Zanzibar is seeking to join countries such as Mauritius, Dubai, Oman, Singapore which have attracted real estate investors by offering tax incentives and non-citizen residence permits to three special categories of investors.
The isles, through its Zanzibar Investment Promotion Authority (ZIPA) is in the process of reviewing the law to add real estate buyers, scientists and prominent retired personalities as new categories of foreign investors who can settle on the archipelago as soon as the end of this year.
ZIPA executive director Shariff A. Shariff said the current ZIPA law, enacted in 2018 and the archipelago’s “outdated” Investment Policy of 2005 will be changed to legalise the stay of the new categories of investors and their families.
Mr Sharrif said the recently introduced “strategic investor” category has yielded the intended results. Strategic investors are required to have a minimum investment capital of $100 million in areas such as high end buildings and tourist hotels.
The expected new tax and residency benefits for real estate buyers will include but not restricted to no income tax on worldwide income and wealth; resident permit for villa buyers and their partner and up to four children under the age of 20; first time buyer pays only 50 per cent of normal capital gains on sale of unit, at 5 per cent instead of 10 per cent; foreign ownership allowed.
Others include registration of ownership to be done by ZIPA; no value added tax on unit rental or sales; income tax is halved only on local income - 15 per cent instead of 30 per cent (applicable to foreigners only); repatriation of profit is allowed after tax; residence permits are only valid for the duration the buyer owns the property, renewable every two years at $3,050 for the main investor and $550 for each dependent.
Also, no work permit is granted, but may be applied for separately by the employer and they will be no minimum stay required to claim benefits.