Zanzibar is becoming one of the world's hottest investment locations
[MEPRwire, Fri Apr 01 2022] Since the Tanzanian government announced the introduction of Strategic Investment Projects, the opportunities for foreign nationals to start, or invest in, businesses on the island has flourished.
Located just off the coast of East Africa in the Indian Ocean, the Spice Island of Zanzibar is known for its beautiful white sand beaches, spectacular sunsets, stunning landscapes and tranquil forests. For Middle East entrepreneurs looking for an exciting and lucrative business venture, there are many compelling reasons to make Zanzibar the next investment location.
A key factor is Zanzibar's stability - politically, socially, and economically. Though Zanzibar is a small island economy, it forms an autonomous part of the Republic of Tanzania, enjoying relatively high economic growth over the last decade, averaging 6-7% per annum (according to the World Bank). The economy is diverse with agriculture, quarrying, mining, industry, electricity generation and services all playing a part - together with a rapidly growing tourism sector.
Tourism is where the opportunity for business investment is particularly exciting and is a significant source of income for Zanzibar - being the largest source of foreign exchange. Tourism contributes about 27% of GDP and more than 80% of foreign direct investment (FDI).
In 2020, Zanzibar received 528,425 tourists, generating a total of US$426 million in foreign exchange. Tourism accounted for 82.1% of Zanzibar's FDI that year.
An average of 10 new hotels are being built each year at an average cost of $30 million each. Data from the Hotel Association Zanzibar (HAZ) shows the amount each tourist spends in Zanzibar has risen from an average of $80 per day in 2015 to $206 in 2020.
Enticing tax breaks for business owners
Another major drawcard are the tax breaks and incentives offered to investors who establish businesses within Strategic Investment Projects on this island.
These include: no business licence fees for the first three months; no income tax on local earnings for the first five years (thereafter it is at only half of the local 30% tax rate); repatriation of profits after tax; 100% exemption on withholding tax on interest paid to foreign banks; 100% deduction of the depreciation rate over five years - so all equipment and assets can be written off over this period; and residency and work permits are granted to business owners/investors as well as their employees.
"Up until recently, non-residents were unable to own businesses or property in Zanzibar. However, the government is working hard to attract foreign investors to the island and has introduced Strategic Investment Projects, which now allow foreign investors to invest in both businesses and/or property on the island - and gain significant tax benefits, business start-up perks, as well as residency and work permits," explains Grant Anderson, CEO of Blue Amber, a recognised Strategic Investment Project in Zanzibar.
Where the opportunities lie
Blue Amber is a luxury mixed-use, seaside resort development which ribbons along four kilometres of magnificent, unspoilt Indian Ocean coastline - and occupies 410 hectares of tropical landscape on the north-eastern side of Zanzibar. The development incorporates residential, hotel, tourism, community and public amenities that will include luxury villas to purchase.
Featuring multiple hotels, luxury residences, and East Africa's first 18-hole signature golf course, Blue Amber will boast a mini-Stone-Town with retail space on the ground floor and 22 two-bedroom apartments above.
World-class sports facilities include a football pitch, tennis courts, squash courts, beach volleyball courts, basketball courts, archery and a skateboard park.
Retail amenities within the resort will include a mini supermarket, outdoor- indoor- and beachfront restaurants with rooftop bars, a gym, sports bar, health and beauty store, bike rental store, hairdressers and laundry services - to name but a few.
Once completed, this stunning Strategic Investment Project will also include an impressive shoreline aqua leisure centre offering a comprehensive water sports facility.
"All of these facilities and hospitality-focused businesses require owners and managers to operate them - and this is where the opportunities come in for savvy Middle Eastern investors keen to invest in, and start businesses in Zanzibar," says Anderson, adding that, for hoteliers, Blue Amber has five allocated hotel sites strategically spread over the four kilomtres of untouched coastline.
"Opportunity exists for interested hotel operators to come on board with Blue Amber to jointly develop a hotel to suit their needs," adds the project CEO.
Invest in property in Zanzibar
Blue Amber has begun construction of its first phase of luxury pool villas and apartments, available to purchase by foreign buyers on a 99-year lease. Prices start at US$197, 125 for a 2-bedroom, 2-bathroom unit with a roof-top terrace, or from US$319, 000 for a double-storey 3-bedroom, 3-bathroom villa. Stunning 2,3 and 4 bedroom apartments will also be available, launching soon.
Property investors will also gain significant tax benefits - such as a 15% tax rate on local income earned, no tax on worldwide income, and no capital gains tax, stamp duty or inheritance tax on properties purchased.
Additionally, property investors, together with their spouses and children under 20, are eligible for residence permits lasting the duration of their ownership of a property. There is no minimum time that must be spent in the country to qualify. Blue Amber is also the only strategic investment real estate development in Zanzibar with an untouched natural beach, offering views of pristine Muyuni beach and Mnemba Island.
Live and work in Zanzibar tax free
"There are phenomenal opportunities for those who work remotely - such as IT professionals, designers, consultants and architects, for example - to base themselves in Zanzibar while offering their services internationally.
"Living and working from a luxury seaside villa on a tropical island whilst paying little to no tax is certainly a major drawcard to many," concludes Anderson.
For more information about Blue Amber visit: www.blueamberzanzibar.com