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A Foreign Investor’s Guide to Doing Business in Nigeria


The current legal position for foreigners intending to carry on business or work in Nigeria is one of the most liberal amongst other jurisdictions. The position of the law in Nigeria is to the effect that a foreigner is free to work and do business alone or in partnership with any other person in any sector of the economy excluding the items or sectors contained in the negative list which includes production of arms and ammunition; production of and dealing in narcotic drugs and psychotropic substances; manufacture of military /paramilitary wears and equipment and participation in coastal and inland shipping. A foreign investor may repatriate his profits including remittance of proceeds and other obligations in the event of any sale or liquidation of the company or any interest realized form the investment in Nigeria. The combined position of the law, however, requires the foreign Investor to register a Company with the Corporate Affairs Commission and obtain relevant permits for its business before it commences operation. It is important to note that foreign investment enjoys protections, assurance and incentives in Nigeria by law.


This article intends to highlight the key legal and regulatory requirements for carrying on business in Nigeria by foreigners both Individuals and corporate entities. The position of the law stipulates that all foreign entities wishing to carry on business in Nigeria shall first register such enterprise with the Corporate Affairs Commission (CAC). The Corporate Affairs Commission is set out to administer, regulate and supervise the formation, incorporation, registration, and management of businesses. The Commission is also responsible for the arrangement and conduct of investigation into the affairs of any company. Until the incorporation of a company/ business as a local entity, a foreign entity may not carry out any business in Nigeria or exercise the powers that a registered company has obtained.


When deciding on registering a company/ business in Nigeria, If you want to establish a new business, there are varieties of business structures that are available. There are four main types of business structure; they are sole proprietorship; partnerships; incorporated trustees; and incorporated companies. You need to decide on the company structure that will best suit your needs.

The Companies and Allied Matters Act, Cap C20, Laws of the federation of Nigeria (LFN) 2004  (CAMA) helps to regulate business organizations. By section 54 of the Companies and Allied Matters Act (CAMA), foreign companies intending to do business in Nigeria must be incorporated as a local entity in Nigeria. However, Section 56 (1) of CAMA provides that a foreign company may apply to the Federal Executive Council for exemption from the requirement to register in Nigeria if it belongs to  companies invited to Nigeria by or with the approval of the Federal Government to execute any specified individual project;  Foreign companies which are in Nigeria for the execution of specific individual loan projects on behalf of a donor country or international organization; Foreign Government-owned companies engaged solely in export promotion activities; and  Engineering consultants and technical experts engaged in any individual specialist project under contract with any of the governments in the Federation or any of their agencies or with any other body or person, where such contract has been approved by the Federal Government. A foreign company may also open a representative office in Nigeria. Such a representative office is however not allowed to engage in any business, conclude any contract or negotiate any letters of credit on behalf of the company.

The initial move towards incorporating a company in Nigeria is to conduct an “availability search” of the desired name for the company at the Corporate Affairs Commission (“CAC”). The proposed name should not be identical to the name of an existing company or trademark. The implication is that it will be totally unacceptable. After the availability search, same name will be reserved for a period of sixty days. Within the sixty days, it is expected that the company should be registered provided all the statutory requirements are complied with. The requisite documents for the registration of company are Memorandum and Articles of Association (MEMART); CAC Application form which contains the particulars of the directors, secretary, share capital amongst others will be filed at CAC and a certificate of incorporation will be issued.  Where any of the subscribers to the to the company’s Memart is a foreign entity or individual, the company’s authorized share capital must be a minimum of N10,000,000 (Ten Million Naira) as prescribed by the Nigerian Investments Promotion Commission.



The next required step is the registration with the Nigerian Investment Promotion Commission (NIPC). The Nigerian Investment Promotion Commission (NIPC) is an agency of the Federal Government set up primarily to promote and encourage foreign investments in Nigeria. The agency requires that all foreign investors should register with it before commencing business operations in Nigeria. If the Commission is satisfied with all the details submitted by the investor, it shall register the enterprise accordingly.


