Zanzibar, with its strategic location and booming tourism sector, is highly attractive to foreign investors. As all land on the islands is public land, foreign entities are strictly prohibited from obtaining outright ownership (freehold). Instead, investors secure their right to develop and occupy the land through a long-term, renewable Leasehold Title, typically granted for up to 99 years.
This process is governed by the Land Tenure Act of 1992 and is heavily managed by the Zanzibar Investment Promotion Authority (ZIPA) for qualified investment projects.
1. Land Ownership and Legal Pathways
A. The Land Tenure Act Principle
Under the Land Tenure Act, all land is vested in the President on behalf of Zanzibari citizens. Non-citizens (including Mainland Tanzanians) cannot be granted the ultimate Right of Occupancy.
- Leasehold (Derivative Right): Foreigners acquire a long-term Government Lease (often referred to as a Derivative Right) which grants the exclusive right to use, occupy, develop, transfer, and inherit the land for the duration of the term.
- Lease Duration: Leases are commonly granted in increments of 33, 66, or the maximum term of 99 years, depending on the investment type and the specific agreement.
B. The Two Main Investment Routes
| Route | Purpose | Key Legislation | Lease Term |
| I. Commercial Land | Large-scale projects (Hotels, Industrial Parks, Custom Development). | Land Tenure Act, 1992 | Up to 99 years |
| II. Condominium/Unit | Purchase of units (villas, apartments) within approved real estate developments. | Condominium Act No. 10 of 2010 | 99 years |
2. The Multi-Stage Lease Acquisition Process (Route I: Commercial Land)
This route applies to large, standalone commercial projects and requires acquiring the land interest from the current registered holder (a Zanzibari citizen or entity) before the Government issues the new lease.
(a) Due Diligence and Transfer Approval
- Official Search : The investor’s legal counsel must conduct an official search with the Commission for Lands to confirm clear ownership, verify boundaries (beacons), and check for any existing mortgages, caveats, or court claims.
- Land Transfer Board Approval: The acquisition and long-term lease transaction to a foreign entity must be reviewed and approved by the Land Transfer Board (established under the Land Transfer Act, 1994) before the sale is finalized.
(b) ZIPA and Government Lease Application
- ZIPA Investment Certificate: The project must be registered and approved by ZIPA, resulting in the issuance of a Certificate of Investment. ZIPA provides a crucial “No-Objection Certificate” for the land transaction.
- Submission: The application for the Government Lease is submitted to the Commission for Lands, supported by the ZIPA certificate, corporate documents, and the detailed Business Plan.
- Site Inspection & Survey: The Commission for Lands will inspect the site and ensure a certified site plan is prepared or verified.
3. Condominium Investment (Route II: Real Estate Unit Purchase)
The Condominium Act No. 10 of 2010 created a streamlined, secure pathway for foreigners to invest in residential property without the complex land transfer process.
- Direct Unit Purchase: Foreigners can purchase individual units (apartments, villas, townhouses) within projects that are specifically approved and regulated by ZIPA.
- Security: The buyer receives a Unit Title (or Sub-Lease) for a full 99-year renewable leasehold interest over the unit, distinct from the ground lease held by the developer. This title is fully transferable, inheritable, and mortgageable.
- Residency Incentive: Investors who purchase property in a ZIPA-approved real estate project valued at a minimum of US$100,000 are eligible to apply for a Residence Permit for themselves, their spouse, and up to two dependents, encouraging long-term stay.
4. Lease Registration and Finalization
The lease is legally established only when the signed agreement is officially registered.
(a) Payment of Government Fees
Before registration, the investor must pay all statutory fees to the Zanzibar Revenue Board:
- Stamp Duty: Approximately 1% of the declared consideration (purchase price or land value).
- Land Rent: Annual ground rent is payable to the government based on land size, location, and use.
- Other Fees: Survey costs and Lease Agreement preparation fees (e.g., typically TZS 1,000,000 for foreign entities).
(b) Formal Registration
The signed Lease Agreement (or Condominium Unit Title), along with all supporting documents (ZIPA approval, proof of payment for stamp duty/rent, Certificate of Incorporation), is submitted to the Zanzibar Land Registry to be recorded. This final step grants the investor legal security and enforceability.
Conclusion
Registering a land lease in Zanzibar requires strict adherence to the Land Tenure Act and close collaboration with ZIPA and the Commission for Lands. Whether pursuing a large-scale commercial project or buying a condominium unit under the special provisions of the Condominium Act, a successful 99-year leasehold provides foreign investors with secure, long-term rights to develop and enjoy their investment in Zanzibar, backed by the government’s legal framework.
Disclaimer
The content of this update is intended for general informational purposes only and does not constitute legal advice. It should not be relied upon without seeking specific legal counsel on any particular matter.
Author Details
The author is Sunday Ndamugoba , Partner, RIVE&Co he can be reached at sunday@rive.co.tz