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Africa Investment Guide: Nigeria in Focus

1. Business formation and regulation

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Accordion Content

Business may be carried on in Nigeria through a company, a Partnership or a Business Name. The Companies and Allied Matters Act, 2020 [as amended] CAMA provides the legal framework for business formation and regulation in Nigeria.  In Nigeria, the main business entities recognised under CAMA are:

  1. Companies

A company is any entity incorporated and registered under CAMA with limited or unlimited liability.  In practice, a foreign investment is usually made through a limited liability company.

The following companies may be registered in Nigeria:

i.  Private limited liability company (Ltd):

  • requires a minimum issued share capital of N100,000.
  • requires minimum of one (1) and a maximum of fifty (50) shareholders.
  • restricts the transfer of its shares
  • is prohibited from inviting the public to subscribe to its shares, debentures and/or deposit money for fixed periods or payable at call, whether or not bearing interest.


ii.  Public Limited Liability Company (Plc):

  • requires a minimum issued share capital of N2,000,000 with 25% of the share capital allotted to its members at incorporation.
  • no restriction on the maximum number of shareholders or their right to transfer their shares freely.
  • is permitted to offer its shares and debentures to the public
  • must appoint a Company Secretary who is a professional with requisite experience.


iii.  Unlimited liability company (Unltd):

  • no limit on the liability of its members.
  • its members are like partners and share the company’s liabilities.


iv.  Company limited by guarantee (Gte):

  • consent of the Attorney General of the Federation must be obtained to register a Gte.
  • generally incorporated as a not-for-profit.
  • allowed to do business not for profit but to apply such towards realising its objects.
  • no share capital. Members merely undertake to contribute the subscribed amount in the event of its winding up, to a sum not less than N100,000 at all times.
  • limits its members’ liability to the amount of their respective guarantees.


  1. Partnership

i.  Limited Liability Partnership (LLP)

  • An LLP is a corporate body formed as a partnership with at least two (2) persons. It has a separate legal personality from its owners. A foreign LLP that wishes to do business in Nigeria must first register as an LLP in Nigeria.

ii.  Limited Partnership (LP)

  • LP is a partnership with no separate legal personality. There is one general partner who is liable for the obligations of the partnership and between one to twenty (20) limited partners, who are liable to an amount agreed at the time of joining the partnership.


Note on Foreign Companies

Every foreign company or investor desirous of doing business in Nigeria is required under CAMA to register an entity in Nigeria. However, a foreign company or investor may be exempted from this requirement upon application by the Secretary to the Government of the Federation (SGF) if it is:

  • invited by or with the approval of the Federal Government for a specific individual project;
  • executing specific individual loan projects on behalf of a donor country or international organisation;
  • foreign government-owned companies engaged solely in export promotion activities; or
  • engineering consultants or technical experts engaged in specialist projects under contract with any tier of Government, where such contract has been approved by the Federal Government.




Business registration is administered by the Corporate Affairs Commission (CAC). Businesses can be registered using the Commission’s online registration portal ( or by visiting the One-Stop Investment Centre (OSIC) of the Nigerian Investment Promotion Commission (NIPC) to complete or submit paper applications.


The online registration process is summarised below:


  • conduct a name availability search and reserve the proposed company name
  • prepare registration documents and complete relevant forms
  • pay the prescribed registration fees and stamp duty. The stamp will be electronically affixed once payment is made online
  • download completed registration documents and append signatures accordingly
  • upload scanned registration documents and other necessary documents for processing
  • once the documents are approved and notification of approval is received, visit CAC’s office and present original copies of uploaded documents and collect a Certificate of Incorporation
  • obtain a Tax Identification Number (TIN) from the Federal Inland Revenue Service


The documents required for filing at CAC are as follows:

  • Form CAC 1.1 (Application for Registration)
  • Form CAC 2.2 (Appointment/Change of Company Secretary)
  • Memorandum and Articles of Association.
  • Statement of Compliance
  • Notice of Approval of proposed name
  • Evidence of payment of registration fees to CAC (the registration fee payable depends on the quantum of authorised share capital)
  • Evidence of payment of stamp duty
  • Recognized form of identification (passport bio-data page, drivers’ licence or National Identity Card) for Director(s)/Shareholder(s) and Secretary
  • Foreign Certificate of Incorporation and Board resolution for subscription to Nigerian company (where applicable)
  • Residence permit of resident foreigners (where applicable)
  • Proficiency certificate (where applicable)



Registration with the Nigerian Investment Promotion Commission


After registration with CAC, and prior to commencement of its business operations, the foreign investor must register at the Nigerian Investment Promotion Commission (NIPC). The NIPC is the main institution that acts as a liaison between foreign investors and Regulators.



The NIPC set up a One-Stop Investment Centre (OSIC), which is an investment facilitation mechanism that coordinates the activities of relevant Regulatory Agencies[1] in granting various permits, approvals, licences. Thus, applications for regulatory permits may be applied for through NIPC via OSIC or directly to the relevant regulatory Agencies.


The key function of the OSIC is granting business entry approvals, licenses and authorizations within the shortest possible time; the provision of general information on the Nigerian economy, investment climate, legal and regulatory framework, sector and industry-specific information to aid existing and prospective investors in making informed business decisions; and the facilitation and follow-up services on behalf of investors in all government ministries, departments and agencies.


Procedure and documentations for business registration at NIPC

To register with NIPC, a formal application must be made to the Executive Secretary of NIPC. The application should include the following documents:

  • Duly completed NIPC Form I;
  • Certified True Copy of Memorandum & Articles of Association;
  • A copy of Evidence of Incorporation with minimum of N10million authorised share capital;
  • CAC Form 1.1 (application for registration);
  • Power of Attorney/ Letter of Authority (where applicable); and
  • Evidence of Payment of Processing fee of N15,000.

[1] Corporate Affairs Commission (CAC); Nigeria Customs Service (NCS); Department of Petroleum Resources (DPR); Nigerian Export Promotion Council (NEPC); Federal Capital Territory Administration (FCTA); Nigerian Electricity Regulatory Commission (NERC); Federal Inland Revenue Service (FIRS); Nigerian Export Processing Zones Authority Federal Ministry of Budget and National Planning (FMB&NP); Nigerian Investment Promotion Commission (NIPC); Federal Ministry of Finance (FMF); Nigeria Immigration Service (NIS); Federal Ministry of Interior (FMI); Nigerian Maritime Administration and Safety Agency (NIMASA); Federal Ministry of Mines and Steel Development (MMSD);New Nigeria Development Company (NNDC); Infrastructure Concession Regulatory Commission (ICRC); National Office for Technology Acquisition & Promotion (NOTAP); Manufacturers Association of Nigeria (MAN); Odu’a Investment Company Limited; Ministry of Foreign Affairs (MFA); Oil & Gas Free Trade Zones Authority (OGTZ); National Agency for Food and Drug Administration and Control (NAFDAC); Pharmacists Council of Nigeria (PCN); National Bureau of Statistics (NBS); Standards Organisation of Nigeria (SON); Nigerian Copyright Commission (NCC); Central Bank of Nigeria (CBN).

There are several government agencies that regulate and control Nigeria’s business environment and operations. These agencies, typically established by a legislative act, are responsible for setting the standards for doing business in Nigeria and operating in a specific sector or industry and for enforcing those standards. We have summarised below some of the key regulatory agencies that are relevant to a Nigerian company with foreign participation.




Corporate Affairs Commission (CAC)


Overall administration of CAMA which includes company incorporation, supervision, management, liquidation, shareholder protection, etc.


Central Bank of Nigeria (CBN)


Formulation and implementation of monetary, trade, currency, credit and banking policy, ensure monetary and price stability, promote a sound financial system in Nigeria, exchange control regulation, regulate financial institutions in Nigeria, etc.


Nigerian Investment Promotion Commission (NIPC)


Co-ordinate and monitor investment promotion activities, initiate and support measures aimed at improving the investment climate in Nigeria, provide support services to incoming and existing foreign investors, etc.


Securities and Exchange Commission (SEC)


Regulate and develop the Nigerian capital market activities in Nigeria, investor protection, management and control of capital market operation, etc.


Federal Inland Revenue Service (FIRS)


Administration of Nigerian tax laws which includes assessing, collecting and accounting for tax revenue, issuing tax refunds, ensuring tax compliance, etc.


Nigeria Immigration Service (NIS)


Regulate immigration into Nigeria, issue residence permits, border surveillance and patrol, etc.


Nigeria Customs Service (NCS)


Collection of import and excise duties, prevention and suppression of smuggling, control and management of all the areas designated as customs ports, airports, border and customs stations, etc.


Nigerian Export Promotion Council (NEPC)


Promotion, development and diversification of exports from Nigeria, coordinating and harmonising export development and promotion activities in the country, interfacing with international trade agencies on cooperation and capacity building, administer export incentive grants and schemes, etc.


Department of Petroleum resources (DPR)



Responsible for ensuring compliance with petroleum laws, regulations and guidelines in the Oil and Gas Industry, issuing licenses to companies engaged in petroleum operations, ensuring Nigerian oil companies operate in line with international standards and practices, etc.


Nigerian Content Development and Monitoring Board (NCDMB)



Guide, monitor, coordinate and implement the Nigerian Oil and Gas Industry Content Development Act, approve Nigerian Content plans developed by operators, engage in targeted capacity building interventions to deepen indigenous human capital development, infrastructure, facilities, material manufacturing and local supplier development, monitor Nigerian Content compliance by operators and service providers, etc.


National Petroleum Investment Management Services (NAPIMS)



Oversee the Federal Government’s (FG) investment interests in the oil and gas industry, manage the FGs oil assets, negotiate and manage third-party operating agreements, encourage gas utilisation and commercialisation, spearhead new technology application in the oil and gas industry, promote transfer of managerial skills and technology, etc.






Nigerian Maritime and Safety Administration (NIMASA)



Administration and regulation of shipping licenses, administration, regulation and certification of seafarers, establishment of maritime training and safety standards, provision of maritime search and rescue services, control and prevention of maritime pollution, provide maritime security, develop and implement policies and programs, which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure, etc.


National Agency for Food and Drug Administration (NAFDAC)



Food and drug administration and control, formulating policies and issuing guidelines on product specification quality control for all foods, drugs, raw materials used in production process, medical devices, cosmetics produced in, imported into and exported out of Nigeria, product inspection and testing, etc.


Standards Organisation of Nigeria (SON)



Preparation of Standards relating products, measurements, materials, processes and services and their promotion at National, Regional and International levels, certification of products, assistance in the production of quality goods and services, improvement of measurement accuracies and circulation of information relating to standards, etc.


National Office for Technology Acquisition and Promotion (NOTAP)


Regulating and monitoring the transfer of foreign technology to Nigeria, approving technology transfer agreements, fostering foreign technology domestication, commercialisation of research and development activities in Nigeria, etc.


National Pension Commission (PENCOM)

Effective administration, regulation and supervision of pension related matters, licensing and supervising pension fund administrators, custodians, and other related institutions, establishing standards, rules and guidelines for the management of pension funds, issuing guidelines for the investment of pension funds, investigating complaints of impropriety levelled against pension fund administrators, custodians, employers or agents, etc.


Trademarks Registry


Registration of trademarks, patents and designs, protection of trademarks, patents, ideas, invention, designs, trade secrets, etc.



Foreign Participation

Nigeria has extensive legislation and safeguards in place to protect indigenous and foreign investments. Nigeria has also proactively engaged in regulatory and statutory reforms, over the years, that have led to significant inflow of foreign investments into different sectors of its economy. The statutory safeguards for investments are contained in the Constitution of the Federal Republic of Nigeria (the Constitution), which is the apex framework that guarantees fair and equitable treatment of foreign and domestic investors in relation to investment and employment opportunities, other investment-related pieces of legislation and international treaties ratified by the Federal Government of Nigeria. 

