NigerianInvestments.com

Business Investments in Nigeria

Nigeria’s high level of freedom and abolition of restrictions on foreign ownership of business and free repatriation of foreign investment capital and profits, huge consumer market potential, rich energy resources and abundant human resources have made Nigeria one of the countries with highest profit yielding and investment returns  in the world.

Trading:

Nigeria has more than 600,000 registered Limited liability companies and over 1.5 Million registered business names. The people are very enterprising and trading is their major business activity. The host of Nigerian “business men and women” are unregistered traders  owing their own minute businesses and referred to as “petty” traders, selling all forms of commodities from fruits to provisions and clothes etc.

The import tariffs in Nigeria are  quite varied, ranging from 0% for vacuum pumps to 50% for tobacco products.

A lot of traders trade in imported goods, some of which are imported very cheaply from South East Asia and the Far East. The importation of some goods are banned for commercial purposes, but can be imported for personal use, whilst the importation of certain goods are absolutely prohibited. (Click for Prohibited items). Link Customs and Excise

As competition is quite fierce in this area, Europe and the America are losing ground on the importation of goods into Nigeria to the South East Asian Countries and China whose cost of the production cost is extremely low and allows for better trading margins.

Setting Up Business In Nigeria

Setting up business in Nigeria is quite easy and the Government has recently undertaken reforms to streamline the registration of business by Nigerians and Foreigners. The World Bank has rated Nigeria as the………position in case of setting up business in Nigeria (April 2006) but this has been overtaken by events.

In Nigeria we can register Three different types of Companies for trading.

1. Click here for the procedure and Cost of Registration of Business Names.
2. Click here for the procedure and Cost of Registration of Private Limited Liability Companies
3. Click here for the procedure and Cost of Registration of Public Limited Liability Companies.

Tax Regime

The Tax Regime in Nigeria is quite investor friendly. The Government has over the years introduced several incentives (click for Investment Incentives in Nigeria) to investors in various sectors of the economy.

Foreign Exchange Regime

The Foreign Exchange regime is regulated by the Foreign Exchange monitoring and Miscellaneous Provisions Act (FEMMP Act)

The FEMMP Act abolished the regime of exchange controls, especially for capital importation and repatriation. Under the new Act, foreign investors can know bring in investment capital by wire transfer through bankers, which will issue the necessary certificate of capital importation, without seeking any approval from Government. Foreign investors may also repatriate dividends/profit arising from their investment in Nigeria.
The Act also permits the repatriation of capital in the event of equity transfer or business liquidation. What is necessary in the event of profit or capital repatriation is proof of capital importation upon the evidence of a duly issued certificate of capital importation.
The FEMMP Act does not, however, authorise unrestrained trading in foreign exchange by unauthorised persons. Thus only authorised dealers (banks and registered bureau de change) can trade in foreign exchange.
Foreign investors may also contribute equity in Nigerian companies through the provision of physical assets such as machines and equipment. Such investors are also entitled to a certificate of capital importation reflecting the value of the physical assets.

Labour laws:

Labour laws in Nigeria are quite simple and 2 tiered. The first tier is the law affecting public servants whose employment is guided by the Government Civil Service Rules, and private employment which is guided by case law. In the private sector, the terms of employment are usually contained in the letter of appointment and damages for wrongful termination is usually limited to those terms as contained in the employment letter. The employment law in the private sector is skewed in favour of the employer. In Unionised Companies the Employers and Employees usually have what is called the Employment Handbook which guides their employment relationships. The handbook contains all the terms of employment. A company with 50 or more employees can become unionised.

Overview Of Insurance Sector In Nigeria
For an overview of the Nigerian Insurance Sector please click here