Popularly known as Africa’s largest economy, and home to over 200 million people and counting, Nigeria is considered a huge consumer market by global brands.

In terms of physical location, Nigeria is strategically located, with easy access to other African countries by air, sea or land.

Nigeria has the second largest oil reserve and the largest gas reserve in Africa.  It has a huge number of mineral resources, some of which are largely untapped.

With the above reasons, and the push by the Nigerian government to promote ease of doing business in the country, Nigeria remains an attractive destination for foreigners to do business.

However, to do business in Nigeria as a foreigner, you need to have a clear understanding of the regulatory aspects of setting up your business in unfamiliar territory to avoid being flagged down by regulators as a result of compliance issues.

In this article, we are providing a comprehensive step-by-step guide to starting your business in Nigeria as a Foreigner.

      1. Incorporation/Registration of Your Business and Appointment of a Local Director

A foreigner can conduct business in Nigeria directly or indirectly through either of the following options;

a. Acquire shares of a company (public or private) in Nigeria as a foreign investor with the aim of making a profit. This is referred to as a Foreign Portfolio Investment. Under this circumstance, foreign investors are not involved in the daily management of the business.

b. Incorporate a company in Nigeria, which is foreign-owned, as either a branch or subsidiary of an existing business. This is referred to as a Foreign Direct Investment. This option may require the actual physical presence of the company and or its representatives in Nigeria.


With respect to incorporating a company in Nigeria, the Corporate Affairs Commission(CAC) is the sole agency responsible for incorporating a company in Nigeria, while the Companies and Allied Matters Act(CAMA) is the principal legislation regulating the commission.

Under the CAMA, 2020, a foreigner can incorporate a company with 100% ownership regardless of whether or not such foreigner resides outside Nigeria.

However, in practice it is advisable that a foreign promoter who wishes to set up a company in Nigeria, nominates or appoints a local director who resides in Nigeria for the following reasons;

a. Easy corporate bank account opening. To meet up with the Know Your Customer Policy requirement, it is a standard requirement by most commercial banks in Nigeria that a foreign-owned company must have a member (i.e. Director and or shareholder) of the company who resides in Nigeria and has a Bank Verification Number (BVN). The BVN is a unique number given to every Nigerian who wishes to open a bank account and signatories to any corporate account must possess it.

b. Tax registration and compliance. Presently, the federal tax authorities in Nigeria (i.e. the Federal Inland Revenue Authority) have an automated system that connects directors of taxable companies to tax obligations of any company incorporated in Nigeria. To enforce this, all personal details of members of a company such as an email, phone number, and residential address are captured during incorporation. It is therefore important that for foreign-owned companies, there is at least one local director who resides in Nigeria and can be accessed by tax authorities whenever the need arises.

c. The need to leverage the experience and knowledge of someone who resides in Nigeria and understands the policies and requirements for doing business in Nigeria, as well as how to go about it.

Arrangements involving appointing a local director are done on a contractual basis and as such, it is advisable that the terms of such a contract are clearly understood by both parties, reduced into writing and signed by the parties before the incorporation process begins.

To incorporate your company, below are the requirements for setting it up.

  • Proposed names of the company (a minimum of two)
  • Principal nature of business
  • The registered address of the company (must be in Nigeria)
  • Type of company to be incorporated (seek professional advice on what type is suitable for your business goals)
  • Details of share capital (the minimum share capital requirement for wholly foreign-owned companies or local                 companies with foreign participation is currently one hundred million naira so as to qualify for a business permit.           See The handbook on expatriate quota administration )
  • Details of Directors such as phone number, email, residential address, means of identification etc.
  • Details of Shareholders such as phone number, email, residential address, means of identification etc.
  • Details of Company Secretary if necessary

It is, however, important to note that not all foreign-owned businesses are required to be incorporated by the CAC to do business in Nigeria so long as they satisfy certain requirements. To know more about this, read this article: CAN A FOREIGN COMPANY DO BUSINESS IN NIGERIA WITHOUT BEING REGISTERED?

      2. Setting up a bank account

Flowing from the point raised in Step 1 above, a major difficulty most foreign-owned companies whose members do not reside in Nigeria face after incorporating their companies, is setting up a corporate bank account. That is one of the reasons we advise our foreign clients wishing to set up a company in Nigeria, to consider appointing a local director.

In situations where such foreigners wish to have a non-Nigerian residing in Nigeria as director, the latter must have a residence permit to be appointed as a signatory to the corporate bank account in question.

With the rise of internet banking services in Nigeria, a foreign owner of the company can exclusively manage the corporate account in question.

    3. Intellectual Property Protection

IP protection is territorial. If you are a foreigner wishing to start a business in Nigeria, you must take active steps to protect your brand. This could be done through trademark, patent or copyright licensing depending on what is to be protected.

If you’d like to know what aspect of your company’s intellectual property you should consider protecting and how to do so, please read some of our articles below on Intellectual property protection in Nigeria:




      4. Tax Compliance.

This involves registration with the federal and state tax authorities i.e. the Federal Inland Revenue Service and the Internal Revenue Service respectively. By law, every company incorporated in Nigeria is mandated to file and remit tax returns when due.