Nigeria is a signatory to several international investment treaties,[1] conventions, trade agreements[2] that commit to foreign investment rights protection. Accordingly, Nigeria is a haven for foreign investment and presents foreign investors with viable investment opportunities given that it is the largest consumer market in Africa. 

Fully liberalised foreign ownership of investments in any Nigerian enterprise is permitted except enterprises engaged in activities included on the ‘negative list’[3]. This prohibition also applies to domestic investors.


[2] International Promotion & Protection Agreement; Double Taxation Agreement; ECOWAS Liberalisation Scheme; etc.

[3] The ‘negative list’ includes (a) production of arms, ammunition, etc; (b) production of and dealing in narcotic drugs and psychotropic substances; (c) production of military and para-military wears and accoutrement, including those of the Police and the Customs, Immigration and Prison Services; and (d) such other items as the Federal Executive Council may, from time to time, determine.


Investment Protection Mechanisms


a)  Prohibition against nationalisation and expropriation

The NIPC Act, 1995, contains investment protection rules that ensure equal investment opportunity for nationals and foreign investors and prohibit nationalisation and expropriation. The Act[1] guarantees protection against:

  • nationalisation or expropriation of foreign investments by any tier of government;
  • full or partial surrender of capital or interest in capital to any other person;
  • acquisition of a business by the Federal Government of Nigeria, except such acquisition is made in national interest, or for public purpose.

In a case of nationalisation or expropriation, an investor is guaranteed access to Nigerian courts (legal recourse) and a fair and adequate compensation.  Compensation will, according to the Act, be paid without undue delay and may be repatriated in convertible currency.

b)  National Investor Protection Fund (NIPF)

The SEC, in line with its mandate to protect investors, set up the NIPF to compensate investors who suffer financial loss from a defalcation committed by a member of a stock exchange in Nigeria and director or employee of a capital market operator.

c)  Investments and Securities Tribunal (IST)

The IST is a dedicated fast-track civil court established under the Investments and Securities Act, 2007, for the resolution of disputes in the Nigerian capital market. The Tribunal has jurisdiction to hear and any question of law or dispute between an investor and a capital market operator, SEC, a securities exchange, a capital trade point or the clearing and settlement agency.

d)  Trade Treaties

Nigeria has signed and ratified trade treaties with several countries that seek to enhance its potential to attract foreign trade and investments. These treaties provide for a stable legal environment that encourages foreign direct investments by granting residents of the treaty contracting State rights in relation to their investments, guaranteeing investment protection and establishing a framework for enforcing those rights.

We have highlighted below some relevant trade treaties:


i.  Investment Promotion and Protection Agreement


Nigeria has signed bilateral Investment Promotion and Protection Agreements (IPPAs) with the China, Finland, France, Germany, Italy, Korea Republic, Netherlands, Romania, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan Province of China and the United Kingdom. These IPPAs seek to foster reciprocal trade promotion and protect foreign investments into participating States.


ii.  African Continental Free Trade Agreement


The African Continental Free Trade Agreement will establish a single market for goods and services across fifty-four (54) countries, allow the free movement of business travellers and investments, and create a continental customs union to streamline trade and attract long-term investment. In August 2019, Nigeria became the 53rd (and penultimate) African country to sign the agreement. It is expected that full implementation of the agreement will take some time as negotiations covering trade, dispute settlement, investment, competition policy and intellectual property rights have yet to be concluded.


iii.  Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme


The ECOWAS Trade Liberalisation, a multilateral treaty with fifteen (15) West African countries, provides an enabling legal environment for the preservation and protection of investments made by Member States within the Community, protection of human rights, a framework for dispute resolution and investment incentives such as the abolition of customs duties on Member State imports and exports, free movement of goods and services, etc.


iv.  Commonwealth Tax Relief


As a member of the Commonwealth and in order to promote its mutual relationship with other Commonwealth states, Nigeria has provided a tax relief for profits gained in those states, which profits are also taxable in Nigeria.


Nigerian companies are subject to a cap of half of the Nigerian tax rate for such company incomes derived in those states.[2]  To be eligible, Nigerian companies must enjoy reciprocal protections in the laws of the relevant Commonwealth country and Republic of Ireland.  The annual claim for relief should be made to the FIRS no later than six years after the end of that year.


e)  Recourse to international arbitration

The NIPC Act grants a foreign investor the option of recourse to international arbitration for the settlement of disputes. Where there is disagreement on the method of dispute settlement to be adopted, the International Centre for Settlement of Investment Disputes (ICSID) rules shall apply.

Furthermore, The Arbitration and Conciliation Act, 1996, provides a unified legal framework for settlement of commercial disputes by arbitration and conciliation. It also makes applicable the Convention on the Recognition and Enforcement of Arbitral Awards.



[1] section 25 subsections (2) & (3) of the NIPC Act.

[2] See section 44 of the Companies Income Tax (CIT) Act.

Investment incentives is granted to promote and encourage foreign and domestic investment in strategic sectors of the economy. A sector is considered strategic if, according to the Federal Government, that sector is integral to achieving Nigeria’s economic diversification plans as set out in the Economic Recovery and Growth Plan. Investment incentives are generally granted in the form of tax exemptions and regulatory waivers.


a)  Tariff Incentives

i.  Import

Import duty and Value Added Tax (VAT) exemption may be enjoyed on the importation of plants, machinery, equipment, parts, raw materials, goods, etc. required for production in the strategic sectors of the economy.

Duty and VAT exemption on imports is administered by the Federal Ministry of Finance, Budget and National Planning, the Federal Inland Revenue Service and the Nigeria Customs Services. To qualify for duty and VAT exemption, an applicant must present evidence of registration of a company with the CAC and FIRS and a certification issued by the regulatory agency or Ministry responsible for certifying operations in the relevant sector.

Imports that enjoy 100% duty (and VAT) exemptions include:

  • agriculture equipment and machinery (tractors, ploughs, etc)
  • greenhouse equipment and machinery
  • plant, machinery, consumer goods, raw materials, components and articles imported for use in an export processing zone,
  • plant, machinery and equipment purchased for utilisation in the downstream petroleum industry
  • aircrafts, engines, spare parts and components whether leased or purchased by airlines registered in Nigeria that provide commercial air transport services
  • goods produced in and moving among ECOWAS Member states
  • equipment and machinery used in the power sector
  • equipment and machinery used in the mineral mining sector
  • billets, hot rolled steel sheets/coils used for the iron and steel manufacturing sector


ii.  Export

Export Expansion Grant (EEG) Scheme 

The EEG is a post-shipment incentive scheme designed to encourage Nigerian exporters to expand (non- oil) export volume, value and improve global competitiveness of Nigerian products. The Scheme grants Nigerian exporters a credit of 5% to 15% of their annual export value, depending on exporters’ product category. The credit referred to as Export Credit Certificate (ECC) may be used to:

  • settle all Federal Government taxes such as Companies Income Tax, VAT, Withholding Tax, etc.
  • purchase of Federal Government Bonds;
  • settle credit facilities given by the Bank of Industry, Nigerian Export – Import Bank, Bank of Agriculture and CBN intervention facilities
  • settle Asset Management Corporation of Nigeria liabilities

The ECC may be transferred to a third party. Transferability of the credit is particularly useful feature of the EEG Scheme as export-oriented companies are typically granted income tax and VAT exemptions.

To qualify for the Scheme, a Nigerian exporter must:

  • register with CAC, FIRS & NEPC
  • have carried out formal exports and repatriated its export proceeds into Nigerian bank account, as confirmed by CBN
  • have a minimum annual export turnover of N5 million
  • be a manufacturer/producer or merchant of products of Nigerian origin
  • show evidence of confirmed repatriation of export proceeds into a Domiciliary Account in Nigeria
  • submit baseline data which should include Audited Financial Statements and information on operational Capacity,
  • present a valid Tax Clearance Certificate and submit an Export Expansion Plan to the NEPC


Export Development Fund

The Fund, set up by the Federal Government of Nigeria, is used to provide financial assistance to export-oriented companies to cover initial expenses incurred for export promotion activities such as local and offshore training courses and study tours, advertisement and publicity campaigns in international media, product adaption services rendered by experts, etc. Intended beneficiaries of the Fund must be registered with the CAC and NEPC.


b)  Income Tax Incentives

i.  Companies Income Tax (CIT) holiday, which may be enjoyed for period of two (2) to seven (years) depending on the nature of company by:

  • a company granted ‘pioneer status’[1] by NIPC upon application
  • small and medium companies[2] engaged in primary agricultural production
  • small and medium companies engaged in manufacturing
  • companies engaged in downstream gas utilisation[3]
  • a new company engaged in the mining of solid minerals


ii.  Income tax exemption on the profits of:

  • a company licensed to operate in and engage in approved activities[4] in an export processing zone
  • a small company
  • an export-oriented company whose export proceeds are utilised profits are utilised for the purchase of raw materials, spare parts and plant and equipment
  • an ecclesiastical, charitable or educational institution whose activities are of public character
  • companies formed to promote sporting activities

Any profit derived by these companies from a trade or business that doesn’t constitute a core business or approved activity will not enjoy income tax exemption.


iii.  Tax exemption on investment income

Foreign investors are only liable to pay a final income Withholding Tax (WHT) on interest and dividends received from a Nigeria. However, foreign investors may enjoy full or partial WHT exemption on:

  • interest earned on loans granted by a bank to a company engaged in primary agriculture production, provided the repayment period includes a twelve (12) month moratorium and interest is charged at no higher than the base lending rate
  • interest due on a foreign loan, repayment period includes a moratorium and grace period of twelve (12) months to two (2) years. Depending on the grace and moratorium period, a foreign investor may enjoy 30% to 70% WHT exemption
  • interest earned on Federal Government Bonds
  • interest earned on a foreign currency domiciliary account in Nigeria
  • dividends received from a small company engaged in manufacturing and in the first five (5) years of it operations
  • dividends received from a Unit Trust Scheme registered in Nigeria
  • dividends received from the pioneer profits of a pioneer company
  • dividends received from a wholly export-oriented company
  • dividends received from a company engaged in downstream gas utilisation during that company’s tax-free period, investment in the business was made in foreign currency or imported plant and machinery that make up no less than 30% of equity share capital in the investee company


In addition, capital gains on the disposal of shares, stocks and Nigerian Government securities are exempted from Capital Gains Tax.


iv.  Other incentives may be granted to a Nigerian company. These incentives include:

  • partial WHT exemption on dividend, interest, rent and royalty due to a foreign investor who is a resident of a country with Nigeria has a Double Taxation Agreement[5]
  • investment tax credits on qualifying capital expenditure incurred by a company engaged in research and development
  • accelerated and additional capital allowance claims on assets utilised by a company in its downstream gas operations
  • CIT exemption on 25% of the income earned by a hotel from tourists in convertible currency, provided the income is reserved to be used for expansion or building new hotels, conference centres or facilities to promote tourism development


c)  Regulatory incentives

An approved enterprise that operates in an export processing zone is entitled to the following regulatory incentives, in addition to import duty, VAT and CIT exemptions:


  • waiver of all import and export licensing requirements
  • exemption from obtaining expatriate quota
  • exemption from foreign exchange regulations relating to capital, profits and dividend repatriation
  • rent free land during construction phase

[1] Pioneer Status is granted to companies that operate in an industry, produce goods or render services regarded as ‘pioneer industries or products’ as contained in the Industrial Development Income Tax Relief Act and as published in the Federal Gazette.

