Db10 sub-nigeria

  • 6,615 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
6,615
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
45
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. COMPARING REGULATION IN 36 STATES, ABUJA FCT AND 183 ECONOMIES 2010in Nigeria
  • 2. COMPARING REGULATION IN 36 STATES, ABUJA FCT AND 183 ECONOMIESA COPUBLICATION OF THE WORLD BANK AND THE INTERNATIONAL FINANCE CORPORATION
  • 3. © 2010 The International Bank for Reconstruction and Development / The World Bank1818 H Street NWWashington, DC 20433Telephone 202-473-1000Internet www.worldbank.orgE-mail feedback@worldbank.orgAll rights reserved.A publication of the World Bank and the International Finance Corporation.This volume is a product of the staff of the World Bank Group. The findings, interpretations, and conclusions expressed in thisvolume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. TheWorld Bank does not guarantee the accuracy of the data included in this work.Rights and PermissionsThe material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission maybe a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission toreproduce portions of the work promptly.For permission to photocopy or reprint any part of this work, please send a request with complete information to the CopyrightClearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400; fax 978-750-4470; Internet:www.copyright.com.All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The WorldBank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org.Doing Business in Nigeria 2010 and other subnational and regional Doing Business studies can be downloaded at no charge athttp://subnational.doingbusiness.orgAdditional copies of the Doing Business global reports: Doing Business 2010: Reforming through Difficult Times, Doing Business2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005:Removing Obstacles to Growth and Doing Business in 2004: Understanding Regulations, may be purchased at www.doingbusiness.orgAbout the Investment Climate Advisory Services of the World Bank GroupThe Investment Climate Advisory Services of the World Bank Group helps governments implement reforms to improve their busi-ness environment, and encourage and retain investment, thus fostering competitive markets, growth and job creation. Fundingis provided by the World Bank Group (IFC, MIGA, and the World Bank) and over fifteen donor partners working through themulti-donor FIAS platform.
  • 4. ContentsDoing Business in Nigeria 2010 is the reforms have worked, where, and why. About Doing Business andsecond subnational report of the Doing Other areas important to business—such Doing Business in Nigeria 2010 1Business series in Nigeria. In 2008, quan- as a country’s proximity to large markets, Overview 7titative indicators on business regula- the quality of infrastructure services Starting a business 13tions were created for 10 states and (other than services related to trading Dealing with construction permits 18Abuja, FCT. This year, Doing Business across borders), the security of propertyin Nigeria 2010 expands the analysis to from theft and looting, the transparency Registering property 23all 36 Nigerian states and Abuja, FCT, of government procurement, macro- Enforcing contracts 28and documents progress in the 10 states economic conditions, or the underlyingand the capital previously measured. The strength of institutions—are not directly Data notes 33states are compared against each other, studied by Doing Business. To make the State tables 38and with 183 economies worldwide. data comparable across jurisdictions, the Doing Business indicators 47 Comparisons with other economies indicators refer to a specific type ofare based on the indicators in Doing business—generally a small or medium- List of proceduresBusiness 2010: Reforming through Dif- size limited liability company. Starting a business 51ficult Times, the seventh in a series of This project is part of the Nigeria Dealing with construction permits 90annual reports published by the World Subnational Investment Climate Pro- Registering property 137Bank and the International Finance gram, which supports state governments Acknowledgments 168Corporation. The indicators in Doing in improving their business environ-Business in Nigeria 2010 are also compa- ments. This program is the Nigerianrable with the data in other subnational government’s response to its NationalDoing Business reports. All Doing Busi- Economic Empowerment and Develop-ness data and reports are available at ment Strategy (NEEDS) and the Coun-http://subnational.doingbusiness.org try Partnership Strategy between it,and at www.doingbusiness.org. the U.K. Department for International Doing Business investigates the regu- Development (DFID), and the Worldlations that enhance business activity and Bank Group, which aim to create mo-those that constrain it. Regulations af- mentum for reform through dialoguefecting 4 stages of the life of a business between the private and public sectorsare measured at the subnational level in in participant states, drive investmentsNigeria: starting a business, dealing with and non-oil growth in these states, andconstruction permits, registering prop- reduce income poverty through sharederty, and enforcing contracts. These in- sustainable economic growth in Nige-dicators have been selected because they ria’s non-oil sector. This study is part ofcover areas of local jurisdiction or prac- a three-instrument benchmarking pro-tice. The data in Doing Business in Nigeria cess for Nigeria that also includes an2010 are current as of January 2010. Investment Climate Assessment (ICA) The indicators are used to analyze and State Level Policy and Institutionaleconomic outcomes and identify which Mapping (SLPIM).
  • 5. 1About Doing The global financial crisis has re- newed interest in good rules and regu- WHAT DOING BUSINESS IN NIGERIA 2010 COVERSBusiness and lation. In times of recession, effective business regulation and institutions can Doing Business in Nigeria 2010 providesDoing Business support economic adjustment. Easy a quantitative measure of the federal entry and exit of firms, and flexibility and state regulations for starting a busi-in Nigeria 2010 in redeploying resources, make it easier ness, dealing with construction permits, to stop doing things for which demand registering property, and enforcing con- has weakened and to start doing new tracts—as they apply to domestic small things. Clarification of property rights and medium-size enterprises. and strengthening of market infrastruc- A fundamental premise of Doing ture (such as credit information and Business is that economic activity re- collateral systems) can contribute to con- quires good rules. These include rules fidence as investors and entrepreneurs that establish and clarify property rights look to rebuild. and reduce the costs of resolving disputes, Until very recently, however, there rules that increase the predictability ofIn 1664 William Petty, an adviser to were no globally available indicator sets economic interactions and rules thatEngland’s Charles II, compiled the first for monitoring such microeconomic fac- provide contractual partners with coreknown national accounts. He made 4 tors and analyzing their relevance. The protections against abuse. The objectiveentries. On the expense side, “food, hous- first efforts, in the 1980s, drew on per- is: regulations designed to be efficient, toing, clothes and all other necessaries” ceptions data from expert or business be accessible to all who need to use themwere estimated at £40 million. National surveys. Such surveys are useful gauges and to be simple in their implementa-income was split among 3 sources: £8 of economic and policy conditions. But tion. Accordingly, some Doing Businessmillion from land, £7 million from other their reliance on perceptions and their indicators give a higher score for morepersonal estates and £25 million from incomplete coverage of poor countries regulation, such as stricter disclosure re-labor income. constrain their usefulness for analysis. quirements in related-party transactions. In later centuries estimates of coun- The Doing Business project, launched Some give a higher score for a simplifiedtry income, expenditure and material 8 years ago, goes one step further. It looks way of implementing existing regulation,inputs and outputs became more abun- at domestic small and medium-size com- such as completing business start-updant. But it was not until the 1940s that panies and measures the regulations ap- formalities in a one-stop shop.a systematic framework was developed plying to them through their life cycle. Doing Business in Nigeria 2010for measuring national income and ex- Doing Business and the standard cost encompasses 2 types of data. The firstpenditure, under the direction of British model initially developed and applied in come from readings of laws and regula-economist John Maynard Keynes. As the the Netherlands are, for the present, the tions. The second are time and motionmethodology became an international only standard tools used across a broad indicators that measure the efficiencystandard, comparisons of countries’ fi- range of jurisdictions to measure the in achieving a regulatory goal (such asnancial positions became possible. Today impact of government rule-making on granting the legal identity of a business).the macroeconomic indicators in na- business activity. Within the time and motion indicators,tional accounts are standard in every The first Doing Business report, pub- cost estimates are recorded from officialcountry. lished in 2003, covered 5 indicator sets in fee schedules where applicable. Here, Governments committed to the eco- 133 economies. This year’s report covers Doing Business builds on Hernando denomic health of their country and op- 10 indicator sets in 183 economies. The Soto’s pioneering work in applying theportunities for its citizens now focus on project has benefited from feedback from time and motion approach first usedmore than macroeconomic conditions. governments, academics, practitioners by Frederick Taylor to revolutionize theThey also pay attention to the laws, regu- and reviewers. The initial goal remains: production of the Model T Ford. De Sotolations and institutional arrangements to provide an objective basis for under- used the approach in the 1980s to showthat shape daily economic activity. standing and improving the regulatory the obstacles to setting up a garment fac- environment for business. tory on the outskirts of Lima, Peru.
  • 6. 2 DOING BUSINESS IN NIGERIA 2010WHAT DOING BUSINESS IN phases of a company’s life cycle, through social security, for example.NIGERIA 2010 DOES NOT COVER 4 specific sets of indicators. The indica- Where regulation is particularly tor sets also do not cover all aspects of onerous, levels of informality are higher.It is important to know the scope and regulation in the particular area. For Informality comes at a cost: firms inlimitations of Doing Business in Nigeria example, the indicators on starting a the informal sector typically grow more2010 in order to interpret the results of business do not cover all aspects of com- slowly, have poorer access to credit andthis report. mercial legislation. employ fewer workers—and their work- ers remain outside the protections ofLIMITED IN SCOPE BASED ON STANDARDIZED CASE labor law. Doing Business in Nigeria 2010 SCENARIOSDoing Business in Nigeria 2010 focuses measures one set of factors that helpon four topics, with the specific aim of The indicators analyzed in Doing Business explain the occurrence of informalitymeasuring the regulation and red tape in Nigeria 2010 are based on standardized and give policy makers insights into po-relevant to the life cycle of a domestic case scenarios with specific assumptions, tential areas of reform. Gaining a fullersmall to medium-size firm. Accordingly: such as that the business is located in cer- understanding of the broader business Doing Business in Nigeria 2010 does tain cities in one of the 36 Nigerian states environment, and a broader perspective not measure all ten indicators covered or in Abuja, FCT. Economic indicators on policy challenges, requires combining in the global Doing Business report. commonly make limiting assumptions of insights from Doing Business in Nigeria The report covers only those 4 areas of this kind. Inflation statistics, for example, 2010 with data from other sources, such business regulation that are the prov- are often based on prices of consumer as the World Bank Enterprise Surveys. enance of state or federal governments goods in a few urban areas. Such assump- and where local differences exist. tions allow global coverage and enhance WHY THIS FOCUS Doing Business in Nigeria 2010 does comparability, but they inevitably come at not measure all aspects of the busi- the expense of generality. Doing Business in Nigeria 2010 func- ness environment that matter to firms In areas where regulation is com- tions as a kind of cholesterol test for or investors—or all factors that affect plex and highly differentiated, the stan- the regulatory environment for domestic competitiveness. It does not, for ex- dardized case used to construct each businesses. A cholesterol test does not ample, measure security, macroeco- Doing Business in Nigeria 2010 indicator tell us everything about the state of our nomic stability, corruption, the labor needs to be carefully defined. Where health. But it does measure something skills of the population, the under- relevant, the standardized case assumes important for our health. And it puts us lying strength of institutions or the a limited liability company. This choice on watch to change behaviors in ways quality of infrastructure. Nor does it is in part empirical: private, limited li- that will improve not only our cholesterol focus on regulations specific to for- ability companies are the most prevalent rating but also our overall health. eign investment. business form in most economies around One way to test whether Doing Busi- Doing Business in Nigeria 2010 does the world. The choice also reflects one ness serves as a proxy for the broader not assess the strength of the financial focus of Doing Business: expanding op- business environment and for competi- system or market regulations, both portunities for entrepreneurship. Inves- tiveness is to look at correlations be- important factors in understanding tors are encouraged to venture into busi- tween the Doing Business rankings and some of the underlying causes of the ness when potential losses are limited to other major economic benchmarks. The global financial crisis. their capital participation. indicator set closest to Doing Business Doing Business in Nigeria 2010 does in what it measures is the Organization not cover all regulations, or all regu- FOCUSED ON THE FORMAL SECTOR for Economic Co-operation and Devel- latory goals, in any jurisdiction. As In defining the indicators, Doing Business opment’s indicators of product market economies and technology advance, in Nigeria 2010 assumes that entrepre- regulation; the correlation here is 0.75. more areas of economic activity are neurs are knowledgeable about all regu- The World Economic Forum’s Global being regulated. lations in place and comply with them. Competitiveness Index and IMD’s World In practice, entrepreneurs may spend Competitiveness Yearbook are broader in For example, the European Union’s considerable time finding out where to scope, but these too are strongly corre-body of laws (acquis) has now grown go and what documents to submit. Or lated with Doing Business (0.79 and 0.72,to no fewer than 14,500 rule sets. Doing they may avoid legally required proce- respectively). These correlations suggestBusiness in Nigeria 2010 measures just 4 dures altogether—by not registering for that where peace and macroeconomic
