Tanzania: Tourism, Foreign Investment and the Land Tenure Ceiling

The macro: tourism as a growth pillar#

Tourism is now the single largest source of foreign exchange for Tanzania, ahead of gold for the first time in the country's recorded statistical history. The 2024 International Visitors Exit Survey, prepared jointly by the National Bureau of Statistics, the Ministry of Natural Resources and Tourism and the Bank of Tanzania, recorded 2,141,895 international arrivals across mainland Tanzania and Zanzibar combined, up 18.5 per cent on the 1,808,205 of 2023, with aggregate tourism earnings of USD 3.9 billion (+15.7 per cent). Tourism contributed approximately 17.2 per cent of GDP in 2024, up from 16.4 per cent in 2023, and supported in excess of 1.5 million jobs.

The composition of the visitor base is the more interesting data point. The United States led mainland source markets in 2024 at 15.0 per cent of arrivals, Italy second at 11.8 per cent and France third at 7.3 per cent. Visitors stayed an average of ten nights on the mainland and seven on Zanzibar, spending USD 243 and USD 251 per person per night respectively. Sixty five per cent were first-time visitors, up from 56.4 per cent in 2023, an indicator that demand is broadening rather than rotating among repeat travellers.

The macro frame is consistent with the trajectory. Mainland GDP growth printed at approximately 5.6 per cent in 2024, accelerating to a recorded 6.4 per cent in Q3 2025 according to the Bank of Tanzania Monetary Policy Committee December 2025 review. Headline inflation has held inside the 3-to-5 per cent national target band, at 3.6 per cent in December 2025. The Central Bank Rate sat at 5.75 per cent through the quarter to December 2025, accommodative against a low-inflation backdrop. Monetary stability is a precondition for property-cycle predictability, and Tanzania is one of the more stable macro frames in Sub-Saharan Africa on a 2024-to-2026 reading.

Foreign direct investment is moving in the same direction. UNCTAD's World Investment Report 2025 records Tanzania FDI inflows at USD 1.72 billion in 2024, a 28.3 per cent increase on the USD 1.34 billion of 2023, the fastest growth rate in East Africa for the year. The Tanzania Investment Centre separately registered 842 projects worth USD 7.7 billion across the 2024 calendar, the highest aggregate investment value since 1991, with manufacturing leading on project count (377 projects, USD 3.1 billion) and tourism absorbing 76 registered projects worth USD 337 million.

The mainland safari market#

Mainland Tanzania carries the African continent's largest concentration of protected wildlife landscape. Serengeti National Park alone received approximately 589,300 visitors in 2024, up 11.2 per cent. Ngorongoro Conservation Area, Mount Kilimanjaro National Park (arrivals +13.4 per cent in 2024, the fastest among the parks), Tarangire, Lake Manyara and the 30,893 square kilometre Nyerere National Park (the former Selous Game Reserve, now East Africa's largest protected area) form the backbone of a premium safari market that has attracted the most disciplined hospitality operators in the segment over twenty years.

The operator footprint is the institutional validation. Singita's Grumeti concession in the western Serengeti corridor (Sasakwa, Sabora, Faru Faru) anchors the ultra-luxury tier at USD 1,500 to 2,500 per person per night, full board. Four Seasons Safari Lodge Serengeti operates inside the park boundary at USD 1,200 to 1,800 per person per night. andBeyond runs Ngorongoro Crater Lodge (USD 1,200 to 2,000, all inclusive) and the Grumeti Tented Camp calibrated for the wildebeest migration. Asilia Africa operates a mid-luxury and explorer-camp portfolio across Serengeti, Ruaha and Selous. These are committed long-term operators with capital, brand and back-office discipline.

The pipeline is informative. The 2025-2026 cycle saw new build approvals concentrated on the Grumeti boundary, the Loliondo concession east of the Serengeti and selected parcels inside the Ngorongoro Conservation Area subject to UNESCO and government overlays. The Nyerere National Park corridor, opened to tourism after the Selous re-designation, remains under-built: visitor density per square kilometre is a fraction of the Serengeti, and the lodge market is still dominated by mid-tier operators rather than the ultra-luxury cohort that has consolidated in the north. For a long-duration investor, the southern circuit is the frontier within the frontier.

