Investing in Tanzania: a look at the newly passed Tanzania Investment Act 2022

On 31 August 2022, a Special Bill supplement for the proposed Tanzania Investment Act, 2022 was published in the special Gazette. This Bill has been tabled for discussion in the Parliament and was passed on 01 November 2022.


The Act repeals the long-lived Tanzania Investment Act, 1997 (TIA 1997) and fundamentally aims to introduce procedures and structures to better promote the investment environment in Tanzania. It is understood that the Tanzania Investment Centre (TIC) is the government organ that has been established solely for the purpose of administering the investment scheme in the country.


This comes in handy when the Foreign Direct Investment (FDI) inflows to Tanzania reached USD 4.144 billion in the period March-November 2021 which is a whopping 300% increase from the USD 1.013 billion in FDIs in 2020 (source: It is noted that out of the USD 4.144 billion, TIC filed project had totaled an FDI inflow of USD 3.55 billion. With this, the country has to ensure that, its investment avenue is objective and encourages investors to knock into the economy.



What the new Act says:


This article sheds light and elaborates on the notable changes and takeaways brought forth by the new Act:


  1. Reduced investment capital requirement to USD 50,000 for Tanzanian investors to qualify under the Act

The Act reduces the minimum investment capital threshold for a business owned by Tanzanian (meaning businesses where majority of shares are owned by Tanzanians) to qualify for benefits and immunities under the Act. This reduction is from the current threshold of USD 100,000 to USD 50,000.

On the other hand, the Act has maintained the same minimum investment capital threshold (i.e. USD 500,000) for foreign investor owned businesses.

This change will add more local investors to the incentive scheme. It will consequently create a better playing field for local businesses and contribute to the growth of industries that fall under TIC priority areas of investment such as agriculture & livestock development, natural resources, tourism, manufacturing, petroleum and mining, real estate, transportation, ICT, financial institutions, telecommunications, energy, human resources, economic infrastructure, and broadcasting.


  1. More functions for the National Investment Steering Committee (NISC)

The Act adds more functions to the NISC that will now include approval of incentives for strategic investors and special strategic investors. It is our view that this comes into effect so as to align the functions of the NISC and the powers to provide tax exemption that this committee has been granted under the Income Tax Act, 2004 and the Value Added Tax Act, 2014. The said changes were brought about by the Finance Act, 2022, that has been effective from 1 July 2022. Click here to read our analysis of the said changes.

We are positive that, the NISC will now be fully functional in terms of granting such tax exemptions that will be duly honoured by the TRA’s Commissioner General with ease.

To assist the NISC, an expert committee will be formed, and it is composed of members from government institutions that deal with investment. It will be effective and objective if the expert committee includes representatives from the private sector who can share experience and knowledge of business and investments.


  1. Introduction of an integrated electronic system

The Act entitles TIC to establish an integrated electronic system for investment facilitation and promotion. As such, data sharing among the necessary authorities (government departments, agencies, and public institutions) will be key in order to foster intended cross-function. This system will enable the registration of investors to be smoother and less hassle in correlation with the existing one-stop centre environment present at the TIC (accessible through this link ). Moreover, it is our hope that with the enactment of the Act, the implementation process in creating the integrated one-stop service centre will be taken with a quick effect so that the resultant benefits can be enjoyed by the investors when setting up their businesses.


  1. Removal of an automatic immigration quota incentive

The Act excludes the immigration quota incentive accorded under the old Act. Among some other incentives offered to investors with a certificate of incentives, the investor was accorded an automatic immigration quota of five (5) expatriates who can be employed by the investor during the start-up period. The exclusion of this incentive in the Act is bound to affect the investor negatively as the expatriates to be employed to render support to the investor’s project will be subjected to the normal work and residence permit process, which does not guarantee the grant of the permits.


