Today, our world operates as a global village with businesses increasingly embracing cross-border transactions to expand their horizons and seize global opportunities. Businesses are now less likely to be confined to territorial borders; they now continuously assess economic feasibility and venture into new territories exploring business development opportunities to fuel their growth. However, navigating these cross-border transactions entails a multitude of legal intricacies that demand thorough analysis to mitigate risks particularly due to the peculiarity in laws when dealing with different jurisdictions.
It is crucial to conduct thorough legal analysis for cross border transactions to manage risks and ensure successful execution of these transactions. Addressing legal considerations in such transactions involves defining the scope of contractual relationships, navigating applicable laws in various business jurisdictions, understanding international trade laws and regulations, safeguarding consumer protection rights, protecting intellectual property, identifying tax implications and international tax treaties, careful due diligence analysis, adhering to data privacy laws, and ensuring regulatory compliance.
The role of legal expertise is indispensable when executing cross-border transactions bringing specialized knowledge and insights to the table. Lawyers are tasked with multitude of responsibilities including examining contract agreements, identifying regulatory compliance issues, assessing legal risks and liabilities, structuring business transactions, drafting and negotiating transaction documents, addressing challenges stemming from diverse legal systems, cultures and languages, managing legal risks, coordinating with various legal teams, advisors and other stakeholders, facilitating closing of transactions, advising on dispute resolution mechanisms and strategies for potential disagreements or breaches of contracts and offering on-going legal support and guidance to clients even after transaction completion.
From a Nigerian perspective, it is essential to adhere to several legislations when undertaking cross-border transactions. These encompass (list not exhaustive):
- the Companies and Allied Matters Act and Corporate Affairs Commission which govern the formation of companies;
- foreign exchange regulations overseen by the Central Bank of Nigeria mandating compliance with profit repatriation requirements;
- the Nigerian Investment Promotion Commission Act which outlines procedures for foreign investment approvals and registration;
- the Copyright Act which regulates intellectual property in Nigeria;
- the Nigerian Oil and Gas Industry Content Development Act which regulates the development of Nigerian content in the Nigerian oil and gas industry;
- the Nigerian Data Protection Act which protects the rights and privacy of Nigerian citizens;
- the Federal Competition and Consumer Protection Act, fostering equitable business practices and safeguarding interests of consumers;
- the Investment and Securities Act which governs the operations of the capital market;
- the Immigration Act which applies to persons entering or exiting Nigeria;
- the Business Facilitation Act aimed at creating a favorable environment for investors and entrepreneurs.
Furthermore, Nigeria has bilateral agreements with 31 countries, 15 of which are in force. The country also has double taxation treaties with 13 countries and has a signatory to 21 investment-related instruments. It is imperative to possess a thorough understanding of the legal landscape governing border transactions in the relevant jurisdictions. At Centurion Law Group, we advise businesses on entry requirements into the Nigerian market covering aspects such as registration, compliance, taxation, licenses and more.
In summary, a comprehensive grasp of essential legal factors empowers businesses to navigate the complexities of international markets with assurance ultimately leading to successful outcomes. Collaborating with seasoned legal advisors and harnessing specialized expertise, can unlock the full potential of businesses in the global market fostering sustainable growth in an increasingly interconnected world. By strategically leveraging insights, businesses can confidently expand their horizons and capitalize on diverse opportunities across borders, ensuring long-term success and resilience in the global market space.
At Centurion Law Group, our commitment to Pan-Africanism means our diverse team of lawyers span various jurisdictions enabling us to provide comprehensive advice and services for cross border transactions, from business establishment to execution of transactions.
Reach out to our team of lawyers and business advisors to seamlessly guide clients through Africa’s abundant investment opportunities.
Oneyka Ojogbo – oneyka.ojogbo@centurionlg.com
Simisola Oso – simi.oso@centurionlg.com
Author: Ariteshoma Etete, Associate, Centurion Law Group, Nigeria Office.
