Investor Guide to Opening

a Business in Nigeria

Thank you for choosing Nigeria!

Thank you for your interest in Nigeria as a business location. In this guide, we give you an overview of
how to invest in Nigeria based on the questions most frequently asked by foreign investors. Of course,
you can contact us if you have any other questions about investing in Nigeria. Industrial Renaissance
provides a confidential one-stop-shop service to foreign companies looking to set up or expand in
Nigeria.
INVESTOR GUIDE HOW TO START A COMPANY
There are a number of important consid-
This guide is designed to help investors and for- erations for investors when deciding on
eign companies navigate investing and operating how to enter the Nigerian market or when
in Nigeria. It is a guide to the regulations, consid- establishing a business in Nigeria. Inves-
erations and assistance relevant to investing in, tors will generally need to choose between
establishing and running a business in Nigeria. establishing a new company or acquiring
an existing company. If establishing a new
PLEASE NOTE: This guide is intended to assist business, a variety of business structures
you in finding the relevant information and to give are available, each with their own regula-
you a starting point for discussion with advisers. tory and tax considerations. Your situation
This guide does not eliminate the need for pro- may require specific advice, so we recom-
fessional advice. It is strongly recommended that mend seeing advisors.
you use professional advisers to advise you on
legal, compliance and tax matters. The Nigeria Nigeria has a set of common structures
government welcomes productive foreign direct that investors can use when establishing a
investment and foreign portfolio investment. It business. The four main types are: sole pro-
has brought shared prosperity to investors and to prietorship; partnerships; trusts; and com-
the country. It helped build Nigeria’s economy and panies. Investors need to consider carefully
contributes to economic growth and to innovation. which structure best suits their business
Foreign investors are treated the same as domes- needs. The business structure will deter-
tic investors under Nigeria’s laws. mine the tax and legal implications.

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INVESTOR GUIDE TO OPENING A BUSINESS IN NIGERIA
No Restrictions on Foreign Ownership
of Businesses
TYPES OF REGISTRABLE
BUSINESS ORGANIZATIONS
Registrable business organiza-
tions in Nigeria include:
1. A company limited by shares
(Ltd or Plc)
2. A company limited by guaran-
tee
(Ltd/Gte)
3. An unlimited liability company
(Ultd)
Any of the above companies may
be a Private Company or a Public
Company.
4. Business Name (registered as
Sole Proprietorship or Partner-
ship)
5. Incorporated Trustees (usually
formed for not-for-profit or chari-
table purposes)
COMPANY SHARE STRUCTURE
In line with the Companies and
Allied Matters Act, all categories
of company shares (i.e. whether
ordinary or preferential) issued by
a company must carry one vote
in respect of each share. Shares
with weighted voting right are
prohibited. A company must have
at least 2 non-employee share-
holders. However, private compa-
nies must not have more than 50
non-employee shareholders.
RESERVING A COMPANY NAME
You can only use a name that is
not identical to an existing com-
pany or business name. A name
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availability search must be con-
ducted at the Corporate Affairs
Commission registry to see if the
name is available for use.
ESTABLISHING A NIGERIA
COMPANY
International investors interested
in entering the Nigerian market
may wish to establish a new Nige-
rian company or establish a new
Nigerian subsidiary which also
operates as a Nigerian company.
Nigerian companies are incorpo-
rated businesses that are also
distinct legal entities. Companies
in Nigeria must be registered with
the Corporate Affairs Commission
(CAC).
OPERATIONS OF FOREIGN
COMPANIES IN NIGERIA
Foreign investors or offshore
companies can hold 100% equity
stake in a Nigerian company. How-
ever, a foreign company wishing to
set up business operations in Ni-
geria should take all steps neces-
sary to obtain incorporation of the
Nigerian subsidiary as a separate
entity in Nigeria for that purpose.
Until so incorporated, the foreign
company may not carry on busi-
ness in Nigeria or exercise any of
the powers of a registered com-
pany.
Through a power of attorney, we
can assist a foreign company in
the formation and incorporation of
a Nigerian affiliate or subsidiary.
INVESTOR GUIDE TO OPENING A BUSINESS IN NIGERIA

Affordable Access to Land

ACQUIRING A NIGERIAN COMPANY

An alternative to establishing a new or subsidiary company may
be to acquire an existing Nigerian company. Merger and Acqui-
sition processes in Nigeria are regulated by the Securities and
Exchange Commission (SEC). Investors interested in acquiring a
Nigerian company may have to make a formal proposal. A propos-
al to acquire a Nigerian Company is subject to approval by SEC
and sanctioning by the Federal High Court. Lex Artifex, LLP. (our
affiliate) can assist you here.

APPOINTMENT OF FOREIGN DIRECTORS

The promoters of business ventures in Nigeria are free to appoint
Directors of their choice, either foreign or Nigerian, and the Direc-
tors may be resident or non-resident.