[2] Small and medium companies are defined as companies with an annual gross turnover of N25,000,000 or less and more than N25,000,000 but less than N100,000,000, respectively.

[3] Section 39 (3) of CIT Act defines gas utilisation as the marketing and distribution of natural gas for commercial purposes and includes power plants, liquified natural gas, gas to liquid plant, fertilizer plants, gas transmission and distribution pipelines.

[4] The Nigeria Export Processing Zone Act and the Oil and Gas Export Processing Zone Act provide a list of approved activities that may be carried out in a designated Zone.

[5] Nigeria has signed and ratified Double Taxation Agreements with Canada, Pakistan, Belgium, France, Romania, the Netherlands, United Kingdom, China, South Africa, Italy, Philippines, Czech Republic, Slovakia and Singapore.

The NIPC Act permits 100% foreign ownership of Nigerian companies except for companies operating in sectors that require domestic participation, ownership or control i.e. local content. Local content rules were introduced to increase Nigerian participation in key sectors by prescribing minimum thresholds for use local ownership, utilisation of indigenous contractors, Nigerian employees, service providers, locally sourced material, etc. and promote technology and skills acquisition by the Nigerian labour force.


Industries that require local participation include:


  1. Oil & Gas industry

a)  Oil prospecting licences, oil exploring licences and oil mining leases can only be granted to a Nigerian company.


b)  Preference must be given to Nigerian Independent Contractors in the award contract in the Nigerian oil and gas industry, subject to fulfilment of certain conditions by the Minister. A Nigerian Company means a “company formed and registered in Nigeria in accordance with the provision of Companies and Allied Matters Act with not less than 51 % equity shares by Nigerians” under the Nigerian Oil and Gas Industry Content Development Act (NOGICDA).


c)  It is mandatory for companies desirous of hiring expatriates in the oil and gas industry to apply and obtain requisite approvals from the Nigerian Content Development & Monitoring Board (NCDMB) prior to applying for Expatriate Quota (EQ), Temporary Work Permit (TWP) or other relevant permits from the Federal Ministry of Interior (FMI), Nigerian Immigration Services or other Government agencies.[1]



All applications for approval from NCDMB before applying for EQ from FMI shall be accompanied with the following documents:


  • a succession plan
  • organisational chart of the company
  • advert report (for new applications)
  • job descriptions/qualifications for each job role
  • training schedule for understudies and other Nigerian staff
  • employment commitment for Nigerians within the two (2) year quota period
  • previous FMI approval letters for the required positions
  • current DPR permits
  • proof of expatriate registration with professional bodies in Nigeria
  • cross posting/exchange program



d)  Operators or project promoters may retain a maximum of 5% of management positions, as may be approved by NCDMB, as expatriate positions to take care of investor interests.


e)  Operators must submit a succession plan for any position held by expatriates to NCDMB. The plan must provide for Nigerians to understudy each incumbent expatriate for a maximum period of four (4) years and at the end of the four (4) year period the position shall become “Nigerianised.”[2]



f)  Companies deploying expatriates in the industry must register on the Nigerian Oil and Gas Industry Content Joint Qualification System (NOGICJQS), and undertake biometric enrolment of all expatriates in their employment as part of the conditions they must fulfil before securing appropriate EQ applications with the FMI.


g)  Legal, financial and insurance services—Entities in the industry must retain Nigerian:

  • lawyers or firms for legal services, and 50% of Nigerian content is required.[3]
  • financial institutions for financial services, except the NCDMB is satisfied that it is impracticable. 50% of Nigerian content is required.[4]
  • insurance companies duly licensed for all insurable risks relating to their oil and gas business. 70% of Nigerian content is required for non-life insurance services.


The NOGICDA 2010 contains detailed local content rules applicable to all matters pertaining to operations or transactions carried out in or connected with the Nigerian oil and gas industry.


  1. Maritime

Domestic coastal carriage of cargo and passengers within the coastal, territorial, inland waters, island or any point within the exclusive economic zone can only be performed using a vessel that is wholly-owned or manned by a Nigerian citizen, built or registered in Nigeria.[5]

The Minister in charge of shipping may grant waivers and authorise a suspension of this strict regime, if satisfied that no wholly-owned Nigerian vessel is suitable for providing those services.[6]


  1. Aviation

The Nigerian Civil Aviation Authority grants aviation licence or other related permits exclusively to a Nigerian citizen or a corporate body controlled by Nigerians. This restriction does not apply to licences, permits, certificates and other authorisations given for operating an aircraft privately.


  1. Real Estate

Foreigners are precluded from acquiring real estate individually or directly except with the express consent of the Governor of the State where the property is located. However, a wholly foreign-owned Nigerian company can validly acquire such property.



[1] section 33 of Nigerian Oil and Gas Industry Content Development Act, 2010 (NOGICD Act).

[2] This holds true except for projects with shorter life span for which special consideration would be made by the NCDMB for a certificate of no objection based on the Human Capacity Development Plan (HCDP) submitted by applicants for the affected position. See section 31(1) and 32 of NOGIC Act.

[3] section 51 of the Local Content Act.

[4] Ibid, section 52(1).

[5] Section 3 of the Coastal and Inland Shipping (Cabotage) Act, 2003

[6] Ibid., section 9

The Foreign Exchange Monitoring and Miscellaneous Provisions Act (FEMMA), 1995 provides the framework for the operation of the Nigeria’s foreign exchange market. Nigeria operates a liberalized foreign currency market primarily through the Inter-bank Foreign Exchange Market (IFEM) – a forum where authorised dealers[1] buy and sell foreign currency amongst themselves.

The FEMMA and the CBN Foreign Exchange Manual (FX Manual) contain rules that govern foreign capital importation, capital and profits repatriation, foreign currency payment for imported goods and services in Nigeria.

Capital Importation and Repatriation

NIPC Act[2] contains provisions that guarantee the unconditional repatriation of capital and return on investment in freely convertible currency through an authorised dealer. Accordingly, a foreign investor may repatriate:

  • dividends or profits (net of taxes) from investment;
  • interest or any other payments in respect of loan servicing; and
  • proceeds (net of taxes) from the sale or liquidation of an investee company or any interest attributable to the investment.


The FEMMA[3] and CBN Fx Manual provide that:

  • Foreigners are eligible to invest in any Nigerian enterprise with foreign currency or capital imported through an authorised dealer (typically a commercial bank) and converted into Naira in the IFEM.
  • Authorised dealers shall, within twenty-four (24) hours, of capital importation issue a foreign investor with a Certificate of Capital Importation (CCI) for capital inflows made in the form of cash (debt or equity), equipment, machinery or raw materials.
  • A CCI guarantees a foreign investor access to the official exchange window for the purpose of sourcing foreign currency required for capital, interest, dividend, etc. repatriation.


Payment for Foreign Services

Nigerian companies wishing to pay a foreign person or investor management, consultancy, technical, technology, software license, royalty, franchise, demurrage etc., fees may obtain the required foreign currency from a Nigerian commercial bank (an authorised dealer) upon presentation of relevant support documentation. Relevant documentation includes service agreements and a NOTAP registration certificate of the service agreement (where necessary), evidence of tax payment, invoice, etc.


Payment for Imported Goods, Plant and Equipment

A Nigerian importer can obtain foreign currency required to pay for imports from the IFEM, provided the imported items are not on the import prohibition list[4]. Payment can be made through a letter of credit or bill for collection. A request for foreign currency payment through an authorised dealer must be supported with documentation such as import transaction documents, invoices, etc.

[1] An authorised dealer is defined as any bank licensed under the Banks and Other Financial Institutions Act and such other specialized banks issued with a license to deal in foreign exchange

[2] See section 24 Nigeria Investment Promotion Commission (NIPC) Act; and section 15(4)(5) of the Foreign Exchange Monitoring and Miscellaneous Provision Act

[3] Section 15(1)(2) of Foreign Exchange Monitoring and Miscellaneous Provision Act.

[4] The import prohibition list is maintained by the Nigeria Customs Service and can be found here


The primary legislation that governs employment relations in Nigeria is the Labour Act, 2010. The Act contains general provisions on the terms and conditions of employment, employment contracts, wage protection, etc. and grants employers the discretion to agree to certain specific terms of employment in its contract with its employees.

Every employer must issue its employees with a contract of employment[1] no later than three (3) months from the date the employee commences its period of employment. The contract should contain some of the following information:

  1. name of the employer or group of employers;
  2. name and address of the employee and the place and date of his engagement;
  3. nature of employment;
  4. if the contract is for a fixed term, the date the contract expires;
  5. notice period for contract termination;
  6. remuneration and periodicity of payment;
  7. terms and conditions relating to hours of work, holidays and holiday pay, incapacity to work due to sickness or injury, including any provisions for sick pay; and
  8. any special conditions of the contract.


An employer may change the terms of its contract with an employee. However, such agreement must first be agreed by the employer and employee and communicated in writing to employee within a month of making the change.

[1] A contract of employment means any agreement, whether oral or written, express or implied, whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker. In practice, employment contracts are often written contracts

Employee probation period is not expressly provided for in the Labour Act. However, employers will in practice set a probationary period of three (3) to six (6) months. The probationary period will usually be stated in the employment contract and may be considered a special condition of the contract.

a)  Annual Leave

Employees are entitled to a minimum of six (6) working days paid holiday after twelve (12) continuous months of service. In the case of an apprentice under the age of sixteen (16), at least twelve (12) working days. In practice, annual leave is determined by the employer in line with the company’s annual leave policy and the leave period will depend on the employee’s designation/level.


b)  Maternity Leave

The law provides for twelve (12) weeks of maternity leave which shall be taken six (6) weeks before actual delivery and six (6) weeks after delivery, with a minimum pay of 50% during the leave period. An employer may extend this leave period in its discretion.


c)  Paternity Leave

Paternity leave is not provided under the law. In practice, an employer may, in its discretion, grant its employees this leave.


d)  Sick Leave

Employees are entitled to paid sick leave of up to twelve (12) workdays in a calendar year.


e)  Compassionate Leave

The Act does not provide for compassionate leave. However, an employer in its discretion can grant its employees compassionate leave.

A contract of employment may be terminated by the expiry date of the contract, by the death of the employee before its expiration, by notice from one party to the other or in any other manner in which a contract is legally terminable.[1]

According to Section 11 of the Act, the required notice period for the termination of the employment contract is:

  • One (1) day, if the contract has continued for more than three (3) months or less;
  • One (1) week, if the contract had continued for more than three (3) months but less than two (2) years;
  • Two (2) weeks, if the contract has continued for a period of two (2) years but less than five (5) years; and
  • One (1) month, if the contract had continued for five years or more.

Any notice for a period of one week or more must be in writing. Notice period may not be served if a party to the contract conducts himself in a manner contrary to the terms of the contract, if either party waives his right to notice on any occasion or accepts payment in lieu of notice.

[1] Section 7 Labour Act, 2010

Every company in Nigeria, whether wholly foreign-owned or indigenous, desirous of hiring a foreigner with special competence must obtain an appropriate Expatriate Quota (EQ), Subject-to-Regularisation (STR) visa and Combined Expatriate Resident Permit and Aliens Card (CERPAC) for the foreigner.  Note that there is a directive from the Federal Government mandating all residents[1] (expatriates inclusive) to register their SIMs with valid National Identity Numbers (NIN). An expatriate is required to have an International Passport, CERPAC and a Bank Verification Number to process the NIN. Failure to register for the NIN may prevent the expatriate from further renewals of their residency status.


a)  Expatriate Quota/Business Permit

The Citizenship and Business Department of the Federal Ministry of Interior (FMI) is responsible for issuing EQs. The EQ permits Nigerian companies, both wholly foreign owned or indigenous, to employ foreigners on long-term (Permanent Until Reviewed -PUR) or short-term basis (Temporary Work Permit – TWP). Business Permit, on the other hand, applies solely to wholly foreign owned companies and joint venture. In practice, the EQ is often applied with Business Permit in the case of wholly foreign-owned companies, but they are not the same.


