Foreigners guide to start business in Nigeria is a post that will guide you on how to start a business/ company in Nigeria, the requirements, ideas, procedures and provide some supports that you may need as a foreigner. Nigeria business environment is a fertile ground for foreigners investment. There are many opportunities and areas a foreigner investor will have very high Return on Investment. For foreigner investment and areas for business join venture/ partnership, contact Aziza M, E & S Limited.
Nigeria has developed into a holistic corporate coalition of different businesses running their operations and growing inside the Nigerian market, therefore, structuring a diverse economy. These businesses hold an intangible intrinsic value towards the development of industries in Nigeria, creating corporate congestion, thus, influencing and motivating new and aspiring entrepreneurs to set up business in Nigeria.
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.
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.
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 –
- Oil and Gas
- Electronics retail
- Construction Infrastructure Development
- Construction material retail
- Packaged Fruit Beverage
- 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
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 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 .