Every business is also expected to obtain a Tax Identification Number and register for Value Added Tax returns filing not later than six months after incorporation. Failure to do so attracts a penalty by way of a fine.

In Nigeria, there are several taxes required by law to be remitted by both individuals and businesses. However, the type of taxes your foreign-owned company would remit / pay depends on several factors such as;

  • The nature of the business activity of your company
  • Whether or not your company has employees
  • The kind of transaction(s) your company is involved in
  • The sector your company operates etc.

There are, however, key taxes you must take note of;

Company Income Tax– This tax is paid to the federal tax authorities. It is assessed on the income of the company. Under the new Finance Act 2021, it is assessed as follows;

30% for large companies with a gross turnover above N100,000,000 (one hundred million naira)

20% for medium companies earning a gross turnover less than N25,000,000 (twenty-five million

naira) but less than N100,000,000 (one hundred million naira)

0% for small companies earning a gross turnover of N25,000,000 (twenty-five million naira) or less

(small companies are required to file tax returns despite being required to pay nothing. Filing tax

returns simply mean completing tax forms.

 Value Added Tax – Currently accessed at 7.5% on the cost of goods and services. There are, however, goods and services exempted from remitting VAT.

Pay-As-You-Earn (PAYE) – This tax is charged to employees and directors of a company. An employer has an obligation in law to deduct relevant taxes from their employees on behalf of the government.

Withholding Tax –  This is charged for payments made to companies and individuals with respect to taxable transactions. There are several rates for these transactions. There is no difference between local and foreign companies when it comes to withholding tax deductions.

Stamp Duty – This tax is charged on transactions at either a fixed rate or based on the value of the

Consideration or type of document involved (i.e. ad valorem)

To know more about your tax obligations, it is advisable to speak with a tax consultant or tax compliance specialist. Our firm provides such service and you may reach out to us HERE or HERE. Another option is to get our ESSENTIAL TAX GUIDE at our online store. It explains everything you should know about tax in detail.

     5. Registration with the Nigerian Investment Promotion Commission (NIPC)

Every foreign-owned business is required to register with the NIPC, See Section 20 of the NIPC Act. This is very important as a foreign-owned company cannot obtain a business permit without meeting the above requirement.

To apply for registration with the NIPC you need;

  • Duly completed NIPC Form I,
  • Memorandum & Articles of Association,
  • Certificate of Incorporation,
  • CAC Form 1.1 (or CAC Forms CO2 and CO7 for old companies),
  • NIPC payment receipt,
  • Power of Attorney/ Letter of Authority (where applicable)

6. Immigration Requirements- Expatriate Quota and or Resident Permit

Foreigners wishing to work in Nigeria must obtain the necessary visa to do so. Generally speaking, the Nigerian Visa is in the following categories; Visa-on-arrival, Transit Visa, Business Visa, Temporary work permit, Subject to regularization Visa and Diplomatic Visa. We would discuss them briefly below;

Subject to Regularization Visa (STR Visa)

An STR permit is the first immigration license to consider to gain initial entry into Nigeria as a foreigner.

Under Section 8 (1) of the Immigration Act, a foreigner cannot accept private employment in Nigeria without the written consent of the Director of Immigrations.

The STR Entry Permit allows a foreigner who wishes to accept private employment in Nigeria.

Under Section 34 of the Immigration Act, an employer who wishes to employ a foreign national must make a formal application to the Director General. The application must contain information on the provision to be made by the employer with respect to the repatriation of the national and his dependents as the Director of Immigrations may require.

After this permit is given, the employer may apply for the Combined Expatriate Resident Permit along with Alien Card (CERPAC).

An STR visa is valid for 90 days.

Business Permit

A business permit allows foreign individuals and corporations to run their businesses in Nigeria. It also gives a company power to request expatriates.

By virtue of Section 36 of the Immigration Act, a foreigner who wishes to practice a profession or establish a trade, whether on his own or in partnership with another person must obtain the written consent of the Minister of Internal Affairs. (Emphasis mine)

This means that a foreigner’s or a foreign-owned company’s partnership with a Nigerian or Nigerian entity does not exempt the latter from obtaining the required consent.

A business permit is issued by the Federal Ministry of Interior through the department of Citizenship and Business.

Prior to now, the minimum share capital requirement for foreign-owned or joint venture companies with foreign participation was ten million naira (N10,000,000), however, the minimum share capital has recently been increased to one hundred million naira (N100,000,000).
What this means is that any foreigner looking to set up business in Nigeria whether as a completely foreign-owned company or a local company with foreign participation in Nigeria, such company must be registered with not less than one hundred million naira (N100,000,000) as share capital to enable such company qualify for a business permit.

Expatriate Quota

Under the Immigration Act, all foreign-owned companies seeking to employ foreigners must have an expatriate quota. With an expatriate quota, a Foreign national who is employed in Nigeria can apply for and obtain a work permit to live and work in Nigeria.

