Zanzibar. The government of Zanzibar has unleashed a new investment scheme set to propel the Isles’ economy to greater heights.
This follows the introduction of a new tax and residency programme which came into effect on July 1, 2021. The new arrangement allows foreigners to live and invest in the island under special conditions.
This game-changing programme that targets foreign real estate buyers was formed as a measure to come back from the storm that withered Zanzibar’s development, exacerbated by the Covid-19 pandemic.
Speaking to The Citizen, Mr Shariff Ali Shariff, who is the executive director of Zanzibar Investment Promotion Authority (Zipa) said the programme was developed after the government became aware of the enormous potential such an arrangement could have on the growth of real estate in Zanzibar.
“Growth of real estate depends on two kinds of investors: the developers and the foreign buyers, because the two are dependent on each other for the expansion of the sector. We gleamed lessons from countries like Mauritius, Dubai, Singapore and saw a noticeable gap that is yet to be filled in the real estate sector in Zanzibar,” he explained.
According to him, the Investments Act of 2018 provided procedures and criteria for Strategic Investment Status (SIS) projects with incentives and allowances to real estate developers, however the same was not offered to those wanting to buy property in the country.
Mr Sharrif said that the government had on several occasions sat down with real estate stakeholders based in Zanzibar to draft down several incentives that would be displayed as attraction for the buyers to invest in the island, whereas the most important of all is ‘the residency permit’ that authorizes buyers together with their partner and not more than four children under the age of 20 years to be allowed to live in the country after purchasing a property.
“The other incentives for real estate investors include 50 percent exemption on capital gain on purchased properties, 100 percent foreign ownership is allowed, 100 percent exemption from worldwide income for foreigners as well as no minimum stay is required to claim benefits,” he explained.
Mr Sharrif also hinted at the presence of other incentives for business investors who want to put their money in ventures such as restaurants, watersports and retail operators whereas the benefits are almost similar except it is approved as ‘Strategic investment’.
“For business investors, incentives include foreign ownership permit, no business licence fees for the first three months, deduction of depreciation rate of 100 percent within five years as well as residence and work permits for investor and employees,” he explained.
One of the project developers who have advocated the ‘residency permit’ for about six years, Mr Saleh Said – the managing director of Pennyroyal Limited, said that the new Act would elevate Zanzibar to new heights in terms of development.
“With the introduction of the new investment programme in Zanzibar alongside the myriad of benefits, we expect to see great interest among buyers from abroad on the long-awaited program,” says Mr Said.
He further explained: “It has taken me six years of constantly pushing for this programme to come to life and I applaud the government for their collaboration with real estate developers especially after they understood its importance and how it will better the island’s investment arena.”
For his part, Mr Milan Heilmann, who is the project manager of ‘The Soul’, a residential facility situated in Paje, Zanzibar explained that the new incentives were promising to the future of real estate in Zanzibar.
“As we embark on the implementation of this residency permit alongside other incentives, It shows that once it becomes exposed to the world and people really get to understand what it is all about and the benefits that are attached, it will definitely earmark Zanzibar as one of the most preferable investment destinations worldwide,” observed Mr Heilmann.