Glossary of Terms

Glossary of Terms

updated

Our World Zanzibar Regulation No.
OWZ OTH/01/2026

1. The following words and expressions, where used in the Regulations, Rules and Circulars of the Zanzibar Digital Free Zone shall have the meanings below.

   1. Accounting Records are records of a Regulated Entity’s transactions and financial statements, including revenue, losses, liabilities and profits, stored in the Financial Records Vault (FRV) and used to determine the Tax Liability.

   2. Airdrop is the distribution of Digital Assets to multiple wallet addresses, often used for promotional purposes, community building, or Token distribution following Blockchain forks or new project launches.

   3. Arbitral Tribunal is the adjudicatory body mandated by the Regulator to resolve disputes between Regulated Entities.

   4. Articles of Incorporation set out the name, objects, share capital, governance, and the rights and responsibilities of Shareholders of a Zone Company. The Articles of Incorporation create the legal framework for the Company’s status as a lawfully registered and regulated entity within the Zanzibar Digital Free Zone.

   5. Asset is any resource, tangible or intangible, owned or controlled by a Regulated Entity for the purposes of storing value and bringing future economic benefits.

   6. Award is a decision of the Arbitral Tribunal mandated to resolve disputes between Regulated Entities, considered binding within the Zone.

   7. Beneficial Owner is a User or Entity with ownership in or control over a Regulated Entity, whether direct or indirect.

   8. Beneficiary is the ultimate owner of a Digital Asset upon completion of a transaction involving that Digital Asset.

   9. Blockchain is a decentralized, distributed digital ledger or database that (1) records Transactions in chronological order; (2) groups entries into cryptographically-linked, tamper-evident blocks; (3) is maintained across multiple nodes or participants in a network, such that no single participant unilaterally controls the ledger; and (4) relies on consensus mechanisms to validate new blocks and ensure the integrity and immutability of the ledger.

   10. Bylaws (Cooperative) are the internal rules of a cooperative entity registered within the Zanzibar Digital Free Zone, governing its membership, management, decision-making processes, allocation of profits or surplus, and the rights and obligations of its members.

   11. Conflicts of Interest is a situation in which a person’s personal, financial, or other interests, or duties owed to another party, may compromise, or reasonably be perceived to compromise, the impartial and objective performance of their duties with regard to any Regulated Entity..

2. Digital Asset is the virtual or electronic representation of real or digital value. Digital Assets constitute property capable of being owned, transferred, secured and utilized for payment, investment or other purposes.

   13. Digital Asset Offering means the Issuance, sale, or distribution of Digital Assets in exchange for value through public solicitation, private placement, or similar method.

   14. Digital Asset Service Provider (“DASP”) is a Zone Enterprise that has been licensed to conduct one or more of the services and activities identified in the Digital Assets Code.

   15. Digital Nomad is a Digital Resident, as that term is defined and applied in the Regulated Entity Code and any subsequent Regulations, Rules and Circulars.

   16. Digital Resident (or “Digital Nomad”) is the digital or virtual representation of a natural person (“User”), registered and classified as a Digital Resident. A Digital Resident is authorized to access a limited set of tools and services within the Zone, which shall be further defined by the Regulator.

   17. Discrepancy Claim is a submission by the Entity lodging a dispute about the accuracy of a Tax Report, triggering a review process by the Registrar.

   18. Distributed Ledger Technology is a decentralized database that records and shares identical copies of data across multiple locations with no central administrator. Each participant can access the shared ledger, and any changes are reflected across all copies through a consensus mechanism.

   19. Entity means ……

   20. Explorer is a Zone Company or Zone Cooperative, as that term is defined and applied in the Regulated Entity Code and any subsequent Regulations and Rules.

   21. Fiat Currency is a government-issued form of money that is in public circulation as a medium of exchange.

   22. Financial Action Task Force (“FATF”) is an intergovernmental organization that develops and promotes global standards to combat money laundering, terrorist financing, and other financial crimes through international cooperation​.

   23. Financial Records Vault (“FRV”) is the Registrar’s secure digital system for storing, organizing, and verifying all financial data generated by Entities. The FRV serves as the official basis for tax calculation, compliance, and audits. All entries are timestamped, cryptographically hashed, and therefore indisputably verified for all purposes, legal and otherwise.

   24. Fit and Proper is the customary standard applied by the Regulator to assess whether a person is suitable to perform a controlled function or hold a position of responsibility, having regard to their integrity, competence, financial soundness, reputation, and ability to perform the role in compliance with applicable laws and regulations.

