In today’s business landscape, companies are constantly seeking the right blend of local and international expertise to drive growth and innovation. For businesses operating in Nigeria, employing foreign nationals is not as straightforward as issuing a job offer and securing the foreign national’s physical presence in Nigeria. It requires navigating the country’s expatriate quota system. This regulatory framework, overseen by the Federal Ministry of Interior, serves as a critical gatekeeper, balancing the need for foreign skills with the development of local manpower. In this article, we break down what the expatriate quota is, why it matters, and how businesses can successfully obtain and manage it within the Nigerian legal context.
What is an Expatriate Quota?
An expatriate quota is a document granted by the Honorable Minister, Federal Ministry of Interior, authorizing indigenous or foreign companies to employ foreigners who are skilled or competent in areas that are either in short supply or not available locally, thereby enabling them to work and live in Nigeria.[1] The company typically processes applications on behalf of its foreign employees. The essence is to regulate foreign investment and migration into Nigeria. To be eligible, the expatriates must possess appropriate academic credentials such as a bachelor’s degree/Higher National Diploma, or recognized professional certification to show proven expertise in their field[2].
An expatriate quota is issued for three(3) years in the first instance and is renewable biennially for two consecutive terms.
Who Needs an Expatriate Quota?
Skilled or professionally qualified foreign nationals working as either employees or directors of a wholly foreign-owned company, joint venture, or indigenous company or organization registered either as a company limited by shares or guarantee, limited liability partnership, business name, limited partnership, or incorporated trustee. This will enable them to work or live in Nigeria for a specified time, subject to renewal. Also, jobs under the Critical Skill List are qualified for the expatriate quota upon proof by the employer that the position cannot be filled by a Nigerian.
It must be noted that not all professions are eligible for the grant of an expatriate quota. The exempted professions are[3]:
- those in teaching positions for nursery, primary, or secondary school, except in highly specialized subjects
- legal profession (with no exception)
- artisan position except with specialized skill (subject to confirmation by the various sectors).
Expatriates employed directly by the government are exempted from the grant of an expatriate quota[4]. Additionally, foreigners working for companies in the oil and gas industry are required to obtain a permit from the Nigerian Content Development and Monitoring Board (NCDMB) before they can be granted an expatriate quota. Additionally, those in the aviation sector are required to obtain necessary permits from the Nigerian Civil Aviation Authority (NCAA) before they can be granted an expatriate quota.
It is worth noting that for each expatriate quota position granted with an expatriate in place, there must be a Nigerian with a minimum of bachelor’s degree/Higher National Diploma to understudy the expatriate. Failure to employ a Nigerian to understudy the expatriate attracts a fine of 3 million naira for each month the position is occupied by the expatriate without a Nigerian to understudy the expatriate[5].
Requirements for expatriate quota in Nigeria
- Application letter on the Company’s letterhead;
- Certificate of Incorporation or registration of business name duly issued by the Corporate Affairs Commission;
- Memorandum and Articles of Association;
- Feasibility Report/Business Plan or Company Profile, where applicable;
- Corporate Affairs Commission’s Form CAC 2.3 & 2.5 or CAC C02 & C07 or CAC 1.1 or e-status report as applicable;
- Joint Venture Agreement for partnership business/firms between Nigerian(s) and Foreigner(s) (where applicable);
- Company’s Current Tax Clearance Certificate or individual income tax certificates for Partnership Businesses/firms;
- Evidence of acquisition of permanent operating premises, i.e., lease/tenancy agreement, C of O or R of O;
- Detailed training programme for Nigerians with proposed salaries;
- Certificate of Capital Importation along with a covering letter from the bank or with a scannable QR Code;
- Evidence of importation of equipment/machinery (with details of the value) such as Form M, Proforma invoice, shipping documents, and Clean Certificate of Inspection, Bill of Lading (where applicable);
- License/Permit/Certificate from relevant Government Agencies /department/Ministries to operate business legally in Nigeria for companies engaged in oil exploration/services, health care services, fishing, mining, engineering services, etc.;
- Evidence of work at hand, its duration, and value attached to the contract(s) if the company is engaged in building, civil engineering, construction, and other sectors;
- Evidence of capital importation or other source of funding; and
- Job description of the proposed expatriate quota position to be recruited, indicating designation, qualifications, and proposed salaries.
Requirements for Non-governmental organizations, companies limited by guarantee, and other incorporated trustees include;
- Application letter in the organization’s letterhead;
- Certificate of Incorporation of Trustees;
- Memorandum for Guidance of Applicants Companies and Allied Matters Act 1, 1990 Part C;
- Application Form for Incorporation of Trustees Enclosures ‘A, B, C & D/Form IT-01;
- Constitution of the Organisation/Body;
- Copy of Licence/Permit or Certificate to Operate (Where applicable);
- Security Clearance Report from DSS/NIA;
- Evidence of acquisition of operational premises, i.e., Tenancy Agreement, C-of-O or R-of-O, etc..
