the report will be provided by the Commissioner for Land.
If the land is a free economic zone, the appropriate authority to provide its details is ZIPA.
Once it is ascertained that the land is clean and free from encumbrances and that the intending seller is the real owner, the sale agreement should be prepared and signed by the seller and the buyer. In order for this sale agreement to have effect, it must be attested and registered.
If the land is unregistered, it must be surveyed. A site plan should be prepared and the demarcation point (beacons) should be fixed. This will not be necessary if the land is registered.
The land transfer process from the seller to the buyer is done by the Land Transfer Board established under the Land Transfer Act, of 1994.
No permanent transfer of land or long-term lease shall take place until the transaction is reviewed and approved by the Land Transfer Board. Once the Board approves the transaction, a Transfer Certificate shall be issued to the buyer.
A government lease is issued by the Land Commission. It is a certification that the buyer is a legal owner of the land. The buyer at this stage is at liberty to enjoy the land.
The government land lease is for 33 years up to 99 years renewable.
The property on this land, after being developed in accordance with the approved investment plan, may be sold, assigned, sub-leased or subdivided, inherited, or mortgaged.
Building on Land in Zanzibar
No person is permitted to develop land without approval from the relevant authorities.
Building permits are issued by the Development Control Unit (DCU) established under the Building Regulation Act of 2015. The main purpose of the DCU establishment is to oversee the issuance of building permits and control arbitrary and non-compliant construction in Zanzibar.
DCU shall consider the application and issue a Building Permit or advise the applicant otherwise, within seven (7) working days from the date of submission.
Requirements for Building Permits
The application for a building permit is done by filing with the DCU and must be accompanied by the Investment Certificate.
The Investment Certificate is issued to investors by the Zanzibar Investment Promotion Authority (ZIPA), under Section 23 of the Zanzibar Investment Promotion and Protection Act No. 14 of 2018.
This procedure is to be done before applying for the building permit.
After ZIPA approves the investment proposal, the investor is issued with the Investment Certificate. The investor will be required to purchase an Investment Service License on an annual basis, with the same fee paid upon approval, until all approved capital has been invested.
Procedures for Application of Investment Certificate
The investor is required to prepare and submit a concept note of his project by using Investment Intention Form which can be obtained from ZIPA.
Once the concept note is accepted, the investor will be notified and provided with an Application Form.
The duly filled and signed application form must be submitted to ZIPA along with the detailed business plan of the project. The business plan must be accompanied by the following:
Minimum Capital Investment Required
The minimum capital required for hotels and real estate businesses is USD 2,500,000 for foreign companies and USD 300,000 for domestic (Tanzanian) companies.
The Capital required for other businesses is USD.300,000 for foreign companies and USD.100,000 for local companies.
A company is considered a domestic company if the majority shareholder is Tanzanian by at least 55%.
If the investor does not meet the capital required to be registered by ZIPA, the investor may apply for a license from the Commission of Tourism.
If the Commission is satisfied with the application for the license, it issues a letter of confirmation to allow the investor to proceed with project activities pending completion of other requirements.
However, one of the conditions for the grant of the letter of confirmation that the applicant will be given the license, is that the company must be owned by Tanzanian citizens by at least 70%.
You may download a PDF version of this legal brief at https://bit.ly/3JpXujl.
You can also read Ardean’s legal brief on how to buy land in mainland Tanzania.
Ardean Law Chambers may advise further on land acquisition in Zanzibar, and in mainland Tanzania. For additional details visit www.ardeanlawchambers.co.tz or call/WhatsApp: +255688361260