1. Overview
The Government of Tanzania (GOT) generally has a favorable and positive attitude toward foreign direct investment (FDI) and has had considerable success in attracting FDI. In 2023, FDI into Tanzania rose to over USD 9.0 billion, the second highest in East Africa. The legacy of socialist policies endures in certain sectors, however, and some officials remain suspicious of foreign investors and free competition. There are no laws or regulations that limit or prohibit foreign investment, participation, or control, and firms generally do not restrict foreign participation.
Tanzania, and through its institutions such as the Tanzania Investment Centre (TIC) has been improving a favorable investment opportunity for investors such as to ensuring availability of potential and strategic land for investment in various sectors of industries, including commercial, housing, hotel, mining, industries and agriculture.
At ‘Alin Law Care’ we are here to provide expert guide and help you to successful know how to acquire land for investment and to establish your investment in Tanzania.

2. Land governance in Tanzania
Tanzania is a union country formed by the Articles of Union entered between the Government of the Republic of Tanganyika (Mainland Tanzania) and the Government of the Peoples’ Republic of Zanzibar (Zanzibar) on 22^nd April 1964. The Article, among other things, set a demarcation of union matters and non-union matters, but land is one of the non-union matters.  Since land is not a Union matter each part of the Union has its own land law and management system.
Land in Mainland Tanzania is not the private property of a person; all land is public property entrusted to the President of the United Republic of Tanzania on behalf of its citizens. Different Laws have been enacted in Mainland Tanzania for the management of Land for different purposes such as the Land Act No.4 of 1999 which manages land other than village land, the Village Land Act No. 5 of 1999 which manages the village land, the Land Acquisition Act No. 47 of 1967. Furthermore, the laws establish different institutions responsible for management of land in Mainland Tanzania.

This article addresses the opportunity of land acquisition and use for foreign Investment in Mainland Tanzania; what are the procedures and requirements for application of land by foreigner for investment purpose, and the privileges accrue to the derivative right of occupancy that foreigner investor acquires after being dully applied for. 

3. Land classification in Tanzania

 For the purposes of land management, land is classified into three classifications namely:

• • Reserved land: Reserved land are National Parks, Forestry reserves, and wildlife conservation areas, altogether they constitute 28% of all land area.

• • Village land: Villages fall under the jurisdiction of existing registered 10832 villages in the country, which constitute nearly 70% of all land. A foreign investor may acquire village land for investment by buying a piece of land from the villagers or the Village Council. However, such land should be changed from village land to general land.

• • General Land: These lands are governed by a number of laws but the Commissioner for Land has ultimate powers of allocation of reserved land. It is important to note that the President of the United Republic of Tanzania can transfer land between all three categories depending on government policies, general planning or upon application by interested persons including investors.

4. Land occupancy in Tanzania 

A person who wants to occupy land can either lease it or apply to acquire it by being issued with an appropriate classification of title. Tanzania offers various land titles to provide legal recognition and rights to land occupiers. These titles vary depending on the category of the underlying land.

• • Granted Right of Occupancy (GRO): This title grants the right to occupy and utilize land under a long-term lease, typically for 33, 66, or 99 years. GROs are issued by the President for general or reserved land, and they serve as a 99-year government lease. GROs represent one of the highest forms of land tenure in Tanzania.

• • Customary Right of Occupancy (CRO): This title provides the right to occupy and use land through a long-term lease, also for 33, 66, or 99 years. Village councils can grant CROs, which are identical to GROs but apply only to land under their jurisdiction.

• • Derivative Right: This refers to the right to occupy and use land created by a Granted Right of Occupancy. It encompasses leases, sub-leases, licenses, usufructuary rights, and similar interests. Derivative Rights can be granted for a period which is one (1) year shorter than the duration of the associated GRO. Derivative Rights are exclusively granted by the Tanzania Investment Centre (TIC) to foreign investors.

5. Obtain land for foreign investment in Tanzania
Land ownership is by means of obtaining Right of Occupancy for citizens, and for non-citizen investors may occupy land only for investment purpose through a government Granted Right of Occupancy, through Derivative Right granted by Tanzania Investment Centre (TIC) or sub lease through a Granted Right of Occupancy 

What is investment?

For purpose of investment in Tanzania, the Tanzania Investment Act of Tanzania defines ‘investment’ as the creation or acquisition of new business assets and includes the expansion, restructuring or rehabilitation of an existing business enterprise.

Local investors 

“Local investor” means a natural person who is a citizen of Tanzania, a company incorporated under the laws of Tanzania in which the majority of the shares are held by a person who is a citizen of Tanzania, or a partnership in which the partnership controlling interest is owned by a person who is a citizen of Tanzania. The local investors are obtaining land for investment in a form of Granted of Right of Occupancy granted by the TIC.

