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Explainers - April 14, 2021

Guide to Doing Business in Nigeria

The ease of doing business in Nigeria, Africa’s largest economy, has improved greatly in the last five years. This is largely due to the Presidential Enabling Business Environment Council led by Vice-President Yemi Osinbajo which has been responsible for driving business reforms in Nigeria since 2016. According to the 2019 ease of doing business report by the World Bank, Africa’s biggest economy (Nigeria) is currently ranked 131 out of 190 countries on the ease of doing business in the 2019 report. This article provides a guide to doing in Nigeria.

Registration/Incorporation of a company

Firstly, it is pertinent to note that before a person or entity can commence business in Nigeria, such person (entity) must be recognized by Nigerian law through a formal registration of their company. Such company registration can be in any of this forms: 

  • Sole proprietorship
  • Partnership organization
  • Limited liability company
  • Limited by guarantee
  • Nonprofit NGO, or Charity

The Corporate Affairs Commission (CAC) is charged with the incorporation of companies at a prescribed fee and the procedure is as follows:

  1. Check for availability and reservation of name
  2. Submission of relevant documents for incorporation such as;
  • Approved availability and reservation of name form (CAC1.1)
  • Particulars of persons who are to be first directors
  • Return of allotments
  • Statement of authorised share capital
  • Notice of address of registered office of the company
  • Statutory declaration of compliance by a legal practitioner certifying the compliance of registration requirements.
  • Duly stamped memorandum and articles of association.
  • Professional certificates of principal partners, in the case of professional entities 
  • Copies of a valid residence permit, if the expatriate directors are residents in Nigeria.
  1. Upon payment of all allotted fees, a certificate of incorporation is issued.

A certificate of incorporation is prima facie evidence that all requirements for registration/incorporation of the company have been met and the company has been duly registered. It is important to note that the registration of a company usually does not exceed 10 days. A company may be granted an exemption if:

  1. the company is invited to Nigeria by or with the approval of the federal government to execute any specified individual project.  
  2. If it is a foreign company present in Nigeria for the execution of specific individual loan projects on behalf of a donor country or international organization. 
  3. The company is a foreign government-owned company engaged solely in export promotion activities.

Relocation to Nigeria as a foreigner

A person who intends to stay in Nigeria for a long period will require a residence permit. Such a permit allows an expatriate to live and work in Nigeria on a long-term basis and to be considered a resident, such persons must obtain employment with a company that has expatriate quota positions 

Categories of Visas

  • Visa-on-Arrival
  • Transit Visa
  • Business Visa
  • Temporary Work Permit (TWP)
  • Subject to Regularisation (STR) Visa
  • Diplomatic Visa


A foreigner with intentions to live and work in Nigeria for a long period is required to come into the country with a Subject to Regularisation (STR) Visa. The application for this visa type must be made by the employer company, to the Nigerian Embassy or Consular office in the prospective employee’s country of residence. 

The validity of the STR Visa is 90 days during which an application will be made to the Comptroller General of Immigrations (CGI) for regularisation of the employee’s stay.

Securing licensing and permits

If the business operation involves the exportation of goods, an export certificate is required before starting such a business in Nigeria. The power to issue export licenses and certificates is vested in two government agencies, namely, the Nigerian Export Promotion Council (NEPC) which issues licenses for agricultural commodities and manufactured goods, and the Federal Ministry of Solid Minerals Development.

It is important to know that some businesses require special licensing and permits before operations can begin. Companies in this category include those in:

Oil & Gas

The Oil and Gas industry is regulated by the Ministry of Petroleum Resources through the Department of Petroleum Resources (DPR). For companies to engage in oil and gas operations in Nigeria, they are required by law to register with the DPR.


A foreigner who intends to run a mining and mineral extraction or processing company in Nigeria must procure the appropriate mining titles, licenses, and permits from the (MCO).

The Ministry of Solid Minerals oversees all mining and minerals operations in Nigeria through four departments, namely, the Mines Inspectorate Departments, Mines Environmental & Compliance, Artisanal & Small-Scale Mining Department, and the Mining Cadastre Office. 