The documentation required for obtaining an EQ and Business Permit are as follows:

i.  Business Permit

  • Duly completed registration form
  • Incorporation documents including a Certificate of Incorporation and Memorandum and Articles of Association.
  • Current Tax Clearance Certificate
  • Joint Venture Agreement (JVA) for partnership ventures between Foreigners and Nigerians, where applicable
  • Lease Agreement, Certificate of Occupancy or Rent Receipt for operating premises
  • Feasibility report and Project Implementation Program of the company, incorporating management succession schedule for qualified Nigerians


ii.  Expatriate Quota

  • Duly completed registration form
  • Incorporation documents including a Certificate of Incorporation and Memorandum and Articles of Association.
  • Current Tax Clearance Certificate
  • Joint Venture Agreement (JVA) for partnership ventures between Foreigners and Nigerians, where applicable
  • Lease Agreement, Certificate of Occupancy or Rent Receipt for operating premises
  • Feasibility report and Project Implementation Program of the company, incorporating management succession schedule for qualified Nigerians
  • Evidence of capital importation (e.g. Form M, Profoma Invoice, Shipping documents and Clean Certificate of Inspection issued by Govt. Appointed Pre-shipment Inspection Agents)
  • Licenses / Permits / Certificate from relevant Government Agencies, Department of Ministries for the operation or execution of project if the company is engaged in oil services, health care services, fishing, mining, construction etc.
  • Details of the expatriates (indicating their proposed annual salaries, job description and qualifications. C.V and copies of credentials).
  • Bank reference letter
  • Business permit (only applicable to companies with foreign participation)
  • Evidence of work at hand, its duration and value attached to the contract if the company is involved in building, civil engineering etc.


b)  Subject to Regularisation (STR) visa

Once the appropriate EQ approval is obtained, an expatriate who wishes to take up employment in Nigeria must apply for a Subject to Regularisation (STR) visa at the Nigerian Mission in his home country. This visa is usually issued to expatriate hired to work in Nigeria based on the EQ approval. The following documentation is required for an STR application.


  • Formal application for STR Visa
  • Two (2) passport-sized photographs taken within the last six (6) months
  • International passport with a minimum validity period of six (6) months and two (2) blank pages
  • Offer of appointment and acceptance of offer letters
  • Expatriate Quota Approval
  • Curriculum Vitae or Resume of the expatriate
  • Duly completed Visa Form IMM22 – available online (To be completed by the employer)
  • An extract of a Board Resolution if the expatriate is a Chief Executive Officer, Managing Director, etc.
  • Evidence of financial support
  • Evidence of payment of application fees


c)  Combined Expatriate Resident Permit and Aliens Card (CERPAC)

Within ninety (90) days of arriving in Nigeria, an expatriate must apply to Nigeria Immigration Service (NIS), through its employer, for a Combined Expatriate Resident Permit and Aliens Card (CERPAC).


The documentation required to obtain a CERPAC are:

  • Application letter from the employer requesting regularization of stay and accepting immigration responsibility on behalf of the expatriate;
  • Letter of appointment/employment;
  • Acceptance of offer of appointment /employment;
  • Form IMM22 with three (3) passport size photographs;
  • Quota approval;
  • Vetted credentials; and
  • Valid Passport with STR visa and photocopies of relevant pages.


d)  Other permits

 i.  Temporary Work Permit (TWP)

A TWP is issued for positions within a company that will be occupied on a temporary basis, such as independent contractors, third party staff, experts, etc. invited to perform technical and short-term assignments. A TWP can be obtained from the office of the Comptroller General of the NIS.


The documentation requirements are as follows:

  • Application to the Comptroller General of Immigration set out on the company’s letterhead;
  • Confirmed airline return ticket;
  • Acceptance of immigration responsibility (IR) by inviting company;
  • Certificate of Incorporation and the company’s profile;
  • Memorandum and Articles of Association; and
  • Name of the expatriate.


ii.  Visa on Arrival

This type of visa is issued to high-net individuals with business interests in Nigeria, citizens of African countries excluding ECOWAS countries whose nationals do not ordinarily require a visa to visit Nigeria for ninety (90) days or less and nationals of countries with which Nigeria has entered a Visa Abolition Agreement. To qualify for a VoA, the applicant must be a frequent traveler of international business repute, an executive of a multinational company, a member of a government delegation or a holder of a diplomatic passport.


The process for obtaining a VoA is as follows:

  • Apply, pay for and obtain a ‘Visa on Arrival Approval Letter’ electronically before traveling through the Immigration Desk at the NIPC OSIC or via email at
  • Upon arrival, present evidence of online payment (or pay if online payment was unsuccessful) and obtain a visa from the immigration desk.


iii.  ECOWAS Residence Card

Nationals of ECOWAS member states may reside and work in Nigeria without a residence permit.[2] However, an ECOWAS member state national must apply for an ECOWAS Residence Card within ninety (90) days of arrival.


The following information is required:

  • Application letter for ECOWAS Residence Card by Individual/Employer/ Embassy/ High Commission/ Diaspora Union accepting Immigration Responsibilities.
  • ECOWAS Travel Certificate or National Passport valid for not less than 6 months
  • Photocopy of Bio-data page of ECOWAS Travel Certificate or National Passport
  • Two (2) copies of applicant’s recent passport photograph
  • Evidence of e-payment i.e. printed payment confirmation page
  • Duly completed and signed application form


Employees must submit the following additional documents:

  • Letter of offer of employment
  • Letter of acceptance of offer of employment
  • Applicant’s credentials / CV, where applicable.
  • Evidence of registration with professional bodies (where applicable)

[1] With a deadline of 6 April 2021.

[2] See Regulations 11 of the 2017 Immigration Regulations

a)  Contributory Pension Scheme

The Pension Reform Act, 2014 mandates every employer in the public and private sectors to maintain a Retirement Savings Account (RSA) with a Pension Fund Administrator (PFA) for its employees. The contributory pension arrangement is as follows – 10% employer and 8% by the employee.

Expatriates may participate in a Nigerian pension scheme at their discretion and with the approval of their employer.

The Act also requires employers to maintain a Life Insurance Policy for each employee for a minimum of three times the annual total emolument of the employee.


b)  Employee Compensation Scheme

The Employee’s Compensation Act, 2010 mandates employers to contribute 1% of their payroll costs to the National Social Insurance Trust Fund (NSITF) to provide adequate compensation to employees (or their dependents) in the event of death, injury, disease or disability arising out of, or in the course of employment.


c)  Industrial Training Fund (ITF)

The Industrial Training Fund Act, 2004 (as amended in 2011) mandates employers to contribute 1% of their annual payroll cost to the Industrial Training Fund (ITF), if the employer:

  • has five (5) or more employees or an annual turnover of ₦50million and above;
  • bids for or solicit contracts, businesses, goods and services from public and private establishments;
  • requires approval for Expatriate Quota; or
  • utilises Customs services for import and export.

The ITF Governing Council may effect a refund of up to 50% of an employer’s contributions if it is satisfied that the training programmes provided by the employer to its employees are appropriate for the ITF’s scheme.


d)  National Housing Fund (NHF)

The National Housing Fund Act, 1992 established a National Housing Fund (NHF) into which each employee must contribute 2.5% of his monthly basic income. The aim of the Fund is to facilitate the mobilisation of funds required to provide Nigerians with affordable housing and ensure a constant supply of loans to Nigerians to build, purchase or improve residential property.

Employers are required to make monthly NHF deductions from its employees and submit a schedule of deduction to the Federal Mortgage Bank of Nigeria.


Taxes are imposed on the income of companies and individuals, goods and services at the Federal, State and Local Government levels. The Federal Government has jurisdiction to collect income tax, capital gains tax, value added tax, customs duties and transaction taxes from companies and some individuals[1]. State Governments collect taxes on the income and capital gains of individuals resident within their state, stamp duties on dutiable instruments executed by individuals and consumption tax. Local Governments collect miscellaneous taxes, levies and rates such as tenement rates, right of occupancy fees on land in rural areas, etc.

The Federal Inland Revenue Service (FIRS) collects and administers taxes collectible by the Federal Government while State and the Federal Capital Territory Internal Revenue Services (SIRS) collect state taxes.  Every taxpayer in Nigeria (whether resident or non-resident) is required to register with the Tax Authorities and obtain a Tax Identification Number (TIN) and/or Payer-ID for tax compliance purposes.

[1] The Federal Government can only collect Personal Income Tax from persons employed by the Nigerian Army, Navy, Airforce, Police, officers of the Nigerian Foreign Service and non-resident individuals who derive income from Nigeria

a)  Companies Income Tax

The Companies Income Tax Act, 2007 (as amended by Finance Act 2019 and 2020) is the enabling legislation for the imposition of Companies Income Tax (CIT) on the profits by every company, excluding a company engaged in oil exploration and production, derived from, accrued in, received in, or brought into Nigeria.  We have presented below key highlights of the CITA:


i.  Basis of Taxation

Nigerian companies are liable to CIT on their worldwide profits. However, non-resident companies (NRC) are only taxable in Nigeria on profits derived from its business/trading activities in Nigeria and investment income accruing to it in Nigeria. In respect of business profits, an NRC will only suffer tax in Nigeria:

  • if it has a fixed base of business in Nigeria and its profits are attributable to the activities of that fixed base;
  • if it habitually operates a trade or business through an agent and its profits are attributable to the activities of the agent;
  • if its trade or business activity involves a single contract for surveys, deliveries, installation or construction (turnkey contract) the profits from that single contract;
  • on transactions deemed artificial or fictitious; and
  • if it has a Significant Economic Presence (SEP) in Nigeria. An NRC will have an SEP in Nigeria if it remotely provides digital and digital-related services to a Nigerian company or person and earns an annual turnover of N25,000,000 from the provision of those services or if it remotely furnishes technical, professional, management or consultancy services of a Nigerian company or person.


ii.  Taxable and exempt income

The CITA imposes tax on business income and investment income such as trading income, fees, dues and allowances for the provision of services, rent, dividend, interest, royalty, and any other source of annual profits on companies liable to CIT in Nigeria.  However, the profits of the following companies and income are exempt from CIT:

  • profits of an ecclesiastical, charitable or educational institutions engaged in activities of a public character
  • profits of a statutory or registered friendly societies and co-operatives registered under any enactment or law relating to co-operative societies
  • profits of a company formed for the purpose of promoting sporting activities
  • profits of a body corporate established under any law in Nigeria
  • income from government bonds and treasury bills. This is valid till 2022 excluding bonds issued by the Federal Government
  • profits of a Nigerian company in respect of goods exported from Nigeria, if the export proceeds are used for the purchase of raw materials, plant, equipment and spare parts
  • profits of a company established within an export processing zone
  • profits of any company or class of companies specifically exempted from CIT by the President
  • Tax deductions and allowances


Every company, for the purpose of ascertaining its taxable profits, may claim the following deductions, allowances and relief:

  • a deduction for expenses incurred wholly, reasonably, exclusively and necessarily (WREN) in the production of its business profits. Tax-deductible expenses include interest[1], rent, staff cost, costs of repairs and maintenance, contributions to approved pension funds, donations made to approved bodies, etc.
  • a deduction for prior year losses
  • capital allowances on qualifying capital expenditure in the purchase or development of plant and machinery, furniture and fixtures, software, building, research and development, motor vehicle, etc. capital allowances are granted because depreciation on capital assets do not qualify as a tax-deductible expense


The following expenses are not tax-deductible:

  • capital repaid or withdrawn and any expense of a capital nature
  • any sum recoverable under an insurance contract of indemnity
  • depreciation
  • payments to unapproved pension, provident or savings funds
  • appropriated profits
  • penalty or fines imposed pursuant to a legislation enacted by the National Assembly or State House of Assembly
  • taxes on income or profits levied in Nigeria, other than tax levied outside Nigeria on profits which are also chargeable to tax in Nigeria where relief for double taxation on those profits may not be given under any provision of the Act.


iv.  Tax rate


The following CIT rates apply:



Small companies (companies with an annual turnover of less than N25,000,000)


Medium companies (companies with annual turnover of N25,000,000 or more but less than N100,000,000)


Large companies (companies with an annual turnover of more than N100,000,000)



The CIT rate is applied against the total profits of a company. Total profit is determined by making necessary tax adjustments for non-taxable income, disallowable expenses, capital allowances and loss relief to the accounting profits of a company.

