On 2nd day of December 2022, the Parliament of Tanzania passed the new Tanzania Investment Act, 2022 (the new Investment Act) in Kiswahili, the new Act repeals the previous Act, this article will explore all significant changes on the instruments mentioned herein above.
Changes
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- Local Investor incentives: Capital requirement for local investor is only USD 50,000 which is a different from the previous statutory USD 100,000.
- Removal of the automatic immigration quota of 5 work and residence permits for expatriates’ workers. The previous Act allows an investor registered at the TIC to have up to 5 immigration & labour permits for investors’ strategic employees.
- TIC integrated electronic system; The center will establish integrated electronic system for the facilitation and promotion of investment, the system will enable various relevant ministries to work closely in the promotion of trade and investment.
- Requirements for investors under the Strategic or Major investment category to qualify for incentives: The Act provides for additional requirement
– Capital is USD 20,000,000 for Tanzanian investor and USD 50,000,000 for a foreign investor;
-To generate at least 1,000 local jobs with a sufficient number of senior positions;
-To have the ability to increase exports by at least 50% of the products that are produced or reduce imports;
-To have the ability to stimulate production by establishing economic incentives in various social and economic sectors;
-To increase technical skills by introducing new technologies to Tanzanians; and
-The potential and ability to produce products or provide services that are for development in the social and economic sectors and based on priorities of the nation.
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- Removal of Investment guarantee: the new Act 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.
- Validity of Certificate of Incentives: No change on the validity of certificates of incentives which were issued before this Act.
- Cancellation of Certificates : Circumstances that shall result in cancellation of the issued certificates include obtaining the certificate by fraud or false information; breaching the conditions of the certificate by the holder; transferring the certificate to another investor or investment without prior consent of the Centre; failure to commence operations within the first two years of issuance of a certificate without satisfactory reasons; and failure to submit annual performance reports of the project for two consecutive years.
- Conclusion
- These changes will bring positive impact on the investment though the government had to consider the negative impact on expatriates permits.
This legal update has been prepared by Eleanor Ngalo |Managing Partner & Advocate and Hamza lule | Advocate. Should you have a question on any aspect of the above, please reach out to us through