New Residency Investment Program has been Launched in Zanzibar

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The Government of Zanzibar has recently launched a residency program targeted at foreigners who wish to live and invest in the island territory off the coast of Tanzania.

This follows other significant developmental initiatives, especially in the infrastructure and tourism sectors, to stimulate growth in the economy after a dry spell left by the COVID-19 pandemic. Till this program was introduced, the 2018 Investments Act specified procedures and guidelines for Strategic Investment Status (SIS) Projects by providing incentives and allowances. However, it was mainly in the interests of real estate developers and did not offer any benefits for those who wanted to buy property and invest in the country. The result of this was that Zanzibar, despite being an exotic tropical destination with relatively affordable real estate prices, wasn’t able to conceive much development and lagged behind other countries such as Mauritius, Dubai and Singapore, who had already implemented strategic investment programs.

 This has changed with the introduction of the new investor program, which is specifically tailored to provide a vast amount of benefits to prospective forgeign buyers so as to attract more investment into Zanzibar, which in turn will boost the economy and achieve growth in the real estate investment sector and all the other sectors that compliment it. Real estate investors will now be able to obtain a residency permit as an investor, which essentially means that they can reside in Zanzibar as a non-citizen. There is no requirement to permanently live in Zanzibar.

 Tax and residency benefits for real estate buyers:

 1) No Income tax on worldwide income and wealth

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2) Resident permit for villa buyers & partners and up to 4 children under 20 years of age

3) First buyer pays only 50% of normal capital gains on sale of a unit

4) Foreign ownership is allowed

5) Registration of ownership is  done by Zanzibar Investment Promotion Authority (ZIPA)

6) No VAT on rental or sale of a unit

7) Income tax is charged at 15% instead of 30% (applicable to foreigners only)

8) Repatriation of profit is allowed after tax

9) Residence permit is only valid for the duration the buyer owns the property for (renewable every 2 years at $3050 for the main investor and $550 for each dependent thereafter)

10) No work permit is given, but may be applied for separately by the employer

11) No minimum stay is required to claim benefits

 Business investors wanting 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:

 1) Foreign ownership is allowed

2) No business license fees for the first 3 months

3) Income tax for the company is free for the first 5 years after which it will be charged at 15% (half of the local income tax)

4) Repatriation of profit is allowed after tax

5) 100% exemption on withholding tax on interest paid to foreign banks

6) Deduction of depreciation rate of 100% within 5 years

7) Residence and work permits can be obtained by both investors and employees.

Pennyroyal Ltd., the developer & manager of Blue Amber Zanzibar, is the first real estate project to be awarded SIS status by the Government of Zanzibar. Blue Amber is a luxurious, mixed-use development, incorporating residential properties, hotels and amenities for both tourists and locals and is spread across 411 hectares along the Muyuni waterfront in the north-eastern part of Zanzibar. It is currently the only SIS rated development on the island with an unspoiled beach and pristine views of Mnemba Island.

Construction began in the 1st quarter of 2020 with the villa residences and visitors center and is due to be completed in the next 18 – 24 months. The hotel, residences and retail sub-projects will commence in the near future with phase 1 expected to be completed in the next 2 years.

 Hussein Ali Mwinyi, the President of Zanzibar, signed a memorandum of understanding for the construction of a port in North Unuja, costing an estimated $230 million. Once it is completed, it will include container berths, liquid bulk goods, offshore natural gas services and marine vessel rehabilitation.

Another large project due for completion is terminal 3 of Amani Karume International Airport, which will provide an improvement in the quality and scale of customer care services for visitors to the island.

To get more information & assistance on Zanzibar’s Residency Program, please submit the form below and our specialist will get in touch with you at the earliest. 

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