In this post, we explained reasons why you should invest/ start Business in Nigeria, the great opportunities available and proffer soft landing ways to go about your investment in Nigeria. There are several Investment opportunities in Nigeria many sectors, but we have chosen the below sectors because of it’s attractiveness and high yield on Return on Investment. These including technology, renewable energy, Oil and Gas, agriculture, real estate, and textiles, etc.
The post is also guide to Foreigners to start business in Nigeria as it provide Business Registration/ Entity Formation Services in Nigeria, the legals and requirements, ideas, procedures and provide some supports that you may need as a foreigner. Nigeria business environment is a fertile ground for everybody including foreigners. There are many opportunities and areas a foreign investor will have very high Return on Investment. For best performing sector for foreign investment/ areas for business join venture/ partnership, contact Aziza Nigeria or Aziza M, E & S Limited.
Complete Guide: How to Start Business in Nigeria as a Foreigner
Investing in the Nigerian market has a lot benefits but some challenges that you need to master. In case you are not sure how to go about your business, you can count on Aziza Nigeria, we have exeeded many people’s expectation.
There are several Investment opportunities in Nigeria many sectors, but we have chosen the below sectors because of it’s attractiveness and high yield on Return on Investment. These including technology, renewable energy, agriculture, real estate, and textiles, etc.
One of the key things to note in Nigerian market is the country’s large population and ongoing economic development efforts.
Renewable Energy Business Opportunities
Nigeria’s significant electricity deficit, coupled with abundant natural resources and government incentives, creates substantial opportunities for private investment in the renewable energy sector.
Key business opportunities in Nigeria’s renewable energy sector are:
Solar energy is a particularly promising area for investment due to Nigeria’s high solar irradiation levels. Opportunities include:
- Renewable Energy equipment Sales. Nigeria is a huge market for Renewable Energy equipment sales. The demand is still very high.
- Decentralized solar solutions: Investing in and operating mini-grids and pay-as-you-go (PAYG) solar home systems is a viable business, especially for electrifying the millions of Nigerians in rural and peri-urban areas who lack reliable access to the national grid.
- Commercial and industrial (C&I) installations: Many Nigerian businesses, from manufacturing plants to telecom companies, rely on expensive and polluting diesel generators to counter frequent power outages. Investing in C&I solar solutions offers them a more reliable and cost-effective alternative and provides significant energy cost savings.
- Local manufacturing and assembly: With the government pushing for “Made in Nigeria” renewable energy products, investing in local manufacturing or assembly plants for solar panels, inverters, and batteries is a growing opportunity.
- Specialized products: Businesses can find niches in products like solar-powered water pumps for agriculture, solar refrigerators for SMEs, and solar-powered cold storage facilities to reduce post-harvest losses.
- Energy Management Systems: Developing software to monitor and manage energy consumption can help individuals and businesses reduce costs.
Read: How to get an Oil and Gas License in Nigeria
Technology:
- Fintech: Nigeria’s booming digital economy presents opportunities in mobile payments, micro-lending platforms for SMEs, and crypto trading platforms. The success of companies like OPay, Moniepoint, Flutterwave and Paystack demonstrates the sector’s potential.
- Agritech: Technology can improve agricultural productivity through smart farming solutions that use IoT, data analytics, and AI. Market linkage platforms connecting farmers directly with buyers are also a growing area.
- E-commerce and Logistics: The rise of online shopping drives demand for new e-commerce platforms and reliable delivery services.
- EdTech: There is a need for online learning platforms and virtual classroom tools to address the education gap.
- Cybersecurity: As businesses move online, demand for cybersecurity services and training programs is increasing.
Agriculture:
- Agro-Processing: Investing in processing and packaging locally consumed food staples like garri, egusi, and ogbono can meet the demand for hygienic, packaged indigenous foods, both locally and in the diaspora.
- Livestock Farming: High demand for meat and eggs makes poultry farming a profitable venture, with rapid turnover. Fish farming, particularly for catfish and tilapia, also benefits from high consumption rates.
- Export-Oriented Farming: Global demand for Nigerian spices such as ginger, turmeric, and chili pepper offers high-value, export-focused opportunities.
- Precision Farming: Given unpredictable weather patterns, technologies that optimize planting, irrigation, and harvesting are in high demand.
