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

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BY SEUN TIMI-KOLEOLU & OLUWAYEMI IBIRINDE

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 

NIGERIA CAPITAL MARKET MASTERPLAN 2.0 – POTENTIAL REGULATORY REFORMS TO WATCH

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BY ADERONKE ALEX-ADEDIPE & PROMISE ITAH

Introduction

In October 2026, the Securities and Exchange Commission (“SEC”) published the Nigeria Capital Market MasterPlan 2.0 (“NCMMP 2.0” or “Plan”), a ten-year roadmap (2026–2036) aimed at tripling Nigeria’s capital market value from approximately ₦250 trillion to ₦750 trillion.750 trillion.

The Plan proposes reforms to expand funding opportunities for businesses, diversify investment products, and improve access to the capital market. However, for these reforms to be effective, new rules, administrative actions or legislation will be required.

In this newsletter, we highlight some key proposals under the NCMMP 2.0 and what businesses and investors should watch for as reforms are implemented.

  1. Key Legal and Regulatory Reforms

The NCMMP 2.0 is structured around five pillars, each addressing key areas of capital market development. Some key legal and regulatory reforms proposed under each pillar are discussed below.

a.      Regulatory Clarity, Coordination and Enforcement (Pillar 1)

Pillar 1 targets overlapping rules and fragmented supervision. The SEC notes that multiple agencies such as the SEC, Central Bank of Nigeria (CBN) and other agencies have duplicate processes and inconsistent requirements that increase compliance costs and uncertainty. To address this, the Plan suggests key proposals, including:

  • Unified Regulatory Portal: Establishment of a central digital portal to streamline regulatory filings and approvals across relevant agencies and reduce duplicate submissions.
  • Inter-Agency Coordination: Improve cooperation between regulatory agencies by leveraging on the existing Financial Sector Regulatory Coordinating Committee (FSRCC) (which includes agencies such as the SEC, CBN, Pension Commission and NAICOM), to improve information-sharing and align regulatory efforts. The Plan also proposes a Commodity Market Development Council to coordinate efforts to improve the trading of commodities, such as agricultural produce and solid minerals.
  • Clearer and Consolidated Rules: Review and consolidate existing SEC rules, including established market practices that are not formally documented, and make regulatory requirements easier for businesses and investors to find and understand.
  • More Consistent Tax Treatment: Review the tax treatment of capital market products to reduce differences that may distort investment decisions.
  • Clearer Rules for Warehouse Receipt Financing: Clarify conditions under which banks and other financial institutions should recognise and value electronic warehouse receipts as loan collateral, making it easier for individuals and businesses to use them to secure financing.
  • Stronger Supervision and Enforcement: Introduce risk-based supervision at the SEC, under which the level of regulatory oversight is tailored to each market operator’s risk profile, with higher-risk firms subject to closer scrutiny. The Plan also proposes improved risk assessment and surveillance tools and specialised training for regulatory staff.

b.     Modernising Market Infrastructure

Pillar 2 focuses on upgrading trading, clearing, and settlement systems. The SEC considers reliable and transparent market infrastructure essential to a well-functioning capital market. Although Nigeria has exchanges, depositories and clearinghouses, these systems are not fully connected. Currently, brokers and custodians may need separate accounts across platforms, creating inefficiencies and limiting competition. To address these challenges, the Plan proposes:

  • Greater interoperability: Connect trading, clearing and settlement systems to simplify access and reduce duplication across platforms;
  • Improved market data: Enhance market data transparency by making trading information more accessible across platforms and promoting competition among infrastructure providers;
  • Stronger commodity and derivatives markets: Develop commodity and derivatives markets by establishing a nationwide electronic warehouse receipt system, strengthening central counterparties (CCPs), developing the over-the-counter (OTC) derivatives market and encouraging greater foreign participation in local derivatives and repo markets;
  • Improved cybersecurity and resilience: Strengthen cybersecurity and resilience by aligning market infrastructure with relevant international standards, including the Principles for Financial Market Infrastructures (PFMI), and improving operational risk management and stress-testing.

c.      Broadening Issuance and Diversifying Financial Products (Pillar 3)

Pillar 3 aims to expand access to capital and diversify the financial products available to businesses and investors. The Plan proposes a range of reforms, including the following:

  • Government and State Bonds: Encourage the Federal Government to issue bonds with longer repayment periods and improve the buying and selling of existing government bonds. This would help establish reference rates for long-term borrowing. For state governments, the Plan proposes simplifying the process of raising funds through bond issuances, providing guarantees or other forms of credit support to attract investors, and strengthening state debt offices to manage the process;
  • Corporate Debt and Equity: Review the existing ₦15 billion cap on securities issued by private companies, including the option of introducing limits based on the size of the issuer. Other proposals include simplifying shelf registration and reviewing the requirement for two credit ratings for certain corporate bonds;
  • SME Financing: Develop new funding channels through fintech-enabled lending, receivables financing, loan securitisation and a proposed national SME debt fund platform. The Plan also proposes a regulatory framework for private credit and mezzanine funds and a review of crowdfunding and growth-board requirements to make it easier for SMEs to raise capital;
  • Sustainable and Non-Interest Finance: Expand sukuk issuance and strengthen the framework for non-interest finance. The Plan also proposes broader use of green, blue, social and sustainability-linked bonds, supported by post-issuance impact reporting, alongside frameworks for real estate investment trusts (REITs), asset-backed securities and funds targeting sectors such as agriculture, minerals and infrastructure.

d.     Deepening and Diversifying the Investor Base (Pillar 4)

Pillar 4 aims to attract more investment from domestic institutions, retail investors, Nigerians in the diaspora and foreign investors. The Plan proposes measures to broaden participation and improve access to the Nigerian capital market, including:

  • Mobilising institutional capital: Encourage pension funds, insurers and other large investors to fund infrastructure and other productive sectors by reducing investment risks through guarantees and similar support, and by creating funds that invest in other funds. The Plan also proposes reviewing investment rules to make it easier for these institutions to invest in SMEs and private credit funds.
  • Expanding retail and diaspora participation: Make it easier for individuals in Nigeria and Nigerians abroad to invest through digital account opening and electronic identity checks (e-KYC), supported by fintechs and mobile network operators. The Plan also proposes Tax-Free Savings Accounts (TFSAs) to encourage investment, as well as diaspora bonds and foreign-currency investment funds for Nigerians living abroad.
  • Attracting foreign investors: Facilitate foreign investors’ participation in the Nigerian capital market through more efficient account opening and settlement processes, cross-border fundraising, recognition of prospectuses across participating markets, and regional or dual-currency listings. These measures aim to attract more foreign investment and strengthen Nigeria’s position as a regional capital market hub.

e.      Building Institutional Capacity and Professional Depth (Pillar 5)

Pillar 5 focuses on strengthening the capacity of regulators, market operators, and capital market professionals to support the proposed reforms. The Plan sets out measures to build institutional capacity and improve professional standards, including:

  • Strengthening the SEC’s capacity: Review the SEC’s operations and funding to address resource gaps affecting technology, staffing, and effective supervision. The Plan further proposes training SEC staff to understand and regulate digital assets and sustainable finance, including new technologies such as smart contracts and decentralised finance (DeFi).
  • Improving market operator resilience: Review the roles and responsibilities of brokers, custodians and other capital market operators, set capital requirements based on the risks they pose, and strengthen governance, technology and cybersecurity to improve the stability and reliability of the market.
  • Developing professional skills: The SEC will work with the National Universities Commission (NUC) and the Nigerian Capital Market Institute (NCMI) to expand capital markets education, update training and certification programmes, and strengthen professional development across the industry.
  1. What Should Businesses and Investors Do Now?

The NCMMP 2.0 provides a guide to potential changes in Nigeria’s capital market, but its proposals do not automatically change existing laws or regulatory requirements. As the reforms take shape, businesses and investors should take the following steps:

  • Review compliance and operational readiness: Assess regulatory filings, governance, reporting, cybersecurity and risk management systems in anticipation of potential changes to supervisory and operational requirements.
  • Monitor regulatory developments: Track proposed changes that could expand investment opportunities in infrastructure, SMEs and private credit, as well as digital onboarding and e-KYC arrangements that could improve access to the capital market.
  • Apply existing rules: Ensure that any financing, investment and market-entry decisions comply with the laws and regulations currently in force. The Plan’s proposals should not be treated as effective until the relevant measures have been formally adopted and brought into force.