  1. Removal of timelines for the objection of different authority decisions

The Act as worded has removed the then prevailing timelines that guided the objection process that TIC could make to the Minister responsible for issuing a decision in relation to the denial of issuing license or approval (that is, within 7 days). Further, there were also timelines for the said Minister to reply to TIC with his decision (that is, within 7 days) so that the investor can be duly informed.

We foresee that, with such timelines removed from the law, then there could be delays in such objections and final decisions being issued for the investor to clearly understand the position and act accordingly.

It will be worth it to reinstate the timelines as worded in the foregoing Act so that each party can be accountable for the decisions that are made for purposes of smoothing the investment procedures.


  1. Timeframe for the issued certificate of incentives made more elaborate

The Act requires that the issued certificate of incentive will expire after 5 years from the date of grant, in the case of financial incentives and for the investment lifetime, in the case of non-financial incentives. For clarity, financial incentives are linked to tax benefits, exemptions or holidays and non-financial incentives are other benefits as outlined in various laws that can be assessed by investors.

For financial incentives, the certificate will be renewable upon application by the investor and suitable reasons. Furthermore, the Act introduces criteria that will force the issued certificate to be void. This includes when:

  • the certificate was obtained by fraud or by providing false information;
  • the holder of the certificate has violated the terms of the provision of incentives;
  • the certificate has been transferred to another person or investment without the permission of TIC;
  • the certificate holder has not started implementing the project within the first 2 years since the certificate was issued without valid reasons; or
  • the certificate holder has not submitted the annual information on the implementation and development of the investment project for two (2) consecutive years.

These timeframes and other disqualification criteria are not present in the foregoing Act, and as such will require investors to be updated with the new requirement so that they cannot be caught up in situations where their certificates have already expired.

Additionally, the Act has not addressed clearly the provision for transfer and amendment of the certificate of incentives. It is noted from the conditions above that there is an avenue for investors to seek permission from TIC in transferring and amending their certificates of incentives. Due to this silence, it will be best that rules to the Act cover this important issue so that investors do not find themselves in violation of the law.


  1. Timeline for issuance of licenses to investors

The Act under Section 18(4) maintains the 14 days’ timeline within which licenses from different regulatory authorities shall be issued. From the foregoing Act, Section 16(3) provides for 14 days as well within which licenses from regulatory authorities can be issued. We recommend that a central e-system linking the regulatory authorities responsible for issuing licenses be put in place so as to cut down the timeline for the issuance of such licenses. Despite there being in place the e-system for licenses in some other institutions like licenses from the Ministry of Industry and Trade a central e-system will immensely facilitate the issuance of electronic licenses to investors.


  1. Detrimental cover for investor benefits has been reinstated

The Act as worded has reinstated the provision that provided for a detrimental cover to investors who were entitled to benefits as per the issued certificate for a period of 5 years. This means, amendments or modifications to the existing laws would not affect the benefits that the investor was entitled to at the point of being issued with the certificate.

This creates a predictive investment climate for investors and give them the assurance that they will continue to enjoy the benefits during the project implementation period.

Notwithstanding the above cover, we have witnessed instances where TRA has ignored the tax incentives issued to investors and raised tax assessments and as a result, these matters are litigated at different tax appellate bodies. In order to protect the investors against such cases, we propose the following:

  • The certificates of incentives be signed and witnessed by all parties (including TIC, TRA and other governing bodies) so that their full consent is obtained beforehand;
  • Establishment of an ombudsman office within the TIC environment that will look upon matters that are conflicting between the investors and the various government bodies and assist in resolving the same amicably.

  1. Added requirements for investors under the Strategic or Major investment category

The Act has added 2 more requirements for investors who would like to qualify for benefits under the Strategic or Major investment category. With the foregoing Act, the requirement was linked to the capital threshold (USD 20 million for Tanzanian investors and USD 50 million for foreign investors). With the Act, we now see the entrant of the below-added requirements to the investor:

  • the need for the investor 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 ability to increase exports by at least 50% of the products produced or reduce imports;
  • the ability to stimulate production by establishing economic incentives in various social and economic sectors;
  • increase technical skills by introducing new technologies to Tanzanians; and
  • the ability to produce products or provide services necessary for development in the social and economic sectors based on priorities at that time.