A company may be assessed to tax on using a specialised rate in the following circumstances:

  • if the company makes a loss, or the company’s total profits result in no tax payable or a tax payment that is less than the minimum tax, the company shall be assessed to a minimum tax on its gross turnover[3] less franked investment income at the rate of 0.25% for tax periods falling between 1 January 2020 and 31 December 2021 and 0.5%[4] Minimum tax does not apply to a small company, a company in its first four calendar years of operation and a company engaged in primary agricultural production.
  • If the company has no assessable profits, assessable profits which on the opinion of the FIRS are less than may be expected to arise from such business or assessable profits that cannot be readily ascertained, the company shall be assessed to tax a fair a reasonable basis (deemed income basis). In practice, the deemed income tax rate for NRCs is 6% of turnover from its Nigerian operations.


v.  Tax filing and payment

Every company, including companies exempted from paying CIT, is required to file an annual CIT return within six (6) months of accounting year end. CIT returns must be filed with the following information:

  • audited financial statements and in the case of NRCs only global audited financial statements and financial statements of its Nigerian operations as attested to by a certified and independent certified or qualified accountant;
  • a true and correct statement in writing containing the amount of profit from each and every source
  • tax and capital allowance computations;
  • duly completed self-assessment form; and
  • evidence of tax payment, where applicable.

Taxpayers are required to pay their taxes in full on or before the CIT filing due date. Tax payments may be made in lump sum or in installments provided the final installment is made by the filing date. A company that its full tax liability ninety (90) days before the due date shall be granted a bonus of 2% of the tax in the case of a medium-sized company or 1% for any other company. Early payment bonus may be used to set-off future tax liabilities.

Failure to file returns by the due date attracts a penalty of N50,000 for the first month of default and N25,000 for subsequent months. Penalty and interest will also be charged on unpaid taxes.

An NRC whose income is subjected only to a final Withholding Tax in Nigeria is exempted from filing CIT returns.


b)  Petroleum Profits Tax

The Petroleum Profits Tax Act (PPTA) is the enabling legislation for the imposition of income tax on profits of any company engaged in winning, obtaining or transporting petroleum in Nigeria.[5]

We have summarised the salient provisions of the PPTA below:


i.  Taxable income

Petroleum companies are taxed on the:

  • proceeds of sale of oil and related extracts, excluding gas income and profits which is taxable under the CITA as an incentive to companies that utilise gas;
  • the value of all oil, determined for royalty purposes, disposed of by the company; and
  • income incidental to or arising from one or more of its petroleum operations.


ii.  Taxable deductions and allowances

  • expenses wholly, exclusively and necessarily incurred within or outside Nigeria for the purpose of petroleum operations qualify as tax-deductible.
  • capital allowances are granted on qualifying capital expenditure such as machinery and equipment, pipelines and storage facilities, buildings and drilling costs
  • prior year losses may be relieved against current year profits until fully utilised

Disallowable expenses include expense of a capital nature, payments made to unapproved pension, provident or savings funds, income tax, profits tax or any other tax of a similar nature paid within or outside Nigeria, any expenditure not directly related to a company’s petroleum operations, etc.


iii.  Tax rates



Companies operating in the deep offshore and inland basin areas in a Production Sharing Contract with the Nigerian National Petroleum Corporation


Companies in a Joint Venture (JV) arrangement or any other traditional concession in the first five (5) years of operations during which pre-production capital expenditure is not fully amortised


Companies in a Joint Venture (JV) arrangement or any other traditional concession after the first five (5) years of operations




iv.  Tax filing and payment

Petroleum companies are required to submit an estimated tax returns within two months of the start of its accounting period. A company may submit revised estimates any time during the accounting period if its initial estimates require revision. Annual year-end PPT returns, based on the actual profits of the year, must be filed within five months of the end of the accounting period.

PPT is payable in twelve (12) monthly installments based on the estimated tax returns submitted by the company. If actual profits for the year exceed the estimated profits, the company must pay the difference within twenty-days (21) of receiving an assessment notice from the FIRS. If the estimated tax payments results are higher than the actual tax payments due, the overpayment may be deducted from subsequent monthly installment payments.


c)  Tertiary Education Tax

The Tertiary Education Trust Fund Act, 2011 imposes a 2% Tertiary Education Tax (TET) on Nigerian companies excluding small companies. The tax base for TET is the company’s assessable profits. TET returns are due to be filed with CIT and PPT returns and the tax thereof payable on the filing date.

TET paid by petroleum companies qualifies as a tax-deductible expense.


d)  Personal Income Tax

The Personal Income Tax Act (PITA) is the enabling legislation for the imposition of income of individuals, trustees, partnerships and corporation sole. PIT is payable to State Internal Revenue Services (SIRS). In respect of employment income, the Operation of the Pay-As-You-Earn Regulations (PAYE), 2002 provides rules for administering PAYE scheme on employment income pursuant to the PIT.

We have highlighted the key features of the PITA and PAYE Regulations as it relates to employment income:

i.  Basis of taxation

Gains or profits from employment shall be deemed to be derived from and thereby taxable in Nigeria if:

  1. The duties of employment are wholly or partly performed in Nigeria, unless:
  • the duties of employment are performed on behalf of an employer in another and the employee’s remuneration is not borne by the fixed base of the employer; and
  • the employee is not in Nigeria for one hundred and eighty three days (183) in a twelve (12) month period commencing and ending in the same calendar year; and
  • the remuneration of the employee is liable to tax in the other country under a double taxation agreement (DTA).


  1. The employer is in Nigeria or has a fixed base in Nigeria.


  1. Taxable and exempt income

Employment income liable to tax in Nigeria includes salaries, wages, fees, allowances, compensation, bonuses, premiums, benefits-in-kind or other profit and perquisites of employment paid to temporary or permanent employees.

However, the following incomes are exempt from PIT:

  • reimbursement of expenses incurred in the performance of employment duties from which it is not intended that the employee should make any gain or profit
  • relocation allowances
  • retirement gratuities
  • social security contributions such as pension, NHF, NHIS, etc.
  • Statutory reliefs and deductions

Employees are granted the following statutory reliefs and deductions from their income:

  • Consolidated relief allowance calculated as the higher of N200,000 or 1% of gross income plus 20% of gross income. Gross income means income from all sources less non-taxable income, income on which no further tax is payable, tax-exempt income, allowable business expenses and capital allowances.
  • Children allowance at N2,500 subject to a maximum of four children. Employees can only claim children allowance on children that are sixteen (16) and unmarried or children above the age of sixteen (16) receiving full time instruction at a recognised educational institution or under articles in a trade or profession.
  • Annual life assurance premium paid by the employer for himself and his spouse in the prior year
  • Interest paid on mortgage loan for owner occupied properties
  • Disability allowance of the higher of N3,000 per annum or 20% of gross to employees who special equipment and the service of attendants in the course of performing his duties.


iv.  Tax rate

Annual taxable income


First N300,000


Next N300,000


Next N500,000


Next N500,000


Next N1,600,000


Above N3,200,000



An employee will be subject to minimum tax at the rate of 1% on gross income if the employee has no chargeable income or the tax payable, after all reliefs and allowances, is less than 1% of gross income. However, employees that earn the National Minimum Wage of N30,000 or less are exempt from minimum tax.[6]


v.  Tax filing and payment

Under the PAYE Regulations, employers are responsible for deducting and remitting the tax on a monthly basis to the relevant SIRS. The relevant SIRS is determined by reference to the employees place of residence (POR). POR is defined as a place available to the employees for his domestic use in Nigeria.

PAYE must be remitted on or before the 10th day of the month following the payment of salary. Failure to pay tax as and when due may attract a penalty of 10% on the unpaid tax and interest at the prevailing commercial rate.

Employers are required to file the following returns:

  • Employers’ Declaration Form (Form H1) showing the income of the employees, taxes deducted and remitted in the preceding year by 31 January every year; and
  • Employers’ Remittance Card (Form G) showing the monthly remittances and reference number on the receipt by 31 January every year; and

Employees are separately required to file an annual return of income (Form A) declaring no later than ninety (90) days from the commencement of the calendar year i.e., by 31 March of every year.


e)  Withholding Tax

The enabling legislations for WHT are the CITA, PITA and the WHT Regulations. Under the laws, any person making payment to another person in respect of a qualifying transaction is statutorily obligated to deduct WHT at the appropriate rate and remit same to the relevant tax authority. WHT deducted on transactions with individuals is payable to the SIRS while WHT deducted on transactions with companies is payable to the FIRS.

Withholding Tax (WHT) generally applies as an advance payment of income tax, except where the WHT is in itself the final tax. WHT is the final tax on dividend, interest, rent and royalty payments made to non-resident persons and the final tax on dividend, interest and royalty paid to Nigerian individuals.

Qualifying WHT transactions and rates are:


Rate applicable to companies

Rate applicable to individuals/partnerships

Rent, dividend, interest






Directors’ fee



Commission, professional, management, technical, consultancy fees



Contract of service and supplies, other contracts



Road, bridge, building and power plants contracts




A return of WHT deducted should be filed with the relevant tax authority no later than thirty (30) days from the date of deduction. Failure to deduct and remit WHT attracts a penalty of 10% on the tax not deducted or remitted and interest at the prevailing CBN monetary policy rate.


f)  Capital Gains Tax

The Capital Gains Tax (CGT) Act imposes a tax at 10% on capital gains accruing to companies (including pioneer companies) and individuals on the disposal of chargeable assets. Chargeable assets include:

  • options, debt and incorporeal property;
  • any currency other than Nigerian currency; and
  • any form of property created by the person disposing of it or otherwise coming to be owned without being acquired.


However, capital gains on the disposal of securities, stocks, shares, from retirement benefit schemes, on take-over, absorption or merger, on the disposal of main residence or dwelling house of an individual, accruing to charities on the disposal of assets used by the charity, statutory bodies, etc.

Capital gains is calculated as the difference between the capital sum (sales proceed) received on the disposal of chargeable assets and the historical cost of the asset. Costs incurred to enhance the value of an asset, establish, preserve or defend the title to, or right over the asset, cost of advertisement, and any other costs incidental to the sale of a chargeable asset qualify as allowable deductions for CGT purposes.

CGT is jointly administered by the FIRS and SIRS. CGT returns are due for filing on 30th  June and 31st of December every year.

[1] Nigeria introduced interest-deductibility rules in 2020 via the Finance Act, 2019. The rules limit the amount of interest expense a Nigerian company can claim as tax deduction on interest incurred on debts issued by a foreign connected person in any tax year to 30% of Earnings Before Interest, Tax, Depreciation and Amortization.

