Tanzania’s New Investment Framework: What Investors Need to Know in 2025

Investment Laws in Tanzania 2025: Key Changes Investors Must Understand

Tanzania has introduced a significant reform of its investment regime through the Investment and Special Economic Zones Act, 2025. This new framework replaces the previous system, where general investment and special economic zones were governed under separate legal and institutional structures.

As a result, investors operating in sectors such as manufacturing, tourism, real estate, export-oriented businesses, and infrastructure development must now understand how this unified system affects the way projects are structured, approved, and regulated.

As investors consider how to structure their projects under the new legal framework, it is equally important to align the investment vehicle with regulatory expectations. Our detailed page on Company Registration Services in Tanzania and Zanzibar explains how business entities are structured in practice and how they interact with licensing and investment requirements.

While many of the underlying incentives remain familiar, the practical approach to investment has changed considerably.

For this reason, investors should not only focus on the incentives available but also on how their projects are structured under the new regime.

The Previous Investment Framework

Before the 2025 reform, Tanzania operated under two parallel systems.

On one hand, general investments were regulated through the Tanzania Investment Centre (TIC) under the Tanzania Investment Act. This framework primarily focused on investment certificates, investor protection, and access to incentives governed by tax laws.

On the other hand, export-oriented and zone-based investments were regulated separately under the Export Processing Zones Authority (EPZA). This system provided licensing for EPZ and SEZ projects, together with operational and customs advantages.

Although both frameworks offered valuable incentives, the separation created practical challenges. In many cases, investors were required to deal with multiple authorities, obtain separate approvals, and structure projects across different regulatory regimes.

Consequently, the process often became administratively complex and time-consuming.

A Unified Investment Framework

The 2025 reform introduces a single, integrated investment system under the Tanzania Investment and Special Economic Zones Authority (TISEZA), bringing together investment promotion, special economic zones, and investor facilitation under one framework.

In practice, this means that investors now interact with one coordinated authority, follow a single licensing pathway, and operate within a unified compliance structure.

This shift represents one of the most important practical improvements under the new regime, particularly for large or multi-phase investment projects.

Key Changes Under the New Law

A More Streamlined Investment Process

Under the previous system, investors were required to obtain separate approvals for general investment and SEZ or EPZ operations.

However, the new framework introduces a coordinated certification and licensing process.

As a result, investors can expect:

• reduced duplication of approvals
• faster processing timelines
• a more efficient project structuring process

Introduction of a Land Bank System

Another important development is the introduction of a land bank system, which allows the government to identify, reserve, and allocate land for investment purposes.

In practical terms, this means that investors may access pre-identified and pre-cleared land, reducing the risks typically associated with land acquisition.

This is particularly relevant for:

• tourism developments
• industrial parks
• large-scale manufacturing projects

Digitalisation of Investment Processes

The new law formalises the use of an electronic integrated investment window.

This development is important because it centralises the application process and reduces bureaucratic delays.

At the same time, it improves transparency and allows investors to track the progress of their applications more efficiently.

Stronger Compliance and Monitoring

While the new system simplifies the investment process, it also introduces stricter compliance requirements.

Investment certificates and licences are now issued subject to specific conditions. In addition, the relevant authority has the power to monitor project implementation, enforce reporting obligations, and, where necessary, revoke approvals.

For investors, this means that compliance is no longer a formality. Instead, it becomes a critical part of maintaining investment approvals.

Strategic Investor Framework

The new law places greater emphasis on strategic investors, particularly those involved in large-scale or high-impact projects.

These investors may qualify for additional benefits, subject to higher investment thresholds.

In general terms:

• local strategic investors may be required to invest from approximately USD 20 million
• foreign strategic investors may be required to invest from approximately USD 50 million

This framework is particularly relevant for infrastructure projects, industrial developments, and large tourism investments.

Revised Capital Thresholds

The law also introduces clearer capital thresholds for investment approval.

Under the current framework:

• local investors are generally required to meet a minimum capital threshold of approximately TZS 150 million
• foreign or joint venture investors are required to meet a higher threshold of approximately TZS 1.5 billion

Unlike the previous regime, which relied primarily on USD-based thresholds, the current framework uses local currency and sets higher entry requirements for foreign participation.

As a result, the system encourages more structured and well-capitalised investment projects.

Classification of Investors

The law now provides clearer definitions of foreign and local investors, based primarily on shareholding.

In general:

• a company with 50% or more foreign shareholding is treated as a foreign investor
• a company with majority Tanzanian ownership is treated as a local investor

This classification has important practical implications, particularly in relation to capital thresholds and regulatory treatment.

For this reason, the shareholding structure of a company should be carefully considered at the planning stage.

What Remains Unchanged

Despite these structural reforms, several important aspects of Tanzania’s investment framework remain consistent.

Investor Protections

The law continues to provide key protections for investors, including:

• protection against expropriation
• the right to transfer profits, dividends, and capital
• access to dispute resolution mechanisms

These protections remain fundamental to maintaining investor confidence.

Tax-Based Incentives

Importantly, most investment incentives are not created directly by the investment law itself.

Instead, they are governed by tax legislation, including:

• the Income Tax Act
• the VAT Act
• the Customs Tariff Act

This means that investors must still structure their projects carefully in order to access available incentives.

Continuity of SEZ and Export Incentives

The incentives previously available under the EPZ and SEZ frameworks largely continue under the new system.

These may include:

• corporate tax relief
• withholding tax exemptions
• import duty exemptions on capital goods
• VAT relief on qualifying goods and services
• simplified customs procedures
• immigration facilitation for investors and employees

In addition, the new law provides clearer recognition of VAT relief on construction materials and services, which is particularly important for real estate, tourism, and infrastructure projects.

Treatment of Foreign Investors

Foreign investors continue to benefit from a relatively open investment environment, subject to applicable laws and sector-specific restrictions.

They are generally entitled to:

• equal treatment with local investors
• repatriation of profits and dividends
• transfer of capital and proceeds from sale or liquidation
• access to local financing institutions

However, foreign investors must still comply with immigration requirements, including work permits and residence permits for foreign personnel.

Practical Considerations for Investors

From a practical perspective, the 2025 reform is not simply about incentives. Instead, it represents a shift in how investment projects are structured and regulated.

Investors should therefore consider the following:

• The investment process is now centralised and more structured
• Capital requirements are more clearly defined, particularly for foreign investors
• Compliance obligations are stricter and actively enforced
• Proper structuring remains essential to access incentives and regulatory approvals

As the investment framework continues to evolve, investors are encouraged to approach projects with a clear legal strategy from the outset. Many of the considerations discussed in this article are closely linked to company formation, regulatory compliance, and sector-specific approvals, which are explored further across our related services and publications.

Final Insight

Tanzania’s new investment framework provides greater clarity, improved coordination, and a more streamlined process for investors.

At the same time, it introduces higher expectations in terms of compliance, capital commitment, and project implementation.

For this reason, the success of any investment under the new regime will depend largely on proper legal structuring at the outset, particularly in relation to:

• shareholding structure
• licensing pathway
• eligibility for incentives

Investors who approach these issues strategically are more likely to benefit from the opportunities created by the new framework while avoiding regulatory challenges.

For investors seeking to establish or expand their presence in Tanzania, we recommend reviewing our Company Registration Services in Tanzania and Zanzibar page for a practical overview of how we support clients through the setup and structuring process.