Tanzania, Slovakia Deepen Economic Ties With Business Forum in Dar

Tanzania and Slovakia are significantly enhancing their diplomatic and economic relations, marked by a recent business forum in Dar es Salaam and the impending establishment of a new Slovak embassy. This deepening engagement signals increased opportunities for foreign direct investment (FDI) and trade. For legal practitioners, this development necessitates a thorough understanding of Tanzania's evolving investment climate, including the comprehensive framework provided by the Tanzania Investment and Special Economic Zones Act, 2025, and its associated regulations. Key considerations for potential investors and their legal advisors include investment incentives, company registration requirements, land tenure laws, and dispute resolution mechanisms, all of which are designed to attract and protect foreign capital while aligning with national development objectives.

The recent high-level delegation from Slovakia to Tanzania, comprising nearly 50 business leaders and top diplomats, underscores a strategic move to deepen economic and diplomatic ties between the two nations. This engagement, culminating in a business forum in Dar es Salaam and the imminent launch of a new Slovak embassy, signifies a concerted effort to unlock new avenues for trade, investment, and bilateral cooperation. For legal professionals, this development presents a critical juncture to assess the legal frameworks facilitating such international economic partnerships, particularly within Tanzania's dynamic investment landscape. The establishment of a new embassy is poised to streamline diplomatic and commercial interactions, offering a direct channel for resolving issues and fostering a more predictable environment for Slovak enterprises eyeing the Tanzanian market.

Tanzania has actively pursued reforms to enhance its attractiveness as a foreign investment destination. The cornerstone of this effort is the Tanzania Investment and Special Economic Zones Act, 2025, which recently consolidated the functions of the former Tanzania Investment Centre (TIC) and the Export Processing Zones Authority (EPZA) into a unified body, the Tanzania Investment and Special Economic Zones Authority (TISEZA). TISEZA serves as a one-stop centre, aiming to streamline the investment process by coordinating, promoting, and facilitating investments, and advising the government on investment policy and special economic zones. Foreign investors seeking protection under this Act are generally required to meet a minimum capital investment threshold of USD 500,000. The legal framework also encompasses the Companies Act, 2002, which governs the incorporation and operation of business entities in Tanzania. Additionally, Tanzania has established Export Processing Zones (EPZs) and Special Economic Zones (SEZs) under the now-repealed Export Processing Zones Act, 2002, and Special Economic Zones Act, 2006, with their mandates now integrated into TISEZA, offering specific incentives to qualifying businesses.

Conversely, Slovakia, as an open, export-oriented economy within the EU and Eurozone, generally maintains a positive attitude towards foreign direct investment (FDI). However, it has implemented a comprehensive foreign investment screening mechanism through Act No. 497/2022 Coll., effective March 1, 2023. This mechanism allows the Slovak government to screen transactions where a foreign investor (defined as non-EU investors) acquires effective control of a Slovak legal entity, with thresholds varying for 'critical' and 'non-critical' investments. This regulatory framework is designed to safeguard national security and public order while encouraging responsible foreign investment, a consideration for any Tanzanian entity contemplating investment in Slovakia.

The enhanced economic ties between Tanzania and Slovakia will primarily be governed by Tanzania's robust, albeit evolving, investment laws. The Tanzania Investment and Special Economic Zones Act, 2025, provides a legal guarantee against nationalisation or expropriation of business enterprises, ensuring fair compensation and access to courts or arbitration for dispute resolution in the event of state acquisition. This protection is crucial for Slovak investors, offering a degree of security for their capital.

Furthermore, TISEZA offers a range of fiscal and non-fiscal incentives to eligible investors. Fiscal incentives include import duty and Value Added Tax (VAT) exemptions on capital goods, raw materials, and essential project inputs, as well as reduced import duties and capital allowances. Non-fiscal incentives include guaranteed transfer of net profits, dividends, and proceeds from sales or liquidation, as well as permission to hire foreign employees. For strategic investors, particularly those with projects exceeding USD 50 million for foreign-owned ventures, special incentives are available. However, practitioners should note that while incentives are offered, investors have reported challenges with the Tanzania Revenue Authority (TRA) in practically recognising these incentives.

Establishing a business in Tanzania typically involves registration under the Companies Act, 2002. Foreign individuals or foreign-owned companies are generally prohibited from owning land outright; instead, land for investment purposes is secured through a Derivative Title granted via TISEZA, which involves long-term leases, often up to 99 years. This distinction in land tenure is a critical legal aspect requiring careful navigation.

Dispute resolution mechanisms are also central to investor confidence. Tanzania is a member of the International Centre for Settlement of Investment Disputes (ICSID) and a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Arbitration Act, 2020, which replaced the 1931 Act, modernises the arbitration landscape in mainland Tanzania. Notably, the Investment and Special Economic Zones Act, 2025, mandates initial amicable negotiations between investors and TISEZA to resolve disputes before escalating to other avenues, a departure from previous legislation. While Tanzania has historically shown some reluctance towards international arbitration, particularly in the natural resources sector, the current framework allows for local and international arbitration in accordance with Tanzanian arbitration laws or international arbitration rules, especially within the framework of bilateral or multilateral agreements.

Although Tanzania has signed numerous bilateral investment treaties (BITs) with various countries, there is no explicit mention of an existing BIT with Slovakia in the available information. The absence of a specific BIT could mean that investments would rely primarily on domestic investment laws and general international law principles, underscoring the importance of robust contractual agreements. For Slovak investors, understanding their own country's FDI screening mechanism (Act No. 497/2022 Coll.) is also crucial, as it would apply to any significant investment by Tanzanian entities into Slovakia, particularly in critical sectors.

The deepening economic ties between Tanzania and Slovakia present significant opportunities for businesses in both nations. For legal practitioners advising Slovak investors, a comprehensive understanding of Tanzania's investment legal framework, particularly the Tanzania Investment and Special Economic Zones Act, 2025, is paramount. This includes navigating the incentives offered by TISEZA, understanding company formation and land tenure regulations, and being conversant with the dispute resolution mechanisms available. Thorough due diligence, robust contractual drafting, and strategic engagement with TISEZA are essential to leverage the opportunities and mitigate potential risks.

Looking ahead, practitioners should monitor for the potential negotiation and ratification of a Bilateral Investment Treaty (BIT) between Tanzania and Slovakia, which would provide an additional layer of investment protection and clarity. Furthermore, staying abreast of the practical application of investment incentives by the Tanzania Revenue Authority and any further refinements to the dispute resolution landscape will be crucial for ensuring successful and sustainable cross-border investments. The new Slovak embassy in Dar es Salaam is expected to play a vital role in facilitating these legal and commercial interactions, serving as a key resource for businesses seeking to expand into the Tanzanian market.