PREPARATION AND FILING OF INCORPORATION DEEDS

Companies must have a Memorandum and Articles of Associa-
tion, file a copy of same at the Corporate Affairs Commission reg-
istry, effect payment of stamp duties and conclude registration of
the company as a legal entity. A foreign investor or offshore com-
pany can grant a power of attorney to us, enabling us to act as its
Agents in executing incorporation and other statutory documents
pending the commencement of business.

FINDING AN OFFICE LOCATION

If you are looking to acquire or lease a location, our affiliate (Lex
Artifex, LLP.)can provide you with a list of options that help meet
your criteria. In the interim, you may with our agreement use our
address as your Nigerian address. The acquisition, lease and
development of land in Nigeria are facilitated at the state or local
government office of which the land is situated. Approvals, as-
sessments (including environmental assessment) and regulatory
requirements will differ between state jurisdictions.

USEFUL LINKS:
Lex Artifex, LLP. - www.LexArtifexLLP.com

Nigeria Immigration Service - www.portal.immigration.gov.ng

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INVESTOR GUIDE TO OPENING A BUSINESS IN NIGERIA

Favourable Tax Incentives &

Investment Guarantees
LISTING ON THE NIGERIAN STOCK EXCHANGE (NSE)
Nigeria has a modern and active stock market, allowing access to
long-term capital. To obtain and maintain an NSE listing, companies
need to meet the prescribed requirements set out in the stock ex-
change listing rules. This includes company disclosure and report-
ing requirements.

REGISTERING A TRADE MARK

Companies entering Nigeria will want to protect their rights and
prevent others from using their name by registering a trade mark.

REGISTER WITH THE TAX AUTHORITIES

The Federal Inland Revenue Service (FIRS) and State Board Internal
Revenue are responsible for the collection of corporate and per-
sonnel taxes, respectively. Our affiliate (Lex Artifex, LLP.) provides
advice to companies on taxation. Every company, business name or
incorporated trustee must be registered with the FIRS, and make
and deliver to CAC and the Annual Return in prescribed Forms with-
in stipulated time. Filling of financial returns must be done within
18 months of incorporation/registration and must be completed
and filed within 42 days after the organization’s Annual General
Meeting. A financial year can in principle start on any given date.
More information on taxation is available at www.indusren.com/
incentives-and-guarantees/

OBTAINING BUSINESS PERMIT AND EXPATRIATE QUOTA

We can assist investors and foreign companies to obtain Business
Permit and Expatriate Quota from the Nigerian Investment Pro-
motion Commission (NIPC) and the Nigerian Immigration Service,
respectively. Expatriate personnel do not require work permits,
but they remain subject to needs quota of their employer company
requiring them to obtain residence permits that allow salary remit-
tances abroad.

Business permit is the authorization for the operation of a business

with foreign capital either as a parent company or a subsidiary of a
foreign company. Expatriate quota is the authorization to a com-
pany to employ individual expatriates to specifically approved job
designations, and also specifying the permissible duration of such
employment. The expatriate quota forms the basis of work permits
for expatriate individuals (those qualifications must fulfill the crite-
ria established for the particular quota position).

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INVESTOR GUIDE TO OPENING A BUSINESS IN NIGERIA

Opening a Business in Nigeria?

Whether you are just starting up, expanding your activities, or looking to establish your
Africa regional headquarters in Nigeria, Industrial Renaissance can put you in fast-track
contact with the main national and sub-national stakeholders with a view to speeding
up your business launch or expansion project in Nigeria. As an integrated economic
development entity, we look at business solutions from the investor’s perspective, not
from the point of view of local business interests. Industrial Renaissance does much
more than promoting and attracting investment. In fulfilling its task of fostering com-
pany growth, it offers overseas investors and foreign companies through its affiliate
service providers a full and varied slate of expertise and professional support. All of
Industrial Renaissance’s services are confidential.

We Look Forward to Hearing from You

Visit our website for more information at INDUSTRIAL RENAISSANCE

www.indusren.com and connect with us on LTD.
Linkedin at www.linkedin.com/in/indusren (Advocacy Advisors House)
Call us on +234 818 701 9206 34 Udo Otung Ubo Street
or email us at invest@indusren.com Uyo, Nigeria.

Acknowledgement
We would like to thank Lex Artifex, LLP. for their contribution to this guide. Lex Artifex, LLP. is one of the leading service
providers in Nigeria providing legal advisory and investment consulting services. Lex Artifex, LLP. high performing people
use their expertise and insight to cut through the complexity of local and international issues and regulations. Find out more
about how Lex Artifex, LLP can serve your business needs by visiting their website at www.LexArtifexLLP.com.

DISCLAIMER: While every effort has been made to ensure the information given in this document is accurate, Industrial Re-
naissance Ltd. and our partners do not provide warranty or accept liability for any loss arising from reliance on such informa-
tion. Copyright © Industrial Renaissance Ltd. ALL RIGHTS RESERVED.