Complex but worth it

Setting up a business in Nigeria can be complicated. But the prospect of good returns on investment can make it worthwhile.

Compared to many countries setting up a new business in Nigeria is a challenge. Globally, Nigeria stands at 116 in the ranking of 183 economies on the ease of starting a business, according to the World Bank Doing Business 2012 report. Currently it takes 36 days to create a company. On the other hand, the report shows it is easier to start a business in Nigeria than in many comparable Sub-Saharan countries and it is getting easier.

“Because of the complexity, we recommend using an experienced local partner and researching the market first,” says Abolade Kehinde, a PwC Senior Manager in Lagos. “The internet can be used but many Nigerian websites are of a low standard and not regularly updated. The best sources of background information is Nigerian newspapers, most of which have their own websites.”

Nigeria also has bilateral chambers of commerce in many countries which can provide advice to potential investors or business people and suggest valuable contacts with people who have successfully conducted business in Nigeria. There is no restriction on foreign nationals or foreign entities doing business in Nigeria provided that such business is conducted using a Nigerian company. It is possible to appoint a local attorney or other organization to act as their agent.



Everyone, including foreign companies, proposing to do business in Nigeria is required to register a company with the Corporate Affairs Commission (CAC) which is the government agency charged with registering companies, business names and incorporated trustees.

The CAC’s head office is in Abuja but it also has branch offices in some other states of the federation.

Once relevant documents have been submitted and fees paid, the company is registered and issued with a certificate of incorporation.


CAC’s website provides additional information including information on the requisite forms and filing fees. In addition, the website provides an online search service for checking company names and completing other procedures. This can be done by purchasing an e-payment card from a bank. However, this system is strictly regulated and only accredited persons have access to the search facilities.

In addition to the general incorporation requirement at the CAC, foreign investors are required to obtain a Certificate of Business Registration from the Nigerian Investment Promotion Commission (NIPC). The NIPC has a One Stop Investment Centre, through which foreign investors can incorporate their business and also obtain the Certificate of Business Registration and relevant approvals. The new company is then required to apply to the Ministry of Interior (MOI) for a business permit.

Foreign companies may also set up incorporated representative offices in Nigeria in certain circumstances. Representative offices must be registered with the CAC and can only serve as a promotional or liaison office.

Repatriation of funds

Foreigners may invest in a Nigerian company with foreign exchange brought into Nigeria through an authorized dealer (a Nigerian licensed bank) but in order to avoid foreign exchange restrictions on the repatriation of funds, the investor must obtain a “Certificate of Capital Importation” (CCI), which can be obtained from the relevant bank within 24 hours of such investment.

For more information:
Corporate Affairs Commission
Nigerian Investment Promotion Commission
Ministry of Interior (MOI)

Tax compliance

Following incorporation in Nigeria, companies are required to comply with the country’s various tax laws. Companies must register with the Federal Inland Revenue Service (FIRS) for the annual filing of tax returns. There is no specific time frame for registration but in practice a company would normally seek registration immediately after incorporation. Upon registration, the company is issued a Tax Identification Number (TIN) to use when filing its annual tax returns.

Taxable persons engaged in the supply of goods and services are required to register and charge VAT on all such supplies. A taxable person is required to register with the FIRS as soon as it commences business. If the company is to employ local or foreign staff based in Nigeria, it must register with each relevant State Internal Revenue Service in which its employees are resident for the remittance of personal income tax under the Pay-As-You-Earn (PAYE) system.

The company must also contend with various other employment-related registrations and obligations. All employers are required to register with the National Housing Fund and deduct and remit a monthly contribution of 2.5% of employees’ basic salary in to the fund. Every company with five or more employees must register under the Pension Reform Act and make mandatory contributions to a Retirement Savings Account (RSA) in favor of their employees.