  • 7. ABOUT DOING BUSINESS AND DOING BUSINESS IN NIGERIA 3stability are present, domestic business makers face particular challenges. Both results. Some states may rank unexpect-regulation makes an important differ- developed and developing economies are edly high on some indicators. And someence in economic competitiveness. seeing the impact of the financial crisis states that have had rapid growth or A bigger question is whether the flowing through to the real economy, attracted a great deal of investment mayissues on which Doing Business focuses with rising unemployment and income rank lower than others that appear to bematter for development and poverty re- loss. The foremost challenge for many less dynamic.duction. The World Bank study Voices governments is to create new jobs and But for reform-minded govern-of the Poor asked 60,000 poor people economic opportunities. But many have ments, how much their indicators im-around the world how they thought they limited fiscal space for publicly funded prove matters more than their abso-might escape poverty. The answers were activities such as infrastructure invest- lute ranking. As states develop, theyunequivocal: women and men alike pin ment or for the provision of publicly strengthen and add to regulations totheir hopes above all on income from funded safety nets and social services. protect investor and property rights.their own business or wages earned in Reforms aimed at creating a better in- Meanwhile, they find more efficient waysemployment. Enabling growth—and en- vestment climate, including reforms of to implement existing regulations andsuring that poor people can participate business regulation, can be beneficial for cut outdated ones. One finding of Doingin its benefits—requires an environment several reasons. Flexible regulation and Business: dynamic and growing econo-where new entrants with drive and good effective institutions, including efficient mies around the world continually re-ideas, regardless of their gender or ethnic processes for starting a business and effi- form and update their regulations andorigin, can get started in business and cient insolvency or bankruptcy systems, their way of implementing them, whilewhere good firms can invest and grow, can facilitate reallocation of labor and many poor economies still work withgenerating more jobs. capital. And regulatory institutions and regulatory systems dating to the late Small and medium-size enterprises processes that are streamlined and acces- 1800s.are key drivers of competition, growth sible can help ensure that, as businessesand job creation, particularly in develop- rebuild, barriers between the informal DOING BUSINESS—ing countries. But in these economies up and formal sectors are lowered, creating A USER’S GUIDEto 80% of economic activity takes place more opportunities for the poor.in the informal sector. Firms may be pre- Quantitative data and benchmarking canvented from entering the formal sector DOING BUSINESS IN NIGERIA be useful in stimulating debate aboutby excessive bureaucracy and regulation. 2010 AS A BENCHMARKING policy, both by exposing potential chal- Where regulation is burdensome EXERCISE lenges and by identifying where pol-and competition limited, success tends icy makers might look for lessons andto depend more on whom you know Doing Business in Nigeria 2010, in captur- good practices. These data also providethan on what you can do. But where ing some key dimensions of regulatory a basis for analyzing how different policyregulation is transparent, efficient and regimes, can be useful for benchmark- approaches—and different policy re-implemented in a simple way, it becomes ing. Any benchmarking—for individu- forms—contribute to desired outcomeseasier for any aspiring entrepreneurs, als, firms or economies—is necessarily such as competitiveness, growth andregardless of their connections, to oper- partial: it is valid and useful if it helps greater employment and incomes.ate within the rule of law and to benefit sharpen judgment, less so if it substitutes Seven years of Doing Business datafrom the opportunities and protections for judgment. have enabled a growing body of researchthat the law provides. Doing Business in Nigeria 2010 pro- on how performance on Doing Busi- In this sense Doing Business values vides 2 approaches on the data it collects: ness indicators—and reforms relevantgood rules as a key to social inclusion. It it presents “absolute” indicators for each to those indicators—relate to desiredalso provides a basis for studying effects state for each of the 4 regulatory topics social and economic outcomes. Someof regulations and their application. For it addresses, and it provides rankings of 405 articles have been published inexample, Doing Business 2004 found that states by indicator. Judgment is required peer-reviewed academic journals, andfaster contract enforcement was associ- in interpreting these measures for any about 1,143 working papers are avail-ated with perceptions of greater judicial state and in determining a sensible and able through Google Scholar. Among thefairness—suggesting that justice delayed politically feasible path for reform. findings:is justice denied. Reviewing the Doing Business rank- - In the current global crisis policy- ings in isolation may show unexpected ated with a smaller informal sector.
  • 8. 4 DOING BUSINESS IN NIGERIA 2010 - METHODOLOGY AND DATA DEVELOPMENT OF THE METHODOLOGY preneurship, enhance firm productiv- ity and reduce corruption. Doing Business in Nigeria 2010 covers all The methodology for calculating each 36 Nigerian states and Abuja, FCT. The indicator is transparent, objective and employment opportunities. data are based on federal and state laws easily replicable. Leading academics col- and regulations as well as administrative laborate in the development of the indi-HOW DO GOVERNMENTS USE DOING requirements. (For a detailed explana- cators, ensuring academic rigor. SevenBUSINESS? tion of the Doing Business in Nigeria 2010 of the background papers underlyingA common first reaction is to doubt methodology, see the Data notes). the indicators have been published inthe quality and relevance of the Doing leading economic journals. One is at anBusiness data. Yet the debate typically INFORMATION SOURCES FOR THE DATA advanced stage of publication.proceeds to a deeper discussion explor- Most of the indicators are based on laws Doing Business uses a simple averag-ing the relevance of the data to the and regulations. In addition, most of the ing approach for weighting subindica-economy and areas where reform might cost indicators are backed by official fee tors and calculating rankings. Other ap-make sense. schedules. Doing Business respondents proaches were explored, including using Most reformers start out by seeking both fill out written surveys and provide principal components and unobservedexamples, and Doing Business helps in references to the relevant laws, regu- components. The principal componentsthis. For example, Saudi Arabia used the lations and fee schedules, aiding data and unobserved components approachescompany law of France as a model for re- checking and quality assurance. turn out to yield results nearly identicalvising its own. Many countries in Africa For some indicators part of the cost to those of simple averaging. The testslook to Mauritius—the region’s stron- component (where fee schedules are lack- show that each set of indicators providesgest performer on Doing Business indica- ing) and the time component are based new information. The simple averag-tors— as a source of good practices for on actual practice rather than the law on ing approach is therefore robust to suchreform. In the words of Luis Guillermo the books. This introduces a degree of tests.Plata, the Minister of Commerce, Indus- subjectivity. The Doing Business approachtry and Tourism of Colombia, has therefore been to work with legal IMPROVEMENTS TO THE practitioners or professionals who regu- METHODOLOGY AND DATAIt’s not like baking a cake where you follow REVISIONS larly undertake the transactions involved.the recipe. No. We are all different. But we Following the standard methodological The methodology has undergone contin-can take certain things, certain key les- approach for time and motion studies, ual improvement over the years. Changessons, and apply those lessons and see howthey work in our environment. Doing Business breaks down each process have been made mainly in response to or transaction, such as starting and legally country suggestions. In accordance with Over the past 7 years there has been operating a business, into separate steps the Doing Business methodology, thesemuch activity by governments in re- to ensure a better estimate of time. The changes have been incorporated into theforming the regulatory environment for time estimate for each step is given by Doing Business in Nigeria 2010.domestic businesses. Most reforms relat- practitioners with significant and routine For starting a business, for example,ing to Doing Business topics were nested experience in the transaction. the minimum capital requirement can bein broader programs of reform aimed at The Doing Business approach to an obstacle for potential entrepreneurs.enhancing economic competitiveness. In data collection contrasts with that of Initially, Doing Business measured thestructuring their reform programs, gov- enterprise or firm surveys, which capture required minimum capital regardless ofernments use multiple data sources and often one-time perceptions and experi- whether it had to be paid up front orindicators. And reformers respond to ences of businesses. A corporate lawyer not. In many economies only part of themany stakeholders and interest groups, registering 100–150 businesses a year minimum capital has to be paid up front.all of whom bring important issues and will be more familiar with the process To reflect the actual potential barrier toconcerns into the reform debate. than an entrepreneur, who will register entry, the paid-in minimum capital has World Bank support to these reform a business only once or maybe twice. A been used since 2004.processes is designed to encourage criti- bankruptcy judge deciding dozens of All changes in methodology are ex-cal use of the data, sharpening judgment cases a year will have more insight into plained in the Data notes section of thisand avoiding a narrow focus on improv- bankruptcy than a company that may report as well as on the Doing Businessing Doing Business rankings. undergo the process. website. In addition, data time series
  • 9. ABOUT DOING BUSINESS AND DOING BUSINESS IN NIGERIA 5for each indicator and state are availableon the website. The website also makesavailable all original data sets used forbackground papers. Information on data corrections isprovided in the Data notes and on thewebsite. A transparent complaint pro-cedure allows anyone to challenge thedata. If errors are confirmed after a veri-fication process, they are expeditiouslycorrected.
  • 10. 7Overview across states. Doing Business in Nigeria there are exceptions. For example, Akwa 2008 was the first report to go beyond Ibom ranks better than its regional neigh- Lagos, to capture these differences in bors due to its above average performance 10 other Nigerian states and the capi- on starting a business and registering tal on 4 Doing Business topics: starting property. In Uyo, Akwa Ibom’s capital, the a business, dealing with construction cost of legal representation to handle com-Nigeria is Africa’s giant. It is the conti- permits, registering property, and en- pany incorporation and property transfernent’s most populous country, second- forcing contracts. This report updates is also cheaper than in other states fromlargest economy, and an emerging leader the information presented in 2008 and the South South region.of African diplomacy. By virtue of its tracks the progress in implementation Large southern business centers—size alone, a prosperous Nigeria would of reforms. It also expands the analysis such as Lagos, Port Harcourt, and Iba-generate social and economic gains for to all 36 Nigerian states and the capital dan—deal with a higher volume of busi-the whole region. But the challenges city, to provide a comprehensive map of ness services, which can lead to delaysfacing the country are formidable and the ease of doing business in the country. and more expensive professional services.success is not guaranteed. Despite its oil The results are presented here (table On the other hand, these cities shouldwealth and sustained economic growth 1.1). Overall, it is easiest to do business also benefit from economies of scale andduring the last decade, more than half in Jigawa, Gombe, and Borno and most have more resources at their disposal toof its population still lives in poverty.1 difficult in Imo and Ogun. invest in administrative modernizationGiven the low employment capacity in Two observations stand out. First, than their smaller neighbors. Behind thethe oil sector, economic diversification this year’s top performers are states with aggregate ranking, there is a rich varia-is important for sustainable growth, job competitive regulatory frameworks that tion on a topic-by-topic basis. No singlecreation, and poverty reduction. Nigeria’s were not measured in Doing Business state does well on all four topics, evenprivate sector is a tribute to the resilience in Nigeria 2008. Others, like Kano and when compared with peers (figure 1.1).of a vibrant enterprise culture struggling Bauchi, maintain their position in the top For example, Ekiti performs well on theto take root. For years Nigerian firms 10. Second, in aggregate, northern states ease of dealing with construction per-have faced a tough business environ- generally perform better.2 Nevertheless, mits, but lags behind on the three otherment and yet resourceful entrepreneurs TABLE 1.1continue to find ways of coping. Efficient, Where is it easier to do business in Nigeria—and where not?accessible, and simple regulations and 1 Jigawa (easiest) 11 Taraba 21 Edo 31 Ebonyiclear property rights could unleash the 2 Gombe 12 Sokoto* 22 Kaduna* 32 Abia*natural entrepreneurship of small and 3 Borno 13 Benue 23 Osun 33 Cross River*medium-size firms even further. 4 Kebbi 14 Kwara 24 Ondo 34 Ekiti Doing Business studies business reg- 5 Kogi 15 Plateau 25 Lagos* 35 Anambra*ulations from the perspective of a small 6 Yobe 16 Niger 26 Oyo 36 Imoto medium-size domestic firm. Lagos 7 Katsina 17 Abuja, FCT* 27 Rivers 37 Ogun*represents the country in the annual 8 Kano* 18 Nasarawa 28 BayelsaDoing Business report, which compares 9 Zamfara 19 Adamawa 29 Deltaregulatory practices in 183 economies.Yet, within Nigeria, entrepreneurs face 10 Bauchi* 20 Akwa Ibom 30 Enugu* *State included in Doing Business in Nigeria 2008 report.different local regulations and practices Source: Doing Business database.