The Zanzibar coastal market#

Zanzibar is treated in detail in the dedicated article ([Zanzibar: An Emerging Luxury Destination](/en/insights/zanzibar-emerging-luxury-destination/)) and the headline figures are recapped here for completeness. OCGS Zanzibar recorded 736,755 international arrivals to the archipelago in 2024 (+15.4 per cent), Europe approximately 72 per cent of the visitor base and Italy the single largest source market at 11.8 per cent, equivalent to roughly 87,202 Italian travellers. The premium operator footprint at Nungwi, Kendwa and Pingwe-Michamvi has consolidated through the post-pandemic recovery, with Park Hyatt (Stone Town, 2015), Meliá Zanzibar (Kiwengwa), Marriott's Le Méridien, the Anantara Zanzibar Resort and Residences at Nungwi (111 hotel keys plus 70 branded apartments, USD 150M GDV, opening 2027, Infinity Developments) and Six Senses (announced 2024, Pingwe corridor) the most visible operators.

The legal grammar is distinct from the mainland. Foreign tenure on Zanzibar is leasehold to ninety-nine years under the ZIPA Act 2018, Section 27 and the Second Schedule. There is no freehold for non-citizens. Strategic Investment Status under the Tanzania Investment Act 2022 applies on Zanzibar with a USD 5 million floor on Pemba, against the USD 50 million mainland threshold. The detailed underwriting commentary, including climate exposure inputs, sits in the dedicated article.

Tanzania Investment Act 2022#

The Tanzania Investment Act of 2022 is the single most institutionally consequential change in the country's investment architecture since the early 1990s. The Act replaced the 1997 Investment Act and introduced a Strategic Investment Status that materially upgrades the legal posture of qualifying projects. The capital thresholds are explicit: a wholly foreign-owned or joint-venture project requires a minimum of USD 50 million, a wholly Tanzanian-owned project a minimum of USD 20 million, and a Special Strategic Investment category applies above USD 300 million. Above these thresholds, upon recognition by the Tanzania Investment Centre, the project receives statutory guarantees against arbitrary nationalisation or expropriation, repatriation of capital and profits in convertible currency, and access to international dispute resolution through the International Centre for Settlement of Investment Disputes (ICSID).

The qualitative criteria are equally explicit. A project also qualifies for SIS if it creates at least 1,000 local jobs with senior-position depth, exports fifty per cent or more of output or provides import-substitution goods, stimulates industrial-park development, transfers technology, or produces goods aligned with national priorities. The framework is calibrated to attract long-duration capital on the basis of legal protection rather than fiscal arbitrage. The guarantee against nationalisation is explicit, the guarantee against discretionary regulatory disruption is partial, and the dispute resolution venue is international.

For the tourism investor, the SIS framework is materially relevant only at resort-scale. A boutique villa investment of USD 200,000 to USD 2 million does not access SIS directly; the institutional confidence the framework creates for the operator is the indirect benefit. A resort-scale project at USD 50 million and above accesses the full protection envelope and can structure dispute resolution outside the domestic court system from the outset. The Anantara Zanzibar project at USD 150 million GDV sits comfortably above the threshold.

Land tenure for foreigners#

The land tenure architecture is the single most important constraint on Tanzania investment underwriting, and it is widely misunderstood. Under the Land Act 1999 and the Village Land Act 1999, all land in mainland Tanzania is held in public ownership, vested in the President as trustee for the people of the United Republic. No foreigner can own land outright. The statute is explicit, the case law is consistent, and the practical effect is structural: foreign capital participates in the land economy through a derivative mechanism, not through freehold.

*The mechanism is the Right of Occupancy. A foreign investor, having registered a Tanzanian limited liability company through BRELA and received a Certificate of Incentives from the Tanzania Investment Centre, obtains land through a granted Right of Occupancy held by TIC, and is in turn issued a derivative Right of Occupancy* by TIC for a term of up to ninety-nine years less ten days. The ten-day shortfall is a statutory construct that preserves the head right at TIC level. Shorter terms of thirty-three and sixty-six years are available; in practice the ninety-nine year ceiling is the working envelope for institutional hospitality and residential investment. The renewal at year ninety-nine is discretionary, not automatic, governed by the law and policy in force at that future date.

Zanzibar operates an analogous but distinct framework. Under the ZIPA Act 2018 the maximum lease term for non-citizens is also ninety-nine years, issued by the Zanzibar Investment Promotion Authority within designated investment areas (Nungwi, Kendwa, Pingwe-Michamvi, selected Stone Town parcels). The two frameworks are administered separately, and a foreign investor with positions on both Unguja and the mainland will hold two independent derivative rights, one from ZIPA and one from TIC. This is procedural detail to plan for at the capital-structure stage.

