Notice

Land is not for sale in Zanzibar. We are strongly advise our distinguished investors not to enter into Land Agreements with any third party. The Government  shall not recognize any such transactions.  ..... This website is currently under maintenance. We apologies for any inconvenience caused.


+255 (024) 223 302 6 / 223 735 3 | Email: zipa@zipa.co.tz

  • A paradise of opportunities

    Welcome for investments and enjoy our hospitality!
  • 1

Incentives

Made under section 31(2) of The Zanzibar Investment Promotion and Protection  Authority Act No. 14, 2018

Zanzibar  has a stable and predictable fiscal regime that, among other things, recognize the importance of the companies to recover their investment costs prior to the payment of corporate tax. Foreign investors are allowed to own 100% of their businesses. It  also offers lucrative incentive package to strategic investors. Some of the incentives provided by law are categorized as follows:

A.  INVESTMENTS WHOSE GRANTED STRATEGIC INVESTMENT STATUS

 1. Incentives and allowances provided during implementation  of investment project

  1. exemption from all duties and taxes on importation and local purchases of construction goods and materials during the project construction;
  2. exemption of income tax on interest on capital borrowed from foreign banks;
  3. five years grace period on payment of Land Lease;
  4. hundred percent foreign ownership is allowed;
  5. engagement of foreign contractors is allowed; and
  6. five years grace period on payment of land lease for marina in tourism investment;

2.  Incentives and allowance provided during project operation 

  1. fifty percent exemption of the prevailing rate for Corporate Income Tax;
  2. fifty percent exemption of Profit Tax for repatriate Profit;
  3. fifty percent exemption for Accelerated Depreciation for five years;
  4. fifty percent exemption of income tax on interest on capital borrowed from foreign banks;
  5. hundred percent allowance on Research and Development expenditure;
  6. hundred percent retention of all profits after tax; and
  7. hundred percent foreign ownership is allowed.

3. Additional incentives to investments in the manufacturing sector only

  1. exemption from payment of any tax on all goods produced for exports;
  2. exemption from payment of trade levy for raw materials and industrial inputs purchased from Tanzania Mainland;
  3. exemption from payment of Import Duty, Excise Duty and VAT on importation of heavy machines and equipment;
  4. exemption from payment of VAT on local purchase of heavy machinery or equipment required during production phase; and
  5. Additional five years allowance of fifty percent Accelerated Depreciation.

B.  INVESTMENTS APPROVED UNDER FREE ECONOMIC ZONES SCHEME

1. Incentives for Free Economic Zone Developers

  1. exemption from payment of taxes and duties for machinery, equipment, heavy duty vehicles, building and construction materials and any other goods of capital nature to be used for purposes of development of the Free Economic Zone infrastructure;
  2. exemption from payment of corporate tax for an initial period of ten years and thereafter a corporate tax, shall be charged at the rate specified in the Income Tax Act;
  3. exemption from payment of withholding tax on rent, dividends and interest for the first ten years
  4. exemption from payment of property tax for the first ten years;
  5. remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle, ambulances, fire fighting equipment and fire fighting vehicles and up to two buses for employees transportation to and from the Free Economic Zones;
  6. exemption from payment of stamp duty on any instrument executed in or outside the Free economic Zone relating to transfer, lease or hypothecation of any movable or immovable property situated within the Free Economic Zone or any document, certificate, instrument, report or record relating to any activity, action, operation, project, undertaking or venture in the Free Economic Zone;
  7. on site customs inspection of goods within Free Economic Zones; and
  8. treatment of goods destined into Free Economic Zones as transit goods;

2.  Incentives for Zone Operators whose primary markets are  within Custom territory 

  1. remission of customs duty, value added tax and any other tax charged on raw materials and goods of capital nature related to the production in the Free Economic Zones;
  2. exemption from payment of withholding tax on interest on foreign sourced loan;
  3. remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle, one ambulances, fire fighting equipment and fire fighting vehicles and up to two buses for employee's transportation into and from the Free Economic Zones;
  4. exemption from pre-shipment or destination inspection requirements;
  5. on site customs inspection of goods within Free Economic Zones;
  6. access to competitive, modern and reliable services available within the Free Economic Zones; and
  7. subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax whenever appropriate, unconditional transfer through any authorized dealer bank in freely convertible currency of:
  1. net profits or dividends attributable to the investment;
  2. payments in respect of loan servicing where a foreign loan has been obtained;
  3. royalties, fees and charges in respect of any technology transfer agreement;
  4. the remittance of proceeds in the event of sale or liquidation of the licensed business or any interest attributable to the licensed business; and
  5. payments of emoluments and other benefits to foreign personnel employed in Tanzania in connection with the licensed business.