  • 11. 8 DOING BUSINESS IN NIGERIA 2010FIGURE 1.1Comparing the Doing Business rankings of states with similar population and economic activity States with low economic activity States with medium economic activity States with high economic activity Starting Starting Starting a busines a busines a busines TOP RANK TOP RANK TOP RANK Akwa Ibom Lagos Plateau Kebbi Dealing with Dealing with Dealing with construction construction construction permits Abia permits permits Enugu Ekiti Bauchi KadunaTOP TOP TOP TOP TOP Rivers TOPRANK RANK RANK RANK RANK RANKEnforcing Enforcing Enforcingcontracts contracts Cross River contracts Kano TOP RANK TOP RANK TOP RANK Registering Registering Registering property property propertySource: Doing Business database. WHAT GETS MEASURED GETStopics when compared with states with DONE and employers are no longer required toa similar population size and economic register with the Nigeria Social Insuranceactivity,3 such as Akwa Ibom, Enugu, or Despite the hardship imposed by the Trust Fund.5 In addition, Nigeria intro-Kebbi. And while Enugu does not do well 2009 economic crisis on businesses glob- duced electronic procedures at the com-on contract enforcement, the other three ally, this was a record year for regula- pany registry, such as online verificationstates can learn from Enugu how to make tory reforms. Doing Business recorded of the company name, speeding start-upproperty registration easier. 287 reforms in 131 of the 183 econo- time by 9 days.6 Stamp duty fees were re- While Bauchi is the best overall mies measured between June 2008 and duced from 1.5% to 0.75% of the nominalperformer among medium-size states, it May 2009—20% more than the previ- share capital. A new building code wasshould look to Plateau for good practices ous year. In Sub-Saharan Africa, 29 of introduced in August 2006, which madewhen starting a business. Cross River 46 economies reformed in 2008/2009, significant improvements to buildingranks lowest among its peers on starting implementing 67 reforms. As in previ- safety.7 Nigeria embarked on major tradea business and enforcing a contract, but ous years, nearly half the reforms in the facilitation reforms, including: introduc-Plateau and Abia can learn from Cross region focused on making it easier to ing computerization to speed up the in-River how to make dealing with construc- start a business and trade across borders. spection of goods, implementing a posttion permits more efficient. Among large And for the first time, a Sub-Saharan Af- clearance audit system to eliminate delaysstates, Kano’s overall performance is bet- rican economy, Rwanda, led the world in and congestion in ports, concessioningter than Lagos, Rivers, and Kaduna. More- Doing Business reforms (figure 1.2). container terminals to private operators,over, Kano outperforms smaller states on Nigeria’s 2020 strategy targets eco- and establishing Inland Container Ter-dealing with construction permits and nomic growth, through structural and minals. Nigeria reformed getting creditregistering property. But when it comes to institutional reforms, as a critical devel- by adopting regulations which paved theenforcing a contract or starting a business, opment initiative. The strategy includes way for the creation of a private credit bu-Kano could learn from Kaduna or Lagos. an ambitious goal of taking the country reau.8 Despite these efforts, Nigeria’s over-The conclusion is that all states can learn into the ranks of the world’s 20 largest all ranking on the ease of doing businessfrom the local regulations and practices economies by the year 2020.4 did not improve, because other countriesof their peers. Also, national level agen- Between 2005 and 2009, Nigeria in- have been reforming more vigorously. Incies can compare the performances of troduced 9 major regulatory reforms to the most recent report, Doing Businesstheir local branches in different states, make it easier for firms to start-up and 2010: Reforming through Difficult Times,implementing the experiences of the most operate, as measured by Doing Business Nigeria, represented by Lagos, ranks 125efficient ones in less successful locations. (table 1.2). With the passing of the Pen- of 183 economies globally on the overall sion Reform Act No.2 of 2004, companies ease of doing business.
  • 12. OVER VIE W 9FIGURE 1.2 2008 to 18 days now. Abuja’s Develop-Consistent reformers continued reform efforts in 2008/09Improvement in the ranking on the ease of doing business, DB2009–DB2010 ment Control Department imposes no1 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 183 time limits, but organizes weekly ap- proval committee meetings to review Georgia Colombia applications. If approval is granted, the 16 TO 11 49 TO 37 2 REFORMS 8 REFORMS permit is issued in one month, faster Mauritius Rwanda than in 2008, when it took 60 days. Some 24 TO 17 143 TO 67 6 REFORMS 7 REFORMS states have taken steps to make informa- Macedonia, FYR Egypt, Arab Rep. tion more easily available to the public. 69 TO 32 116 TO 106 7 REFORMS 4 REFORMS Abeokuta’s Bureau of Urban and Physical Planning organizes a weekly televisionAVERAGE RANKING 30 71 83 95 118 139 program, Town Planning Half an Hour, ON THE EASE OF OECD EASTERN EAST 92 LATIN SOUTH SUB- DOING BUSINESS, HIGH EUROPE ASIA & MIDDLE AMERICA & EAST & CARIBBEAN ASIA SAHARAN on the Ogun state Gateway television DB2010 INCOME & CENTRAL PACIFIC AFRICA ASIA NORTH AFRICA channel every Thursday to address urbanSource: Doing Business database. development issues and complaints. In Lagos, several reforms are currently NIGERIAN STATES ARE obtaining a building permit has halved being implemented. In October 2009, the REFORMING the time to 14 days. Delegating the gov- governor of Lagos issued an executive ernor’s power to grant consent on prop- order that delegates the power to grantThe federal government is not alone erty transfers to both the Commissioner construction permits to lower levels ofin introducing regulatory reforms in and the Permanent Secretary for Lands the administration, depending on theNigeria. States have been actively imple- has resulted in substantial reductions in complexity of the project. The executivementing reforms over the past two years. time. The process can now be completed order also specifies that building regula-Since the publication of Doing Business in 2 weeks, faster than in most states. tions contained in the Lagos Buildingin Nigeria 2008, eight of the ten states Efforts have been made to broaden ac- Permit Approval Handbook should beand the capital measured for the second cess to justice and speed up proceedings made available to the public for free.time reformed in at least one of the by setting up new Magistrates Courts. Lagos’ District Office now requires itsfour Doing Business indicators (table The new courts and an increase in the field officers to carry a camera when1.3). In total, 14 positive reforms9 were number of magistrates have resulted in a conducting their first site inspection. Therecorded, of which 11 focused on con- decrease in the time needed to enforce a pictures—proving that the plot is in factstruction permits and property registra- contract by three months, from 810 days empty—are attached to the application,tion. Most reforms adopted by the states recorded in the last report. with no need to conduct any further pre-were administrative and often not costly In dealing with construction per- construction inspections.to implement. One state stands out: mits, five of the eleven states surveyed Six states reformed property registra-Kano introduced reforms in three areas in the last report reformed. Enugu has tion. One of the reasons why transferringbecoming the top reformer since the enforced statutory time limits, result- a property title in Nigeria is cumbersomepublication of Doing Business in Nigeria ing in a reduction in the time to obtain is because entrepreneurs have to pay mul-2008. Enforcing statutory time limits for a construction permit from 67 days in tiple fees at commercial banks and waitTABLE 1.2Reforms in Nigeria* 2005–2009Doing Dealing with TradingBusiness Starting a construction Employing Registering Getting Protecting Paying across Enforcing Closing areport business permits workers property credit investors taxes borders contracts businessDB 2006DB 2007DB 2008DB 2009DB 2010* Represented by LagosSource: Doing Business database.
  • 13. 10 DOING BUSINESS IN NIGERIA 2010TABLE 1.3 The average cost of starting a business isEight of the eleven states measured since 2008 implemented reforms in at least one area below the Sub-Saharan Africa average of Dealing with Registering EnforcingState construction permits property contracts 99.7% and, unlike most countries on the continent, Nigeria abolished the min-Kano*Anambra imum capital requirement. In Abuja,Ogun FCT, the top-ranked city for starting aEnugu business, it takes 5 procedures, 22 days,Abuja, FCT and 58.5% of income per capita to start aKaduna business. By contrast, in Enugu, it costsSokoto almost twice as much. In Bayelsa, theAbia most difficult state in which to start a*Top reformer. A top reformer is a state that implemented reforms since Doing Business in Nigeria 2008 that made it easier to do business in business, it takes almost a month longertwo or more of the Doing Business indicators, and also achieved the largest increase in the aggregate ranking from the previous report. to complete the same incorporation pro- indicates a negative reformNote: This table records reforms that occurred between June 2008 and January 2010. cess as it does in Abuja, FCT.Source: Doing Business database. In comparison with countries from the Economic Community of West Afri-for the respective agency to receive pay- doubled the number of account officers can States (ECOWAS), Nigeria requiresment confirmation. Ogun state addressed from 2 to 4 in an effort to speed up the rec- almost the same number of proceduresthis problem by introducing a system that onciliation of payments for property fees. than the ECOWAS average but five moreallows fee payments using an ATM card Ongoing reforms in Lagos also include than Burkina Faso and Senegal. The av-at a “point of payment” terminal located the delegation of governor consent for erage time needed to start a business iswithin the Ministry of Lands. The total property transfers to 4 more commission- below the ECOWAS average (39 days), buttime needed to register property in Ogun ers, with a mandatory consent deadline behind twelve ECOWAS countries and justhas decreased by almost two weeks, com- of 48 hours. ahead of Côte d’Ivoire, Guinea, Togo, andpared with 114 days two years ago. Abia In the area of contract enforcement, Guinea-Bissau. When it comes to cost,introduced e-payment in 2009 and now there is a dynamic trend of moderniz- Nigeria’s national average is cheaper thanall fees are paid at a commercial bank and ing and updating civil procedure rules in the ECOWAS average (113.7%), but moretransferred electronically to the account many states. The momentum was initiated expensive than in Ghana and Liberia.of each agency, which keeps corruption at by Lagos, where new High Court Civilbay. In Sokoto, the Nigerian Bar Associa- Procedure Rules were adopted in 2004. In DEALING WITH CONSTRUCTIONtion and other stakeholders put pressure 2006, Abuja, FCT, was among the first to PERMITSto speed up the process of granting con- follow suit. As a result, the time to enforce A construction company based in Lagossent on property transfers. The governor a contract in the capital was reduced from spends 350 days on 18 procedures toagreed and has since ensured that consent 432 to 381 days. Since then, many other obtain all building approvals and util-is granted within 60 days, rather than 75 states have remodeled their rules on those ity connections, at a cost of 580%10 ofdays, as previously. Another reform is of Lagos and Abuja, FCT. Some states, like income per capita. As reported in Doingthe introduction of the Geographic Infor- Kaduna and Nasarawa, have been faster to Business in Nigeria 2008, building a ware-mation System (GIS). Following Abuja’s act than others. Most recently, in Decem- house is faster and cheaper in the Northexample, and more recently Lagos, Kano ber 2009, Ondo adopted new High Court than in the South. It takes on average 74and Kwara will implement GIS, which rules. Others are setting up committees to days and 514% of income per capita tocaptures and stores land information in introduce the new rules. deal with construction permits in the 19a digital format. This reform speeds the northern states and the capital surveyed,process of searching the property title COMPARING BUSINESS against 114 days and 573% of income perfor encumbrances. It also increases title REGULATIONS ACROSS NIGERIA capita in the 17 southern states. Theresecurity, eliminating the need for submit- are also large variations in the numberting additional documents to prove the STARTING A BUSINESS of procedures required across Nigeriantitle origin. Anambra lowered the search Across all 36 states and Abuja, FCT, start- states. To obtain all construction-relatedfee for property titles fivefold from NGN ing a limited liability company requires permits and utility connections, a con-5,000 (US$ 37) to NGN 1,000 (US$ 7). on average 9 procedures and 36 days, struction company must complete onlyIn 2009, the Lands Registry in Lagos has and costs 77.7% of income per capita. 10 procedures in Jigawa, compared with
