Investment Procedure

  1. Investment
  2. Procedure

Nigeria Investment Procedure


The NIPC issues guidelines and procedures, which specify priority areas for investments and prescribed incentives and benefits, which are in conformity with Government policy. 

Mandatory requirements

All businesses in Nigeria must be registered with the Corporate Affairs Commission before going formally into operation. Registration can take various forms as follows, depending on the type of business:

  • Private Limited Liability Company (Ltd)
  • Public Limited Company (PLC)
  • Unlimited Company
  • Company Limited by Guarantee
  • Subsidiary or Branch of a foreign company
  • Partnership or Joint Venture
  • Sole Proprietorship
  • Incorporated Trustees (religious, charitable, philanthropic or cultural)
  • Representative Office (in special cases)

A minimum share capital of Ten Thousand Naira (N10 000) is required to set up a private company (Limited Liability). For a Public Company (PLC), the required minimum share capital is five hundred thousand naira, (500,000 Naira). A minimum subscription of 25% of the authorised capital is also required at the point of incorporation.

Company Registration Process

Company Registration process has been streamlined and simplified to enhance efficiency and rapidity, with the establishment of the One-Stop Investment Centre (OSIC), located in the premises of the Nigerian Investment Promotion Commission (NIPC). Through the services of OSIC, companies can now be registered in a matter of days. However, companies which so wish can engage the services of a legal counsel to perform the registration formalities, although this may attract a substantial fee. The following are the main steps in the process of company registration:

  • Prepare the Memorandum and Articles of Association of the proposed company.
  • Conduct at the Corporate Affairs Commission availability search on the proposed name of the company; once the company name is approved, a set of incorporation forms should be purchased and filled; the registration of business name can be conducted without the assistance of a legal practitioner and attracts a fee of 10,000 Naira (Ten Thousand Naira).
  • Submit appropriate documents to the Federal Inland Revenue Service for payment of stamp duties and stamping
  • Submit the completed and stamped documents, together with the corresponding permits, to the CAC for verification and final approval
  • The Certificate of Incorporation is then issued, with the accompanying Certified True Copies of relevant documents, to the investor. All post-registration processes are done at the Head Office of the Corporate Affairs Commission (CAC) where all files are kept in safe custody and data entered on the CAC records.

Incorporating and operating a foreign company

Foreign companies wishing to establish and operate in Nigeria must accomplish required formalities for the local incorporation of the Nigerian branch or subsidiary, or autonomous business entity. Prior registration must be done before embarking on any business activity.

An investor may, however, give power of attorney to a solicitor for a limited period of time during which incorporation is being processed. This arrangement would then be indicated in the relevant incorporation documents, specifying that the solicitor, whose name appears therein, is merely acting as an “Agent” or “Principal”. The appointed solicitor ceases to function in the specified capacity upon the completion of the registration formalities.

The locally incorporated company must then register with the Nigerian Investment Promotion Commission (NIPC) before commencing formal operations. It may also apply to NIPC for other investment approvals (expatriate quota, etc.) and incentives ((Pioneer Status, etc.). 


Companies income tax rate is 30%. There is an additional education tax of 2% on the income of companies. Withholding tax of 5% is chargeable on unearned income. For foreign investors, the 10% withholding tax on dividends is the final tax on dividends. The top personal income tax rate is 25%. Value added tax (VAT) is chargeable on goods and services at 5%. The Capital Gains Tax rate is 10% but shares in companies are exempt from capital gains tax. This is a very significant tax relief for investors. Stamp duty is chargeable on various documents at various flat and ad valorem rates, depending on the nature of the instrument, up to a maximum of 2% of the value involved. There are Pay-As-You-Earn income tax regulations, and various social insurance-type contributions are compulsory.

Exemption from Incorporation

Where applicable, exemption from local incorporation may be granted in accordance with Section 56 of the Companies and Allied Matters Act. Application to this effect should be addressed to the National Council of Ministers, through the Secretary to the Government of the Federation (SGF).

The National Council of Ministers eventually grants the exemption in the terms it deems fit. Below are the concerned categories of businesses:

  • Foreign Companies which are in Nigeria for the execution of a specific individual loan project on behalf of a donor country or an international organisation
  • Foreign government-owned companies engaged solely in export promotion activities;
  • Engineering consultants and technical experts on any individual specialist project under contract with any of the governments of the Federation or any of their agencies or with any other body or person, where such contract has been approved by the government.