[2] Companies Income Tax Act and the Finance Act 2019.

[3] Gross turnover means “gross inflow of economic benefits during the period arising in the course of the operating activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants, including sales of goods, supply of services, receipt of interest, rents royalty and dividends”.

[4] Section 13 of Finance Act 2020

[5]  Petroleum is defined as “any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in Nigeria but does not include liquified natural gas, coal, bituminous shales or stratified deposits from which oil can be extracted by destructive distillation”


[6] Section 30 of the Finance Act 2020

Nigeria has entered into income and capital gains tax Double Taxation Agreements (DTAs) with Belgium, China, France, Netherlands, South Africa, United Kingdom, Canada, The Czech Republic, Pakistan, Philippines, Romania, Singapore, Slovakia and Italy (Aircrafts and Ships). The DTAs apply to Companies Income Tax, Capital Gains Tax, Petroleum Profits Tax and Personal Income Tax.

The DTAs contain rules to minimise the incidence of double taxation on the same income in the same tax year in Nigeria and the Contracting State’s jurisdiction. One of the treaty benefits enjoyed by tax residents of jurisdictions with which Nigeria has a DTA is reduced WHT at 7.5% (rather than 10%) on dividend, interest, rent and royalty. According to the FIRS’ Information Circular on the Claim of Tax Treaty Benefits, taxpayers eligible to claim treaty benefits in Nigeria must first apply to the FIRS.

Nigeria has also signed DTAs with Mauritius, South Korea, the United Arab Emirates and Qatar. However, these treaties have yet to be ratified by the National Assembly.

a)  Transfer Pricing

The FIRS, in exercise of its powers under the FIRS (Establishment) Act, issued revised Income Tax (Transfer Pricing) Regulations, 2018 (the Regulations) to replace the previous 2012 Regulations.  

Transfer pricing rules apply to transactions between connected persons and requires that such transactions are conducted at arm’s length. Persons are deemed connected “one person has the ability to control or influence the other person in making financial, commercial or operational decisions, or there is a third person who has the ability to control or influence both persons in making financial, commercial or operational decisions”.

Taxpayers are required to file annual TP returns, along with their annual income tax returns, to demonstrate that related party transactions entered into during the year were done at arm’s length. TP returns include TP documentation, declaration and disclosure forms. TP policies and contemporaneous documentation are to be submitted to the FIRS upon request.

Failure to comply with the TP regulations above will attract some administrative penalties such as follows:



Failure to file TP Declaration

N10,000,000 in the first instance and N10,000 for every day failure continues

Failure to file TP Disclosure

The higher of N10,000,000 or 1% of the value of related party transactions not disclosed; and N10,000 for every day in which the default continues

Failure to file TP documentation upon request

The higher of N10,000,000 or 1% of the value of related party transactions not disclosed; and N10,000 for every day in which the default continues

Late filing of Country-by-Country Report

N10,000,000 in the first instance and N1,000,000 for every month default continues

Failure to provide notifications to FIRS by a constituent entity of an MNE Group

N5,000,000 in the first instance and N10,000 for every day default continues



b)  Country-by-Country Reporting

The FIRS published the Income Tax [Country-by-Country Reporting (CbCR)] Regulations, 2018 (CbCR Regulations) in 2018. Under the Regulations, Nigerian headquartered Multinational Enterprises (MNEs) with consolidated group revenues of ₦160 billion (in the preceding accounting year) have an obligation to prepare and file CbCRs with the FIRS annually. The report must be filed no later than 12 months after the group’s accounting year end date with effect from the accounting year beginning on or after 1st January 2018.


A CbCR should contain information on:

  • the revenue, profit or loss before income tax, income tax paid, income accrued, stated capital, accumulated earnings, number of employees, and tangible assets other than cash or cash equivalents in each jurisdiction in which the MNE Group operates; and
  • the constituent entities (CE) in the MNE Group such as the tax residency or the jurisdiction under the laws of which such CE is organised and the main business activities of the CE.


The Nigerian CE of the MNE is required to notify the FIRS of entity within the Group (typically the ultimate parent entity or a surrogate parent entity) that is responsible for filing the CbCR if the Group has a consolidated revenue of EUR 750 million or near equivalent in the domestic currency of the entity filing the report. The Nigerian CE will however be responsible for filing the CbCR has not been implemented in the home-country of its ultimate parent company.


The following non-compliance penalties will apply:

  • late filing penalty – N10,000,000 for the first month of default and N1,000,000 for every month the default continues
  • incorrect/false report – N10,000,000
  • failure to notify FIRS of the MNE Group’s ultimate parent entity, surrogate parent entity or the identity and residence of the Group’s reporting entity – N5,000,000 for the first month of default and N10,000 for subsequent months of default


c)  Income Tax (Common Reporting Standard) Regulations

The Federal Inland Revenue Service (FIRS), in 2019, issued the Income Tax (Common Reporting Standard) Regulations, 2019 (CRS Regulations) and the Income Tax (Common Reporting Standard) Implementation and Compliance Guidelines, 2019 (“the CRS Guidelines”). The Regulations and Guidelines were issued pursuant to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Information (AEOI) signed by the Federal Republic of Nigeria in 2017. AEOI is intended to provide Nigeria and other signatories to the Agreement information required to improve international tax transparency and minimise tax evasion.


CRS Regulations impose an obligation on qualifying Nigerian Reporting Financial Institutions (RFIs) to submit annual returns of ‘reportable accounts’ to the FIRS by 31 May. A reportable account is a Nigerian financial account owned by a person (individual or company) who is tax resident in a foreign jurisdiction with which Nigeria has signed a AEOI. The return should contain the name, address, jurisdiction or residence, TIN, date and place of birth, account number; account balance/value as at year end and any other specific information relating to investment proceeds and similar income credited to the accounts. This information may, upon demand, be shared with the tax authority of the other jurisdiction in which the account holder is tax resident. By virtue of signing the Agreement, Nigeria is also entitled to receive similar information on Nigerian tax residents in a member jurisdiction.


Failure to comply with the Regulations will expose a RFI to some of the following penalties:

  • failure to comply – N10,000,000 for the first month of default and N1,000,000 for every month the default continues
  • incorrect/false report – N5,000,000
  • failure to keep records – N1,000,000 in the first instance and N100,000 for each subsequent month of default

a)  Value Added Tax

The Value Added Tax Act, 1993 (as amended) imposes tax at the rates of 7.5% or 0%[1] on the supply of goods and services in Nigeria, other than goods and services exempted from VAT.

Goods and services (including intangibles and incorporeal) will be deemed to be supplied in Nigeria if the person making the supply is physically present in Nigeria at the time of supply or the goods (and rights in the goods) or services are physically present, registered, consumed or exploited in Nigeria. We have highlighted salient provisions of the VAT below:


i.  Registration and imposition of the tax

Every taxable person[2] (including NRCs) must immediately register with the FIRS upon commencing business in Nigeria. The penalty for failure to register for the tax is N50,000.00 in the first month of default and N25,000.00 in the subsequent months in which the failure continues. It is only registered taxable persons that are permitted by law to charge VAT and issue a tax invoice.

By virtue of Finance Act 2019, a taxable person who makes taxable supplies that are singularly or cumulatively valued at N25,000,000 or less in a calendar year is exempt from the penalties for failure to register for tax, issue a tax invoice, collect the tax and submit a return of the tax collected.


ii.  VAT returns and payment

A taxable person, except exempted, must charge the tax when making taxable supplies to its customers, collect and remit it and render a returns of the tax to the FIRS by the twenty first (21) day of the subsequent month in which the tax was collected. However, Oil and Gas companies, Government Agencies, Nigerian persons that receive taxable supplies from an NRC and any other person who receives taxable supplies but is not charged VAT is required to deduct the VAT from payments to its suppliers and remit it directly to the FIRS.

The tax to be remitted to the FIRS is the excess of the ‘output’ tax charged over the ‘input’ tax paid by the taxable person. Allowable input tax that may be recovered against output tax is limited to tax paid on the goods purchased or imported directly for resale and goods that form stock-in-trade used for the direct production of any new product on which output tax is charged. Input VAT paid on the purchase of fixed assets or on general/administrative expenses must be capitalised with the cost of the asset or expensed in the income statement, respectively.

If the input VAT paid exceeds the output VAT charged, a taxable person may use the excess tax paid as a credit in the subsequent month or obtain a refund of any amount that cannot be utilised as a credit.

Failure to file returns attracts a penalty of N50,000 in the first month the failure occurs and N25,000 for each subsequent month in which the failure persists. The penalty for failure to remit VAT is 10% plus interest at the prevailing CBN minimum re-discount rate.


iii.  VAT exempt goods and services


Exempt goods and services listed in the VATA and Finance Act, 2019 and Finance Act 2020 are as follows:

  • Medical and pharmaceutical products
  • Basic food items
  • Books and educational materials
  • Baby products
  • Fertilizer, locally produced agricultural and veterinary medicine, farming machinery and farming transportation equipment
  • Oil exports
  • Plant and machinery imported for use in the Export Processing Zone
  • Plant, machinery and equipment purchased for utilisation of gas in downstream petroleum operations
  • Tractors, ploughs, agricultural equipment and implements purchased for use in agricultural purposes
  • Hire, rental or lease of tractors, ploughs and other agricultural equipment for agricultural purposes
  • Locally manufactured sanitary towels, pads or tampons
  • Commercial aircrafts, commercial aircraft engines, commercial aircrafts spare parts
  • Medical services
  • Services rendered by microfinance banks, people’s banks and mortgage institutions
  • Plays and performances conducted by educational institutions as part of learning
  • All exported services
  • Airline transportation tickets issued and sold by commercial airlines registered in Nigeria



b)  Stamp Duty

Stamp Duty (SD) is charged on documents such as Conveyances on Sale, Bills of Exchange, Promissory notes, Agreements, Contracts or even documents such as Letters and Certificates of Admission, Instruments of Apprenticeship, Insurance Policies etc.


We have highlighted key features of SD in Nigeria:

  • SD is either chargeable at fixed rates or ad valorem on written instruments (except specifically exempted).
  • The Stamp Duties Act 1939 (as amended)[3] provides the respective duties payable on each documents listed in its Schedule and also a list of items exempted from stamp duties.
  • SD is applicable on all dutiable instruments, such as agreements, contracts, receipts, memorandum of understanding, promissory notes, insurance policies and other instruments stipulated in the Schedule to the Stamp Duties Act, Cap S8, Laws of the Federation of Nigeria 2004 (as amended) (SDA or “the Act”).
  • SD is chargeable on both physical and electronic dutiable instruments, either as a fixed sum or a percentage of the consideration on the instrument (ad-valorem)
  • The FIRS is the competent authority to impose, charge and collect stamp duties on all dutiable instruments executed between a company and an individual. SIRS’ remit is limited to collection of stamp duties on instruments executed between individuals.
  • Stamp duties due to the Federal Government and collectible by the FIRS are to be remitted into the FIRS Stamp Duties Account with the Central Bank of Nigeria, while the stamp duties due to State Governments are to be remitted to the stamp duties accounts of the States.
  • Stamp means as an impressed pattern or mark by means of an engraved or inked dye, an adhesive stamp, an electronic stamp or an electronic acknowledgement for denoting any duty or fee. The FIRS is, by virtue of Finance Act 2020, required to utilise adhesive stamps produced by the Nigeria Postal Service pursuant to its enabling Act.
  • Failure to deduct or remit stamp duties into the appropriate stamp duties account would attract penalty and interest as provided by the SDA.


c)  Electronic Money Transfer Levy

The Finance Act 2020 has replaced SD hitherto levied on electronic receipts or electronic transfer of money deposited in any deposit money bank or financial institution with the Electronic Money Transfer Levy (EMTL). EMTL is levied as a singular and one-off charge of N50 on electronic receipts or transfers of money values at N10,000 or more.