Conclusion

The NCMMP 2.0 sets out a ten-year programme to develop a deeper, more efficient and accessible capital market. Its proposals address challenges such as fragmented regulation, gaps in market infrastructure, and limited financing options for businesses. However, the Plan does not automatically bring these reforms into effect. Some proposals will require new regulations, amendments to existing rules, legislative action, or coordination among relevant institutions. Their impact will depend on what is formally adopted and how effectively it is implemented.

This newsletter highlights selected proposals and is not an exhaustive account of the NCMMP 2.0 or the reforms it envisages. Businesses and investors should monitor relevant developments, assess how they may affect their activities, and continue to comply with the laws and regulations currently in force.

NIGERIA CAPITAL MARKET REGULATORY UPDATE: SEC MANDATES REGISTRATION OF COLLATERAL MANAGEMENT COMPANIES, WAREHOUSE OPERATORS AND WAREHOUSES

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BY ADERONKE ALEX-ADEDIPE & OMODELE FATODU

On 11 May 2026, the Securities and Exchange Commission (the “Commission”) issued a circular clarifying the registration requirements applicable to certain capital market operators.

The Circular applies to entities involved in the storage, management and facilitation of commodities used in structured trade financing or warehouse receipt arrangements. In particular:

  • Collateral Management Companies (“CMCs”);
  • Warehouse Operators; and
  • Warehouses linked to commodity exchanges or electronic warehouse receipt systems.

Although these categories of operators were already recognised and regulated under the SEC Rules on Commodity Exchanges and Trading Platforms; Warehouse Receipt Systems; and Collateral Management and Warehousing Operations, the Circular appears intended to reinforce compliance with the existing registration regime and clarify that entities operating under informal, transitional or unregistered arrangements are not exempt from regulatory requirements.

The Commission notes that entities currently carrying on any of the relevant activities under such informal or transitional arrangements are also required to apply for registration. Accordingly, the Commission has directed all existing and prospective entities within the scope of the Circular to submit complete registration applications within 90 days from the date of the Circular (the “Registration Deadline”).

The SEC further clarified that compliance will only be recognised upon submission of a complete application within the Registration Deadline. Consequently, incomplete applications, or failure to respond to requests for additional information within the stipulated timelines, will not satisfy the registration requirement.

In view of this Circular, we have set out below a brief overview of the registration and minimum capital requirements applicable to CMCs and Warehouse Operators:

S/N Capital Market Operator Registration Documents Minimum Capital
1. Collateral Management Companies
  • Duly completed SEC Forms 2, 2D and 3
  • Minimum of three sponsored individuals, including a Managing Director and Compliance Officer;
  • Certificate of Incorporation, Memorandum and Articles of Association, and CAC Status Report;
  • Company profile, organisational structure and details of principal officers;
  • Evidence of payment for shares allotted to shareholders;
  • Evidence of financial and technical capacity to carry out collateral management functions;
  • Latest audited accounts or statement of affairs; and
  • Valid fidelity insurance bond covering at least 20% of the minimum paid-up capital.
 Tier 1 (Local/Regional Operators) – ₦200,000,000

Tier 2 (National/International Reach) – ₦500,000,000

 
2. Warehouse Operators
  • Duly completed SEC Forms 2, 2D and 3;
  • Minimum of three sponsored individuals, including a Managing Director and Compliance Officer;
  • Certificate of Incorporation, Memorandum and Articles of Association, and CAC Status Report;
  • Evidence of adequate storage facilities and appropriate security arrangements;
  • Evidence of requisite weighing and quality control equipment;
  • Evidence of comprehensive insurance coverage for facilities, equipment and commodities;
  • Evidence of suitable operational infrastructure, including loading and unloading systems;
  • Standard Operating Procedures (SOPs) for warehousing operations;
  • Latest audited accounts or statement of affairs; and
  • Valid fidelity insurance bond covering at least 20% of the applicable minimum capital requirement.
 ₦500,000,000

 

Conclusion

The Circular reflects the Commission’s intention to strengthen regulatory oversight, transparency and accountability within the commodities trading and warehouse receipt ecosystem. By requiring all relevant operators to formally register, the Commission is likely seeking to ensure that only entities with adequate operational capacity, governance structures and financial standing participate in the market and remain subject to direct regulatory supervision.

Accordingly, entities operating within this sector should assess whether their activities fall within the scope of the Circular and take immediate steps to commence or regularise their registration with the Commission where applicable.