  • 14. OVER VIE W 11TABLE 1.4Best practices in Nigeria compared internationally Nigeria in DB 2010 Nigeria best practice (represented by Lagos) Global rank (183 economies) Global rank How Nigerian (183 Best-performing states wouldIndicator Performance economies) state within Nigeria Performance compare globallyDays to deal with construction permits 350 days 167 Jigawa 47 days 6Number of procedures to deal with 18 procedures 101 Jigawa 10 procedures 9construction permitsDays to enforce a contract 457 days 64 Jigawa 261 days 10Number of procedures to start a business 8 procedures 94 Abuja, FCT 5 procedures 25Days to register property 82 days 140 Borno 14 days 26 580.3% of income 94.6% of income perCost to deal with construction permits 143 Kano 67 per capita1 capita 32% of the claim 26% of the claimCost to enforce a contract 120 Katsina 86 value valueDays to start a business 31 days 117 Abuja, FCT 22 days 92 20.9% of the 5.2% of the propertyCost to register property 178 Yobe 104 property value valueNumber of procedures to register property 13 procedures 177 Borno, Gombe, Kwara 8 procedures 136 77.0% of income 58.5% of income perCost to start a business 153 Abuja, FCT 148 per capita2 capita1. At the time of publication of Doing Business 2010: Reforming through Difficult Times the cost was 573.4% of income per capita.2. At the time of publication of Doing Business 2010: Reforming through Difficult Times the cost was 76.7% of income per capita.Source: Doing Business database.23 procedures in Ebonyi. This difference the 36 states and the capital in detail, state, it takes more than twice the timeis explained in part by the fact that in wide differences emerge. State govern- (835 days) and money (52.8%) to get theJigawa there are only two inspections ment requirements and practices and the same result. On a global scale, Nigerianduring construction, while in Ebonyi, differing performances of local branches courts prove efficient when filing a claim.a site analysis report is required before of federal agencies drive these variations. It takes an average of 23 days, but inconstruction starts, followed by 12 in- For example, registering property is easi- Akwa Ibom, Delta, Ekiti, and Ondo, thespections during the construction. est in Gombe, where it takes 8 procedures, process can be as fast as 7 days. The trial 16 days, and 6.6% of the property value and judgment stage is where most delaysREGISTERING PROPERTY to transfer a title. By contrast, in Rivers occur. This usually takes at least one year,On average, an entrepreneur would have state, it takes 13 procedures, 201 days, and with the longest delays in Niger state—to go through 12 procedures, wait 82 days, 23.2% of the property value to complete more than three years.and pay 16% of the property value to have the same process.it registered in the Lands Registry. The LEARNING FROM EACH OTHER:average time and cost needed to transfer ENFORCING CONTRACTS ADOPTING GOOD LOCALa property title make Nigeria one of the It takes on average 511 days and costs PRACTICESmost difficult places to register property 36.3% of the claim value to resolve aworldwide. Nigeria only has two fewer commercial dispute through the courts. Benchmarking exercises like Doing Busi-requirements than Brazil—the country This is faster and cheaper than the Sub- ness inspire governments to reform. Theywith the highest number of procedures Saharan Africa regional average of 644 uncover potential challenges and iden-to register a property globally—and one days and 49.3% of the claim value. How- tify where policy makers can look forless than Uganda—that with the highest ever, Nigeria lags behind Ghana, where it good practices. Comparisons betweennumber of procedures in Sub-Saharan takes 487 days and costs 23% of the claim cities within the same country are evenAfrica. At 16% of property value on aver- value. There are wide differences across stronger drivers of reform, because localage, the cost is almost 70% higher than the Nigeria. In Yobe, it takes 1 year and costs governments have a hard time explain-Sub-Saharan average. Yet, when analyzing 26.1% of the claim value. In Cross River ing why doing business in their city or
  • 15. 12 DOING BUSINESS IN NIGERIA 2010state may be harder than in neighboring days, is similar to Finland. Finally, resolv-locations. The good news is that sharing ing a commercial dispute in 261 days, likea national legal framework facilitates the in Jigawa, would put Nigeria among the 1. United Nations. 2009. Human Develop- ment Report. New York.implementation of existing good prac- 10 fastest countries in the world, similar 2. Nigeria is divided into six geopoliticaltices within a country. National govern- to Rwanda and faster than the United regions: North West, North East, Northments can also use Doing Business data Kingdom. Central, South West, South East, andto monitor how local branches of their Payoffs from reform can be large. South South.agencies implement national regulations. Reforms expand the reach of regulation 3. The classification is based on city popula- tion and on state Gross Domestic Prod-In a world where locations compete by bringing businesses and employees uct (GDP). Population statistics are basedagainst each other to attract investment, into the formal sector. Take Mexico, for on the 2006 Census published in thesubnational Doing Business data allow example, where reforms cut the time Official Gazette of Lagos on January 19, 2007. GDP statistics were obtained fromlocal governments to review the condi- to start a business from 58 to 13 days. the Canback Global Income Distributiontions facing entrepreneurs in their cities A recent study reports the payoffs: the Database, Canback Dangel. http://www.from a comparative perspective. Subna- number of registered Mexican busi- cgidd.com. Accessed on August 20, 2008.tional data are now available for almost nesses rose by nearly 6%, employment 4. Nigeria’s Vision 2020: www.nv2020.org.300 cities in 41 countries. increased by 2.6%, and prices fell by 1% 5. World Bank. 2005. Doing Business 2006: Creating Jobs. Washington, DC. World The example of Colombia is telling. because of the competition from new Bank Group.Doing Business in Colombia 2008 identi- entrants.13 Such results would be im- 6. World Bank. 2007. Doing Business 2008.fied good practices in 13 cities, pointed portant for Nigeria, where only 10% of Washington, DC. World Bank Group.out bottlenecks, and provided recommen- the 6-million new entrants to the labor 7. Ibid.dations for reform. Two years later, a new market find jobs.14 The high percentage 8. World Bank. 2009. Doing Business 2010:report tracked progress over time. The re- of youth in Nigeria (more than 50% of all Reforming through Difficult Times. Wash-sults were impressive. All 13 cities showed Nigerians are under 24) is an indicator ington, DC. World Bank Group.improvements in at least one of the areas that the country will struggle to create 9. There were also 4 negative reforms in Enugu, Abuja, FCT, Abia, and Bauchi –allmeasured, thanks to local-level reforms.11 the jobs needed to absorb new entrants of them due to fee increases for propertySimilarly, Doing Business in India 2009 into the formal labor market.15 Reforms transfers.showed that 9 out of 10 Indian states that strengthen property rights would 10. At the time of publication of Doing Busi-benchmarked for the second time had also benefit the Nigerian economy, where ness 2010: Reforming through Difficult Times the cost was 573.4% of income perintroduced reforms. As a result of these secure property titles exist for just 3% capita.reforms, the average time to start-up a of the country’s land area,16 preventing 11. World Bank. 2010. Doing Business incompany dropped from 45 to 35 days and businesses and the poor from using it as Colombia 2010. Washington, DC. Worldthe time to obtain a building permit was collateral to raise funds. Bank Group.reduced by 25 days, on average.12 The implementation of and support 12. World Bank. 2009. Doing Business in India 2009. Washington, DC. World Bank States in Nigeria can learn from each for reforms at all levels of government Group.other and adopt regulations and practices must continue. Consistent reformers 13. Bruhn, Miriam. 2008. “License to Sell:that are working elsewhere in the country. globally follow a long-term agenda and The Effect of Business RegistrationIf a hypothetical state called “Nigeriana” continually push forward. The top-ranked Reform on Entrepreneurial Activity in Mexico.” Policy Research Working Paperadopted all the best practices identified economy on the ease of doing business, 4538. Washington, DC. World Bank. Thein this report, it would rank 72nd out of Singapore, introduces reforms every results were obtained after controlling for183 countries globally—53 places ahead year. Reforms are comprehensive, thus GDP per capita, number of economic es- tablishments per capita, fixed assets perof Nigeria’s position in Doing Business increasing the chances of success and capita, and investments per capita in the2010 (table 1.4). Reducing start-up re- impact. Moreover, consistent reformers benchmarked municipalities.quirements to the 5 procedures and 22 are inclusive, involving all relevant actors 14. Kwakwa, Victoria, Adeola Adenikinju,days needed in Abuja, FCT, would make and institutionalizing the reform effort. Peter Mousley, and Mavis Owusu-Nigeria as speedy as Japan. Fast approval They also stay focused by setting specific Gyamfi. 2008. Binding Constraints to Growth in Nigeria. New York: Palgraveof construction permits, like in Jigawa, goals and regularly monitoring progress. Macmillan.would mean that dealing with construc- The federal and state governments in 15. Economist Intelligence Unit, Nigeriation permits is three times faster than Nigeria can follow similar strategies to Country Profile 2009.the OECD average (157 days). The time improve their regulatory environment 16. Nigeria: Factbook. CIA.needed to register property in Borno, 14 and enhance the chances for success.
  • 16. 13Starting a TABLE 2.1 Where is it easy to start a business—and where not?business 1 2 Abuja, FCT (easiest) Kogi 14 15 Kaduna Zamfara 27 28 Anambra Ebonyi 3 Kebbi 16 Edo 29 Rivers 4 Gombe 17 Jigawa 30 Osun 4 Plateau 18 Abia 31 Delta 6 Taraba 19 Kwara 32 Ekiti 7 Akwa Ibom 20 Adamawa 33 Imo 8 Lagos 21 Bauchi 33 Ondo 9 Niger 21 Enugu 35 Cross River 10 Benue 23 Sokoto 36 Ogun 11 Borno 24 Oyo 37 Bayelsa (most difficult) 12 Nasarawa 25 Katsina 13 Yobe 26 KanoTuoyo has returned to Nigeria after earn- Note: The ease of starting a business is a simple average of the state rankings on the number of procedures, and the associated time and cost required to start a business. See the Data notes for details.ing an MBA from Harvard and is anxious Source: Doing Business database.to set up his own business. His motherhas a weaving business that produces Across all 36 states, starting a lim- a business globally have no more than sixrugs, baskets, and various other crafts. ited liability company requires on aver- procedures each and a cost of less thanTuoyo’s mother could not afford the high age 9 procedures and 36 days and costs 5% of income per capita (figure 2.2).cost and hassle of business incorporation 77.7% of income per capita. The cost of There are marked differences acrossin Delta state and has operated for over starting a business in Nigeria is less than Nigeria in the time, cost, and number oftwelve years from the family compound. the regional average of 99.7% and, unlike procedures required to start a business.Because her business is informal, she can- many countries in Sub-Saharan Africa, These variations stem from differentnot advertise and must rely on verbal Nigeria has abolished the minimum cap- performance levels of state branches ofreferrals from customers. She markets her ital requirement. But starting a business national agencies, such as the Corporatecrafts at local fairs and festivals, where her is still a burdensome process, and in the Affairs Commission (CAC) and stamp-stand is always the busiest. Tuoyo plans area of business registration the country duty offices, as well as variations in stateto expand his mother’s thriving business lags behind economies such as Mauritius departmental taxes and local licensingand to set up manufacturing outlets in and South Africa. In Mauritius, the top- fees for business premises in each state.the neighboring states to tap into new ranked economy in Sub-Saharan Africa In Abuja, FCT, the top-ranked city formarkets. For this to happen the business on business start-up, it takes only six starting a business in the country, it takesmust be properly set up in each state. In days and costs 4.1% of income per capita. only five procedures, 22 days, and 58.5%Delta state, where Tuoyo’s mother lives, it In South Africa it is 13 times cheaper and of income per capita to open a business.takes as long as 51 days to complete the two weeks faster to register a company By contrast, in Bayelsa, it takes almost anregistration procedures and costs 84.4% than in Nigeria. The more efficient proce- extra month to complete the same incor-of income per capita. dures for business start-up in Mauritius poration process due to the high number In order to increase private-sector and South Africa can be accounted for of procedures required—two more thanactivity, the incorporation requirements to some extent by automation and themust be easy, fast, and inexpensive. Re- use of information and communication What is measured?search shows that the number of new technologies (ICT), but some other Sub- Doing Business records all procedures that arefirms increases and employment grows Saharan Africa countries are champions officially required to start-up and formallywhen business entry becomes easier. In in business start-up without ICT involve- operate a commercial or industrial small or medium-size limited liability company. TheseColombia, after the introduction of one- ment. This is the case of Rwanda, which include obtaining the necessary licenses andstop shops in six cities, new firm registra- has a completely manual and paper- permits and completing all required notifica-tion increased by 5.2%.1 These findings based system, but provides for business tions, verifications, and registrations for the company and its employees with the relevantare confirmed by additional studies in start-up in only two steps and three authorities. See the detailed description ofother countries (figure 2.1).2 days. The top ten performers on starting the standard case in the Data notes.
