Summary Notes:

1. Introduction
2. Key Changes
3. Legal Implications
4. Conflict Between Regulations and Principal Legislation
5. Comparative Analysis
6. Legal Challenges and Gaps
7. Recommendations
8. Conclusion

1.0 Introduction

The Immigration (Amendment) Regulations, 2023, introduced through Government Notice No. 428 of 2023 (“the Regulations”), brought substantial reforms, particularly regarding the issuance of residence permits. These changes are of significant interest to foreign investors and non-citizens seeking residency in Tanzania. This article delves into the legal ramifications of the new regulations, focusing on their application in Mainland Tanzania and providing a comparative analysis with Zanzibar.

2.0 Key Changes

2.1 Introduction of Residence Permit Class C-11

One of the notable changes in the Second Schedule of the Regulations is the introduction of Residence Permit Class C-11. This new category allows foreigners to obtain a residence permit by purchasing real estate worth at least USD $100,000 in Tanzania.

Residence Permit Class C has traditionally been reserved for individuals who do not qualify for Class A or B permits. These include students, researchers, NGO employees, and retirees. With the amendments, the category of “buyers of real estate” has been added, allowing foreigners who purchase property worth USD $100,000 or more to qualify for Residence Permit Class C-11.

2.2 Expansion of Qualifying Criteria for Residence Permit Class C

Prior to these amendments, foreign nationals seeking residence in Tanzania primarily used Residence Permit Classes A and B. Class A is designated for investors, while Class B is for employees. Class C permits have historically been issued to a broader group, including interns, volunteers, and artists. However, with the introduction of Class C-11, foreigners purchasing property no longer need to meet the qualifications tied to employment, investment, or specific engagements.

3.0 Legal Implications on Immigration and Investment Laws

The introduction of Residence Permit Class C-11 has several legal implications, particularly when juxtaposed with Tanzania’s existing land and investment laws.

3.1 Ownership of Land by Foreigners

Under Section 20(1) of the Land Act, Cap 113, land ownership in Tanzania is generally restricted to Tanzanian citizens. Foreigners may only acquire land for investment purposes, typically through derivative rights granted by the Tanzania Investment Centre (TIC) or the Export Processing Zones Authority (EPZA). These regulations mandate a minimum investment of USD $500,000 for projects to qualify for a Certificate of Incentives.

However, the new regulations allow foreigners to acquire and own property worth USD $100,000 without requiring a certificate of incentives from TIC or EPZA. This creates a legal conflict between the Immigration (Amendment) Regulations and the Land Act. While the Land Act mandates that land for foreign ownership must be acquired through derivative rights, the new immigration regulations appear to bypass this requirement for real estate purchases.

3.2 Requirements for Residence Permit Class C-11

Applicants for Residence Permit Class C-11 must meet several conditions, including:

• Police clearance from the country of origin
• Tax clearance from relevant authorities
• A recommendation letter from TIC (for Mainland Tanzania) or the Zanzibar Investment Promotion Authority (ZIPA)
• Proof of purchase of real estate worth at least USD $100,000
• Title deed or certificate of occupancy

4.0 Conflict Between Regulations and Principal Legislation

The conflict between the Immigration (Amendment) Regulations and the Land Act, Cap 113, is evident. The Land Act restricts foreign land ownership to investment purposes through TIC or EPZA, while the Immigration Regulations allow for ownership based solely on property purchase. This raises questions about the legal enforceability of the new regulations, particularly regarding land transfers to foreigners.

5.0 Comparative Analysis: Zanzibar and Other Jurisdictions

5.1 Zanzibar’s Approach: The Golden Visa

Zanzibar offers a “Golden Visa” residence permit to foreign investors purchasing real estate. This permit, known as Residence Permit Class C, can be obtained for a fee of USD $500, provided the property is worth at least USD $100,000. The permit covers the investor, their spouse, and up to four children under 18. This scheme has boosted foreign investment in Zanzibar, especially in projects approved by ZIPA, such as the Fumba Town real estate development.

5.2 International Comparisons

Countries like Portugal have implemented similar programs offering residence permits to property buyers:

• Portugal: The Golden Visa scheme allows foreigners to obtain residence by purchasing commercial premises worth €500,000–€1,375,000.

In contrast, the United Arab Emirates (Dubai) offers a Golden Visa for real estate investments of at least AED 2 million (approximately USD $545,000).

6.0 Legal Challenges and Gaps in the Regulations

The new regulations present several challenges:

• Lack of Clarity on Land Ownership: The regulations do not specify whether foreign property ownership is limited to residential purposes or can extend to other uses, creating ambiguity.
• Uncertainty Around Tenure: It remains unclear what type of land tenure will be granted to foreigners under these regulations, as existing tenures (Granted Right of Occupancy and Customary Right of Occupancy) are limited to citizens.
• Omission of Key Details: The regulations fail to outline essential details such as the location of permissible real estate purchases, the duration of the residence permit, and the number of dependents it covers.

7.0 Recommendations

To resolve these conflicts and ambiguities, several changes are necessary:

1. Amendment of the Land Act: Section 20 of the Land Act should be revised to explicitly allow foreign ownership of land for residential purposes, provided the property is located in designated areas approved by TIC or ZIPA.
2. Harmonization of Laws: The Immigration Regulations, Land Act, and Tanzania Investment Act need to be harmonized to ensure that the regulations align with the principal legislation on land matters.
3. Clear Definition of Real Estate Investment Zones: The government should designate specific areas for real estate investment by foreigners, similar to the approach taken in Zanzibar.
4. Clarification of Permit Duration and Coverage: The regulations should clarify how long Residence Permit Class C-11 remains valid and whether it extends to dependents.

8.0 Conclusion

The introduction of Residence Permit Class C-11 represents a significant shift in Tanzania’s immigration and land ownership laws. However, the legal inconsistencies between the Immigration Regulations and the Land Act pose challenges that must be addressed to ensure a clear, coherent framework. Harmonizing the regulatory framework will promote foreign investment while safeguarding Tanzania’s land and immigration policies.

Disclaimer: This article is authored by Khalifa Rukazibwa, from Rive & Co, a new and innovating law firm as a result of the partnership between ABC Attorneys, Stallion Attorneys and Sepia Attorneys, built on the foundation of trust, credibility, and novelty, offering expert legal solutions. This Article is for informational purposes only and should not be construed as legal advice. It is recommended to consult with a qualified legal professional for advice specific to your situation.