   25. Foreign Entity is a body corporate with legal personality established in a jurisdiction outside the Zanzibar Digital Free Zone.

   26. General Assembly is the supreme decision-making body of a Zone Cooperative, consisting of all Members who gather periodically to exercise democratic control following the principle of one-Member-one-vote.

   27. Global Business Company (“GBC”) is a Zone Enterprise, registered within the Zanzibar Digital Free Zone, and subject to its Rules and Regulations.

   28. Income shall mean “net operating income,” being the operating profit or loss of a Regulated Entity for the relevant period, derived from its ordinary business activities, as reflected in Accounting Records prepared in accordance with International Financial Reporting Standards (IFRS), and calculated before taxes, interest, depreciation, and amortization, and excluding unrealized gains or losses, treasury or investment revaluations, gains or losses on the disposal of assets not held for trading in the ordinary course of business, extraordinary items, and other non-operating income or expenses.

   29. International Financial Reporting Standards (“IFRS”) means the accounting standards and interpretations issued by the International Accounting Standards Board (IASB), as amended from time to time, and includes any successor framework or standards recognized by the Regulator.

   30. Issuer is a Global Business Company authorized by the Regulator to conduct a Digital Asset Offering or Issuance.

   31. License is authorization by the Regulator to engage in and provide specificLicensed Services under terms defined by the Regulator.

   32. License Fee includes the amount required to be paid by an Entity for both submitting a License Application and for yearly maintenance of the License.

   33. Licensed Services are those Services requiring a License issued by the Regulator that are identified in the Digital Assets Code or related Regulations, Rules or Circulars.

   34. Member is a Digital Resident or Zone Enterprise which holds Membership in a Zone Cooperative, with rights and obligations as specified in the Regulated Entity Code and the Zone Cooperative's Articles of Incorporation and Bylaws (“Articles and Bylaws”).

   35. Member Capital is the sum of all capital contributions made by Members to a Zone Cooperative, including Share Capital, Membership fees, additional capital contributions, retained Member allocations, and Member loans.

   36. Member Share is a unit of ownership in a Zone Cooperative, representing a proprietary interest held by a Member, that confers specific rights and obligations as defined in the Regulated Entity Code and the Zone Cooperative’s Articles of Incorporation and Bylaws. Member Shares are represented digitally and recorded on a Blockchain ledger managed by the Regulator.

   37. Membership is a unit of participation in a Zone Cooperative, representing an interest held by a Member, that confers specific rights and obligations as defined in the Regulated Entity Code and the Zone Cooperative's Articles of Incorporation and Bylaws. Membership interests shall be represented digitally and recorded on a Blockchain-based ledger managed by the Registrar.

   38. Membership Fees are payments made by a Member to the Zone Cooperative, typically upon joining or on a recurring basis, to cover administrative costs or support operations; it does not confer ownership rights.

   39. Membership Interests refer to a Member’s ownership stake in the cooperative, representing rights and obligations such as voting power, entitlement to Surplus distributions, and participation in Zone Cooperative governance.

   40. Mining is the computational process of validating and adding new Transactions to a Blockchain network for which participants (Miners) receive Digital Asset rewards and Transaction fees.

   41. Notice is a formal communication by one party to another, including between and among the Regulator and Regulated Entities.

   42. No-Objection Letter is a formal communication issued by the Regulator indicating that, after review, it has no objections to a proposed activity. Issuance of a No-Objection Letter does not imply endorsement or approval, but only signifies that the Regulator does not oppose the proposed activity.

   43. Official Wallet is the digital wallet assigned to the Entity during initial registration and is the location from which all transactions for the payment of taxes, Zone fees, and other compliance activities must originate.

   44. Oracle is a Blockchain-based digital agent that provides Smart Contracts with external data.

   45. Originator is the party to a Transaction that initiates the transfer of a Digital Asset, whether directly from an account under its ownership or through an intermediary.

   46. OurWorld Zanzibar (“OWZ”) is a Joint Venture Company and Public Private Partnership between the Zanzibar Communication Corporation (“ZICTIA”) and OurWorld Holding Limited (GBC, Mauritius), registered under the laws of Zanzibar (Registration No. Z0000246780) and established in order to act as the Regulator of the Zanzibar Digital Free Zone, as authorized by Presidential Designation of Special Economic Zone, reflected in Legal supplement (Part II) to the Zanzibar Government Gazette, Vol. CXXXIII No. 7294, p. 649 (6 December 2024)(hereinafter, “SEZ Designation (2024).”

