Investment Opportunities in Export Processing and Special Economic Zones (EPZ), in Tanzania

Export Processing Zones and Special Economic Zones provide for a wide range of investment operations within the zones within the stand-alone industrial park, investors in this category are provided with operators’ license and start their business immediately without any need of having another license. An investor might choose to invest but not limited to the following sectors:

1. Agriculture and agricultural products.
2. Metal products, machinery, and transport equipment.
3. Electronics and electrical appliances.
4. Chemical, paper, and plastics.
5. Light industries.
6. Mining, ceramics, and gemstones.

Qualification to invest in SEZ:

Any investor can qualify to invest underSpecial Economic Zone Scheme provided he/she fulfills only these simple criteria.
• The investment must be new.
• Annual export turnover should not be less than US$ 5 million for foreign investors and US$ 1 million for local investors.
• Adequate environmental protection systems.
• Utilization of modern production process and new machinery.
• Investments must only be in located SEZ industrial parks.
Eligibility criteria for SEZ user licensing:
• New investment
• Minimum capital of US$ 500,000 and US$ 100,000 for foreign and local investors respectively
• The investment must be located in the Special Economic Zone
Eligibility criteria for SEZ Export user
licensing:
• New investment
• At least 80% of goods produced/processed should be exported
• Minimum annual export turnover of US$ 500,000 and US$ 100,000 for foreign and local investors respectively.

The EPZ policy places emphasis on products that use local materials, such as textiles and garments, leather goods, agro-processing, and the lapidary industry. The EPZ activities are regulated by the Export Processing Zones Act no.11 of 2002. The Special Economic Zones Act 2006 outlines areas, such as industrial parks, export processing zones free trade zones free ports, tourist parks, science and technological parks etc; as areas that may be regarded as special economic zones. The special economic zones also invite light industry in specific regions, such as Dar es Salaam, Tanga, Kigoma, and Mtwara. The Exemptions under EPZ and SEZ are available under their respective laws.

Multiple incentives for SEZ investors:

1. Exemption from payment of taxes and duties for machinery, equipment, heavy duty vehicles, building and construction materials and any other goods of capital nature to be used for purposes of development of SEZ infrastructure;
2. Exemption from payment of corporate tax for an initial period of ten years and thereafter a corporate tax shall
be charged at the rate specified in the Income Tax Act;
3. Exemption from payment of withholding tax on rent, dividends, and interest for the first ten years;
4. Exemption from payment of property tax for the first ten years;