Doing business in Nigeria

Nigerian law is based on English common law, supplemented by federal and state statutes. Companies are incorporated with the Corporate Affairs Commission under the Companies and Allied Matters Act 2020, and foreign-owned businesses also deal with the Nigerian Investment Promotion Commission. The Nigeria Revenue Service (formerly the Federal Inland Revenue Service) administers company taxes and VAT, the Central Bank of Nigeria regulates banking and foreign exchange, the Federal Competition and Consumer Protection Commission reviews mergers, and the Nigeria Data Protection Commission enforces data protection.

Key facts

Companies income tax

30%; 0% for small companies

Development levy

4% of assessable profit

VAT

7.5% standard rate

Foreign ownership

Up to 100%, except a short negative list

Main entity form

Private company; one person can form it

Repatriation

Guaranteed through authorised dealers (NIPC Act)

Data protection

Nigeria Data Protection Act 2023; NDPC

New York Convention

Party since 1970, with reciprocity and commercial reservations

Foreign investors usually incorporate a private company with CAC; one person can form one, and most sectors allow full foreign ownership. Companies with foreign shareholders face a higher minimum share capital, must disclose persons with significant control and must obtain a Tax ID.

Key facts

• A single person can form a private company; the general minimum share capital is N100,000.

• CAC's checklist sets N10 million minimum share capital where there is foreign participation; confirm the current figure.

• Foreign ownership up to 100 percent is permitted outside the NIPC Act negative list, subject to sector rules.

• Anyone with 5 percent or more of shares or votes, or other significant control, must be disclosed to CAC.

• Register for a Tax ID early: it is needed for compliance and for any government contract.

Who handles this in NigeriaSetting up and running a companyLicences, permits and regulators

The 2025 tax laws keep companies income tax at 30 percent, exempt small companies and add a 4 percent development levy and a 15 percent minimum effective rate for large groups. VAT stays at 7.5 percent. Returns are due six months after year end, and related-party dealings must be at arm's length.

Key facts

• Companies income tax is 30 percent; small companies with turnover up to N100 million and assets up to N250 million pay 0 percent.

• Add the 4 percent development levy when modelling the effective rate for non-small resident companies.

• Large multinational and domestic groups face a 15 percent minimum effective tax rate.

• VAT is 7.5 percent with zero rating for non-oil exports and certain essentials.

• File the annual return within six months of year end, and price related-party transactions at arm's length.

Who handles this in NigeriaTax and structuringAccounting and annual filings

Foreign staff need an expatriate quota position, except in export processing zones. Employee income tax is administered by the state of residence. Minimum wage, pension and labour law rules were not confirmed for this guide.

Key facts

• Plan expatriate quota positions before hiring foreign staff.

• NEPZA zone enterprises are exempt from expatriate quotas.

• Payroll tax for resident employees is administered by state tax authorities, not the NRS.

Who handles this in NigeriaEmployment, payroll and immigration

The new Economic Development Tax Incentive replaces Pioneer Status for priority sectors, and free zones offer broad tax exemptions. Sector licensing was not sourced.

Key facts

• The Economic Development Tax Incentive gives a 5 percent annual credit on qualifying capital spending for five years in priority sectors.

• NEPZA zone enterprises are exempt from all tiers of tax on zone income and may be fully foreign owned.

• Oil and gas free zones offer a tax holiday and a 75 percent duty rebate on processed raw materials.

Who handles this in NigeriaLicences, permits and regulatorsTax and structuring

Foreign investors are guaranteed transferability of dividends, loan payments and sale proceeds through authorised dealers, which in practice depends on documenting inflows under Central Bank rules. CBN foreign exchange and account-opening rules were not confirmed.

Key facts

• The NIPC Act guarantees transfer abroad of dividends, loan servicing and sale proceeds through authorised dealers.

• Document capital inflows in line with CBN rules, such as Certificates of Capital Importation.

• Free repatriation of capital and profits is also guaranteed in NEPZA zones.

Who handles this in NigeriaPayments and currencyBanking and capital

Nigeria applies the ECOWAS Common External Tariff and duty-free trade within ECOWAS for qualifying goods, with targeted import duty exemptions and free zone relief.

Key facts

• Tariffs follow the ECOWAS Common External Tariff.

• Goods originating in ECOWAS states can move duty free under the Trade Liberalisation Scheme.

• Power, agricultural and mining machinery can qualify for 0 percent import duty.

• Free zone enterprises need no import or export licences but face limits on sales into the domestic market.

Who handles this in NigeriaCustoms, trade and export controls

The Nigeria Data Protection Act 2023 is enforced by the Nigeria Data Protection Commission. Transfers abroad need adequate protection or an approved transfer instrument, annual audit returns are due by 31 March, and the tax authority is introducing an electronic fiscal system.

Key facts

• The NDPA 2023 and the NDPC set the framework for processing personal data.

• Cross-border transfers need adequacy, an approved transfer instrument or another lawful basis.

• Major-importance controllers face fees of up to N10 million or 2 percent of revenue, whichever is greater.

• File compliance audit returns through a licensed compliance organisation before 31 March.

• Expect to connect invoicing systems to the NRS Electronic Fiscal System once it is deployed.

Who handles this in NigeriaData protection and cyber

Nigeria is a PCT state. National trade mark, patent and copyright rules could not yet be checked for this guide.

Key facts

• International patent applications can enter Nigeria through the PCT.

Who handles this in NigeriaTrade marks, patents and brands

Notifiable mergers must be approved by the FCCPC before implementation, and offshore deals can be caught where the parties sell into Nigeria. Corporate capital gains are taxed at 30 percent.

Key facts

• Do not implement a notifiable merger before FCCPC approval.

• Notification depends on Nigerian turnover thresholds; confirm the current figures before signing.

• Foreign-to-foreign deals can be notifiable where the parties sell into Nigeria.

• Phase One review runs 20 business days for small mergers and up to 60 for large ones.

• Corporate capital gains on disposals are taxed at 30 percent.

Who handles this in NigeriaBuying, selling and investingTax and structuring

Only the NIPC Act guarantee against expropriation could be confirmed. Anti-bribery, AML and sanctions rules need to be checked from official sources.

Key facts

• Investments are protected against nationalisation and expropriation without fair and adequate compensation.

Who handles this in NigeriaAnti-bribery, sanctions and compliance

Nigeria is a New York Convention state with reciprocity and commercial reservations. The domestic arbitration statute and court enforcement of foreign judgments were not confirmed.

Key facts

• Foreign awards from other contracting states arising from commercial relationships are enforceable under the New York Convention.

Who handles this in NigeriaDisputes and arbitration