RULES AND REGULATIONS OF DOING BUSINESS IN NIGERIA
LAWS GOVERNING BUSINESS OPERATION IN NIGERIA
RULES AND REGULATIONS OF DOING BUSINESS IN NIGERIA
There are various rules and regulations guiding business operation in Nigeria. If you wish to do business in Nigeria, you must first and foremost have an idea of the kind of business you want to venture into. It must be a business which the law permit.The next step is to register the business with the Corporate Affairs Commission (CAC). Conduct a search for the intended name of the business in order to have the name reserved for 60 days once approved. You may pay for business premises registration fees.
BUSINESS STRUCTURES ESTABLISHED BY THE COMPANIES AND ALLIED MATTERS ACT, 2020.
Registered Business Name
limited liability partnerships
Company Limited by Guarantee
Unlimited Company (any company may be either private or public)
,INSTITUTIONS THAT SUPERVISE AND ENFORCE COMPLIANCE WITH THE RULES AND REGULATIONS OF DOING BUSINESS IN NIGERIA
The Inland Revenue Service of the various states
Securities and Exchange Commission
The National Information Technology Development Agency and the Standards Organisation of Nigeria
The Corporate Affairs Commission
The Federal Inland Revenue Service
The National Agency for Food and Drug Administration and Control and among others.
VARIOUS LAWS THAT GOVERN THE OPERATION OF BUSINESS IN NIGERIA
Nigerian Investment Promotion Commission Act
The Companies and Allied Matters Act
Companies Income Tax Act
Employee Compensation Act
Banks and other Financial Institutions Act
Value Added Tax Act
Withholding tax Act
SOME LEGAL REQUIREMENTS FOR DOING BUSINESS IN NIGERIA
• Expatriate Quota, Tax Laws and Levies
. Combined Expatriate Residence Permit and Alien's Card (CERPAC)
• The Business Registration Procedure
• The Nigerian Investment Promotion Commission (NIPC)
. National Office for Technology Acquisition and Promotion (NOTAP)
.Environmental Impact Assessment
. Value Added Tax
.Tax Identification Number (TIN)
. Company Income Tax
. Stamp Duty
EXPATRIATE QUOTA POSITIONS
Nigeria companies that need the service of an expatriate is required by law to make an application to the Federal Ministry of Internal Affairs for Expatriate Quota positions. The company applying for an expatriate Quota must provide incontrovertible evidence to establish that no Nigerian citizen is qualified to be employed in the position. Expatriate Quota positions subject to renewal for 2-3 years or more.
COMBINED EXPATRIATE RESIDENCE PERMIT AND ALIEN’S CARD (CERPAC)
A foreigner seeking to obtain CERPAC must be employed by a company duly registered in Nigeria with the required share capital. However, CERPAC is for foreigners that wish to obtain residence permit and alien card. The card may be issued upon application and satisfaction of necessary requirements as provided by Federal Ministry of Internal Affairs. The card enables foreigners to reside in Nigeria and have right of movement.
BUSINESS REGISTRATION PROCEDURE
It is a matter of mandatory requirement that every foreign company or business name that wishes to carry on business in Nigeria must be properly registered as provided by the Law. This registration is done by the Corporate Affairs Commission (CAC) in accordance with the provisions of the Companies and Allied Matters Act, 2020.
A foreign company is permitted by Nigeria law to have a representative office. But such a representative office is in fact not allowed to
engage in any business, conclude any contract on behalf of the company. However, It can only be used
as a promotional office and would also require registration with the Corporate Affairs Commission.
NIGERIAN INVESTMENT PROMOTION COMMISSION (NIPC)
The Nigerian Investment Promotion Commission (NIPC) encourage foreign investments and serves as a regulatory agency for foreign investors operating in Nigeria. the Nigeria Government is willing to enter into an Investment Protection Agreement with foreign enterprises wishing to invest in Nigeria. This agency encourage foreign investment in Nigeria, guarantees an unrestricted transfer of funds in freely convertible currency, through an authorised dealer (a Nigerian bank). The agency requires all foreign investors to register with it before commencing any business thereto. By registration of this businesses, the agency uses same to checkmate the activities of the foreign investment to insure they don't invest illegal business in Nigeria. The agency can register a foreign interprise if satisfied with the requirements provided by the investor. However, foreign investment is another way of promoting Nigeria economy that is one of the reasons the Nigerian Investment Promotion Commission encourage registration of foreign enterprse that so wishes to invest in Nigeria.
NATIONAL OFFICE FOR TECHNOLOGY ACQUISITION AND PROMOTION (NOTAP)
The National Office for Technology Acquisition and Promotion (NOTAP) is one of the Nigeria agencies set up by the Act of 1995. NOTAP deals with the transfer of foreign technology, agreements and commercial contracts dealing with the transfer of foreign technology into Nigeria and all other related issues. By the NOTAP Act of 1995, the importation of dangerous technology in Nigeria is disallowed.
ENVIRONMENTAL IMPACT ASSESSMENT
Section 2 (1) of the Environmental Impact Assessment Act requires an assessment of public or private projects likely to have a dangerous impact on the environment. Section 2 (4) of the Act also specifies that an application shall be made in writing to the National Environmental Standards and Regulation Enforcement Agency (NESREA) before embarking on projects for their environmental assessment to determine if approval will be granted or otherwise. This is mandatory for businesses taking up development activities such as mining, creation of parks, agro-allied, and related industries.
VALUE ADDED TAX: Value added tax is charged and payable on the supply of all taxable goods and services. It is chargeable at a flat rate of 5%.
TAX IDENTIFICATION NUMBER (TIN)
It is required that every business must register as a taxpayer and get a tax identification number. Paying taxes is a major requirement of law. The tax identification number is required for the payment of taxes.
COMPANY INCOME TAX: All companies in Nigeria are required to pay income tax on all profits brought into or received in Nigeria. All companies incorporated in Nigeria are liable to pay tax on their profits.
STAMP DUTY: Stamp duty is charged on written agreements and other relevant documents to which a company is party. The tax may be fixed or based on the value of the transaction.
PREPARED BY: CHAMAN LAW FIRM TEAM
Tel: 08065553671, 08024200080