Read: NCEC Certificate and NCDMB Certificate Registration
Real Estate:
- Short-Term Rentals: The popularity of platforms like Airbnb has created a lucrative market for short-let apartments in business and tourism hubs.
- Commercial Property: Investment in commercial real estate, such as office spaces, shopping complexes, and warehouses, can offer higher and more stable rental yields compared to residential properties.
- Off-Plan Investment: Buying properties during the construction phase at a lower cost and reselling them for a profit upon completion is a viable strategy, provided due diligence is conducted on the developer.
- Land Banking: Purchasing land in rapidly developing zones and holding it for long-term appreciation is a potential investment, though it may not provide immediate returns.
Nigeria’s Oil and Gas Sector Investment Opportunities
Nigeria’s oil and gas sector offers diverse investment opportunities, including upstream activities like marginal field development and technical services; midstream opportunities in gas processing, pipeline equipment, and storage infrastructure; and downstream projects such as refining, retail distribution, and gas-based industrial projects. Other areas include renewable energy integration, local service companies, and the development of carbon capture and storage (CCS) technologies.
Upstream opportunities
- Marginal field development: Participate in the development and production of smaller oil and gas fields.
- Technical services: Provide technical expertise, including services related to gas-to-liquid technology.
- Exploration: Invest in oil and gas blocks through an Oil Prospecting License (OPL) and potential conversion to an Oil Mining Lease (OML).
Midstream opportunities
- Gas processing and pipelines: Invest in equipment for processing, transportation, and distribution of natural gas.
- Storage infrastructure: Provide equipment and services for the storage and transportation of crude oil and refined products.
- LNG/FLNG: Support the growth in liquefied natural gas (LNG) and floating liquefied natural gas (FLNG) projects.
Downstream opportunities
- Refining: Invest in or own refineries and petrochemical plants.
- Distribution networks: Establish and operate retail distribution networks, such as gas stations.
- Gas-based projects: Support industrial projects that utilize natural gas, such as fertilizer or urea plants.
Read: Oil and Gas Consultancy Service Firm
Emerging and supporting opportunities
- Clean energy: Invest in gas-based clean cooking solutions and other renewable energy initiatives like solar power.
- Carbon capture and storage (CCS): Explore opportunities in CCS technologies to support decarbonization efforts.
- Local service companies: Invest in women- and youth-led local service companies that support the oil and gas sector.
- Training and skills development: Establish training centers to equip individuals with skills needed in the oil and gas industry.
Important considerations
- Regulatory framework: Familiarize yourself with the Petroleum Industry Act (PIA) 2021 and regulatory reforms aimed at streamlining approvals.
- Local content: Be aware of local content requirements that mandate the involvement of Nigerian personnel and companies.
- Partnerships: Consider forming joint ventures with Nigerian partners to navigate the market and finance capital-intensive projects.
- Environmental compliance: Ensure all operations meet environmental regulations and complete Environmental Impact Assessments (EIAs).
Textiles and Apparel:
- Revival of the Industry: The Nigerian government is actively working to revive the textile and apparel sector, which is receiving significant investment and development plans.
- Local Production: Opportunities exist in local cotton, textile, and garment production to reduce the country’s $4 billion annual expenditure on imported clothing.
New companies have been storming Nigeria’s business market like race cars in a drifting to a rally track.
The central ideology behind this is that ever since Nigeria had hit rock bottom in 2016 due to their unprecedented share of industrial tragedies, the government has been working towards ensuring stealthy recovery of the economy. Thus since the economy is in the improving stages and the government pumping in investments towards infrastructure, most business entities sought this to be an opportune moment to start a business in Nigeria eyeing the factor that market penetration will also be simplified.
Contact us for Start-up Business in Nigeria
Why is Nigeria a Healthy Investment for Foreigners?
1. Supportive Legal Structure
A new Repeal Companies and Allied Matters Act signed into law 2020 has strengthened easy way of doing business and business formation for foreign investors.
This document is a proclamation that contains several relevant provisions in the context of Nigerian company law. The newly passed act includes necessary legal amendments that simplify the entry and exit for foreign national investors in to and fro from the Nigerian business market. Therefore, investors may not worry about company incorporation procedures and market penetration and in any case, company revaluation and wrap up procedures.
