Due Diligence in Land Acquisition by Foreigners in Zanzibar: Why Legal Advice Matters

Zanzibar continues to attract international investors seeking opportunities in tourism, hospitality, real estate, commercial development and other sectors. Its strategic location, beautiful coastline, growing tourism industry and investment-friendly initiatives make it an increasingly attractive destination for foreign investment.

However, acquiring an interest in land in Zanzibar is not simply a matter of finding a desirable property, agreeing on a price and signing an agreement.

For a foreign investor, proper legal due diligence is one of the most important steps in protecting the investment.

Understanding Land Ownership in Zanzibar

One of the first issues a prospective investor must understand is the legal nature of land in Zanzibar. Under the land tenure framework, land in Zanzibar is public land administered by the relevant Government authorities. Consequently, a foreign investor should not approach a land transaction as though purchasing freehold land in another jurisdiction. The legal structure, tenure, approvals and permitted use of the land must be carefully examined before money is committed.

Zanzibar Investment Promotion Authority (ZIPA) materials confirm that land may be leased to investors, including non-Zanzibaris, for investment purposes, subject to the applicable approvals. ZIPA also identifies long-term leasing as an important mechanism for foreign investment in Zanzibar's real estate sector. 

This makes legal due diligence particularly important. The investor needs to know what interest is actually being acquired, who has authority to grant it, for how long, for what purpose, and whether the proposed transaction complies with Zanzibar's laws and investment regulations.

What Is Land Due Diligence?

Land due diligence is the process of investigating and verifying the legal, regulatory, commercial and practical status of a property before completing the transaction. It goes beyond checking a document presented by a seller or intermediary.

A proper due diligence exercise seeks to answer questions such as:

• Who legally holds the interest in the land?
• Does the person offering the property have the legal authority to transfer or lease it?
• Is the land properly surveyed and identifiable?
• Are the boundaries consistent with the official records and the physical property?
• Is the proposed lease or interest valid and enforceable?
• Are there existing mortgages, charges, claims, disputes or competing interests?
• Is the land subject to restrictions, reservations or Government interests?
• Is the proposed development permitted on the land?
• Are there planning, environmental, tourism or other regulatory requirements?
• Are there outstanding land rent, taxes, fees or other liabilities?
• Does the transaction require approval from ZIPA or another Government authority?
• Can the proposed investment legally be implemented on the property?

These questions can make the difference between a secure investment and a costly dispute.

Why Due Diligence Is Especially Important for Foreign Investors

Foreign investors may be unfamiliar with Zanzibar's land administration system, local documentation, Government approval procedures and the practical realities of land transactions.

This can create significant risks.

1. Avoiding Invalid or Defective Transactions

A transaction may appear legitimate because the parties have signed an agreement and money has changed hands. However, contractual documents alone do not necessarily establish that the investor has acquired a legally enforceable interest in the property.

Legal due diligence helps establish whether the proposed transaction has a proper legal foundation and whether the relevant approvals and documentation are in place.

2. Confirming the Seller's or Grantor's Authority

One of the most serious risks in property transactions is dealing with a person who does not have the authority to grant the interest being offered.

An investor should not rely solely on copies of documents supplied by an intermediary or prospective seller.

A lawyer should independently investigate the relevant land records, ownership or occupancy history, authority of the parties and supporting documentation before the investor commits substantial funds.

3. Detecting Existing Claims and Encumbrances

Land may be affected by competing claims, disputes, mortgages, restrictions, leases, easements or other interests.

If these issues are not discovered before completion, the investor may inherit a dispute that could take years and significant resources to resolve.

Due diligence is therefore not merely a formality. It is a risk-management tool.

4. Verifying the Boundaries and Physical Property

A legal description of land should correspond with the physical property. A professional due diligence exercise should consider survey plans, plot numbers, boundaries, location and other relevant records. Where necessary, legal review should be coordinated with appropriate surveying and technical professionals.

This is particularly important where investors are purchasing or developing beachfront, agricultural, tourism or large development properties.

5. Confirming Development and Investment Approvals

Buying or leasing land does not automatically mean that every proposed development can legally be constructed or operated on that land.

The intended use should be assessed against applicable planning, environmental, investment and sector-specific requirements.

