COMPLIANCE CHECKLIST: A FOREIGN INVESTOR’S GUIDE TO DOING BUSINESS IN NIGERIA

INTRODUCTION 

Nigeria continues to attract foreign investment across technology, financial services, manufacturing and energy. However, incorporating a company with the Corporate Affairs Commission (CAC) is only the first step towards establishing a business presence in Nigeria. Depending on the nature and scope of their operations, foreign investors may also need to comply with investment registration requirements; obtain immigration approvals; meet tax and employment obligations; register qualifying technology transfer agreements; comply with data protection laws; and secure sector-specific licences. These requirements may involve different regulatory authorities and apply at different stages of the business lifecycle.  

This newsletter outlines the key compliance requirements for foreign companies wishing to do business in Nigeria, including relevant approvals; registrations and ongoing obligations. 

CORPORATE INCORPORATION AND REGISTRATION WITH THE NIGERIAN INVESTMENT PROMOTION COMMISSION (NIPC) 

1. Incorporation Under the Companies and Allied Matters Act (CAMA) 2020 

A foreign company intending to carry on business in Nigeria must generally incorporate a separate Nigerian entity with the Corporate Affairs Commission (CAC) before commencing operations. Operating without incorporation is prohibited, except where the company qualifies for specific exemptions under CAMA. Key things to consider include: 

1. Minimum share capital: Companies with foreign participation are generally required to have a minimum share capital of ₦100,000,000 (One Hundred Million Naira), which must be fully allotted. 
2. Persons with significant control: Any individual holding 5% or more of the shares or voting rights of the company must disclose same to the CAC. 
3. Ongoing compliance: The company must keep statutory registers and accounting records, file annual returns, and notify the CAC of changes to its registered particulars. 

2. Registration with the NIPC 

Under section 20 of the Nigerian Investment Promotion Commission Act, enterprises with foreign participation must register with the NIPC before commencing business in Nigeria. This requirement applies to wholly foreign-owned companies and joint ventures with foreign equity participation. 

Applications may be submitted online or through the NIPC’s One-Stop Investment Centre (OSIC). Supporting documents typically include the company’s Certificate of Incorporation, Memorandum and Articles of Association, particulars of directors, and evidence of capital inflow. 

CAPITAL IMPORTATION, REPATRIATION OF FUNDS AND INVESTMENT INCENTIVES 

Foreign investors should understand the requirements for introducing capital into Nigeria, repatriating investment proceeds and accessing available investment incentives. key considerations are outlined below: 

1. Capital Importation:

   Foreign investors bringing capital into Nigeria, whether as equity or debt, must transfer the funds through an authorised dealer bank and obtain a Certificate of Capital Importation (CCI) as evidence of the inflow. Without a CCI, investors may be unable to demonstrate that the capital was properly imported, which may complicate subsequent repatriation. For more information, please see our newsletter here
    

2. Repatriation of Funds:
   Foreign investors may repatriate proceeds through the official foreign exchange market, subject to applicable requirements. A Certificate of Capital Importation (CCI), obtained through an authorised dealer bank, provides evidence of the capital imported and supports such repatriation.  
3. Technology Transfer Agreements:

   Agreements involving the transfer of foreign technology, know-how or services to Nigerian businesses may require registration with the National Office for Technology Acquisition and Promotion (NOTAP). These include qualifying intellectual property licences, software licences, and technical or management services agreements. Where payments such as royalties and technical service fees are due to foreign parties under these agreements, NOTAP registration is a requirement to facilitate the remittance of those payments through official banking channels. 
    

4. Investment Incentives: 

   The Economic Development Tax Incentive (EDTI) offers eligible companies a tax credit of 5% per annum on qualifying capital expenditure for five years, subject to the applicable sector requirements, investment thresholds and other statutory conditions. 
    

STATUTORY EMPLOYMENT OBLIGATIONS 

Foreign-owned companies employing staff in Nigeria are subject to the same statutory contributions as local companies. This includes: 

1. Pension Contributions 
2. Employees’ Compensation (NSITF) 
3. Industrial Training Fund (ITF) Contributions 
4. National Minimum Wage and Written Employment Terms 
5. Pay-As-You-Earn (PAYE) Tax 

The specific obligations applicable to a company may depend on its workforce, size, and other statutory requirements. 