Corporate Affairs Commission (CAC)

The Corporate Affairs Commission (CAC) was established by the Companies and Allied Matters Act (1990) as an autonomous body to regulate the formation and management of companies in Nigeria. The Commission dispenses a wide range of services before, during and after incorporation and registration of business enterprises. It administers the Companies and Allied Matters Act promulgated in 1990 and commonly called the “Companies Act”. It is headed by a Registrar General/ Chief Executive Officer. Among the functions and services offered by the Corporate Affairs Commission Headquarters are:

  • Registration of business name and incorporation of companies;
  • Registration of Incorporated Trustees;
  • Same Day Incorporation Services, whereby, under certain conditions, companies can be registered within one day;
  • Issuance of True Certified Copies of filed company documents;
  • Registration of share capital increases, mortgages, etc.;
  • Processing the statutory filings of Annual Returns, increase, changes in the memo and articles, addresses, etc.
  • Management and winding- up of companies.

The Corporate Affairs Commission has branch offices in all the 36 states of the Federation. It enjoys accreditation for ISO 9001 for its services.

Representative Offices

A foreign company may set up representative office in Nigeria. However, such an office can only serve as a promotional and liaison office and its local expenses have to be covered by the foreign company. It cannot engage in business activities or conclude contracts or open or negotiate any letters of credit.

Legislation on investment

Two principal laws govern investment in Nigeria, with emphasis on foreign investment:

  • The Nigerian Investment Promotion Act N° 16 of 1995;
  • The Foreign Exchange (Monitoring and Miscellaneous Provisions) Act N°17 of 1995.

The functions of the Nigerian Investment Promotion Commission (NIPC), as stipulated by the NIPC Act 16, 1995, are wide-ranging and include coordinating, monitoring, encouraging and providing necessary assistance to and guidance for the establishment and operation of businesses in Nigeria. The NIPC is also to promote investment in and outside Nigeria through effective means. The highlights of the above- mentioned Acts (N°16 and N° 17 of 1995) with regards to investment are as follows:

  • A foreigner may invest and participate in the operation of any enterprise in Nigeria;
  • An enterprise in which foreign participation is permitted shall, after its incorporation, be registered with the NIPC;
  • A foreign enterprise may buy shares of any Nigerian enterprise in any convertible currency;
  • A foreign investor in a registered enterprise is guaranteed unconditional transferability of funds through an authorised dealer, in any convertible currency, be it: – dividends or profit (net of taxes) attributable to the investment; – payments in respect of loan servicing, where a foreign loan has been obtained; – proceeds (net of taxes and other obligations) in the event of sale or liquidation of enterprise or any interest attributable to the investment; – the entire capital can be transferred should the investor decide to relocate elsewhere.

Investment Protection

The legislation on investment also provides solid assurance regarding the protection of investment.

It guards against nationalisation or expropriation of an enterprise by the government and the compulsory dispossession of an investor of his/her interest in the capital of an enterprise, whether wholly or in part.

It guards against the acquisition of an enterprise by the government unless such an acquisition is in the best interest of a public purpose, in which case, adequate compensation must be paid promptly, with authorisation for full repatriation of the proceeds in convertible currency, where applicable. The law also gives the investor the right of access to the courts for determination of his/her interest or right and the compensation to which he/she is entitled.

Investment Promotion and Protection Agreements

Countries willing to invest in Nigeria may choose to enter into bilateral Investment Promotion and Protection Agreement (IPPA) with the Nigerian government.

Deregulation of Equity Structure in Nigerian Enterprises

The Nigerian Investment Promotion Commission (NIPC) Act N° 16 of 1995 has effectively abolished any restrictions in respect of the limits of foreign shareholding in an enterprise registered in Nigeria.


However, certain categories of enterprises remain subject to authorisation for non-Nigerians:

  • Production of arms and ammunition;
  • Production of and dealing in narcotics and psychotropic substances;
  • Manufacture of military and paramilitary wears and accouterments;
  • Participating in coastal and inland shipping.


Nigeria Export Processing Zones 

The Nigeria Export Processing Zones Authority was set up under the Nigeria Export Processing Zones Decree 63 of 1992.

The Authority has the mandate to grant all requisite permits and approvals for operators within the zones, to the exclusion of other government bodies and agencies.


Investment Procedures Within the Nigeria Export Processing Zones (EPZ)

  1. Any company, person or group of persons wishing to carry out approved activity within a zone shall apply to the Nigerian Export Processing Zones Authority (NEPZA) using the prescribed forms and shall submit such documents and information in support of the applications. The forms shall specify the application fees and such other details as the Authority may stipulate from time to time. A feasibility study in respect of the investment project, which the applicant wishes to undertake in the zone, shall be attached as an annex to the application and shall contain the following among others:
    • Project description;
    • Market survey;
    • Funding proposals;
    • Financial projections;
    • Environmental impact statement and control measures.
  2. Application to undertake approved activity in the zone duly received, shall be considered by the Authority within 30 days of receipt and the Authority shall notify the applicant in writing of its decisions to grant the said approval or otherwise. The approval shall be subject to such terms and conditions as may be imposed by the Authority.
  3. If the application is approved the investor may proceed to carry out the following:
    1. Apply for company registration
    2. If outright purchase of factory building is desired.
      • Payment of 10% deposit of the selling price of the standard factory building within 3 months of approval;
      • Payment of the balance 90%, 5 month after;
    3. Renting of factory building
      • Down payment of one-year rent required not exceeding 3 months after signing the rental contract. Thereafter, rental charges shall be paid in the first quarter of every year.
    4. Leasing the standard factory
      • Payment of 40% lease value on approval;
      • Payment of 30% at the end of the 5th year;
      • Payment of 30% balance at the end of the 10th year.
    5. Leasing of serviced plots
      • Down payment of 40% on completion of factory building;
      • 30% at the end of the 5th year;
      • 30% at the end of the 10th year.