Read: Business Registration/ Entity Formation Services
2. Newly Emerging Sectors
Nigeria has a history of being defined as a Oil and Gas dominated economy, having the second largest crued oil reserve within Africa and about 7th in the world. But very recently, new sectors of business have been on the rise with the consumer market happily embracing the emerging companies that are simplifying lifestyle through the diverse range of products and services. The newly emerging businesses that are elevating the corporate landscape by catering to the vast consumer needs in Nigeria are –
- E-commerce
- Oil and Gas
- Electronics retail
- Construction Infrastructure Development
- Construction material retail
- Packaged Fruit Beverage
- Confectionaries
- Poultry Farming
- Telecommunication services
3. Ease of Networking
The market has developed into an ecosystem of businesses cohesively networking and partnering with each other to ensure coalesced industrial growth. This development has significantly impacted the habit of networking for many entities across various sectors of business. Establishing the foundation of trust for partnerships, joint ventures and bulk investments in new and emerging start-up firms. The networking facilities have become a mitigating factor for foreign entities to enter and socialise with various firms and actively grow towards a versatile developing economy.
4. Incentives for Foreign Nationals
The government provides for multiple incentives for Foreign National companies and business persons to facilitate their operations in Nigeria for a short term as well as a long term with specific legislative incentives –
- Quick procedure for business incorporation
- Flexible immigration and business permit provision
- A structured legal process for repatriation of Capital and Interest
- Except for a few outlined core businesses that significantly involve the government, foreign nationals can own 100% of the shares of their respective limited liability companies
Read: Why & Best Sector To Invest in Nigeria
5. Low Tax Rate
Nigeria is still one of low tax country in the world. Value Added Tax is at 7.5%, Company Income Tax rate at 30% on your profit and subject to the available exceptions.
Many businesses enjoy the low tax rate in Nigeria with many other incentives.
6. Vast Profitable Sectors
Nigeria heavily relies on external trade to sustain its domestic economy through importation of raw materials and equipment, machinery used by manufacturers and for the exportation of its crude oil and agricultural and manufactured products.
Manufacturing sector is one of the high profitable area to invest as a foreigner. Joint venture with Nigerian citizen could be one of the best means of starting Manufacturing business in Nigeria.
7. Deep Sea Transportation
Nigeria is one of the countries that has good and deep-sea transport system for import and export of goods and services. The essentials of a reliable and cheap means of transportation which maritime transport in Nigeria offers does not only make the landing costs of these cargoes lower but makes it possible for large quantity of tonnage to be carried over long distance and landed in Nigeria thereby reducing the cost of the imported and manufactured goods since transportation cost is one of the variable costs of production.
Business Registration as a Foreigners in Nigeria
- Decide a company name after which you must check for the availability of the name within the register of the Corporate Affairs Commission (CAC).
- The next step includes filling up of the form CAC 1.1 which entitles the business owner to provide information about the internal details of the company such as – the status of authorized share capital and details of the directors and the shareholders.
- Create the Memorandum of Association (MOA) and Articles of Association (AOA), inclusive of the following – company objectives, shares issued to each of the directors. This document must be duly signed by a witness, which can also be the company secretary who is the legal representative of the company.
- Payment of the requisite amount or initial amount must be made to the CAC as registration fee and stamp duty based on the type of company/business entity the volume of your share capital.
- The form CAC 1.1 and the MOA as well as the AOA must be duly stamped signed by the directors, shareholders, witnesses and authorized CAC agents.
The procedure for analysis of legitimacy and official examination of the documents is a comprehensive one; therefore, it may consume time up to 3 days. Post verification, the CAC will send a notification along with the company’s RC number. On receiving the confirmation, owners can start operating their business in Nigeria; however, they are still obligated to register for paying taxes.
Permits and Licenses
There are some businesses that may requires some other proficiency permit or licenses before a foreigner or even indegine must obtain before starting a Business in Nigeria.
For example, a foreigner going into oil and gas business sector will require a relevant NUPRC (DPR) Permit, Local content registration. Businesses in Food and Drugs will require NAFDAC approval.
Let us assist you in the process of company incorporation and post incorporation services. Regulatory Compliances and local partner service. With our network and expertise, we can get your business up and running with all the necessary permits and registration that will otherwise take an incremental amount of time for individual business owners.
Contact us to know more advantages you stand to gain when you use our service to facilitate your business setup in Nigeria .
Contact us for Support services.
WhatsApp: +234 811 611 2326
Call: +234 8033 185 898
Email: contact@aziza.com.ng