Economic & Business Laws — Nigeria

Economic and Business Laws for Immigrants to Nigeria

*Note: Nigerian regulations change periodically. Always verify current requirements with the Nigeria Immigration Service (NIS), Nigerian Investment Promotion Commission (NIPC), Corporate Affairs Commission (CAC), and a licensed Nigerian attorney before making decisions.*

Right to Work by Visa Type

Temporary Work Permit (TWP)

• For short-term, specific assignments (installation, repairs, consulting) lasting under 90 days
• Employer/inviting company must apply through NIS
• Does not permit general employment—strictly tied to the stated purpose

Subject to Regularization (STR) Visa

• Entry visa for intending expatriate employees
• Must be converted to a residence permit within 90 days of arrival
• Employer typically handles the conversion process

Combined Expatriate Residence Permit and Aliens Card (CERPAC)

• The primary work/residence authorization for expatriates
• Valid for 1-2 years, renewable
• Tied to a specific employer and job role (Expatriate Quota position)
• Cost: Historically ₦1,000-₦2,000 for processing, but total costs including agent fees can run $200-$500+
• Cannot freely switch employers—new employer must apply for a fresh quota/permit

Expatriate Quota System

• Companies must obtain government approval for each expatriate position before hiring
• Quota positions are categorized as "permanent until reviewed" or fixed-term
• Companies must justify why the role cannot be filled by a Nigerian (with limited exceptions for specialized skills)
• Nigerian Content Act imposes local employment quotas in oil/gas sector specifically

Key Restriction

• Business/tourist visas do NOT permit employment or business operation—working on these visas is illegal and can result in deportation

Starting a Business as a Foreigner

Minimum Share Capital Requirement

• Companies with foreign participation must have minimum share capital of ₦100 million (~$65,000-$70,000 depending on exchange rate)
• This is significantly higher than the ₦100,000 minimum for wholly Nigerian-owned companies

Registration Process

• Corporate Affairs Commission (CAC) registration of the company
• NIPC registration (mandatory for companies with foreign participation)
• Business Permit from the Ministry of Interior
• Expatriate Quota approval if employing foreign staff
• Tax registration with Federal Inland Revenue Service (FIRS)
• Sector-specific licenses (CBN for banking, NCC for telecoms, etc.)

Structural Requirements

• Foreign investors typically must incorporate a Nigerian limited liability company—cannot operate as a sole proprietorship
• A local Nigerian director is often practically necessary though not always legally mandated
• Registered office address in Nigeria required

One-Stop Investment Centre (OSIC)

• Operated by NIPC to streamline registration for foreign investors
• Consolidates approvals from multiple agencies

Foreign Investment Restrictions

NIPC Act (1995) - General Framework

• Allows 100% foreign ownership in most sectors
• Guarantees against expropriation without fair compensation
• Guarantees free transfer of profits, dividends, and capital (subject to CBN documentation via Certificate of Capital Importation)

Restricted/Prohibited Sectors

• Negative List includes:
• Production of arms and ammunition
• Production of narcotics
• Currency printing/minting
• Production of military apparel

Sector-Specific Foreign Ownership Caps

• Oil & Gas: Nigerian Content Act requires local participation; specific indigenous company incentives
• Broadcasting: Foreign ownership capped at 20% under NBC regulations
• Maritime/Cabotage: Coastal shipping largely reserved for Nigerian-owned vessels (Cabotage Act)
• Banking: Foreign banks can operate but face CBN capital and licensing requirements
• Insurance: NAICOM sets capital requirements affecting foreign entrants

Certificate of Capital Importation (CCI)

• Essential document for foreign investors bringing capital into Nigeria
• Issued by authorized banks on behalf of CBN
• Required for future repatriation of capital and profits
• Must be obtained within 24 hours of fund inflow (in practice, timelines vary)

Property Ownership Rights for Non-Citizens

Land Use Act (1978) - Foundational Restriction

• All land is technically owned by state governments, held in trust for the people
• Individuals (Nigerian or foreign) only hold rights of occupancy, not outright freehold ownership
• This applies equally to citizens and non-citizens in terms of underlying tenure structure

