Tanzania's New Investment Act: "Same ' Same But Different"

• Law Firm: Shikana Group
• Subject Matter: Finance and Banking, Immigration, Technology, Financial Services, General Immigration, New Technology
• Author: Shikana Law Group
• Published date: 02 February 2023

Tanzania's New Investment Act: "Same - Same but Different"

The New Tanzania Investment Act 2022 has now become law replacing the Tanzania Investment Act Cap 38 RE 2015 and its amendments. While there was an expectation for major changes, the reality is that the new Act is more or less the same as the previous minus a few differences outlined below:

1. The Act is in the Kiswahili language and there is no translation of the same in English.

2. Removal of the automatic immigration quota of 5 work and residence permits for expatriates workers. While previously an investor registered at the TIC would be allowed up to 5 immigration permits and this was typically used for investors' strategic employees, this incentive is removed which means there is no guarantee for the investor to obtain immigration permits for its strategic employees who will be treated like every other applicant.

3. Local Investors ie Tanzania nationals or companies where a shareholder owns more than 51 percent of shares may benefit from the incentives under the Act where the investment capital is only USD 50,000 which is an different from the previous statutory USD 300,000 requirement, but in practice it was USD 100,000.

4. The Act repeals has removed the investment guarantees of unconditional transferability of proceeds of royalties, fees and charges in relation to transfer of technology agreements that are part of the investment.

5. The Act repeals the provision that was guaranteeing investments that were based on technology transfer agreements

6. The Act now contains additional requirements for investors under the Strategic or Major investment category to qualify for incentives. In addition to the investment capital which needs to be USD 20,000,000 for Tanzanian investor and USD 50,000,000 for a foreign investor, there are these additional requirements for the investment namely to:

a. To generate at least 1,000 local jobs with a sufficient number of senior positions on projects that do not require advanced and modern technology. The previous law required 1,500 local jobs.

b. To have the ability to increase exports by at least 50% of the...