Setting Up a Company and Doing Business in Nigeria

Business Processes in Nigeria

 Our services include 

• Nigerian company registration services
• Government licensing services
• Corporate bank account opening services in Nigeria and abroad
• Employee recruitment and Nigerian work visa services
• Nigerian office rental solutions.

Advantages of Nigerian Company Registration

Nigeria is a gateway to Africa because:

The country has bilateral investment treaties with China, Finland, France, Germany, Italy, the Netherlands, South Korea, Romania, Serbia, South Africa, Spain, Sweden, Switzerland, Taiwan, and the United Kingdom.

Nigeria is Africa's largest economy and has a local consumer market hungry for luxury goods, branded clothing, cars, designer furniture, the latest smartphones and IT products, and white goods.

With 50% of Nigeria's population under the age of 30 and average income expected to triple by 2030, investment opportunities for multinational clients include:

• Educational services
• The demand for quality education services is growing faster than the government can provide.
• Telecommunications, including mobile phones and software applications, and other e-commerce businesses.
• FinTech and other financial services, including mobile payment solutions and digital banking.

Nigeria has vast resources, most of which are not yet fully exploited.

• Mineral resources including gold, lead, coal, tin, and iron ore
• Cash crops including groundnuts, palm oil, cocoa, and coconuts
• Leather and textiles
• It is interested in investment opportunities such as oil and gas.

The country's agricultural sector is inefficient and lacks equipment, and the land is underutilized. Nigeria has 36.8 billion barrels of proven oil reserves, and technology will be required to extract them.

The government actively encourages foreign investment in the agriculture, oil and gas production, mining, and export industries, especially through tax incentives. Export-oriented businesses benefit from attractive tax incentives.

Profits derived from goods exported from Nigeria are legally tax-exempt if the profits are repatriated to Nigeria and used solely for the purchase of raw materials, plant equipment, and spare parts.

Only a 10% withholding tax is levied on the repatriation of profits.

These taxes are on:

• Intellectual property
• Head Office management fees
• Overseas technical service fees
• International consulting fees.

This is an excellent way to legally minimize Nigerian corporate tax.

The profits of companies in Nigeria whose products are used primarily by export-oriented manufacturers are not subject to corporate tax.

1. A three-year tax holiday (with a possible two-year extension) is available for multinational Clients operating in sectors such as agriculture, mining, manufacturing, food processing, deep-sea fishing, printing, solid mineral mining, hotels, road infrastructure development, downstream gas utilization operations, and glass manufacturing, fertilizers, and steel manufacturing.

Nigeria's 20 Special Economic Zones are attractive for foreign manufacturing investment because:

Projects benefit from federal, state, and local government tax holidays.

The import of raw materials and other goods from abroad is duty-free.

Capital, profits, and dividends can be freely repatriated from Nigeria without restriction, unlike an 'onshore' Nigerian LLC.

Unlike LLCs elsewhere in Nigeria, a special economic zone company does not need a license for import or export, and there are no quotas for obtaining visas for foreign workers.

Economic Environment in Nigeria

Dealing with special economic zone authorities is easier than dealing with government departments. Most authorities can issue licenses and incorporate companies under one roof.

Nigeria's relatively low average monthly salary of US$890 is attractive for labor-intensive businesses like manufacturing. Due to high unemployment at 8%, there is an abundance of cheap labor available.

100% foreign ownership is permitted in Nigeria. The exception is in oil and gas, where foreign investors must enter into joint venture agreements with local partners.

With a population of 200 million, Nigeria is by far the largest domestic market in Africa. Despite the negative impacts of the Covid-19 pandemic on the Nigerian economy, spending power among ordinary Nigerians is increasing. For example, in 2021, disposable personal income was expected to be US$51.5 billion. The expanding middle class is increasing demand for consumer goods such as electronics, automobiles, etc.

English is widely spoken in Nigerian government departments, banks, and tax offices. Marketing campaigns and networking are easy for foreign investors.

To set up a company in Nigeria, our clients do not need to travel to Nigeria to complete the setup formalities. This includes the opening of a multi-currency corporate bank account in Nigeria, which can normally be opened within two weeks of company incorporation. For multinational Clients who wish to quickly secure a government contract in Nigeria, we also offer a fast Nigerian business setup solution.

Company Formation Processes in Nigeria

Opening a company in Nigeria takes an average of five weeks, even for a simple incorporation. Registration must be completed with various government agencies, including the Corporate Affairs Commission, the Nigerian Investment Promotion Commission, and the Federal Inland Revenue Service.

A license may be required depending on the company's activities.

Foreign investors are prohibited from acquiring majority stakes in companies related to aviation, oil and gas, shipping, real estate, and telecommunications.

To obtain a license in an export processing zone, a company must have a minimum capital of US$62,000. These funds must be deposited into a corporate bank account or spent on capital goods for the business before the license is issued.

Best Investment and Trade Areas for a Nigerian Company

Easy access to African markets

• Nigeria's location provides entrepreneurs setting up a company in Nigeria with easy access to the lucrative West African and sub-Saharan African markets by rail, road, sea, and air.
• English is the official business language and is spoken by the majority of educated business people in the country, making it easy for foreign companies to set up business in Nigeria through subsidiary registration.
• Nigeria has the lowest manufacturing costs in Africa; in particular, skilled labor costs are significantly cheaper than in other African countries.
• There is no minimum capital requirement to register a Nigerian limited liability company.
• Nigeria is an active member of the Organisation of Islamic Cooperation (OIC) trade bloc and enjoys preferential trade access to wealthy markets including Saudi Arabia, the UAE, and Qatar.
• Traveling around Nigeria is cheap. Taxi fares and gasoline are much cheaper than in other African countries.