  • 17. 14 DOING BUSINESS IN NIGERIA 2010FIGURE 2.1 81 official treasury receipts have been pre-More business entry after reformIncrease in annual business entry after reform (%) 72 sented. In some states, such as Katsina, cash payments above a certain threshold 52 cannot be accepted at the stamp-duty office.3 As a result, before stamping the incorporation documents, the entrepre- 24 26 neur must first pay the stamp duty at a 22 23After reform designated bank, adding one more step to the process. The time needed to start a business Finland Guatemala Jordan Madagascar Mauritius Egypt Saudi ranges from 22 days in Abuja, FCT to Arabia 51 days in Delta. Across all states, theSource: Doing Business database. lengthiest procedure is registration withthe national average (table 2.1). tax, value-added tax, and Pay-As-You- CAC. In 2008, CAC introduced elec- The number of procedures to start a Earn (PAYE) in one integrated tax office. tronic procedures for company namebusiness varies from five in Abuja, FCT to Moreover, new businesses in Abuja, FCT verification and registration. But the on-11 in Bayelsa. Five procedures are federal do not have to obtain a business premises line system that would allow registrationand uniform across the country. These permit from the municipality. Whereas documents and payment to be processedinclude the name-availability search, the in the northern parts of the country reg- electronically has not yet been fully im-stamping of incorporation documents, istering a business premise involves one plemented. Documents must still be filedincorporation with CAC, and tax regis- visit to the Ministry of Commerce to sub- physically, and although entrepreneurstration with the Federal Board of Inland mit the necessary forms and payment, can apply for business registration inRevenue Service (FIRS). The deposition in the South, several steps are necessary. their state of residence, all applicationsof the CAC Declaration of Compliance For example, in Bayelsa, an entrepreneur are processed at CAC headquarters inform is also a federal requirement. This must visit three different offices to regis- Abuja, FCT, where business registrationdeposition can be made through a notary ter his business premises (figure 2.3). In certificates are issued for the whole coun-public or a commissioner of oaths in addition to applying for the permit at the try. There is a vast time lag between sub-either a federal or state High Court. All Ministry of Commerce and making the mission of documents to the local CACother procedures are state requirements. payment at a designated bank, the entre- office and approval from Abuja, FCT. On-Since Abuja, FCT is not a state, there preneur must present a proof of deposit line name checking is now available, butis no separate requirement to register at FIRS, where an official treasury receipt is not working optimally because pro-with state tax authorities. Companies is issued. The Ministry of Commerce posed company names must be verifiedthere are required to register for income issues a business premises permit once through a central database maintained atFIGURE 2.2 CAC headquarters in Abuja, FCT. Due toBest, average and worst practices in starting a business in Nigeria, compared globally unreliable Internet services, the time for 499.5 such verification varies across states. TheRange ZIMBABWEin Nigeria name search could take two to three days KENYA ZIMBABWEBAYELSA 11 in most states, and as much as ten days in ZIMBABWE Nigeria OYO 110.2 Rivers. Stamping the incorporation doc- average 9 SSA AVERAGE GHANA SSA AVERAGE uments with FIRS is lengthy, especially 77.7 in states without a stamp-duty office. It DELTA 51 SSA AVERAGE takes four days to stamp the registra-ABUJA 5 MAURITIUS ABUJA 58.5 36 KENYA GHANA tion documents in Bauchi and Kaduna, KENYA where FIRS maintains a stamp-duty of- ABUJA 22 GHANA RWANDA fice, and ten days in Bayelsa, where there NEW ZEALAND MAURITIUS RWANDA 0 0 RWANDA 0 MAURITIUS is no local office. Since Doing Business in NEW ZEALAND NEW ZEALAND Procedures Time Cost Nigeria 2008 was published, additional (days) (% of income per capita) stamp-duty offices have been opened in Mauritius is the 2010 top performer in Sub-Saharan Africa (SSA) on the ease of starting a business. some states, bringing the total number Rwanda is the 2010 global top reformer overall. of state stamp-duty offices to 16. ForSource: Doing Business database.
  • 18. STARTING A BUSINESS 15FIGURE 2.3 yers in places like Delta and Bayelsa stillStarting a business—faster in Abuja, FCT than in Bayelsa charge the old rate in practice. The busi-Time (days) Bayelsa 11 procedures, 47 days ness premises registration fee set forth in45 the legislation7 is either a fixed rate speci- Procedure 5 Register the company with fied in an appendix to the Registration the Corporate Affairs Commission of Business Premises Edict or a variable30 rate based on the business activity, size of Procedure 2 Prepare the requisite incorporation premises, urban or rural location, num- documents and pay the stamp duty Abuja, FCT ber of employees, and type and size of15 6 procedures, 22 days signage displayed. The Ministry of Com- merce in Taraba and Yobe charges NGN 2,000 (US$ 15) and NGN 5,000 (US$0 37.50), respectively, for business premises 1 2 3 4 5 6 7 8 9 10 11 Procedures registration for a medium-size company,Source: Doing Business database. while in Kwara and Delta states, the fees are as high as NGN 40,000 (US$ 300) andthe remaining 21 states, entrepreneurs assessed on the nominal share capital. NGN 20,000 (US$ 150).must travel to the nearest state that has a In 2008, the joint Tax Board revised the Since the publication of Doing Busi-stamp duty office. Stamp Duty Act and reduced stamp duty ness in Nigeria 2008, business registration There are significant variations in rates by half from 1.5% to 0.75% of share across Nigeria has improved, with the es-the cost of starting a business across the capital. The stamp duty commission- tablishment of regional branches of CAC36 states and Abuja, FCT (figure 2.4). ers now receive NGN1.506 for every 200 in all 36 states and the Federal CapitalThe lowest cost is seen in Abuja, FCT shares. However, this reduction has not Territory. The introduction of standardand Taraba, at 60% of income per capita been properly communicated to the pub- forms for the memorandum and articlesor less, while Oyo stands out as the most lic in all states, and incorporation law- of association (MEMART) has simplifiedcostly at 110%. The largest cost com-ponent is the professional fees charged FIGURE 2.4 Time and cost to open a business in selected Nigerian statesby intermediaries. The Companies and Time CostAllied Matters Act 1990 makes it manda- (days) (% of income per capita)tory for an entrepreneur to engage the Abuja, FCT 22 58.5services of professional intermediaries Taraba 33 60.0accredited by CAC.4 These professionals Edo 45 60.5 Kebbi 30 61.7typically handle all the steps involved in Yobe 38 61.9the registration process with CAC, but 31 63.7 Plateaunot the post-incorporation tax and busi- Benue 36 65.0ness premises registrations. Best-practice Akwa Ibom 34 65.1economies, such as New Zealand, Canada Gombe 24 66.2and Singapore do not make such services Kaduna 31 69.5 Borno 34 71.4mandatory. In Nigeria, lawyers are often Adamawa 44 74.7used as incorporation agents without Lagos* 31 77.0*having their activity and registration fees Kano 38 77.8regulated.5 Lawyers fees for incorporation Delta 51 84.4services are notably lower in states where Bayelsa 47 84.7 Imo 39 85.9the process of company registration is Nasarawa 29 87.6fastest and stamp-duty offices are avail- Ogun 40 90.9able. Professional fees are compounded Ondo 37 90.9by additional costs for transportation and Ekiti 40 103.7accommodation for lawyers who have Cross River 47 103.7 Oyo 31 110.2to travel out of state. Another expensivecomponent is the stamp duty, which is * At the time of publication of Doing Business 2010: Reforming through Difficult Times the cost was 76.7% of income per capita. Source: Doing Business database.
  • 19. 16 DOING BUSINESS IN NIGERIA 2010the registration process by shortening the duced at the state level have not been MONITOR AND EVALUATE THE PERFORMANCE OF CAC REGIONALcharter documents and preventing errors. staffed with representatives from the rel- OFFICESThe Integrated Tax Office for corporate evant agencies and have therefore failedincome tax and VAT is functioning well to have a real impact. To be effective, of- At present, the state CAC offices functionin all parts of the country. Consultations ficials at one-stop shops should be given as clearing houses. Incorporation papersare ongoing between FIRS and states and decision-making power to act on behalf are filed through them, but the actuallocal government councils to implement of their respective agencies. Without it, processing of applications is handled inthe full provisions of Section 8(q) of the delays will continue, as the documents Abuja, FCT. The time needed to trans-Federal Inland Revenue Service (Estab- travel to agency headquarters and back. mit incorporation documents from eachlishment) Act, 2007 for issuance of a It is also important that these one-stop state office to headquarters and to sortunique taxpayer identification number shops be available not only for foreign through piles of incorporation certifi-(TIN), which seeks to standardize the TIN businesses but for local entrepreneurs as cates received from headquarters signifi-across Nigeria. Whereas in most states well. Many African countries have had cantly delays the business registrationa separate TIN is issued by both FIRS success consolidating company start-up process. Entrepreneurs demand quickand the State Board of Internal Revenue at a single access point. In Rwanda, all turnarounds across the country and one(SBIR), a few states, such as Niger, are in relevant officials, forms, and payments way to achieve this is to grant state CACthe process of linking their SBIR database were recently consolidated under one offices the autonomy to handle applica-to FIRS in order to issue a single TIN to roof. Togo is another good example, tions and issue certificates. Providingnew businesses. The One Stop Investment where the establishment of an opera- the zonal CAC branches with the sameCentre (OSIC), created by the Nigerian tional one-stop shop eliminated six pro- discretion, mandate, and functionality asInvestment Promotion Commission and cedures for starting a business.9 headquarters will cut down registrationlocated in Abuja, FCT, is now fully op- time and eliminate delays.erational. Similar one-stop shops have WHAT TO REFORM?recently been launched in several states, MAKE THE REQUIREMENT TO USEsuch as Ogun, Delta, and Cross River, to EXPEDITE REFORMS TO UNIFY THE PROFESSIONAL INTERMEDIARIES FOR REGISTRATION PROCESS AT A SINGLE INCORPORATION OPTIONALfacilitate company start-up. So far, these ACCESS POINTstate investment centers, unlike the federal The requirement to use accredited inter-OSIC, have been unsuccessful in bringing The requirement to visit several offices mediaries to handle business registrationall federal agencies relevant to starting a when setting up a new business is a is outdated. It adds to the complexitybusiness together in one location. major obstacle that continues to nega- and cost of business registration. Profes- To keep up with the fast pace of tively affect business registration. Uni- sional intermediary services are nowbusiness start-up reforms across the re- fying the registration processes would optional under Samoa’s new Companiesgion, Nigeria must continue reforming. reduce the time by anywhere from five Act and the Nigerian government canAs a member of the Corporate Registers days to two weeks, depending on the implement a similar reform by amend-Forum,8 Nigeria can learn from the expe- state. The procedure for stamping the in- ing its Companies and Allied Mattersrience of other federal countries, such as corporation documents with FIRS poses Act. A convenient, fast, and simple al-Canada and Australia, and adopt some of a great burden to business registration ternative would be to fully automatetheir good practices. Although all states and can easily be resolved. If this pro- the business registration process, so thatwould benefit from federal reforms, each cedure is primarily aimed at generating entrepreneurs can handle the process onstate should also improve state-level revenue for the government, a simpler their own. Best-practice economies inprocedures associated with starting a alternative is to have CAC collect stamp- business start-up, such as Canada andbusiness. The reform recommendations duty fees, along with other registration the United Kingdom, currently imple-from Doing Business in Nigeria 2008 still fees, and later transfer them to FIRS. ment online incorporation system. Newrequire attention, as there have been no This is in line with the recommendations business owners no longer have to worksignificant reforms since. Several federal of Doing Business in Nigeria 2008. Jordan through the red tape of various agenciesreforms are still in the pipeline. The and Egypt have transferred tax registra- and they can save money by avoiding ac-digital filing and electronic system for tion to the registrar, thus streamlining countants’ or lawyers’ fees.company registration proposed by CAC and speeding up the process, which nowin June 2005 has yet to be implemented. takes only one or two days.10The one-stop investment centers intro-
  • 20. STARTING A BUSINESS 17IMPROVE OR REMOVE BUSINESSPREMISES REGISTRATIONNigerian entrepreneurs must pay state 1. Cardenas, Mauricio, and Sandra Rozo. 2007. “La informalidad empresarial ygovernments a fee for a permit to oper- sus consecuencias: Son los CAE unaate business premises within the state. solucion?” Documento de Trabajo 38.Registration is expensive and creates a Bogotá, Colombia: Fedesarrollo.burdensome administrative bottleneck. 2. World Bank. 2008. Doing Business in Egypt 2008. Washington, DC. WorldStates should consider the purpose be- Bank Group.hind this mandatory post-registration 3. The threshold for cash payment is up toprocedure. If it is intended to generate NGN 5,000 (US$ 37.50).revenue, states might consider consoli- 4. Companies and Allied Matters Act, Cap.dating registration with other existing 59, Laws of the Federal Republic of Nige- ria, 1999.revenue streams. Where permit fees are 5. Doing Business in Nigeria 2008 did notaffordable and the procedure is fast and take into account these professionalsimple, new businesses are more likely to charges in the cost calculations for the 11comply with registration requirements. states measured.In Northern states, such as Kebbi and 6. Equivalent to US$ 0.011.Zamfara, the business premises permit 7. Registration of Business Premises Edict No. 20 of 1973.can be obtained in one day, at a sin- 8. The Corporate Registers Forum is an in-gle-access point within the Ministry of ternational not for profit organization forCommerce, against a small flat fee. By administrators of corporate and securi-contrast, over two-thirds of the states ties registers. http://www.corporateregis-require multiple steps for registration tersforum.org.and have no fee schedule. States might 9. World Bank. 2009. Doing Business 2010: Reforming through Difficult Times. Wash-reform further and eliminate this permit ington, DC. World Bank Group.all together if it serves no particular 10. World Bank. 2009. Doing Business inregulatory function. India 2009. Washington, DC. World Bank Group.