The implication for capital structuring is straightforward. Institutional investors underwriting on a thirty to fifty year horizon sit well inside the tenure envelope. Multi-generational transmission plans that assume perpetual title need to price the lease renewal risk explicitly. Allocators that underwrite Tanzania as if it were a freehold market are misreading the regulation, on both islands and the mainland.

The corporate setup#

The operational pathway for a foreign investor into Tanzania is sequenced, documented and slower than a Gulf master-developer route. Company registration runs through the Business Registration and Licensing Agency, BRELA, via its online registration system. A Limited Liability Company under the Companies Act requires at least two shareholders and two directors, with no statutory minimum capital floor. BRELA issues a Certificate of Incorporation for a subsidiary or a Certificate of Compliance for a branch of a foreign parent. The Tanzania Revenue Authority then issues a free Taxpayer Identification Number, and the entity applies for sector-specific business licences before commencing operations.

Foreign directors, managers and employees require work and residence permits. The residence permit is typically a precondition for the work permit and, in practice, often required before the business licence can be issued to a foreign-majority entity. A power of attorney mechanism allows a temporary licence where the permits are not yet in place at registration.

The investor-resident framework was upgraded in 2023. The Immigration (Amendment) Regulations 2023 introduced a Class C-11 Investor Residence Permit calibrated for the individual property buyer. The threshold is USD 100,000 of qualifying real estate investment, renewable on a two-year cycle at USD 500 for the principal applicant plus USD 50 per dependent. The application requires a recommendation letter from TIC on the mainland or ZIPA in the case of Zanzibar, plus title deed and police clearance from the country of origin. The C-11 covers the principal applicant, spouse and dependent children. It does not carry a path to Tanzanian citizenship and does not extend automatic European travel access. It provides legal residence inside the tenure envelope.

The SIS route is administratively distinct from C-11. Above the USD 50 million threshold the project is registered with TIC under SIS and the senior team accesses separate permits attached to the strategic project. The two pathways are calibrated for different scales: C-11 for the individual property buyer, SIS for the resort-scale operating investor. They are not mutually exclusive within a single family-office allocation.

The Italian buyer specificity#

Italy is the second largest source market for mainland Tanzania at 11.8 per cent of arrivals in 2024, behind the United States at 15.0 per cent and ahead of France at 7.3 per cent. On Zanzibar Italy is the single largest source market on the archipelago, also at 11.8 per cent of the 736,755 total. The combined volume across the two destinations places Italy as the largest single European source for the country. The pattern is not a 2024 anomaly: Italian charter capacity from Milan Malpensa, Bergamo Orio al Serio and Rome Fiumicino has been continuous through the post-pandemic recovery, and the Italian package-holiday operator base routes a documented annual flow into both the safari and coastal circuits.

The fiscal layer is the Italy-Tanzania double taxation treaty, in force since 1974 with subsequent amendments, one of the older instruments in the Tanzanian network alongside the Canada, Denmark, Finland, India, Norway, Sweden, South Africa and Zambia treaties. Withholding tax rates under the Italian treaty network cap interest, dividends, royalties and management-fee withholdings at a maximum of 20 to 25 per cent, with the specific Tanzania rates set in the bilateral text. Allocators should verify the current rate schedule against the live text.

The interaction with the Italian Article 24-bis regime is meaningful. Italian residents on the substitute-tax regime, which moves from EUR 200,000 to EUR 300,000 from 1 January 2026 under the Budget Law 2026, can structure passive income from Tanzanian property assets within the substitute-tax envelope while the Tanzanian withholding applies at source under the bilateral treaty. The combined effect, for an Italian resident with a Zanzibar villa or a mainland safari estate, is a clean fiscal architecture that does not require a third-country routing.

The diaspora and second-home dimension is small but growing. The estimated population of Italian property holders across mainland Tanzania and Zanzibar runs in the 1,200 to 2,000 range, a high-signal cohort given that structured Italian foreign investment in Tanzania was effectively zero a decade ago. The operator base on Zanzibar has consolidated around Italian-led capital and project management for over a decade.

Risk vectors honestly disclosed#

Honest disclosure of risk is the underwriting input that distinguishes institutional allocation from cycle-driven capital. Tanzania carries documented exposures that have to be named at the parcel and portfolio level.

Currency. The Tanzanian shilling (TZS) depreciated 1.3 per cent against the US dollar in the twelve months to December 2025, after appreciating 3.8 per cent in 2024. The currency is not freely convertible in the G10 sense, and capital repatriation, while statutorily guaranteed under SIS, is administered through formal banking channels. Allocators should underwrite property cash flows in USD where the lease and operating agreements permit.