It is noted that the criteria for obtaining a Special Strategic investment status has not changed as compared to ones in the foregoing Act.

These requirements have been added for purposes of boosting the national economy through employment and external trade. However, they might cause some of the investors not to qualify for such category and hence, deprive them of the intended investment incentives and benefits.

As such, a keen analysis should be performed to check whether the amended requirements are indeed measurable, practical and achievable for investors of the said capital band.


  1. More stringent fines for non-compliance offences

The Act has increased the maximum fine from TZS 350,000 to TZS 5,000,000 relating to an offence by a person who in the course of his official duties has disclosed unauthorized documents or information to another person.


  1. Safeguarding the already issued certificate of incentives

The Act has imposed to safeguard the validity of the issued certificates of incentives under the Tanzania Investment Act, 1997 in the sense that, the agreed-upon incentives and immunities from the certificate of incentives issued under the foregoing Act will continue until the expiry of the certificates.

As such, the owners of such certificates would not be entitled to privileges drafted under the Act, until the expiry of the certificates.

This will assist in preserving the incentives, immunities and benefits that were provided to investors when they started their investments. Another move to safeguard the rights of investors and create certainty to the investment climate in Tanzania.


  1. Recommendation for official establishment and regulation of a Land Bank under the Tanzania Investment Center

Despite a long cry for land specifically designated for investors’ projects and the TIC’s plan to establish a land bank, the same is not reflected in the Act. Through the land bank, TIC will hold various parcels around the country ready for prospective investors’ projects by issuing derivative titles. By TIC, having in place a land bank with ample land in different strategic areas for massive and medium projects will be beneficial to investors. This will cure majority of delays in projects due to cumbersome procedures to search for viable land for the project and processing conversion of such land for investment and seeking derivative title from TIC. Investors waste over a year trying to convert village land into Derivative Titles.

Therefore, we recommend that the land bank should be put in place and the same be reflected and regulated in the Act.


  1. Reinstatement of the right to international arbitration

It is commendable that the Act has embraced a spirit of bilateral agreements or international treaties in the dispute settlement process between the investor and the TIC/ Country. Accessibility to external (offshore) dispute settlement forums was key towards assuring the investors that they are protected. With the assurance provided by Section 33(2)(c) on forums such as ICSID (International Centre for Settlement of Investment Disputes), investors will be confident in investing and importing FDI into Tanzania. In the near past, with the enactment of the Natural Wealth and Resources (Permanent Sovereignty) Act 2017, the statement from the country was that all disputes concerning investment, utilization, extraction etc of natural resources and wealth will not be adjudicated outside Tanzania by foreign courts or tribunals (See Section 11 of the Act here).

In essence, this new enactment is surely a step in the right direction to assure the international investment community that Tanzania is ready to talk investment but we call on the government to work further to harmonize this stance in other existing predatory and hostile legislation.





Generally, it is our view that the Act creates a good investment climate save for the few notable comments placed in this article that need improvement. Moreover, we hope that other government organs such as TRA can respect the tax incentives given to investors under TIC so that harmonization can be fulfilled. On the other hand, we see the importance of the government sharing the Regulations/ Rules referred under Section 35 of the Act for public review and commentaries before implementation.


Breakthrough Attorneys and Advisory Services can assist in further exploring various benefits and incentives available to investors under the Act and the procedures involved in making the necessary applications for obtaining the certificates of incentives and benefits from TIC. Moreover, Breakthrough Attorneys and Advisory Services can assist in engaging the Government for the purposes of proposing constructive improvements to the Act subsequently for creating a better business and investment environment in Tanzania.




Read the original publication at Breakthrough Attorneys.

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