  • 21. 18Dealing with TABLE 3.1 Where is it easy to deal with construction permits—and where not?construction 1 2 Jigawa (easiest) Sokoto 14 15 Borno Katsina 27 28 Nasarawa Ebonyipermits 3 4 Kano Adamawa 15 17 Rivers Cross River 29 30 Akwa Ibom Abia 5 Kwara 18 Zamfara 31 Anambra 6 Kogi 19 Ondo 32 Imo 7 Bauchi 20 Delta 33 Kaduna 8 Kebbi 21 Taraba 34 Enugu 9 Osun 22 Yobe 35 Abuja, FCT 10 Niger 23 Oyo 35 Lagos 11 Benue 24 Plateau 37 Ogun (most difficult) 12 Ekiti 25 Bayelsa 13 Gombe 26 Edo Note: The ease of dealing with construction permits is a simple average of the state rankings on the number of procedures, and the associ- ated time and cost required to build a warehouse. See the Data notes for details.Riding a wave of oil-driven prosperity, Source: Doing Business database.Nigeria has experienced rapid urbaniza-tion in the last thirty years. The country’s oper. “It is such a hassle to obtain all state level through the amendment of theurbanites now account for 48.2% of the certificates, receive all inspections, pay a local Urban and Regional Planning Laws.population, compared to 23.4% in 1975.1 fee for this and a bribe for that, that only Some states, such as Lagos; Abuja, FCT;Cities have struggled to absorb this large big construction companies bother to Abia; and Ebonyi have already enforcedrural exodus and the resultant hous- comply with the letter of the law.” Deal- several provisions of the code, such asing shortages, traffic congestion, and en- ing with construction permits is indeed requiring new inspections and certifi-vironmental degradation. In addition, cumbersome and costly in Nigeria. A cates of completion. Others have not.many of the buildings erected to accom- construction company based in Lagos These discrepancies, combined with themodate newcomers have used substan- spends 350 days on 18 procedures to persistence of old local building bylawsdard construction materials and fallen obtain all building approvals and utility and differences in local practices, createshort of construction regulations.2 As a connections, at a cost of 580% of income wide local variations in the requirementsresult, building-related incidents have per capita.5 Lagos ranks 162nd of 183 to be met when dealing with construc-multiplied. According to the Nigerian economies, behind Rwanda (90th) and tion permits.Institute of Building, 84 structures have Kenya (34th). In Hong Kong, China,collapsed in the last 20 years in Nigeria, the best performer for this indicator, a What is measured?claiming more than 400 lives.3 construction company spends only 67 Doing Business looks at construction permits A good building code is an essential days and 18.7% of income per capita on as an example of the licensing regulationstool to ensure sustainable urban devel- 7 procedures (figure 3.1). that businesses face. This indicator measures the procedures, time, and cost needed to getopment. But striking the right balance To streamline the process and im- the required permits to build a commercialbetween too little or too much regulation prove compliance, the Nigerian govern- warehouse, hook it up to basic utilities, andis challenging. A well-balanced build- ment drafted a new National Building formally register it. The recorded procedures include submitting project documents (build-ing code must formulate and enforce Code in 2006, which sets out minimum ing plans, site maps, etc.); obtaining clear-strict construction standards to protect construction standards. The code estab- ances and permits; passing inspections; andpublic safety, while remaining efficient lishes a strict schedule of inspections to obtaining connections from electricity, water,and affordable. Sixty to eighty percent be conducted at specific stages during sewerage, and telephone providers. The time and cost needed to complete each procedureof construction projects in developing construction (setting out, foundation, under normal circumstances are calculated.economies are undertaken without a floor level, and so on), and requires every All official fees are included. The case studypermit because the approval process is project to obtain a certificate of comple- assumes that the warehouse will be used for storage of nonhazardous goods and istoo complex or oversight too lax.4 tion after construction. located in the peri-urban area of the bench- “When you want to build, you sim- Although ratified by the Federal marked location. See the detailed descriptionply go ahead and do it,” confesses Ola- Executive Council, the Building Code has of the standard case in the Data notes.sunkamni, a Nigerian real estate devel- yet to be adopted and implemented at the
  • 22. DEALING WITH CONSTRUC TION PERMITS 19FIGURE 3.1 spections during construction in EbonyiBest, average and worst practices in dealing with construction permits in Nigeria,compared globally and 7 in Lagos, but none in Adamawa INDIA and Gombe. Moreover, only 16 states LAGOS 350 CHINA require a certificate of completion. Al- CHINA SSA AVERAGERange though the new Building Code lays outin Nigeria SSA AVERAGE ENUGU a precise set of inspections and requiresEBONYI 23 1,509.1 RWANDA a certificate of completion, enforcement depends on staff capacity. Where there SOUTH AFRICA Nigeria SOUTH AFRICA are no qualified inspectors, the author- average 15 RWANDA KENYA ity relies on the supervising architect to UNITED KINGDOM 92 UNITED KINGDOM CHINA KENYA 541.1 ensure that the construction respects theJIGAWA 10 HONG KONG, JIGAWA 47 KANO KENYA plan’s specifications, and only conducts a CHINA 94.6 few ad hoc visits to ensure that a building 0 0 0 SOUTH AFRICA Procedures Time Cost permit has been obtained. (days) (% of income per capita) Local variations in the time neededNote: SSA denotes the Sub-Saharan Africa region.Source: Doing Business database. to deal with construction permits are substantial. Completing all procedures can be as fast as 47 days in Jigawa and 52 As reported in Doing Business in (table 3.1). Jigawa, the best-performing days in Kwara or as long as 148 days inNigeria 2008, building a warehouse is state for this indicator, would rank 30th Rivers or 350 days in Lagos. These differ-faster and cheaper in the north than in out of 183 economies, ahead of Saudi ences are driven by two main bottlenecks:the south. It takes on average 74 days and Arabia (33rd) and Switzerland (36th). obtaining a building permit and getting a514% of income per capita to deal with There are large variations in the permanent electricity connection.construction permits in the 19 northern number of requirements across states. Across Nigeria, obtaining a buildingstates and the capital surveyed, against To obtain all construction-related per- permit represents, on average, 27.4% of114 days and 573% of income per capita mits and utility connections, a construc- the total time spent on the construction-in the 17 southern states. Local varia- tion company must complete only 10 permit process (figure 3.2). Behind thistions, however, go beyond the north/ procedures in Jigawa compared to 23 number lie different local realities. Thesouth divide, and can be observed at the procedures in Ebonyi. All states require a time it takes for the authority in chargestate level. It is easier for construction building permit, but the procedures that to issue the permit varies from 4 days incompanies to obtain all construction- precede and follow obtaining this docu- Yobe and 5 days in Adamawa to 90 daysrelated permits and utility connections ment differ. in Cross River.in Jigawa, Sokoto, Kano, and Adamawa In 32 of the states surveyed, con- The efficiency of the issuing author-than in Abuja, FCT; Lagos and Ogun struction companies must obtain one or ity depends on two factors: the workload more certificates before applying for a of the office and the enforcement, or not,FIGURE 3.2 building permit. These certificates might of a statutory time limit. AdministrationsObtaining a building permit and electricity include an environmental impact assess- are more efficient when they are suffi-connection is time consuming ment, a land use clearance, which verifies ciently staffed to handle all applicationsShare of total time to deal with constructionpermits , Nigeria average (%) that the project is consistent with the and entrusted with a clearly defined task. local master plan, a site analysis report, Otherwise, office clerks find themselves Other* a fire safety report, and other types of overworked, applications pile up, back- 14.3 BuildingPre-permit permit authorizations. In the remaining five logs appear, and delays ensue. City size 27.4 states (Jigawa, Kwara, Kano, Benue, and may be a factor. The four most efficient 12.5 Sokoto), no such preliminary approvals permit-issuing authorities are located in are needed for simple structures with cities with populations below the 36-state 11.7 low environmental impact, such as a average.6 But size is only one side of the Water 34.2 connection warehouse storing books. coin. Administrations that focus solely Electricity connection Procedures that follow the building on reviewing applications and issuing permit also differ from state to state. building permits are more efficient than*Includes inspections and certificate of completion procedures. Development authorities conduct 12 in- those burdened with additional activi-Source: Doing Business database.
  • 23. 20 DOING BUSINESS IN NIGERIA 2010TABLE 3.2 work,” local architects say. As a result,Five of the 11 states measured in 2008 reformed dealing with construction permits Enugu’s Town Planning Authority now Statutory time Improved limit / silent is Approval transparency of issues the building approval in 18 days, consent committee information compared to 67 days in 2008. Abuja’s De-Kano velopment Control Department imposesAnambra no limits, but organizes weekly approvalEnugu committee meetings to review applica-Ogun tions. If approval is granted, the permit isAbuja, FCT issued in one month, faster than in 2008, when it took 60 days (figure 3.3).Note: This table records reforms that occurred between June 2008 and January 2010.Source: Doing Business database. The single biggest bottleneck is the electricity connection, which representsties. A good example is Ondo, where the Doing Business in Nigeria 2008 have since 34.2% of the total time (figure 3.2). Get-Ministry of Physical Planning and Urban developed and enforced statutory time ting a warehouse wired to the power gridDevelopment recently created two new limits, resulting in substantial reductions can take as little as 14 days in Bayelsadepartments and narrowed the tasks of in time (table 3.2). In Ogun, the Urban and Yobe, and as long as 9 months inthe existing ones. The Development Per- and Physical Planning Board has intro- Lagos. Why such differences? The Powermit Department now focuses on issuing duced a two-week statutory time limit Holding Company of Nigeria (PHCN),permits, while the other departments7 and asked its officers to produce weekly the country’s main power provider, hastake care of the physical planning, master activity reports in order to assess their recently introduced a new three-phaseplanning, monitoring, enforcement, and performance. Combined with a fast track prepaid meter to replace the currentso on. As a result, a construction com- for simple applications, such as for resi- credit meter. In order to avoid abusespany in Ondo can obtain a construction dences and small buildings, this reform and non-payment, the prepaid meterpermit in only 14 days. has halved the time needed to obtain a requires the purchase of a card of fixed States that have an enforced statu- building permit in Ogun, from 28 days in value prior to consumption. Once empty,tory time limit for processing applica- 2008 to 14 days in 2010. Kano and Ana- the card must be refilled. The supply oftions tend to issue permits in less time mbra have implemented similar reforms prepaid meters has been unable to keepthan those that do not. When local of- and seen their construction permit time up with demand in several states, how-ficials in charge of issuing permits are shrink from 30 to 14 days and 30 to 21 ever, leading to substantial delays. There-not encouraged to complete their work days, respectively. Enugu has had a statu- fore, getting connected to electricity iswithin a certain time frame, they may tory time limit in its Urban Planning Law faster in states where PHCN does not yetbe tempted to procrastinate or create since 1992. Yet it never enforced it until require the use of prepaid meters (Yobe,artificial delays. recently, under compulsion by a new Zamfara, Kogi, and Abia) and where the Five of the eleven states surveyed in government determined to “make things supply of prepaid meters is sufficient (Taraba). For states where there are notFIGURE 3.3Five of the eleven states measured in 2008 cut the time for building permit or enough meters, the wait can stretch frombuilding plan approval two months to one year.8Time (days) The cost of dealing with construc-2008 67Before reform tion permits also shows local variations, 60 from 95% of income per capita in Kano Means of time to 1,509% in Enugu. Why? First, the cost reduction: Statutory Approval Statutory of a building permit ranges from NGN time limit committee time limit 4,500 (US$ 34) in Adamawa to NGN 30 30 30 28 975,450 (US$ 7,324) in Abuja, FCT. Big-2010 ger, more developed cities, such as LagosAfter reform 18 21 14 14 and Abuja, where development projects are rife and the price of land higher, can charge larger fees. Smaller cities, on Enugu Abuja, FCT Kano Anambra Ogun the other hand, have more incentives toNote: Reforms occurred between June 2008 and January 2010. encourage real-estate development. TheSource: Doing Business database.