Pharmaceuticals and Foods

The National Agency for Food and Drug Administration (NAFDAC) is a Federal Government Agency charged with the regulation and control of the importation, exportation, manufacturing, advertisement, distribution, sale, and use of pharmaceuticals and food. These include cosmetics, medical devices, bottled water, drugs, food, etc. All products in this category must be registered under the regulations of NAFDAC before they can enter the business cycle.


The Central Bank of Nigeria (CBN) regulates the banking industry in Nigeria. No banking business can operate in Nigeria unless it is incorporated in Nigeria and holds a valid banking licence issued under the Banks and other Financial Institutions Act.


All telecommunication service providers are required to apply and obtain requisite licenses and permits from the Nigerian Communications Commission (NCC).


The Nigerian Civil Aviation Industry is regulated by the Nigerian Civil Aviation Authority (NCAA). The agency is charged with the registration of aircraft in Nigeria and the issuance of a certificate of registration to its owners. Foreign registered aircraft need not procure NCAA licenses to operate in Nigeria’s airspace as their operations are dependent on the bilateral agreement between Nigeria and the country the aircraft has as its principal place of business.


The Nigerian Maritime Administration and Safety Agency (NIMASA) oversees the Nigerian maritime and shipping industry. The agency is charged with issuing ships and maritime licences, with its headquarters in Lagos. Persons eligible to own a Nigerian ship include Nigerian citizens, companies and lawful partnerships, and other persons the Minister may, by regulation, adjudge as eligible to lawfully own and operate the same within the shores of Nigeria.

Guide to doing business in Nigeria

Access to Land

In Nigeria, the Land Use Act governs land acquisition and use. The law confers all land in each state of the country on the State Governor, who is entrusted to operate to the benefit of the citizens. The Governor allows private persons and corporate bodies to occupy the land for a term determined by the Governor, mostly not exceeding 99 years (Section 21 of the Land Use Act).

To date, there are restrictions and regulations regarding land acquisition and use by foreigners which limits their rights to own property in Nigeria. These limitations differ from state to state in leasehold interests and durations, granting of statutory rights, customary rights of occupancy, and more. A foreigner can only be free from these limitations if he/she becomes a citizen of Nigeria either by registration or naturalization.

Taxation & Tax Identification Number (TIN) 

As a law-abiding citizen or resident of Nigeria, you are required by law to pay your tax. To fulfil your tax obligation, you must undergo the necessary tax registration processes.

Tax Administration is enforced by the three tiers of government and each tier presides over a designated jurisdiction for tax collection. Local councils manage the local government levies, the state taxes are managed by the Internal Revenue Board and the Federal Board of Inland Revenue (FBIR) manages federal taxes through the Federal Inland Revenue Service (FIRS). 

The various tax laws and treaties ensure that the tax system works smoothly to avoid issues such as tax evasion, double taxation and all forms of tax fraud.

Tax Identification Number (TIN) refers to a unique number allocated and issued to identify individuals or companies as duly registered taxpayers in Nigeria. All registered businesses must obtain a TIN upon commencement of business because tax payments cannot be made without it. The TIN application is free, however, all requirements must be complied with.

For a company, the requirements for a TIN application include;

  • An application letter on the company’s letterhead
  • Duly completed TIN application form
  • Photocopy of certificate of incorporation 
  • Photocopies of particulars of directors form and return of allotment form.
  • Memorandum and Articles and Association
  • Evidence of address of the place of business

In the case that the business is a sole proprietorship or partnership, the applicant must provide;

  • An application letter on the company’s letterhead
  • Duly completed TIN application form
  • Photocopy of business name registration.
  • Evidence of address of the place of business

However, doing business in Nigeria is not for the faint-hearted, as several challenges may slow down productivity. These challenges are majorly infrastructural challenges such as power shortage and disruptions, bad roads; ports congestion, and corruption with government officials, and also multiple taxations by different levels of government.

EDITOR’S NOTE: This article was written by Olufikayo Owoeye. You may follow him on LinkedIn here.

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