The Minister of Finance, subject to the approval of the National Assembly, is empowered by law to make regulations for the imposition, administration, collection and remittance of the levy

[1] Zero-rated goods and services include non-oil exports, goods and services purchased by diplomats and goods purchased for use in humanitarian donor-funded projects

[2] A taxable person includes “an individual or body of individuals, family, corporations sole, trustee or executor or a person who carries out in a place an economic activity, a person exploiting tangible or intangible property for the purpose of obtaining income therefrom by way of trade or business or a person or agency of Government acting in that capacity

[3] See further, sections 52 – 56 of the Finance Act, 2019.

Importation and Exportation of Goods

Imported goods must be inspected on arrival in Nigeria, in line with the extant Destination Inspection (DI) Scheme, before it is cleared for entry into the customs territory. The inspection is performed by the Nigeria Customs Service (NCS) using a previously completed and submitted Pre-Arrival Assessment Form (PAAR) and other relevant commercial documents relating to the imported goods. DI enables the NCS determine the correct customs value of imported goods on which import duty and levies will be charged.

To import goods into Nigeria, an importer must first be registered with CAC, FIRS and obtain the relevant regulatory permits depending on the goods to be imported. We have summarized the process for importation[1] below:

  • activate the product certificate (PC), if the product is regulated by the Standard’s Organisation of Nigeria (SON), on the Nigerian Trade Platform Single Window System
  • open a Form M on the single window system attaching the required documents such as the insurance certificate, the Proforma Invoice, the Product Certificate, etc. and submit it to an authorised dealer bank (ADB)
  • the ADB reviews and validates the Form M and sends it to the NCS
  • NCS either accepts or rejects the Form M. A Form M will be rejected if the form is not properly completed or lacking some information and/or documents
  • if the NCS accepts the Form M, the importer forwards a copy of the Form M to his exporter, who will, in turn, contact a DI agent with the Form M, the Final Invoice, the Bill of Lading/Airway Bill, and the packing list, for issuance of the PC
  • the importer activates the PC and applies for a PAAR issuance on the Nigeria Single Window for Trade
  • the PAAR is issued and the importer commences the clearance of his goods

The NCS has issued detailed guidelines[2] for importing goods into Nigeria.

[1] Source: Cotecna Destination Inspection Limited is a Destination Inspection agent contracted by the Federal Government of Nigeria to support the NCS with conducting Dis.

[2] You can find a detailed importation guideline here 

Nigeria is a signatory to the ECOWAS Common External Tariff (CET) system adopted by ECOWAS member states. CET is the application of the same customs duties, import quotas and preferences by a group of countries in a customs union to goods entering the region from a third state. The agreed rates are organised along five categories:



Duty rate


Goods description



Essential social goods



Goods of primary necessity, raw groups and capital goods



Intermediate goods and input



Final consumption goods or finished goods



Specific goods for economic development



In addition to import duty, Nigeria imposes the following additional charges and levies:


  • 1% Comprehensive Import Supervision Scheme charge on the Free on Board value (FOB) of the import;
  • 7% surcharge on custom duty;
  • 5% trade liberalisation scheme levy on customs duty. Note that this levy is only charged on goods from third states;
  • 5% VAT on the Cost, Insurance and Freight value of the imports, customs duty and the aforementioned levies;
  • excise duty; and
  • other surcharges.


All goods are exportable from Nigeria except goods on the export prohibition list maintained by the NCS. According to the list, individuals and companies are precluded from exporting maize, timber (rough or sawn), raw hides and skin including wet blue and all unfinished leather, scrap metals, unprocessed rubber latex and rubber lumps, artifacts and antiquities, wildlife animals classified as endangered species (crocodiles, elephant, lizard, eagles, monkeys, lion, etc.) and their products and all imported goods.


The first step to exporting goods from Nigeria is to register as an exporter with the Nigerian Export Promotion Council (NEPC), the CAC and FIRS and obtain an export permit/license (if necessary) from the appropriate regulator. Registration with NEPC also qualifies an exporter for export benefits and incentives in Nigeria.


We have summarised the exportation process below:

  • Complete and register a Form NXP (Nigeria export proceeds) with an authorised dealer bank. The Form NXP should be submitted with the export contract, pro-forma invoice, packing list, etc.
  • Pay the Nigerian Export Supervision Scheme (NESS) charge to the authorised dealer bank. NESS is charged at the rate of 0.5% and 0.15% on the FOB value of the goods to be exported
  • Engage with a government- appointed pre-shipment inspection agent to inspect the goods to be exported. The agent will examine the quality and quantity of the goods, evaluate the true value of the goods and issue the exporter with a Clean Certificate of Inspection (CCI) in respect of the goods within 72 hours of inspection – if the goods meet the required standards
  • Pay export duty where applicable, shipping charges, Nigeria Port Authority charges, etc.
  • Submit copies of the bill of lading and final invoice to the buyer to the agent and commence loading the export vessel or shipment container
  • On completion of loading, the exporter returns four copies of the NXP form as completed by the agent and NCS to the authorised dealer bank.

Real Property Acquisition

The laws that govern real estate in Nigeria are the Constitution, the Land Use Act, 1978 and State Land Laws[1]. The Constitution guarantees Nigerians (persons or companies) the right to acquire real estate in every Nigerian state. The Land Use Act regulates land ownership and provides for a leasehold method of land ownership in Nigeria.

We have highlighted below the key policies that govern estate acquisition in Nigeria.

[1] As an example, Lagos State enacted the Land Registration Law, 2015, Acquisition of Land by Aliens Law, 2015 and Land Use Charge Law 2020 that further regulate land acquisition in Nigeria

The Land Use Act 1978 vests absolute ownership of all lands within each State (except those earmarked as Federal lands) in the Governor of that State. The Governor holds all land in trust and administers same for the common use and benefit of Nigerians.  Accordingly, it is only a State Governor that can grant a leasehold (right of occupancy) to a Nigerian person or company. Some features of a leasehold are:

  • it can only be granted for a term not exceeding ninety-nine (99) years
  • a holder will be issued a Certificate of Occupancy and is required to comply with the covenants in the certificate. Failure to comply may expose a holder to a penalty or revocation of interest
  • a holder may be required to pay an annual rent or premium on the land
  • State Governors have reversionary interest in land upon expiration of the leasehold tenure
  • State Governor’s consent must be obtained before making a valid legal transfer of real estate to another person
  • Title documents such as Certificate of Occupancy and Deed of Assignment serve as evidence of leasehold interests vested in an individual or company


Acquisition of a leasehold interest is merely a transfer or assignment (from the State Governor) of the legal right to occupy and use land for a term. It does not constitute an outright sale or ownership of land.  The State Governor remains the owner of land. Hence, the need to obtain Governor’s consent prior to transferring a leasehold interest to another person.

Title deeds/documents like Certificate of Occupancy and Deeds of Assignment serve as evidence of leasehold interests vested in individuals or corporate entities.

The process of acquiring real estate in Nigeria varies from State to State, depending on the system of registering property (whether it is registered conveyancing or unregistered conveyancing) practiced in the State. However, the generally accepted procedure for registration is as follows:

  1. Physical inspection of the real estate
  2. Investigation and due diligence on vendor’s title (it is vital to engage an experienced Solicitor for advice and guidance at this stage) in order to ascertain the:
  • nature of the title/interest
  • capacity of the vendor to assign,
  • adverse claims/interests or litigation
  • land use designation and zoning purpose,
  • unexpired term of years,
  • survey and size of the property;
  • confirmation as to whether or not the property is under government acquisition
  1. Preparation and execution of title documents
  2. Collection of Certified True Copy of title documents and survey plan
  3. Payment of charting, endorsement and Form 1C fees
  4. Application for registration, with executed title deeds and relevant documents, at the Lands Registry
  5. Assessment of fees in respect of Governor’s consent, stamp duty, registration and sundry charges and taxes. Do note that consent and registration fees differ across various States
  6. Registration of title in the Register of Deeds at the Lands Registry of the relevant State.

Data Protection

The National Information Technology Development Agency (NITDA) is responsible for data protection in Nigeria. In 2019, NITDA, pursuant to its enabling law, issued the Nigeria Data Protection Regulation 2019 (the “Regulation”)[1].

The objective of the Regulation is to:

  1. safeguard the rights of natural persons to data privacy;
  2. foster safe conduct of transactions involving the exchange of personal data;
  3. prevent manipulation of personal data and
  4. ensure that Nigerian businesses remain competitive in international trade, through a just and equitable legal regulatory framework on data protection and which regulatory framework is in tune with global best practices.


The Regulation applies to all:

  • transactions intended for the processing of personal data and to actual processing of personal data, regardless of how the data is processed or intended to be processed and in respect of natural persons in Nigeria; and
  • natural persons residing in Nigeria or residing outside Nigeria but of Nigerian descent.

[1] There is currently a Data Protection Bill at the National Assembly which is more comprehensive and expected to be passed this year.

  1. Data Processing

Under the Regulation, Personal Data means “any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person; It can be anything from a name, address, a photo, an email address, bank details, posts on social networking websites, medical information, and other unique identifier such as but not limited to MAC address, IP address, IMEI number, IMSI number, SIM and others.”


Personal Data:

a)  shall be collected and processed for a specific, legitimate and lawful purpose consented to by the Data Subject. Provided that further processing may be done only for archiving, scientific research, historical research or statistical purposes for public interest;

b)  must be adequate, accurate and without prejudice to the dignity of human person;

c)  must be stored only for the period within which it is reasonably needed; and

d)  must be secured against all foreseeable hazards and breaches such as theft, cyberattack, viral attack, dissemination, manipulations of any kind, damage by rain, fire or exposure to other natural elements.


Anyone entrusted with or in possession of a Data Subject’s personal data owes a duty of care to the Data Subject and shall be accountable for acts and omissions in respect of data processing and storage[1]. A Data Controller will be held liable for the actions or inactions of any third party engaged to handle the personal data of Data Subjects.


  1. Lawful processing

Data processing is deemed lawful if one of the following occurs:

a)  the data subject has given consent to the processing of his or her personal data for one or more specific purposes;

b)  processing is necessary for the performance of a contract to which the Data Subject is party or in order to take steps at the request of the Data Subject prior to entering into a contract;

c)  processing is necessary for compliance with a legal obligation to which the Controller is subject;

d)  processing is necessary in order to protect the vital interests of the data subject or of another natural person and

e)  processing is necessary for the performance of a task carried out in the public interest or in the exercise of official public mandate vested in the controller.


  1. Privacy Policy

The Regulation requires that any organisation through which data is being collected or processed shall display a simple and conspicuous privacy policy that the class of Data Subjects[2] being targeted can understand. The policy shall also contain the following:

  • what constitutes the Data Subject’s consent;
  • description of collectable personal information;
  • purpose of collection of personal data;
  • technical methods used to collect and store personal information, cookies, JWT, web tokens, etc.;
  • access (if any) of third parties to personal data and purpose of access;
  • a highlight of the principles of the Regulation;
  • available remedies in the event of violation of the privacy policy;
  • the time frame for remedy; and
  • any limitation clause.


  1. Data Security

The Data Controller[3] (i.e. corporate body or person involved in data processing or the control of data) has an obligation to develop security measures to protect such data. Such measures may include protecting systems from hackers, setting up firewalls, storing data securely with access to specific authorized individuals, employing data encryption technologies, developing organizational policy for handling personal data (and other sensitive or confidential data), protection of emailing systems and continuous capacity building for staff.