  • 24. DEALING WITH CONSTRUC TION PERMITS 21FIGURE 3.4 local tribes lived. Since then, in 10 states WHAT TO REFORM?High water connection costs (Abia, Akwa Ibon, Anambra, Bayelsa,Share of total cost to deal with constructionpermits, Nigeria average (%) Delta, Edo, Enugu, FCT, Imo, and Ogun), Doing Business in Nigeria 2008 recom- 9 of them located in the south, construc- mended introducing a fast track and Other* tion companies building an edifice must time limits for processing permit ap- Permit Compensation 10.3 to the natives pay compensation10 to the natives and plications, lowering the permit fee, and 5.3 hire some of them as masons or security making information more readily avail- 20.0 Pre-permit 8.4 guards on the site. able. These recommendations are still Some states are in the process of valid for many states. Some additional implementing additional reforms. Lagos recommendations also apply. 56.0 District Office now requires its field of- ficers to carry a camera when conducting INTRODUCE TIME LIMITS AND FAST Water their first site inspection. The photos— TRACK PROCEDURES TO IMPROVE THE connection EFFICIENCY OF PERMIT AUTHORITIES proving that the plot is in fact empty—* Includes electricity and phone costs. are then attached to the application, with In construction, speed matters to entre-Source: Doing Business database. no need to conduct further pre-construc- preneurs as well as to the government. Incapital of the brand new state of Jigawa, tion inspections. In addition, in October Nigeria, building companies in severalDutse, is a small semirural city with few 2009, the governor of Lagos issued an states wait up to three months to obtainbuildings. Jigawa’s Ministry of Land, at executive order, where he delegates the a building permit. To improve the effi-four stories, is the highest edifice in the power to issue the construction permit ciency of the permit-issuing authorities,city. To encourage real-estate develop- to lower levels of the administration, de- Nigerian states could emulate the goodment, the Dutse Capital Development pending on the complexity of the project. practices set by some of their peers, suchAuthority keeps its requirements simple While buildings of 7 floors and higher as the statutory time limits enforced byand its permit fees relatively low, at NGN must obtain approval from the governor Ogun, Kano, Enugu, and Anambra, the50,000 (US$ 375). himself, buildings of less than two stories administrative restructuring undertaken Obtaining a water connection is the need only obtain the approval of the local by Ondo, and the improvements in trans-most expensive component in the overall district office. parency of information made by Ogun,cost (figure 3.4). In the presence of a The executive order also ensures the state that has reformed the most inreliable public delivery system, such as that information is more available to construction permits.in Cross River; Abuja, FCT; Sokoto; and the public. Entrepreneurs can now ob-Kano, connecting a warehouse to water tain the Lagos Building Permit Approval SIMPLIFY PRE-PERMIT PROCEDUREScosts between NGN 2,000 (US$ 15) and Handbook, which contains all building Before applying for a building permit,NGN 70,000 (US$ 526). When the public regulations, at no charge. The handbook construction companies may undergowater system is not dependable, however, used to cost NGN 50,000 (US$ 375) and up to five procedures—obtaining anconstruction companies have no choice require entrepreneurs to submit prop- environmental impact assessment, sitebut to drill a borehole, which is more erty title documents. Ogun state has analysis report, land use clearance, fireexpensive. The cost of boreholes varies taken a similar step toward transparency. safety report, and preliminary approval.widely depending on how far and deep Abeokuta’s Bureau of Urban and Physi- Adding procedures adds to the complex-the aquifer source is and how rocky the cal Planning holds a “town planning ity and cost of the building-approvalsoil is, among other factors. In the capital half an hour” every Thursday on Ogun process. In 2006, Hong Kong, China,of Delta state, Warri, located 6 meters state capital television to address devel- faced the same problem. To streamlineabove sea level and endowed with soft opment-related issues and complaints. the permit process, Chinese authoritiessoil, drilling a borehole costs only NGN Abeokuta also organizes zonal meetings set up a cross-sector consultation team200,000 (US$ 1,500). In Enugu, where soil with community-development associa- to identify redundant procedures. As ais filled with coal, companies must drill tions to inform landowners and develop- result, Hong Kong eliminated eight stepstheir boreholes nine miles from the city, ers of the procedures to follow to obtain and cut the time needed for constructionat a cost of NGN 2,000,000 (US$ 15,000), a construction permit. Leaflets that de- permits by five weeks.11and bring water to their site by truck.9 scribe the procedures to undertake, the Nigerian states could follow suit. With the Land Use Act of 1978, the documents to submit, and the applicable Pre-permit procedures are important togovernment appropriated land on which fee schedules are also available. ensure that construction respects safety
  • 25. 22 DOING BUSINESS IN NIGERIA 2010and planning standards. Rather than IMPLEMENT THE NATIONAL BUILDING CODE AT THE STATE LEVELforcing entrepreneurs to approach mul- 1 Economist Intelligence Unit. Countrytiple authorities, Nigerian states could While Nigerian state laws often require profile, Nigeria 2009. The Economist.streamline a number of these procedures several inspections during the construc- London.within the building-permit review pro- tion process, Denmark requires only 2 According to the Minister of the Federalcess. Public officials could conduct the one. This is not to say that buildings in Capital Territory Administration (FCTA), 346 structures violated the building codesite analysis and environmental assess- Denmark are less safe. In Nigeria, many in Abuja in 2008, in This Day newspaper,ment themselves while processing the of the inspections required are not con- “FCTA Sanctions Owners of 346 Illegalapplication for the building permit or ducted, in practice, or are conducted at Structure”, September 15, 2008.coordinate with fire authorities to con- random and motivated by rent-seeking 3 Agence France Presse. 2006. Nigeria Ap- proves Building Code. As many cases go un-duct joint safety inspections. intentions. Implementing the new Build- reported, the real figure is probably higher. Moreover, environmental assess- ing Code, would replace random visits 4 Moullier, Thomas. 2009. “Reformingment should focus on high-risk con- with a set schedule of inspections occur- Building Permits; Why Is It Important andstructions, such as dams and heavy in- ring at critical stages of the construction What Can IFC Really Do?” International Finance Corporation. Washington, DC.dustries. Dutse, Kano, Ebonyi, Gusau, process. Though adopted at the federal World Bank Group.Sokoto, Delta, Anambra, and Kwara al- level, the new code must still be imple- 5 At the time of publication of Doing Busi-ready exempt simple constructions from mented at the local level through the ness 2010 the cost was 573.4% of incomethis requirement. amendment of state urban and regional per capita. planning laws. Local development au- 6. The population average across the 36 cit-LOWER FEE FOR BUILDING PERMITS thorities should also increase staff capac- ies surveyed, excluding Lagos, is 580,214 inhabitants. Population statistics are basedSeveral states have some of the world’s ity to ensure that these inspections are on the 2006 Census published in the Offi-highest fees for construction permits. conducted by qualified professionals. cial Gazette of Lagos on January 19, 2007.Such high fees encourage entrepreneurs 7. Ondo’s Ministry of Physical Planningto build illegally or—when the fees are FACILITATE CONNECTION TO and Urban Development counts with UTILITIES seven departments: development permit,based on building size, which is often monitoring and enforcement, physicalthe case in Nigeria—submit fake plans In the majority of states, electricity con- planning, urban renewal, master andto lower the cost. In order to fight infor- nection is the most time-consuming, and local planning, planning research and statistics, and administration.mal construction and ensure compliance water connection the most expensive 8. While waiting for a meter, it is commonwith safety standards, some state govern- procedure. The Power Holding Company practice to sign a provisional contractments resort to more random inspec- of Nigeria (PHCN) should ensure that based on an estimated consumption ratetions, which are burdensome for the prepaid meter supplies meet demand, to connect the warehouse to electricity.entrepreneur and costly to administer. to limit delays, or allow companies to 9. To control for the variation of estimates due to factors like geographical location,An alternative would be to make the fees function with a credit meter while supply technology used to drill, and so on, themore affordable. issues are addressed. In addition, state data apply an average of NGN 500,000 Such a reform should take into con- authorities should improve their water (US$ 3,754) across 30 cities. Only cities identified as outliers, such as Warri (lo-sideration the sources of revenue on which delivery systems to increase the reach cated 6 meters above sea level), Zamfarastate governments rely. If high permit fees and reliability of their networks. (rocky terrain), Maiduguri (water locatedcompensate for a lack of fiscal resources in deep in the soil), Enugu (coal soil), Lagosother areas (property taxes, for example, and Port Harcourt (water easily avail- able), and Osun (irrigated by the Osunadministered at the state level), lowering River) show variations compared withthe fees might require a broader overhaul the average.of the local tax structure. 10. The amount of the fee varies widely de- pending on the company’s negotiation skills, the value of the site, the political context, the connections between the de- veloper and the natives, and the number of native tribes in the area. As such, to control for the large variance in the esti- mates, an average of NGN 200,000 (US$ 1,502) has been applied to all 10 cities. 11. World Bank. 2009. Doing Business 2010: Reforming through Difficult Times. Wash- ington, DC. World Bank Group.
  • 26. 23Registering TABLE 4.1 Where is it easy to register property—and where not?property 1 2 Gombe (easiest) Borno 14 15 Enugu Kwara 25 27 Imo Lagos 3 Zamfara 16 Kebbi 28 Delta 4 Kano 17 Akwa Ibom 29 Ekiti 5 Jigawa 18 Nasarawa 30 Abia 5 Taraba 19 Niger 30 Anambra 5 Yobe 20 Cross River 32 Edo 8 Katsina 21 Ebonyi 33 Oyo 9 Abuja, FCT 21 Sokoto 34 Ondo 10 Kogi 23 Bayelsa 35 Ogun 11 Benue 23 Kaduna 36 Osun 12 Bauchi 25 Adamawa 37 Rivers (most difficult) 13 Plateau Note: The ease of registering property is a simple average of state rankings on the number of procedures, associated time and cost (mea- sured as a percentage of the property value) required to register a property. See Data notes for details.Izigbe from Benin, in Edo state, has been Source: Doing Business database.manufacturing reproductions of the fa-mous ivory pendant mask for eight years. construction materials.1 Indeed, banks practices. Some Nigerian states performHer business grew rapidly as tourists in countries lacking adequate creditor in- much better than others. And things arewere interested in reproductions of this formation prefer land titles as collateral, improving: 6 of the 14 reforms imple-traditional mask, which can be found in since land is difficult to move or hide.2 mented by states measured in 2008 are inmuseums in both Edo and the United Property registration also benefits gov- the area of property registration. Nigeria’sKingdom. She now has dozens of em- ernments, as more properties registered top performing states provide good ex-ployees. Izigbe needed more space to translate into greater tax revenues. amples from which others could learn.4accommodate her growing business, so In the past 5 years, Doing Business If all states were to adopt the existingshe decided to invest in a warehouse on has recorded 125 reforms in property best practices from across the countrythe outskirts of the city. Her plans came registration in 93 economies, one third and register property in 8 procedures asto a halt, though, when she realized that of them in Sub-Saharan Africa. However, in Kwara and 14 days like in Borno for ashe would have to pay 27.6% of its value registering property in Nigeria continues cost of 5.2% of the value of the propertyto register the property title under her to be a slow, expensive, and burdensome as in Yobe, then Nigeria would climb 89name. So Izigbe did what many entre- process. On average, in the 36 Nigerian positions, from 178 to 89, outperformingpreneurs in Nigeria do: she settled for a states and Abuja, FCT, an entrepreneur France and Italy.power of attorney showing that the cur- would have to go through 12 procedures, Despite the fact that registeringrent owner transferred the right to use wait 82 days, and pay 16% of the value property falls within the same legalthe property to her. This option, however, of the property to have it registered in framework across Nigeria, practice var-does not provide full legal security. It also the Lands Registry. On a global scale, ies greatly among states. Registeringdoes not allow her to use the property as that makes registering property in Ni-collateral for a loan to expand her busi- geria more expensive than in 170 of 183 What is measured?ness further. economies measured by Doing Business Doing Business records the sequence of procedures, time, and costs necessary for a Entrepreneurs like Izigbe are aware and lengthier than in 139 countries. This business to purchase property from anotherthat an efficient property registration puts Nigeria in the last place on the business and to transfer the property title tosystem has real benefits. In fact, property global registering property ranking.3 The the buyer’s name so that the purchasing busi-registration should be a priority in every best performer, Saudi Arabia, registers ness can use it as collateral in taking out loans or sell it to another business. Every proceduresociety. When there is a formal deed, en- property in two days, free of charge. required by law or necessary in practice istrepreneurs can use their immovable as- However, Nigeria does not need to look included, whether it is the responsibility ofsets to obtain credit and grow their busi- that far for lessons on how to improve the seller or the buyer or must be completed by a third party on their behalf. It is assumednesses. A recent study in Peru suggests registering property. that the property is registered and free of titlethat property titles are associated with a In fact, Nigeria does not even have dispute. See the detailed description of the10% increase in loan approval rates for to look beyond its borders for good standard case in the Data Notes.