Section 36(1)(b) of the Immigration Act, 2015 prohibits a non- citizen of Nigeria from establishing a business or registering a company  without the consent of the Minister responsible for immigration matters.  A foreigner who intends to carry on business in Nigeria must obtain a business permit after the incorporation of the company has been concluded. So to enable foreigner do work in Nigeria, such a person must obtain the following.


The employment of foreign nationals is prohibited unless the permission of the Comptroller-General of Immigration is obtained under section 38(1) of the Immigration Act 2015. This permission is usually granted in the form of Expatriate Quota Approvals. A company seeking to employ foreigners in Nigeria is required to obtain Expatriate Quota Approval in respect of such position and it must justify the requirement for employing expatriates for the specified positions. Otherwise, the application could be refused on the ground that there exists competent Nigerians to fill the relevant positions. The application for Expatriate Quota Permission can be made along with Business Permit. There are two types of expatriate quota permission namely: (a) Permanent Until Reviewed (“PUR”) quotas, which are usually reserved for Chief Executive Officers; and (b) Ordinary quotas, which are issued to expatriate employees of the company as well as directors.


Upon securing the Expatriate Quota Permission, the expatriate employee shall obtain a CERPAC, which permits him/her to reside and work in Nigeria. The CERPAC is issued to the foreign employees by the Immigration Office upon their arrival in Nigeria. Prior to arriving in Nigeria, foreigners  are required to obtain a “Subject To Regularization” (“STR”) Visa from the Nigerian Embassy/High Commission in their  countries, which enables them to lawfully take up employment during the period in which applications for the issuance of CERPAC is being processed. 


The Companies Income Tax Act provides for the taxation of profits of companies (other than oil companies) in Nigeria. Accordingly, all companies assessable to tax under the Companies Income Tax Act must register with the Federal Inland Revenue Services (“FIRS”) and obtain a Tax Identification Number (“TIN”). The TIN must be show on all returns filed or correspondence exchanged with the FIRS. This registration is done immediately after the incorporation process. 

Personal Income Tax: The Personal Income Tax Act establishes a “Pay-As-You-Earn” (PAYE) scheme whereby employers are required to act as agents of the tax authorities for the purpose of collecting and remitting taxes on salaries due to their employees. For this purpose, every employer is required to register with the zonal office of the tax authority in the State where its place of business is located. This registration is done after the incorporation of the company and upon employment of staff. 

Value Added Tax: Value Added Tax (“VAT”) is imposed under the VAT Act. Under the VAT Act, all companies involved in business or trade are required to register with the FIRS within 6 (six) months of commencement of business.


All contracts between a Nigerian company and a foreign company involving the transfer of foreign technology to the Nigerian company must be registered with NOTAP within sixty (60) days from the date of execution of such contract. Upon registration, NOTAP will issue a Certificate of Registration which subsists for a period not more than three (3) years. However, in practice, such Certificate is usually renewable from time to time depending on the nature of the technology transfer involved.


As part of the attempt to attract foreign investments and stimulate private sector investment, the Nigerian government has made available a number of incentives and reliefs to promote both local and foreign Investment. While some of the incentives and reliefs cover all sectors, others are limited to specific sectors. The nature of these incentives is mostly tailored towards tax exemptions and reliefs for the company. The incentives/reliefs available in Nigeria are listed thus: pioneer status, industry specific incentive, research and development expenses, investment in economically disadvantaged areas, interest on foreign loans, investment tax allowance and incentives in form of tax exemption with respect to dividend and domiciliary account.



 Foreign entities seeking to carry on business in Nigeria can legally acquire real property. However, there are different limitations on the type of lease they may hold. To be able to access loans by companies, the institutions giving out such loans would often require collateral, with real property as the most preferred, often times. It is therefore important that foreigners seek legal advice and make proper arrangements in order to obtain the necessary documents and permit or license for the acquisition of real property. 

This article is intended to assist you in getting the broad view of the legal framework for doing business in Nigeria. This article does not put an end to the need for professional advice and must not be construed as a substitute for legal guidance. If you are looking forward to doing business in Nigeria, it is strongly recommended that you engage the services of  professional advisors to assist you with the legal, tax and regulatory complication.

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