Foreigner-Specific Rules

• No blanket prohibition on foreigners owning property, but:
• Foreign individuals typically cannot hold land directly in personal capacity in most states without special governor's consent
• Common workaround: Foreigners incorporate a Nigerian company (even wholly foreign-owned) to hold property
• Some states (particularly Lagos) are more accommodating to foreign property transactions through corporate vehicles

Practical Path for Foreign Property Ownership

• Incorporate Nigerian company (CAC registration)
• Company acquires rights of occupancy/leasehold
• Governor's consent required for transfers (Section 22, Land Use Act)—this is a significant bottleneck causing delays and requiring "consent fees"

Lease Terms

• Foreign entities/individuals often granted leasehold interests (commonly up to 99 years in practice, though shorter terms are common)
• Renewal not automatically guaranteed—subject to state discretion

Banking Access for New Immigrants

Account Opening Requirements

• Bank Verification Number (BVN) mandatory for all account holders, including foreigners
• Requires:
• Valid international passport with visa/residence permit
• CERPAC (for those on work permits)
• Proof of address in Nigeria (utility bill, tenancy agreement)
• Reference from existing account holder (sometimes required)
• Passport photographs

Account Types

• Domiciliary accounts: Allow holding foreign currency (USD, GBP, EUR)—useful for expatriates receiving foreign salary
• Naira accounts: Standard local currency accounts

Practical Challenges

• Some banks are stricter with non-residents or those on short-term visas
• CBN's periodic forex restrictions have affected ease of moving money in/out
• Documentation requirements can vary significantly by bank—shopping around is common practice

Money Transfer/Remittance

• International Money Transfer Operators (IMTOs) regulated by CBN
• Diaspora remittances have specific inflow channels favored by CBN policy

Labor Law Protections for Immigrant Workers

Applicable Legal Framework

• Nigerian Labour Act (1974, as amended) applies to most employees regardless of nationality, with some exceptions for senior management
• Employees' Compensation Act (2010) covers workplace injury for all employees including expatriates

Key Protections

• Written contracts: Required within 3 months of employment start
• Minimum wage: Currently ₦70,000/month (as of 2024 increase)—though this primarily targets Nigerian workers; expatriate salaries typically far exceed this
• Working hours: No universal statutory maximum, but standard practice is 40 hours/week; overtime provisions vary by contract
• Termination: Requires notice periods based on length of service (1 week to 1 month typically, longer for senior staff)
• Leave entitlements: Minimum 6 working days annual leave after 12 months (in practice, most professional contracts offer more)

Expatriate-Specific Considerations

• Employment tied to work permit: Job loss typically means the CERPAC becomes invalid, requiring departure or new sponsorship
• No automatic right to remain if employment ends—unlike some countries' protections for long-term workers
• Tax obligations: Expatriates working in Nigeria for more than 183 days in a 12-month period become tax resident, subject to Nigerian personal income tax (PAYE) on Nigerian-source income
• Pension: Contributory Pension Scheme technically applies to employees including some expatriates, though enforcement/applicability for short-term expatriates varies

Dispute Resolution

• National Industrial Court has jurisdiction over labor disputes, including those involving foreign workers
• Nigeria has ratified several ILO conventions, but enforcement mechanisms can be inconsistent

Key Practical Recommendations

• Engage a Nigerian corporate/immigration lawyer early—the interplay between CAC, NIPC, NIS, and CBN requirements is complex
• Budget for professional/agent fees—many processes are technically simple but practically require intermediaries
• Verify current exchange rates and thresholds—the ₦100 million minimum capital and other Naira-denominated figures fluctuate significantly against USD given currency volatility
• Confirm current expatriate quota policies with NIS, as government has periodically tightened or adjusted these based on domestic employment priorities
• For property, always verify state-specific requirements—Lagos, Abuja (FCT), and other states may have different practical procedures despite the uniform Land Use Act

More about immigrating to Nigeria