Foreign Investors

For land ownership under Tanzanian laws, a non-citizen has been defined as set out below. This article uses the definitions of non-citizen and foreign investors interchangeably. A foreign investor means:

1. 1. an individual who is not a citizen of Tanzania;

1. 1. a body corporate registered in Tanzania whose shares are not at least more than 50% owned by Tanzanian citizens;

1. 1. by convention, a foreign body corporate which is not incorporated in Tanzania incorporated under the laws of any country other than Tanzania, or

1. 1. in the case of partnerships, means a partnership in which the partnership controlling interest is owned by a person who is not a citizen of Tanzania. 

6. Procedures for obtaining land for foreign investment in Tanzania

To be presided the procedure involves the following steps:

i. Identify Suitable Land

Foreigners can only be granted Derivative Rights of which generally must be from general land. However, if a foreign investor identifies any village land which they wish to acquire, then they will need to follow a preliminary process to convert the village land to general land, before commencing the Derivative Right. Furthermore, if the investor has not already identified suitable land, then the TIC, in coordination with the investor, may work together to identify suitable land for the proposed investment through the TIC’s land bank.

ii. Registration of the investment at TIC

To acquire land through a Derivative Right issued by the TIC, the foreign investor is required to first register the investment with the TIC. To register an investment project at Tanzania Investment Centre an investor is required to invest a minimum investment capital of USD 500,000 (for foreign investors) and a minimum of 300,000 (for local investors).

iii. Application for a Derivative Right 

Once the TIC registration is completed, the investor applies to them, providing all necessary documentation and information required for the Derivative Right application. This includes details about the proposed investment project, the intended land use, and any relevant supporting documents concerning the land. The relevant fees also need to be paid.

iii. Issuance of Derivative Right 

Once the land allocation approval is obtained, the TIC facilitates the issuance of a Derivative Right to the foreign investor. This legal document confirms the investor’s rights and interests in the allocated land, granting them the necessary authority to utilise and develop the land for their investment project.

7. Application for Land for foreign investment

a. Submit application for derivative right

The application is made to the Tanzania Investment Centre (TIC) and must be accompanied by the following requirements:

1. 1. Application letter (original): The letter should explain the purpose of the land, expected location and or particulars of the land that investor want

1. 1. Proof of land ownership (Simple copy): Sales agreement, or title deed

1. 1. Certificate of incorporation (BRELA) (2 simple copies) or Certificate of compliance (BRELA) (2 simple copies)

1. 1. Certified Memorandum and Articles of Association (2 simple copies)

1. 1. Proof of nationality of each shareholder (Simple copy)

1. 1. Proof of annual returns (Form 128) (2 simple copies) certified.

b. Obtain notification letter from TIC 

The notification that you should expect here is:

• • Notification letter (derivative right)

• • Payment invoice (control number -land) and,

• • Payment invoice (control number – TIC)

c. Pay for land allocation and facilitation fees.

The requirements here is control number (land) and control number (TIC), both should be original.

d. Sign derivative right

The requirement is Land commissioner’s receipt (original)

e. Pay for derivative right registration fee 

The Derivative right registration fee is TZS 135,000/=, payment methods is cash, check or mobile phone money transfer

f. Obtain the derivative right

8. Duration of processing application with TIC

Generally, the timeline for issuing a derivative right range from 6 to 12 months. However, the time may vary depending on several factors and circumstances as the case maybe.

9. How to apply for Village Land for investment 

In Tanzania, investors both foreigners and local often identify village land as an optimal choice for their investment projects. While a foreign investor can acquire village land for investment purposes, certain procedures must be followed. The investor cannot acquire the designated village land as it is; instead, it must undergo a transfer process from village land to general land.

The transfer from village land to general land requires the villagers’ involvement through their village council and assembly. Compensation must be paid to the affected villagers as a result of the transfer. It is the investor’s responsibility to cover the compensation costs, subject to the confirmation of the compensation amount determined by a qualified valuer. This ensures that the villagers are fairly compensated for the land being transferred.

Once the compensation is settled and the transfer process is completed, the land is earmarked for investment purposes. At this stage, if the investor is majority foreign-owned, then the land is granted to the TIC, so that a derivative right can be issued in favour of the foreign investor, solidifying their legal rights and interests in the land.

10. Utilisation of Derivative Rights

Investors need to understand the obligations associated with holding derivative rights to ensure a smooth and compliant process to leverage such derivative rights for their investment ventures.

Because Derivative Rights are issued specifically for an investment purpose, as approved by the TIC, an investor is required to obtain the TIC’s approval and/or notify the TIC in respect of certain transactions relating to the land.

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