   47. Physical Asset means any tangible item or property that has material form and intrinsic value, including but not limited to land, buildings, equipment, machinery, inventory, commodities, vehicles, and physical currency.

   48. Physical Resident is a User who has physical residence in Zanzibar as determined under applicable tax law. Such a User’s Digital Resident is deemed to be a Physical Resident of Zanzibar for purposes of taxation under the SEZ Designation (2024).

   49. Proof-of-Stake is a Blockchain consensus mechanism where validators are selected to create new blocks and verify transactions based on the amount of a Digital Asset they hold and are willing to "stake" as collateral.

   50. Redemption is a Zone Cooperative's repurchase and cancellation of a Member's ownership interest, extinguishing the Member's rights upon withdrawal from the Zone Cooperative.

   51. Registrar is the body established by the Regulator in order to, inter alia, create and operate the FRV as well as to manage and support communications between and among the Regulator and Entities.

   52. Registration is the submission and approval process through which Regulated Entities are legally recognized in the Zone. Issuance of a Registration Certificate confirms approval, which may be suspended, canceled, or denied without recourse.

   53. Registry is a digital platform and database developed for the purpose of storing and managing all Zone records, as well as for managing and storing communications between and among Regulated Entities. The Registry is managed by the Registrar.

   54. Regulated Entity (“Entity”) includes Digital Residents, Zone Companies, Zone Cooperatives, and Ventures as recognized and defined under the Regulated Entity Code.

   55. Regulations are binding, authoritative instruments issued that have the force of law within the Zone. Any violation of Zone Regulations shall subject the Entity to penalties as defined by the Regulator or its Subsidiary Bodies.

   56. Regulator is OurWorld Zanzibar, or “OWZ.”

   57. Risk Assessment is the systematic evaluation of financial, operational, security, legal, and compliance risks, including identifying vulnerabilities, assessing exposure to illicit activities, and implementing mitigation measures to protect clients, assets, and market integrity.

   58. Rules provide instructions, guidelines or procedures required for implementing Regulations including with regard to registration process, service fees and fines, and the issuance of licenses.

   59. Schedule is a list of fees, fines or penalties issued by the Regulator for purposes of ensuring accountability and promoting compliance within the Zone.

3. Security is a fungible financial instrument that represents an ownership interest in an Asset that (1) has monetary value, (2) has been exchanged or transferred in a marketplace.

   61. Service Fee is the amount paid by a User to the Regulator to access any Zone service, facility or product.

   62. Services are related to the management, investment, transfer, fiduciary holding, and lending of Fiat Currency and Digital Assets including inter alia, insurance, payment processing, digital payment systems, depository, investment management, financial advisory, and other financial technology services that facilitate Transactions, asset management, credit, currency exchange, and capital markets activities.

   63. Share is a unit of ownership in a Zone Company, representing a proprietary interest held by a Shareholder, that confers specific rights and obligations as defined in the Regulated Entity Code and the Zone Company’s Memorandum and Articles of Association. Shares are represented digitally and are recorded on a Blockchain ledger managed by the Regulator.

   64. Share Capital is the total value of Shares issued or authorized for issue by a Zone Enterprise, including the nominal value of issued Shares and any Share premiums.

   65. Shareholder is a Digital Resident or Zone Company which holds at least one Share in a Zone Company, with rights and obligations as specified in the Regulated Entity Code and the Zone Company’s Memorandum and Articles of Association.

   66. Significant Shareholder means any person who holds, directly or indirectly, ten percent (10%) or more of the shares or voting rights in the Company, or who otherwise exercises control or significant influence over the Company, whether directly or indirectly.

   67. Smart Contract is a self-executing contract, coded and stored on a Blockchain digital ledger, that automatically enforces and executes the terms agreed upon by parties when predefined conditions are met. Smart Contracts are legally binding and may be used to facilitate, verify, and enforce Transactions, in particular, those involving Digital Assets.

   68. Solvency Statement is a declaration by a Zone Enterprise Director related to the solvency of the Zone Enterprise.

   69. Special Resolution is a resolution approved by Shareholders representing a minimum number of total Shares in a Zone Company or total Members in a Zone Cooperative, as determined by the Zone Enterprise’s Memorandum and Articles of Association or Memorandum of Incorporation and Bylaws as applicable.