An expatriate quota can be issued on a permanent basis until reviewed or temporarily.

The Combined Expatriate Residence Permit along with Alien Card

As a foreigner, if you intend to live and work in Nigeria for more than 56 days, you are required to obtain a CERPAC.

The CERPAC is a document that allows a foreigner to reside and work in Nigeria and carry out business as specified in the permit, or to accompany a resident or citizen of Nigeria as a dependent.

The CERPAC is valid for two years and is subject to renewal.

    7. Procurement of Certificate of Capital Importation (CCI)

Any foreigner who wishes to set up a business in Nigeria as well as import capital into the country for that purpose is required to have a Certificate of Capital Importation. Capital in this context could refer to raw materials, foreign currency, machinery, etc.

A CCI is gotten from the Central Bank of Nigeria through Commercial Banks. It serves as evidence that capital by way of cash, equipment or a combination of both, from foreign investors, has been received by the foreign-owned company incorporated in Nigeria.

A CCI in addition permits a foreign investor to send back capital, profit and dividend at official foreign exchange market rates to their country.

    8. Other licenses.

Depending on the business sector you wish your company to operate in, there are special license requirements for such business activities. Some of them include;

  • Export Certificate Registration – This would be required where the foreign-owned company is involved in export activities. Presently, there are two export agencies entrusted with the power to issue export certificates and licenses. They are; 1. The Nigerian Export Promotion Council, which issues licenses for agricultural products and 2. The Federal Ministry for solid minerals and Development issues licenses for extraction and exportation in Nigeria.
  • Oil & Gas Sector; If you wish to operate in this sector, you must be registered with the Department of Petroleum Resources (DPR) to obtain the relevant licenses and lease approvals.
  • Solid Minerals Sector – If you intend to do business in the Solid Minerals sector in Nigeria, your company must obtain the requisite mining license, permit and titles.
  • Pharmaceuticals, Cosmetics and Food Sector – If your company intends to trade products in this category, it must register such products with the National Agency for Food and Drug Administration and Control (NAFDAC) before trading them.
  • Electricity/Power – The Nigerian Electricity Regulatory Commission(NERC) is responsible for issuing licenses to companies wishing to carry out business in the electricity sector in Nigeria. If you wish to carry out business activities within this sector as Independent Power Producers (IPP), you need this license.
  • Telecommunications – To operate as a Telecommunications Service Provider(TSP), you must obtain a license from the Nigerian Communications Commission(NCC).
  • Fintech, Banking and Finance – To operate a bank or a fintech service, you must obtain relevant licenses from the Central Bank of Nigeria. To learn more about the CBN license requirements for fintech services in Nigeria, read this article; CBN LICENSE REQUIREMENTS FOR FINTECH STARTUPS IN NIGERIA
  • Maritime and Shipping – The Nigerian Maritime Administration and Safety Agency (NIMASA) regulates maritime and shipping industry in Nigeria. To operate within the maritime space, you must obtain a shipping license from the above agency.
  • Aviation – The aviation sector in Nigeria is governed by the Nigerian Civil Aviation Authority (NCAA). This agency registers aircraft in Nigeria and issues registration certificates to its owners. If you wish to own an airline or operate within this space as a foreigner, you must be licensed by the NCAA.

However, in the case of an aircraft already licensed by foreign authorities, there may be no need to obtain a license from the NCAA as the ability of the foreign licensed aircraft to operate in Nigeria, would depend to a large extent on the existence of a bilateral treaty between Nigeria and the country from which its license was obtained.

ARE THERE INCENTIVES FOR FOREIGNERS WISHING TO START BUSINESSES IN NIGERIA?                                                                                                                                        

Yes, there are. Some of them include;

i. 7 years of tax holidays for industries located in undeveloped Local Government Areas

ii. 100% Foreign Investment ownership,

iii  Rent-free land (construction stage) & Import/Export License waivers in Export Processing Zones

iv  Investment protection for foreign investors who are citizens of countries that are signatories to Investment Promotion and Protection Agreements (IPPAs) with Nigeria such as Holland, the UK, France, Canada, etc. Investor Visa for foreign investors importing a yearly minimum capital amount into Nigeria. The Visa lasts for 5 years and can be applied for at any Nigerian embassy.

v  20% Investment Tax concession for Industries carrying out Research and Development projects aimed at business profits etc.


Setting up a business in new territory can be quite complex and requires all the expert guidance you can get. You, therefore, need to retain the services of experienced business law experts who can assist you with navigating the regulatory, and in some cases bureaucratic hurdles of starting and operating your company.

If you need help in this regard, our team of experts will provide you with the assistance you need to bring your vision of starting a new business in Nigeria to life. Feel free to reach out to us here or HERE and we will be delighted to assist you.


Cynthia Tishion
Cynthia is a lawyer and currently serves as Head of Corporate / Commercial Services at LEX – PRAXIS. With her passion for business and entrepreneurship, she is actively engaged in creating awareness on the legal aspect of businesses through various platforms such as writing, public speaking engagements.

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