ZIPA currently operates as a central investment facilitation authority and provides an electronic window intended to simplify investment approvals and compliance processes. Its mandate includes investment facilitation, determining investment opportunities and modalities of accessing them, and monitoring approved investments. 

A foreign investor should therefore consider the land transaction and the proposed investment as interconnected legal processes rather than completely separate matters.

What Should a Foreign Investor Investigate Before Signing?

A comprehensive land due diligence exercise may include:

Land and Title Documentation

The lawyer reviews the available land documentation and verifies the legal basis of the proposed interest, including the relevant lease, allocation, title or other supporting documents.

Government and Land Registry Searches

Appropriate searches should be undertaken with the relevant authorities to establish the status of the property and identify registered or recorded interests affecting it.

Ownership and Authority Verification

The identities and authority of all relevant parties should be verified. Where a company is involved, corporate records and authority to enter into the transaction should also be examined.

Survey and Boundary Verification

The legal description of the property should be checked against survey documentation and, where appropriate, physical boundaries.

Encumbrance and Dispute Checks

The transaction should be reviewed for mortgages, charges, restrictions, competing claims, litigation and other potential impediments.

Planning and Permitted Use

The investor's intended use of the property should be assessed against applicable planning and development requirements.

Investment and Regulatory Compliance

Where the investment falls within the relevant investment framework, the investor should determine whether ZIPA registration, an investment certificate or other approvals are required.

The Zanzibar Investment (General) Regulations, 2025, made under the Zanzibar Investment Act No. 10 of 2023, form part of the current investment regulatory framework. 

Contractual Review

The lease, sale-related agreement, development agreement, joint venture agreement or other transaction documents should be reviewed and negotiated to protect the investor's interests.

What Can Alin Law Care Assist With?

At Alin Law Care, we understand that a land investment is often one of the largest financial commitments an investor will make. Our role is to help foreign investors make informed decisions before committing their money.

We can assist with:

• Pre-purchase legal due diligence on the proposed property.
• Verification and review of land documentation and the legal interest being offered.
• Land and Government searches through the relevant authorities.
• Verification of parties and their authority to enter into the transaction.
• Review of survey and boundary documentation and coordination with relevant technical professionals where required.
• Identification of encumbrances, disputes and potential legal risks.
• Review and negotiation of leases, sale-related agreements and other transaction documents.
• Advice on foreign investment requirements and applicable approvals.
• Assistance with ZIPA-related investment processes, where applicable.
• Development and regulatory compliance advice relating to the proposed use of the property.
• Transaction structuring to help ensure that the investment is held through an appropriate and legally compliant structure.
• Completion and post-completion legal support, including documentation and follow-up with relevant authorities.

Our objective is not simply to help a client complete a transaction. Our objective is to help the client understand the transaction, identify the risks and enter into the investment with greater legal certainty.

Do Not Let the Price Be the First Question

When a foreign investor sees an attractive piece of land in Zanzibar, the first question is often:

“How much is it?”

The more important question should be:

“What exactly am I legally acquiring?”

A property can be attractive, strategically located and commercially promising, yet still carry significant legal risks. A relatively small investment in professional due diligence before committing funds can prevent substantially larger losses later.

Conclusion

Zanzibar presents significant opportunities for foreign investors, particularly in tourism, hospitality, real estate and other strategic sectors. The Government's investment framework continues to facilitate foreign investment, while ZIPA identifies real estate development as an important investment opportunity and provides mechanisms for investors to access land through long-term leases and approved investment structures.  Nevertheless, opportunity must be accompanied by caution.

Land due diligence is not an unnecessary legal expense. It is an essential investment-protection mechanism.

Before signing an agreement, paying a deposit or transferring substantial funds, a foreign investor should obtain independent legal advice and ensure that the land, the proposed tenure, the parties, the transaction documents and the intended development have all been properly investigated.

At Alin Law Care, we help investors look beyond the promise of the property and understand the legal reality behind the investment.

NEED HELP

Please feel free to contact us Alin Law Care for free consultation via info@alinlawcare.co.tz   Phone: +255 752500040, +255 673 030 412, or visit our website  https://www.alinlawcare.co.tz/ for more articles on different areas of interests.

Invest with confidence. Investigate before you commit.