A person or corporate body will be liable for the actions or inactions of third parties who the organisation or person contracts to handle the personal data of Data Subjects. The Regulation also imposes a general duty of care towards a Data Subject on anyone entrusted with the personal data of the data subject or who is in possession of such personal data.[4]


  1. Data Subject’s Right of Objection

A Data Subject has the right to object to the processing of their data. This right is sacrosanct and shall always be safeguarded. Accordingly, a Data Subject shall have the option to:

  • object to the processing of his personal data by the Data Controller for marketing purposes, and
  • be expressly and manifestly offered the mechanism for objection to any form of data processing at no cost whatsoever to the Data Subject.


  1. International transfer of data

International transfer of personal data to a foreign recipient is permissible if NITDA is satisfied that recipient’s country has rules that ensure adequate data protection, following an evaluation by the Honorable Attorney General of the Federation (AGF) of that country’s legal system as it relates to the applicable data protection law, rule of law, respect for human rights and fundamental freedom, etc.

In the absence of a determination by the AGF on the sufficiency of the other country’s legal system, a Data Controller may transfer a Data Subject’s personal data if the Data Subject has consented to the transfer, the transfer is done in the vital interest of the Data Subject or in the public interest or is necessary for the establishment, exercise or defense of legal claims. 



  1. Penalty for Default

The penalties[5] for breaching of the Regulation are (in addition to any other criminal liability that such breach might give rise to) as follows:

  • in the case of a Data Controller dealing with more than 10,000 Data Subjects, payment of the fine of 2% of its annual gross revenue of the preceding year or payment of the sum of ten million Naira N10,000,000), whichever is greater; and
  • in the case of a Data Controller dealing with less than 10,000 Data Subjects, payment of the fine of 1% of its annual gross revenue of the preceding year or payment of the sum of two million Naira (N2,000,000), whichever is greater.


[1] Section 2.1(2)(3) of the Regulation

[2] “Data Subject” means “an identifiable person; one who can be identified directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity.”

[3] “Data Controller” means a person who either alone, jointly with other persons or in common with other persons or as a statutory body determines the purposes for and the manner in which personal data is processed or is to be processed.

[4] Section 2.1(2)(3) of the Regulation

[5] Section 2.10 of the Regulation

a)  Every Data Controller must designate a Protection Officer responsible for compliance with the Regulation, relevant data privacy instruments and data protection directives of the Data Controller. A Data Controller may however outsource this function to a verifiably competent firm or person.


b)  Data Controllers and Data Processors must engage a Data Protection Compliance Organization (DPCO) to perform periodic Data Protect Audits and file a report with NITDA. A DPCO is any entity licensed by NITDA to train, audit, consult on and render services and products required for compliance with the Regulation or any foreign Data Protection Law or Regulation effective in Nigeria.


c)  Public or private organisations that are Data Controllers must publish a data protection policy. The policy must be publicly available and comply with the Data Protection Regulation.


d)  Every Data Controller must ensure continuous capacity building and training for its Data Protection Officer and other personnel involved in processing personal data

Dispute Resolution

Prior to seeking legal redress in any Nigerian Court, the aggrieved party must consider several preliminary matters. Failure to consider these preliminary matters may lead to termination of the suit or dismissal at the end of a tortuous and costly trial. We have examined some key preliminary matters below:


a)  Limitation Period

This is the time within which a legal wrong may be initiated in Court. These time limits vary depending on the subject-matter of the dispute. For example, the time limit for initiating actions based on:

  • Simple contracts and debt recovery – 6 years;
  • land, Court judgments, instruments under seal, claim from deceased person’s personal estate – 12 years;
  • damages for negligence, slander, nuisance, etc. – 3 years;
  • an action against Public Officers – 3 months; and
  • an action by State Authority to recover land – 20 years.


b)  Locus Standi

This means legal capacity to institute proceedings in Court. No person can properly sue for the enforcement of a right apart from the person, in whom a right is vested as his personal right.


c)  Conditions Precedent

The law sometimes requires certain conditions to be satisfied before filing an action in Court. Such condition precedents may be by way of service of Pre-Action Notice or satisfaction of other steps required by law before commencement of action, like Case Management Conference, where the Judge assesses the suitability of the matter for alternative dispute resolution and gives necessary directions.


d)  Cause of Action

There must be a factual situation, the existence of which entitles one person to obtain from the court a remedy against another person.


e)  Jurisdiction

Jurisdiction is the legal capacity of the Court to hear and determine judicial proceedings. A court of law can only exercise judicial powers when it has jurisdiction over the matter before it.

Alternative Dispute Resolution (ADR) refers to a process of resolving civil and commercial disputes, without resorting to litigation, in an efficient, in a mutually beneficial and efficient manner. ADR methods commonly used in Nigeria to settle commercial disputes are negotiation, mediation, conciliation and arbitration. Foreign investors are accorded the same rights as Nigerian citizens to adopt any ADR method to resolve commercial disputes.



Arbitration is a process whereby disputing parties agree to submit a matter to one (arbitrator) or more (arbitration tribunal) neutral third parties who decide on the dispute. The rules or procedure for arbitration will typically be determined by the disputing parties. However, an arbitrator or tribunal may decide if the disputing parties fail to do so.


The principal legislation for arbitration in Nigeria is the Arbitration and Conciliation Act (ACA). The ACA is based on United Nations Commission on International Trade Law’s (UNCITRAL) model law and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Award (New York Convention).


The decision of an arbitrator, referred to as an arbitral award, is binding and legally enforceable and must be signed by all the arbitrators. The party who receives the arbitral award may apply to a High Court in Nigeria for a leave to enforce the award as a court judgment.


Arbitral awards made in Nigeria can be enforced in England and Wales or in any other country that is a signatory to the New York Convention.

In Nigeria, Judgment may be enforced in any one of the following ways:

a)  Writ of Fieri Facias – directs the Court’s Sheriff to seize and sell the Judgment Debtor’s property to satisfy the Judgment Debt.

b)  Garnishee Proceedings – usually initiated against a third party who is indebted to the Judgment Debtor in order to attach the debt in satisfaction of the Judgment Debt.

c)  Writ of Possession – applicable to judgments relating to land.

d)  Order for execution of deeds and negotiable instruments

e)  Insolvency proceeding – where a company is unable to pay its debts.


Enforcement of Foreign Judgments.

Enforcement of judgment issued by a foreign superior Court (equivalent to a Nigerian High Court or more) is possible in Nigeria. This can be done by:


  1. An action at common law

A judgement creditor can institute an action in Nigerian Court claiming reliefs of the foreign judgment. For this enforcement to be successful, the foreign judgment must satisfy the following:

  • the judgment must be final and conclusive;
  • it must have been delivered by a competent court of jurisdiction;
  • it must be for a definite sum not recoverable as tax, fine or penalty; and
  • if the judgment is not monetary, its subject-matter must be within the jurisdiction of the foreign court at the time of delivering the judgment.


  1. Reciprocal enforcement

The Foreign Judgments (Reciprocal Enforcement) Act, 1961 permits the enforcement of foreign judgments by registration in Nigeria if the judgment is given by a superior court of a country[1] that will equally enforce a Nigerian judgment in its courts.

[1] Mostly Commonwealth countries. Judgments of countries outside the Commonwealth are enforced by action at common law.

Dispute Resolution

South Africa’s court system is very efficient. It is comprised of the Magistrates Courts, High Court, Supreme Court of Appeal and the Constitutional Court.

There are specialist courts which have been established for the adjudication of specific matters. These include: the Labour Court, the Labour Appeal Court, the Specialist Income Tax Court, the Electoral Court, the Companies Tribunal, the Competition Commission, the Competition Tribunal, the Competition Appeal Court, the Consumer Commission and the Consumer Tribunal. Each of these specialised courts has been established in terms of legislation governing the subject matter in question.

Section 165 of the Constitution of the Republic of South Africa, 1996 (‘Constitution’) protects the independence of the courts by providing that no person or organ of state may interfere with the functioning of the courts. Thus, the Courts are empowered to apply the Constitution and the law impartially and without fear, favour or prejudice.

Generally, the South African judicial system is thriving and it has successfully managed to maintain its independence and impartiality.

a. Enforcement of foreign judgements and arbitral awards-

The South African legal system makes it possible to enforce foreign judgements in South Africa by way of registering the judgement with a local court under the Enforcement of Foreign Civil Judgements Act 32 of 1988.

However, the scope of this Act is extremely narrow and only applies to judgements from countries designated by the Minister of Trade and Industry as published in the Government Gazette. Thus far, only Namibia has been designated (See Government Gazette Number 17881 published on 1 April 1997).

Therefore, in most instances, a claimant wishing to have a foreign judgement enforced in South Africa must apply to a local court for an order recognising the judgement and declaring it to be enforceable in South Africa. There are certain requirements that must be met for this to be successful.

In the event that the judgement has been recognised by a local court, the claimant can obtain a writ of execution and proceed to enforce the judgement.

A foreign judgement will probably not be recognised in South Africa if the foreign court exercised jurisdiction over the defendant solely by virtue of an attachment to found jurisdiction or on the basis of domicile alone.

South African courts do not enforce foreign revenue or penal laws.

The following types of alternative methods of dispute resolution are available in South African Law:

a. Arbitration –

This process usually takes place pursuant to an agreement between the parties to a dispute, referring that dispute for final determination to an independent tribunal appointed by or on behalf of the parties.

b. Mediation –

This is a dispute resolution process through which a third party acceptable to all parties to a dispute helps to bring the parties to an agreed solution. The mediator usually has no decision-making powers.

Accordion Content

Industry Spotlight

Nigeria’s Fintech industry is growing rapidly with over two hundred and fifty (250) companies operating in the ecosystem poised to take advantage of increased technology literacy and penetration, limitations of the traditional banking/financial service provision systems in Nigeria and regulatory drive towards financial inclusion of Nigeria’s unbanked population of about sixty (60) million people.

According to a report issued by Mckinsey & Company in September 2020, Harnessing Nigeria’s Fintech Potential, foreign direct investment into Nigeria’s Fintech industry between 2014 and 2019 stood at about $600 million and increased by 197% between 2017 and 2019 owing to industry’s ability to develop and design useful, convenient and affordable financial products and services for Nigerians. These products include much needed payments, wealth management, lending, personal finance and savings, etc. solutions and services. Investment in the industry has facilitated the growth of Nigeria’s digital economy (e-commerce, social commerce), small and medium sized enterprises (SMEs) sector and has, overall, had a multiplier effect on the Nigerian economy.

Despite the growth in the sector, there is still room for growth and investments. Nigeria, being Africa’s largest economy, offers opportunities for increased inclusion, financial penetration and seamless provision of financial services to SMEs, mass-market sectors and individuals. Furthermore, increased internet infrastructure and penetration, the countries youthful population, the Government’s desire to improve financial inclusion and the presence of evolving regulations to protect investments enhances Nigeria’s attractiveness for investment in the Fintech industry. The increasing need for improved digital payment solutions/channels and digitized unsecured loans and Nigeria’s low credit penetration presents significant investment opportunities in Nigeria.

Nigeria’s Fintech industry is primarily regulated by the Central Bank of Nigeria, Securities and Exchange Commission, Nigerian Communications Commission, Nigerian Deposit Insurance Corporation and the National Insurance Commission who separately provide regulations for licensing entrants into the sector, consumer protection, data protection and investor protection. The regulatory environment is evolving and supportive of Fintech innovations given Nigeria financial inclusion agenda.