The Nigerian economy is still very much at its primary level and therefore provides attractive opportunities for progressive prosperity for investors. The country is young, independent and relatively stable. Nevertheless, there are challenges, especially in the areas of infrastructure, such as inadequate power supply, poor road networks, transport systems, and some political risks. Discerning investors will discover that such challenges are actually business opportunities. Many investors have found that they are able to richly realise their investments within five or ten years. Nigeria is, therefore, an investor’s heaven. From a business point of view, Nigeria is the dominant business hub and, with large sea and international standard airports, the gateway to the Africa continent.
The most common form of business organisation in Nigeria is the limited liability company, private or public. Company incorporation in Nigeria has been very much simplified. It can be accomplished within 24 hours on an urgent basis, or within four weeks, depending upon the circumstances of the investor and the nature of business, provided correct incorporation papers have been properly filed with the appropriate authority.
The Immigration Act requires that any person who is not a citizen of Nigeria, who wishes to register or take over any company with limited liability, should obtain the consent in writing from the Minister of Interior. Any person may invest in any enterprise or security, with foreign currency or capital imported into Nigeria through an authorised dealer. With a view to easing and accelerating investment in Nigeria, the Nigerian Investment Promotion Commission (NIPC) was established by the Federal Government as a one-stop-shop to coordinate the process of establishing and doing business in Nigeria.
Investors have the choice for the location of their business premises anywhere in the 36 states of the Federation and Abuja Federal Capital Territory. There are of course various factors which must influence the choice, including the nature of the business itself and its ideal environment. Lagos appears to be very popular and most attractive to investors for many reasons. Leases of business premises are readily available and are supported with binding contracts. One of the requirements for the issuance of a business permit is that the applicant investor should show evidence of business premises. This is often satisfied with the production of a valid lease contract.
Nigeria has a strong and robust banking sector, with links to the world’s leading financial institutions. To open a bank account with any bank of the investor’s free choice, certain documents are required. Any company or individual may open, maintain and operate a domiciliary account designated in foreign currency with any bank. The foreign currency in which a domiciliary account may be opened, maintained and operated can be any internationally convertible currency.
The legal framework for company administration is basically the same as that of all the common law countries of the Western world. Good corporate governance requires compliance with basic rules and regulations. In this connection, there is a pool of competent corporate lawyers who can guide the company.
The current company income tax rate is 30%. It is fairly constant. The Nigerian income tax regime includes petroleum profit tax, education tax, information technology tax, capital gains tax, withholding tax, value-added tax, and personal income tax as may be applicable.
Dividends and repatriation of funds
Foreign currency imported into Nigeria and invested in any enterprise in accordance with the law will be guaranteed unconditional transferability of funds, through an authorised dealer in freely convertible currency, relating to: dividends or profits (net of taxes) attributable to the investment; payments in respect of loan servicing where a foreign loan has been obtained; and the remittance of proceeds (net of all taxes) and other obligations in the event of sale or liquidation of the enterprise or any interest attributable to the investment.