   70. Staking is the process of locking up or holding Tokens to support the operations of a proof-of-stake Blockchain network, including Transaction validation and network security, in exchange for Token rewards or yields.

   71. Subsidiary Bodies include any entities created within or related to OWZ, which, as Regulator, has determined necessary for the efficient functioning and growth of the Zone.

   72. Surplus is an excess of capital, above operating expenses and statutory reserves, borne by a Zone Cooperative.

   73. Tax Authorities are the Tanzania Revenue Authority (TRA) and the Zanzibar Revenue Authority (ZRA).

   74. Tax Liability is the total amount of tax owed by an Entity during a specified period as determined by the Registrar in the Tax Report.

   75. Tax Report (“Report”) is issued by the Registrar to an Entity and includes a list of all transactions, the calculated net income, the applicable tax rate, the total Tax Liability, and the tax payment due date for a specified period.

   76. Terms of Service is a legally binding agreement between a User and OWZ governing User access to the Zone and its services, facilities and products.

   77. Token is a digital unit of value (or Digital Asset) that is created, stored or transferred using digital distributed systems, such as blockchain or distributed ledger technology. Tokens can represent ownership, access rights, governance privileges, or utility within a decentralized ecosystem, and may be fungible or non-fungible.

   78. Transaction is any act or agreement that creates, modifies, transfers, or extinguishes rights or obligations between two or more parties, whether effected by contract, exchange of value, or other legally recognized means, in particular with regard to the disposition of Digital Assets, Shares, or any other goods or services.

   79. User is a natural person who registers a Digital Resident within the Zone through, inter alia, accepting the obligations assumed under the Zone Terms of Service including the payment of any Tax Liability owed by its Digital Resident.

   80. Venture Creator is a Subsidiary Body of Our World Zanzibar responsible for the creation of new entities within the Zone by generating business ideas, directing strategy, and providing resources, such as capital, infrastructure and mentorship. Zone Enterprises created by this Subsidiary Body are called Ventures.

   81. Wind-Up Process is the method of settling the accounts of a Regulated Entity in the event of liquidation, dissolution, abandonment, or any other event requiring the distribution of its Assets and termination of the Regulated Entity’s Registration.

   82. White Paper is a document prepared by the Issuer that meets the requirements of a White Paper as set out in the Digital Assets Code.

   83. Zanzibar Digital Free Zone (“Zone”) is a Digital Free Zone within the meaning of Article 39 of the Zanzibar Investment Act of No. 10 of 2023 and designated by the President of Zanzibar and Chairman of the Revolutionary Council (the “President””) by SEZ Designation (2024), the functions, characteristics and powers of which are laid out in this Code. The Zone has virtual and physical components, the latter of which is included in SEZ Designation (2024).

   84. Zanzibar Digital Free Zone Company (“Zone Company”) is an “Explorer” as that term is used in SEZ Designation (2024). A Zone Company is an entity with legal personality owned by one or more Digital Residents as defined in the Zanzibar Digital Free Zone Commercial Code (OWZ REG_ZNZ/03/2025). Zone Companies are authorized to conduct commercial and financial activities both within and outside the Zone to the extent not prohibited by law.

   85. Zanzibar Digital Free Zone Cooperative ("Zone Cooperative") is a type of Zone Company recognized by the Regulator under the authority granted to the Regulator in SEZ Designation (2024). A Zone Cooperative is an entity with legal personality which is created and limited by Membership held by one or more Digital Residents who are Members of the cooperative. Zone Cooperatives are authorized to conduct commercial and financial activities to the same extent not prohibited by law as other Zone Companies.

   86. Zanzibar Digital Free Zone Enterprise (“Zone Enterprise”) is a Zone Company or Zone Cooperative.

   87. Zanzibar Digital Free Zone Operating System ("Zone OS") is the Blockchain-based digital infrastructure platform that comprises the technological backbone of the Zanzibar Digital Free Zone ecosystem. The Zone OS integrates all commercial, operational, regulatory, and governance functions in a unified system that relies on decentralized storage technologies to achieve high levels of security. The Zone OS is operated and managed by the Regulator, its designees, and Subsidiary Bodies.

   88. Zone Enterprise is a Zone Company or Zone Cooperative.

4. The Regulator shall keep this Glossary of Terms updated as necessary for purposes of ensuring clarity and predictability within the Zone.