- Data pages of the International Passport of the Board of Trustees;
- Proof and sources of adequate funding to run the NGO/company limited by Guarantee (GTE)/Incorporated Trustees; and
- Where the organisation is international by definition, evidence of a Cooperation Agreement with the National Planning Commission will be required.
How long does it take to process?
After the application has been submitted, it is then forwarded to a briefing officer for appraisal. This process takes a period of 14 days from the time the application is received to when it is appraised by a briefing officer. After appraisal, the application will take another 7 days for verification and processing. Once the application is verified and processed, it will then be forwarded to the Honourable Minister for approval. In total, it takes about 56 days from the point of receipt to approval for the grant of an expatriate quota.
What is the Cost of obtaining an expatriate quota in Nigeria?
The following fee schedule applies to all entities, including incorporated trustees and companies limited by guarantee, for obtaining an expatriate quota:
- Automation fee – N100,000
- Processing fee -100,000
- Approval fee – N50,000 per slot
- Portal fee – N50,000 per slot
Please note that this fee covers the application fee alone.
Can an Expatriate Quota be Renewed?
Yes, an expatriate quota can be renewed. At the first instance, a grant of the expatriate quota is valid for a period of 3 years with a biannual renewal period of 2 consecutive times within a lifespan of 7 years. However, for companies in the oil and gas industry, approval will be for an initial period of 2 years and renewable once within a life span of 4 years. Renewals are granted upon the submission of all required documents. Failure to renew the expatriate quota within the stipulated time attracts a fine of 3 million naira.
Requirements for renewing the Expatriate Quota in Nigeria
The requirements for renewal depends on the type of company. For all other companies except incorporated trustee and companies limited by guarantee, the requirements for renewal is as follow:
- Application letter in Company’s letter head;
- Corporate Tax Clearance Certificate duly issued by Federal Inland Revenue Service;
- Current Tax Clearance Certificate of the expatriates or individual income tax certificates for Partnership Businesses/firms;
- Expatriate Quota Returns duly stamped by NIS for the three months preceding the date of application;
- Detailed Training Programme for Nigerian understudies;
- List of Nigerians understudying expatriate on prescribed format showing date employed, qualification, National Identification Number (NIN)/Tax Identification Number (TIN), phone number and e-mail addresses;
- List of Nigerian Senior/Management Staff showing names, designation, qualifications, National Identification Number (NIN)/Tax Identification Number (TIN), phone number and e-mail addresses; Current Certified Audited Report/Statement of Affairs and Acknowledgement letter from CAC.
Renewal requirements for incorporated trustees and companies limited by guarantee;
- Application letter on Organization’s letter head;
- Corporate Affairs Commissions Certificate of Incorporation of Trustees;
- Memorandum for Guidance of Applicants Companies and Allied Matters Act 1, 1990 Part C;
- Application Form for Incorporation of Trustees Enclosures ‘A, B, C & D/Form IT-01;
- Constitution of the Organisation/Body;
- Copy of Licence/Permit or Certificate to Operate (Where applicable);
- Security Clearance Report from DSS/NIA;
- Evidence of acquisition of operational premises i.e. Tenancy Agreement, C-of-O or R-of-O etc;
- Data pages of International Passport of Board of Trustees
- Proof and sources of adequate funding to run the NGO/company limited by Guarantee (GTE)/Incorporated Trustees.
- Expatriate Quota Returns duly stamped by NIS for the three months preceding the date of application;
- Training Programmes for Nigerian Understudies; and
- Updated report of operations/activities covering the years of existence.
Is it Possible to Obtain an Additional Expatriate Quota?
Yes, it is possible to obtain an additional expatriate quota. However, this is subject to either expansion or diversification of business, acquisition of new machinery or injection of fresh capital investment into the Company. The grant is for a period of two (2) years in the first instance, renewable biennially for two consecutive times within a lifespan of seven (7) years, except for companies in the oil and gas industry whose approval will be for an initial period of 2 years and renewable once within a life span of 4 years.
Conclusion
The expatriate quota system in Nigeria serves as a strategic tool for balancing the incorporation of foreign expertise with the development of local talent. While it facilitates international investment and business growth, it also underscores the government’s commitment to protecting employment opportunities for Nigerians. For businesses and expatriates alike, understanding and complying with the quota regulations is essential for seamless operations and long-term success in the Nigerian business landscape.
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[1] 2.3 Handbook on Expatriate Quota Administration (Revised 2022)
[2] 3.0 (ii) Handbook on Expatriate Quota Administration (Revised 2022)
[3] 3 (x) ibid
[4] 4.10 ibid
[5] 5.1 ibid
