Free Trade Zones are specialized economic zones that confer certain privileges on local and foreign businesses. Here, enterprises registered with the Zone Authority, or Free Zone Enterprises, are allowed to import, export, and trade their products and services within the Zones. Some privileges include exemption from taxes, levies, rates, and customs duties, repatriation of foreign capital investment, foreign ownership of businesses, etc.
This article provides a step-by-step guide on how to register a foreign company in the Snake Island Integrated Free Trade Zone
ABOUT THE SNAKE ISLAND INTEGRATED FREE ZONE (SIIFZ)
Also known as the “Nigerdock,” the Snake Island Integrated Free Zone (SIIFZ) is one of Nigeria’s Free Trade Zones, operating under the Nigeria Export Processing Zones Authority (NEPZA). Established and licensed in January 2005 during the Olusegun Obasanjo administration, this zone is located in Lagos, close to the Tin Can and Apapa Seaports. It is home to both local and foreign businesses and is the first registered and operational privately owned Free Trade Zone in Nigeria, promoted by Nigerdock, a leading Nigerian maritime and logistics company that operates an integrated free zone and port terminals in Lagos.
The SIIFZ offers enterprises various benefits and incentives, including duty-free imports, on-site customs processing, repatriation of foreign capital investment, corporate tax exemptions, a streamlined business setup process, duty-free imports of raw materials, equipment, and machinery, and full immigration support and guidance on repatriation matters.
HOW TO REGISTER AN ENTERPRISE WITH A FREE TRADE ZONE IN NIGERIA
Nigeria has several free zones, including the Lekki Free Trade Zone, Calabar Free Trade Zone, and Onne Oil and Gas Free Zone. To operate within a Free Trade Zone (FTZ) in Nigeria, any enterprise must first submit a written application to the Nigeria Export Processing Zones Authority (NEPZA) for permission. NEPZA can grant a license for approved activities in an FTZ to individuals and businesses, regardless of whether they are incorporated in Nigeria.
Obtaining a license from NEPZA serves as registration for company operations within the FTZ. Importantly, licensed enterprises are exempt from the local incorporation requirements established by the Companies and Allied Matters Act (CAMA), as the license issued by NEPZA signifies that the company is registered in the FTZ.
An Overview of the Application Procedures
1. Application Form: Prospective investors should complete an application form, which can be downloaded online or collected from the administration of the free zone or the NEPZA headquarters in Abuja.
2. Payment: A non-refundable fee of $500 or its equivalent in Naira must be paid.
3. Submission: After filling out the application, it should be submitted to the zone of interest or directly to NEPZA.
4. Response Time: NEPZA aims to provide feedback on the application within 5 working days.
5. Approval Process: If the application is approved, the investor will need to visit the zone and pay the applicable licensing fee.
6. Operating License: The Operating License (OPL) will be issued by the Free Zone Administration.
CAN A FOREIGN COMPANY BE REGISTERED WITH THE SNAKE ISLAND INTEGRATED FREE ZONE?
Under Section 5(1) of the Snake Island Integrated Free Zone Regulation 2012, all entities planning to operate within the Snake Island Integrated Free Zone (SIIFZ) must be registered by the Zone Management Authority as Free Zone Enterprises. This requirement applies to both local and foreign companies, provided that their business activities are in line with those approved by the Zone Management. Consequently, the same registration procedure applies to foreign companies seeking to operate as enterprises within the SIIFZ. The Free Zone Enterprise license granted to foreign companies is only valid and operational within the confines of the zone.
Additionally, it is important to note that if a Foreign Zone Enterprise employs foreign workers, work permits must be issued for these employees. Furthermore, Section 20 of the NEPZA Act stipulates that if a non-Nigerian citizen is employed by either the Authority or an approved enterprise within a zone, the enterprise must apply to the Authority for immigration and employment permits on behalf of the non-Nigerian citizen. This application should be made when the enterprise seeks a license to establish itself within the zone or at any time thereafter, under the Authority’s prescribed procedures.
HOW TO REGISTER A FOREIGN COMPANY IN THE SNAKE ISLAND INTEGRATED FREE ZONE
Permissible Activities in the Snake Island Integrated Free Zone
Activities allowed in the Snake Island Integrated Free Zone are limited to services within the maritime and oil and gas sectors.
Procedure for Registering a Foreign Company in the Snake Island Integrated Free Zone
The registration process for a foreign company in the Snake Island Integrated Free Zone can be summarized as follows:
1. Application: Apply the Zone Management or Authority to register as a Free Zone Enterprise by completing and submitting a questionnaire.
2. Required Documents: Along with the application, submit the necessary documents, which may include:
a. A copy of the Certificate of Incorporation of the applicant, verified by the Corporate Affairs Commission (CAC) or other regulatory bodies for companies registered outside the SIIFZ
b. A signed copy of the board resolution from the applicant company authorizing the registration in the Zone.
c. A consent letter signed by the directors of the enterprise, along with photo identification for each director.
d. A five-year business plan.
3. Payment: Pay the relevant registration fee to the Zone Management or Authority.
4. Screening and Review: The application will be screened and reviewed for approval.
5. Issuance of Certificate: A registration certificate will be issued once the application is approved.
6. Operating License: Obtain an operating license to operate within the Free Trade Zone.
Registration with the SIIFZ involves a one-time fee, as well as an annual operational license fee.
HOW LONG DOES IT TAKE TO SET UP AN ENTERPRISE WITHIN THE SNAKE ISLAND INTEGRATED FREE ZONE?
The process lasts between two to eight weeks, based on the applicant’s ability to provide the requirements.
ADDITIONAL CONSIDERATIONS FOR SETTING UP A FOREIGN COMPANY WITHIN THE SNAKE ISLAND INTEGRATED FREE ZONE
In addition to registering and obtaining an operating license with the SIIFZ, foreign promoters and investors should consider the following important points:
1. Physical Presence Requirement: Establishing a physical presence within the Free Zone Enterprise (FZE) is mandatory. Therefore, foreign investors should plan adequately to secure physical space within the SIIFZ. This can be achieved through a lease, and the type of space can be a warehouse, office, or other suitable premises.
2. Trading Flexibility: Enterprises registered within the SIIFZ are not limited to conducting business solely within the free zone. However, these enterprises must comply with the relevant licensing requirements to transact outside the free zone. On the other hand, conducting transactions within the free zone allows the enterprise to benefit from various tax exemptions.
3. Import Duty Exemptions: Products imported into the free zone by a registered enterprise are exempt from paying import duties. However, this exemption does not apply to exports.
These considerations are crucial for ensuring a smooth and compliant operation within the SIIFZ.
CONCLUSION
Free trade zones are designated economic hubs for trade, manufacturing, and service delivery within a customs territory. Establishing a business in a free trade zone comes with various benefits, including both physical and financial incentives the government offers to local and foreign investors. The Snake Island Integrated Free Trade Zone (SIIFZ) is no exception to this.
Among the various free trade zones in Nigeria, SIIFZ facilitates a streamlined business registration process. The incentives provided by the SIIFZ Regulation apply to foreign companies as well. Therefore, foreign businesses operating within the SIIFZ must adhere to the existing legal framework to enjoy these benefits.
If you need professional assistance setting up your foreign company within the Nigerdock or Snake Island Integrated Free Zone, please feel free to contact us , through our email or the Whatsapp icon on this page, and we will be happy to assist you.