3.  Incentives for Zone Operators who producing for Export markets 

  1. subject to compliance with applicable conditions and procedures, accessing the export credit guarantee scheme;
  2. remission of customs duty, value added and any other tax charged on raw materials and goods of capital nature related to the production in the Free Economic Zones;
  3. exemption from payment of corporate tax for an initial period of ten years and thereafter, a corporate tax shall be charged at the rate specified in the Income Tax Act;
  4. exemption from payment of withholding tax on rent, dividends and interests for the first ten years;
  5. exemption from payment of all taxes and levies imposed by the local Government Authorities for products produced in the Free Economic Zones for a period of ten years;
  6. exemption from pre-shipment or destination inspection requirements;
  7. on site customs inspection of goods in the Free Economic Zones;
  8. remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle, ambulances, firefighting equipment and vehicles and up to two buses for employees transportation to and from the Free Economic Zones;
  9. treatment of goods destined into Free Economic Zones as transit goods;
  10. access to competitive, modern and reliable services available within the Free Economic Zones; and
  11. subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax whenever appropriate unconditional transfer through any authorized dealer bank in freely convertible currency of:
  1. net profits or dividends attributable to the investment;
  2. payments in respect of loan servicing where a foreign loan has been obtained;
  3. royalties, fees and charges in respect of any technology transfer agreement;
  4. the remittance of proceeds in the event of sale or liquidation of the business enterprises or any interest attributable to the investment;
  5. payments of emoluments and other benefits to foreign personnel employed in Tanzania in connection with the business enterprise;

       l. twenty percent of total turnover is allowed to be sold to the local market and is subject to the payment of all taxes;
     m. hundred percent foreign ownership is allowed; and
      n. no limit to the duration that goods may be stored in the Freeport Zones.

Important Note

Investors licensed primarily for export markets are investors whose exports are more than eighty percent of total annual production.

C.  APPROVED INVESTMENTS  OUTSIDE FREE ECONOMIC ZONES

1.  Incentives for investor investing outside Free Economic Zones.

  1. exemption from payment of import duty, excise duty Value Added Tax and other similar taxes on machinery, equipment, spare parts, vehicles and other input necessary and exclusively required by that enterprise during construction period indicated in the Investment Certificate;
  2. exemption from payment of business license fee for the first three months of trial operation;
  3. corporate tax exemption for up to five years;
  4. hundred percent foreign ownership;
  5. hundred percent retention of all profits after tax;
  6. hundred percent allowance Research and Development; and
  7. hundred percent allowance for free repatriation of profit after tax.

2. Additional incentives to investment in manufacturing sector only

  1. exemption from payment of any tax on all goods produced for exports;
  2. exemption from payment of trade levy for raw materials and industrial inputs procured from Tanzania Mainland;
  3. exemption from payment of import duty, Value Added Tax and Other similar taxes on raw and packaging materials during project operations;
  4. exemption of Income Tax on interest on registered borrowed capital; and
  5. hundred percent allowance investment deduction on capital expenditure within five years;

3.  Additional incentives to investment in Real-estate business only

  1. exemption of income tax on interest on borrowed capital;
  2. stamp duty exemption;
  3. hundred percent allowance investment deduction on capital expenditure within five years; and
  4. capital gains tax on properties sold or purchased.

Get in touch

For inquiries, comments and advice please contact us at the following address:

Executive Director
Zanzibar Investment Promotion Authority (ZIPA)
Maruhubi Complex - Zanzibar 
United Republic of Tanzania
Phone: +255 24 2233026; Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Working Hours: Mon - Fri: 07:30 am - 03:30 pm

Subscribe to our Newsletter

Please enable the javascript to submit this form