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Zanzibar has approved plans for a new cryptocurrency-focused “cyber city” to be built on its western coast, marking a bold step into digital governance and blockchain-based administration. The project is designed to attract digital nomads, technology entrepreneurs, and remote workers from around the world while testing new ways of running services such as taxation, payments, and business registration using digital systems.
The planned development will sit on a 71-hectare piece of land near the Fumba Peninsula. It is being developed by private entrepreneurs working closely with the Zanzibar Information and Communication Technology Authority. The idea is to create a mixed-use city that combines modern housing with a digital residency program, allowing people to register companies, manage taxes, and conduct official business online without needing to live on the island full time.
At the heart of the project is a special legal framework known as the Digital Free Zone legislation, which was passed earlier in 2024. This law allows the cyber city to operate under alternative systems for financial transactions, taxation, and business administration. While many services would be handled digitally, criminal and civil matters would still fall under Zanzibar’s existing legal system, ensuring that national laws remain in force.
The initiative received strong political support in November 2024, when Zanzibar’s leadership approved a partnership agreement between the project developers and the Zanzibar Communication Corporation. This endorsement signaled the government’s willingness to explore new economic models and experiment with digital-first systems as part of its long-term development strategy.
According to the project’s founders, Florian Fournier and Kristof De Spiegeleer, the cyber city is not meant to attract large numbers of traditional residents. Instead, it is aimed at globally mobile technology workers who can live anywhere and work online. As De Spiegeleer explained, the focus is on attracting “digital people, not physical ones,” meaning individuals and businesses that operate primarily through the internet rather than relying on a permanent physical presence.
The proposed tax structure is a major part of the project’s appeal. Digital residents, who may never live full time in Zanzibar, would pay a flat income tax of 5%. People who choose to live within the cyber city would be taxed at 15%. Businesses operating in the zone would benefit from a 10-year tax holiday and would not be subject to capital gains or wealth taxes. Developers believe these incentives will make the cyber city highly attractive to startups and remote companies looking for flexible and low-cost environments.
So far, interest appears to be growing. Developers say around 100 digital residents and about 30 businesses have already registered under the program. The land for the project has been leased for 30 years and is estimated to be worth about $70 million, highlighting the scale of investment involved and the expectations surrounding the development.
The cyber city concept draws inspiration from the idea of “network states,” a term popularized by cryptocurrency entrepreneur Balaji Srinivasan. Network states are communities that are organized primarily online, with shared digital systems and values, rather than being defined solely by physical borders. While similar projects have been launched in other parts of the world, their success has been mixed, with some struggling to move beyond experimental stages.
For Zanzibar, the project fits into a broader effort to diversify its economy. As part of Tanzania, the island has long relied heavily on tourism, making it vulnerable to global shocks such as travel disruptions. By investing in blockchain technology and digital infrastructure, Zanzibar hopes to position itself as an innovation hub in Africa and reduce its dependence on traditional sectors.
If successful, the cyber city could serve as a testing ground for new forms of digital governance and economic organization, potentially influencing how other regions think about technology, residency, and the future of work.