TAX OBLIGATIONS  

Companies operating in Nigeria must comply with applicable federal and state tax requirements, including registering with the relevant tax authorities, filing tax returns and remitting taxes within the prescribed deadlines. The specific obligations depend on the company’s activities, income, transactions, and employment arrangements. Key taxes and statutory levies may include: 

1. Companies Income Tax (CIT) 
2. Development Levy 
3. Capital Gains Tax (CGT) 
4. Value Added Tax (VAT) 
5. Withholding Tax (WHT) 
6. Personal Income Tax (PAYE) 

Proper tax advice should be sought to determine the relevant taxes applicable to the business and the extent of its applicability. 

BUSINESS PERMITS AND EXPATRIATE EMPLOYMENT 

Foreign-owned companies employing expatriates must comply with applicable business permit and immigration requirements administered by the Federal Ministry of Interior and the Nigeria Immigration Service.  

The applicable permits, approvals and immigration documents include: 

1. Business Permit 
2. Expatriate Quota Approval 
3. Subject to Regularisation (STR) Visa 
4. Combined Expatriate Residence Permit and Aliens Card (CERPAC) 
5. Nigerian Understudy Requirements 

DATA PROTECTION 

The Nigeria Data Protection Act 2023 (NDPA) applies to organisations processing personal data in Nigeria, including foreign companies that target Nigerian individuals. The NDPC’s General Application and Implementation Directive (GAID) 2025 also classifies data controllers and processors of major importance into four tiers: Ultra-High, Extra-High and Ordinary High. Key things to consider include; 

1. Registration as Data Controller/Processor of Major Importance: Companies that process personal data of individuals in Nigeria and meet the applicable thresholds are required to register with the Nigeria Data Protection Commission (NDPC). This requirement also applies to foreign companies that fall within any of the prescribed categories.  

   For more information, please see our newsletter here.

2. Annual Audit: Companies must file their first Compliance Audit Report within 15 months of commencing operations and subsequent reports by 31 March each year. 
3. Core Duties: Companies must appoint a Data Protection Officer where required, publish privacy notices, conduct impact assessments for high-risk processing, report breaches as required by law, and comply with cross-border data transfer requirements. 

SECTOR LICENCES AND RESTRICTIONS ON FOREIGN OWNERSHIP 

Incorporation does not, by itself, authorise a company to conduct regulated activities. Businesses must obtain the relevant licences, for example from the Central Bank of Nigeria or the Securities and Exchange Commission (fintech and financial services), the Nigerian Communications Commission (telecoms), NAFDAC (food, drugs and cosmetics) and NUPRC or NMDPRA (oil and gas). 

Although Nigeria generally permits 100% foreign ownership, certain sectors are restricted: 

1. Oil and gas: Nigeria’s local content rules prioritise qualifying Nigerian companies and indigenous operators for certain licences, contracts and projects. 
2. Coastal shipping: The Coastal and Inland Shipping (Cabotage) Act restricts foreign-owned vessels from participating in domestic coastal trade, subject to statutory exemptions and waivers. 
3. Broadcasting: Foreign participation is subject to ownership and licensing restrictions imposed by the National Broadcasting Commission (NBC) 
4. Advertising; Foreign participation is restricted by local ownership requirements applicable to advertising agencies operating in Nigeria \
5. Private security: Private guard companies must be wholly owned by Nigerians; foreign investors are generally prohibited from holding equity in these companies
   

CONCLUSION 

Establishing a business presence in Nigeria requires foreign investors to look beyond company incorporation. An appropriate corporate structure must be supported by capital importation certificates, statutory permits, tax portal setups, employment processes, technology transfer approvals, and sector-specific operational licenses. Early identification of these obligations enables foreign entities to prevent operational delays, avoid regulatory fines, and secure easy profit repatriation. 

Please note that the information in this newsletter is not exhaustive, and the requirements outlined may not apply to every business. Accordingly, investors should map these requirements before committing capital and revisit them as regulations evolve. 

For further information or tailored legal guidance, please contact lawyers@pavestoneslegal.com