Political concentration. Freedom House classifies Tanzania as Partly Free. The Mo Ibrahim Foundation's 2024 Ibrahim Index of African Governance ranks Tanzania 15th of 54 African countries with an overall score of 58.2 out of 100, above the African average (49.3) and the Eastern African regional average (46.8). The 2025 transition managed by President Samia Suluhu Hassan has been treated by external observers as orderly relative to the regional baseline, but Freedom House notes that progress on constitutional reform has stalled and civil society space remains constrained relative to the rule-of-law leaders documented in the Geography of Trust framework. The principal political risk vector is electoral cycle volatility rather than systemic regime instability.

Regulatory cadence. The 2022 Investment Act is a deliberate institutional upgrade, but the broader regulatory environment moves on a slower cadence than the master-developer Gulf jurisdictions. Permitting through TIC and ZIPA, environmental impact assessment through the National Environment Management Council, and registration through the Department of Lands each carry documented administrative steps. The institutional buyer that allocates on the back of an operator that has not completed a previous full project cycle is, in plain language, pricing first-time-developer risk that should be discounted accordingly.

Infrastructure transition. The Standard Gauge Railway, with freight services from Dar es Salaam to Dodoma launched June 2025 and the Kwala Dry Port commissioned July 2025, is materially improving logistics. A planned 1,028 kilometre extension from Tanga via Moshi and Arusha to Musoma is scheduled for completion in 2028, with implications for the northern safari circuit. The Bagamoyo deep-water port project is again in preparation but still preparatory as of mid-2026. Infrastructure improvement is positive for operating costs, but the timeline is multi-year and should not be priced as imminent.

Sector concentration. Tourism contributed approximately 17.2 per cent of GDP in 2024 against extractives (primarily gold) at roughly 8 to 10 per cent. Record gold exports of USD 2.8 billion in the first ten months of 2025 (+38.9 per cent year on year) confirm the foreign-exchange base is now structurally diversified between tourism and minerals. Concentration risk in tourism itself is at the source-market level (United States and Italy combined account for approximately 27 per cent of mainland arrivals) rather than at the country-revenue level.

What this means for the institutional buyer#

For a family office, principal advisor or single private buyer considering Tanzania exposure in 2026, the implications are practical and can be stated in five points.

First, the tenure ceiling is the binding underwriting input. All foreign land access on the mainland and Zanzibar is leasehold, capped at ninety-nine years (less ten days on the mainland derivative right), with discretionary renewal. Holding horizons inside thirty to fifty years sit well inside the envelope. Multi-generational transmission plans need to price renewal risk explicitly.

Second, the Strategic Investment route is the institutional protection envelope. Above USD 50 million on the mainland (USD 5 million on Pemba), projects access statutory guarantees against nationalisation, repatriation in convertible currency and ICSID dispute resolution. The smaller individual buyer does not access SIS directly but benefits from the institutional confidence the framework creates for the operator.

Third, the corporate setup is sequenced and slower than a Gulf jurisdiction. BRELA LLC, TIN with the Tanzania Revenue Authority, sector-specific licensing, immigration permits, TIC or ZIPA recommendation, derivative Right of Occupancy registration. The cumulative timeline from first engagement to operating asset is measured in months, not weeks. The chain of title at exit is correspondingly more defensible.

Fourth, the operator chain matters more than the brand flag. Singita, Four Seasons, andBeyond, Asilia and the Zanzibar branded-residence operators are all credible, but the relevant underwriting question is whether the underlying development manager has completed at least one full Tanzania project cycle. Brand validates the segment; the development manager delivers the building. Confusing the two is the most common error in Tanzania hospitality underwriting.

Fifth, the residence frame is residence, not citizenship. Class C-11 provides legal residence and full property rights within the leasehold envelope at a USD 100,000 threshold. The interaction with the Italian Article 24-bis regime is favourable for Italian-resident buyers structuring a multi-jurisdictional platform, but the C-11 is not a golden visa and does not extend a path to Tanzanian citizenship or global travel scope.

Skin in the game disclosure. Victaura, through its parent Greystone B.V. (Netherlands), holds an active operating position in Zanzibar in the Nungwi area, the Secret Zanzibar hotel and villas project. Readers should assume that commentary on the Tanzanian market may be influenced by, or may benefit, Greystone's existing position. This document is classified as marketing material under MiFID II Article 24(3). It is not investment advice.