    Construction must be completed within a period of one year, which can be extended for another 6 months. A plan of the building shall be submitted to the Authority for approval. The land lease contract shall be signed within 2 months after allocation of land. The area occupied by such building shall be between 60%-70% of the leased land and construction shall start within 3 months after signing the lease contract.

  4. With condition(s) in (iii) fulfilled, the investor may proceed to carry out the following:

    Remittance of Investment Capital through banks in the zone and notify the Authority on arrival.

  5. When the factory building is ready, investor(s) may bring in machinery for installation and workers employed. Therefore, the Authority shall be required to carry out pre-inspection, and if found satisfactory, a certificate to commence production will be issued.
  6. Companies intending to sell the permitted 25% of their total production in the domestic market will be required to notify the Authority for necessary documentation and payment of appropriate levies and charges as applicable.
  7. The Company shall apply to the Authority for assessment of invested capital for later repatriation purposes. This is applicable to companies which are 100% foreign owned and those with part foreign equity participation only.



  1. Industries must be guaranteed to be environmentally friendly.
  2. At lease 75% of total products to be exported.
  3. Maximum of 25% of products can be exported to the customs territory on payment of appropriate levies and duties.
  4. Minimum investment capital outlay is 500,000 US Dollars or its Naira equivalent. 


Types of Industries Permissible in Nigeria Export Processing Zones

  • – Electrical and Electronic Products
  • – Leather Products
  • – Plastic Products
  • – Petroleum Products
  • – Rubber Products
  • – Cosmetics
  • – Garments
  • – Chemical Products
  • – Metal Products
  • – Educational Materials and Equipment
  • – Communication Equipment and Materials
  • – Sports Equipment and Materials
  • – Machinery
  • – Handicraft
  • – Optical Instruments and Appliances
  • – Medical Kits and Instruments
  • – Biscuits and Confectioneries
  • – Printed Materials, Office Equipment and Appliances
  • – Paper Materials-
  • – Food Processing
  • – Pharmaceutical Products 


Procedure to Set Up Free Trade Zones


    • Complete an application form. This can be downloaded online, obtained from the Free Zone Administration or from NEPZA HQ in Abuja.
    • Submit a completed application form to the Zone Administration or NEPZA Office along with a Project Plan/Feasibility Study. Applications are reviewed and either approved or returned with observations within five (5) working days.
    • Upon approval, an Operating License (OPL) will be issued by the Free Zone Administration. This licence constitutes registration and no further registration is required with the Corporate Affairs Commission (CAC). At this point, the Free Zone Administration will discuss site location and assign a space to the business.
    • Remit investment capital through a bank located in the zone which will issue a Certificate of Capital Importation.
    • Prepare building or warehouse space. Investors constructing their own buildings must submit four (4) copies of full architectural drawings for approval by Zone Management according to established building codes. Built-up spaces should not exceed 70% of the leased land, and construction should start within three (3) months after execution of agreement.
    • Move in and operate. Government has designed the process to be as streamlined and user friendly as possible. Some companies may need to obtain permission for their foreign employees through the immigration desk offices in the free zones.

Interested individuals or organisations may also set up a free zone following the procedure below:

    • Payment of US$1,000.00 or its Naira-equivalent to NEPZA as application fee
    • Submission of application letter indicating interest to establish a zone, and relevant documents (feasibility study, land title and survey documents, EIA report etc.)
    • Inspection of proposed site by NEPZA Officials
    • Recommendation for approval will be passed to the Minister of Industry, Trade and Investment by NEPZA.
    • Recommendation will be passed to the President by Minister for final approval.
    • Approval or comments from Presidency will be communicated back to the investor by NEPZA
    • Issuance of Free Zone Declaration License on payment of licensing and operating fees.


Operating Licenses

Certain enterprises require approvals and/or licences to operate whether they are owned by Nigerians or not. Examples of the sectors where licences are needed are banking where a

  • Central Bank of Nigeria licence is needed,
  • Insurance where a licence from the National Insurance Commission is required,
  • The oil sector where Department of Petroleum Resources licences are needed and,
  • The telecommunications sector where licences from the Nigerian Communications Commission are needed.

The detailed regulations identifying the various licences available and stating what is required to obtain each of them are numerous. It is therefore important to check with the relevant body.