  • 27. 24 DOING BUSINESS IN NIGERIA 2010TABLE 4.2 Sub-Saharan regional average.Six of the 11 states measured in 2008 reformed property registration The average time to transfer a prop- Reduction Elimination Promotion of Speeding up/delegation erty title among the 36 Nigerian states of fees of fees electronic services of governors consent and the capital is 82 days—only slightlyAbia shorter that the longest time needed toAbuja, FCT register property in a Kenyan city (Ga-Anambra rissa, 87 days).5 But the time neededBauchi varies greatly from state to state. In Borno it takes two weeks to transfer a propertyEnugu title, while in Anambra it takes sevenKano months. The time is largely dependent onOgun a single requirement: the state governor’sSokoto consent. In accordance with the 1978Note: This table records reforms that occurred between June 2008 and January 2010. Land Use Act, all land within the territory indicates a negative reform.Source: Doing Business database. of a state is vested with the governor, mak- ing his consent mandatory for the legalproperty is easiest in Gombe and most number of procedures varies from 8 in validity of any transfer of landed property.burdensome in Rivers state, where it Borno, Gombe, and Kwara to 17 in Oyo. On average, waiting for the governor’stakes 13 procedures, 201 days, and 23.2% The variations are due to the fact that consent accounts for 70% of the total timeof the property value to transfer a title some states have managed to merge needed to register property. Depending(table 4.1). procedures or establish payment points on whether or not this power has been Registering property across Nige- conveniently located within the respec- delegated by the governor to a Ministryrian states follows several basic stages— tive institutions, while others have not. of Lands official, however, the delay variessearching the property title for encum- Kogi and Gombe, for example, have from two days in Borno to six months inbrances, signing the deed of assignment, merged three procedures—assessing Kebbi (figure 4.1).obtaining the governor’s consent, as- the deed at the Federal Inland Revenue Registering property is further com-sessing and paying fees, and register- Service (FIRS), paying the stamp duty, plicated by the inefficiency of some ofing the title under the buyer’s name. and stamping the deed—into one by al- the government agencies responsible forIn addition to these, states have added lowing applicants to pay the stamp duty registering property. Reportedly, an ap-their own requirements. As a result, the at FIRS directly, rather than at a com- plicant has to make many follow-up calls mercial bank. In Lagos, five different and personal visits in order to move theFIGURE 4.1 fees can be paid at the same time: the file from one desk to another. Otherwise,Obtain governor’s consent—the biggestbottleneck in property registration consent fee, registration fee, stamp duty, as an entrepreneur from Yobe says, thefor most Nigerian states neighborhood improvement charge, and file would just “sit there.” Moreover, ap-Days to register property 195 capital gains tax. On the other hand, in plicants are often obliged to perform Lagos, Taraba, and Nasarawa, the ap- themselves what should be internal plicant is required to submit a certified procedures. Incomplete applications are true copy of the title document, even if sometimes accepted just to secure the the seller has the original title. This adds payment of application fees. Lagos was at least one procedure. In Oyo, the state confronted with this issue and decided with the highest number of procedures, to introduce a checklist for all applica- Total 82 180 the applicant has to visit the Ministry tion requirements at the initial intake of of Lands six times to submit or pick up the file. The Lands Bureau also requested Other procedures a variety of documents; go to the bank that applicants’ contact information be six times to pay various fees; receive an collected for faster follow-up. SimpleDays to obtain governor’s 58 evaluation inspection from the Ministry measures can make the difference. Add- consent 14 of Lands; and obtain a valuation report ing to the hassle is the necessity to pay 2 from an independent valuer. This back- multiple fees at various points at com- Nigeria Kebbi Borno and-forth adds up to a total of 17 pro- mercial banks, then wait each time for average cedures, 10 procedures more than the the respective agency to receive paymentSource: Doing Business database.
  • 28. REGISTERING PROPERT Y 25confirmation before the process is al- government officials claim will make up ring property. The governor agreed tolowed to proceed. Ogun state addressed for revenue lost due to underreporting expedite the process and has since en-this problem by introducing a system of property values. Another federal tax sured that consent is granted within 60that allows applicants to pay fees using that is applied inconsistently is the stamp days, rather than 75 days, as previously.an ATM card at a “point of payment” duty, which, according to the federal By 2008, Kano had already delegated theterminal located within the Ministry of Stamp Duty Act 1939, should be 2% of power to grant consent, which decreasedLands. This reform decreased the total the property value for property transfers the time to 20 days. In June 2009, thetime needed to register property in Ogun between businesses.6 In practice, many power to grant consent was further del-by 13 days compared to two years ago. states charge 3% or even 4%. egated to both the Commissioner and the The average cost of registering Of the 11 states benchmarked in Permanent Secretary for Lands. Gover-property is 16% of property value. The Doing Business in Nigeria 2008, 6 have in- nor’s consent on assignment can now becost ranges from 5.2% in Yobe, which troduced positive reforms in the past two obtained in 14 days, decreasing the over-is comparable to Germany, to 33.6% in years (table 4.2). Abia state introduced all time to register property to 31 days.Ondo, which is more expensive than the e-payment in 2009 and now all fees are Another reform is the introductionSyrian Arab Republic, the worst global paid at a commercial bank, which keeps of the Geographic Information Systemperformer (figure 4.2). The cost is a sum corruption at bay; Anambra decreased (GIS). Following Abuja’s example, Lagos,of several fees: the consent fee, registra- the search fee for property titles from Kano, Kaduna, and Kwara are implement-tion fee, stamp duty, and legal fees. These NGN 5,000 (US$ 37.5) to NGN 1,000 ing a GIS, which captures and stores landfees are required in all states, but their (US$ 7.5). In Sokoto, the Nigerian Bar information in digital format. Titles se-amounts differ greatly from state to state. Association and other stakeholders put curity is now strengthened since a com-For example, the registration fee is a flat pressure on the governor to speed up the puterized registry makes it easier to spotfee of NGN 2,500 (US$19) in Akwa Ibom, process of granting consent on transfer- overlapping titles.while in Borno and Sokoto it is set at 5% FIGURE 4.2of the property value. The consent fee in The cost of transferring a property title in Ondo, Yobe and in selected African countriesEkiti is 15% of the value of the property, Cost (% of property value)while some states, like Kano and Ka- Total 36.6duna, have eliminated the consent feealtogether. Legal fees vary from 1% of theproperty value in Gombe to 10% in mostother states. At 10%, the cost of hiring a Capital gains taxlawyer accounts for half of the total costs. 10.0While hiring a lawyer is not mandatedby law, it is a common practice, which 22.7increases the costs substantially. The capital gains tax also contrib-utes to the variations in the total cost. Consent fee 10.0According to the federal Capital GainsTax Act 1990, the capital gains tax is10% of the gain (profit), defined as thedifference between the selling price andthe purchasing price paid by the seller,minus the cost of improvements to the Legal fees 8.7 10.0property. However, the manner in which 6.2the capital gains tax is calculated in 5.2 0.2different states does not always complywith the letter of the law. Most states do Stamp duty 3.0 3.0 1.1not charge capital gains tax at all, while 0.5 Otherothers, like Cross River and Abuja, FCT, Ondo Yobe Chad South Equatorial Ghana Rwandalevy it as a percentage of the property Nigeria Africa Guineavalue rather than the gain, a measure Source: Doing Business database.
  • 29. 26 DOING BUSINESS IN NIGERIA 2010 Unfortunately, not all reforms have standardized schedule of property val- their property altogether. Flat fees canbeen positive. Four states increased the ues, where areas of the city would be translate into more revenue for the gov-fees associated with registering property. assigned rates per square meter and fees ernment. In 2007, the Arab Republic ofIn Bauchi, the search fee was increased would be calculated by the desk officer, Egypt introduced a low fixed stamp dutytwo-and-a-half times and in Abuja, as is successfully done in Lagos. And fee, replacing the 3% registration fee. ThisFCT, the consent fee was increased from publishing a property valuation schedule led to a boom of property registrationsNGN 10,000 (US$ 75) to NGN 55,000 would enable entrepreneurs to anticipate that increased government revenues by(US$ 413) in 2009. In Enugu, almost all how much transfer tax they have to pay. 39% six months after the reform.8property registration fees were increased In addition to the above, Nigeria cansince 2008, some as much as 30 times. In benefit from introducing several other CONSOLIDATE PROCEDURESDecember 2009, the Executive Council of reforms. Some states have merged procedures byAbia state passed a resolution and imple- integrating government services or es-mented a 25% increase of administrative ELIMINATE THE REQUIREMENT OF tablishing commercial banking paymentfees across the board. GOVERNOR’S CONSENT, OR AT LEAST points within the agencies themselves. MAKE IT EASIER TO OBTAIN States also introduced structural With the creation of the Commissionerland reforms. In June 2009, the Min- The requirement to obtain governor con- of Stamp Duties at the Lands Bureau inistry of Lands in Kaduna pledged to sent to property transfer remains the Lagos, five fee payments were mergeddeliver same-day consent to mortgages, largest bottleneck. Governor’s consent into one. Gombe has merged three proce-one-week consent to assign Statutory is not particular to Nigeria; other Af- dures—assessing the deed at the FederalRight of Occupancy (including perform- rican countries, such as Lesotho, Ma- Inland Revenue Service (FIRS), payinging valuation inspections and submitting lawi, Gambia, Senegal, and Zambia have the stamp duty, and stamping the deed—valuation reports within two days), and similar consent requirements. This is not into one by allowing applicants to payone-month consent to assign Custom- always a relic of colonial days: Nigeria the stamp duty at FIRS rather than at aary Right of Occupancy and Deemed introduced the Land Use Act in 1978. It commercial bank. Moreover, these threeGrant of Statutory Right of Occupancy. was adopted to reduce conflicts deriv- procedures could be merged with anotherOngoing reforms in Lagos include the ing from overlapping ownership claims, three procedures performed at the Minis-delegation of governor consent for prop- but it added a six-month delay and a try of Lands: assessing the property value,erty transfers to 4 more commissioners, 10% fee. Eliminating governor’s consent paying consent and registration fees at awith a mandatory consent deadline of would significantly speed up the total bank, and submitting payment receipts48 hours. In 2009, the Lands Registry time needed to register property across to the Ministry of Lands. By establishingin Lagos has doubled the number of ac- the country. Even delegating the power a FIRS counter at the Ministry of Lands,count officers from 2 to 4 in an effort to to grant consent will significantly de- these six procedures can be merged intospeed up the reconciliation of payments crease the waiting time, as evidenced three or even one, if a payment point isfor property fees. in states that have implemented this established within the Ministry as well. (Abuja, FCT; Bauchi; Borno; Cross River;WHAT TO REFORM? Gombe; Kaduna; Kano; Lagos; Ogun; SET UP ELECTRONIC PAYMENT POINTS and Taraba).7 The time needed to ob- WITHIN GOVERNMENT AGENCIESDoing Business in Nigeria 2008 recom- tain consent in Enugu, for example, was Revenue collection is carried out eithermended the elimination or simplification reduced from 60 days to 30 days when through cash payments to the relevantof obtaining governor consent, lowering the power was delegated to the Commis- agencies (which can be susceptible toproperty transfer fees or introducing flat sioner for Lands. corruption) or payments made via com-rates, and replacing physical inspections mercial banks (which is time-consum-with a standardized schedule of prop- INTRODUCE FLAT FEES ing, as it often takes several days forerty values. While states such as Kano, The introduction of flat rates instead of payments to go through). A convenient,Kaduna, and Lagos have implemented fees expressed as a percentage of prop- fast, and secure alternative would besome of these recommendations, for the erty value has proven beneficial for both to establish electronic payment pointsmajority of states they remain valid. entrepreneurs and the government in within the revenue-generating agencies, Rather than spending resources and many countries, as it reduces the in- where applicants could pay using ATMstaff time on performing on-site inspec- centive for property owners to either or prepaid cards and the money wouldtions, Land Registries can introduce a undervalue their plots or not register be directly deposited to the agency’s ac-
  • 30. REGISTERING PROPERT Y 27count. Ogun is currently implementing a PUBLICIZE AND COMMUNICATE THE BENEFITS OF REFORMSsimilar system, called the Point of Pay-ment (POP) terminal, which has already Information on legal requirements 1. De Soto, Hernando. 2003. The Mystery of Capital: Why Capitalism Triumphs indecreased the time needed to process should be easily available to the public. the West and Fails Everywhere Else. Newpayments from 14 days to 1 day. This would eliminate many of the frus- York, NY: Perseus Group Books. trations of entrepreneurs, who often have 2. World Bank. 2009. Doing Business 2010:ELIMINATE THE INVOLVEMENT OF A to figure out the system through trial Reforming through Difficult Times. Wash-LAWYER FOR STANDARD PROPERTY ington, DC. World Bank Group.REGISTRATIONS and error. Government communication 3. Last place among the 178 countries campaigns are an essential part of any where registering property is measured.It is customary to retain a lawyer to reg- reform process. They raise awareness For five economies there is no practiceister property. Lawyers not only draft the about government efforts, inform the for registering property.Deed of Assignment, they also make sure public about the benefits, and reduce 4. Peer-learning mechanisms, such as the National Development Forum (NDTF)the property is unencumbered, follow up legal uncertainty. Such information could —set up under a land administrationwith government agencies, and ensure be provided via posters, brochures, web reform program supported by a numberthat the title is registered with the Land sites, and billboards. In Nigeria, some of of development partners—have been established to promote exchange of bestRegistry under the new owner’s name. the recent reforms described above have practices in this area.The legal fees are approximately 10% not been properly communicated and 5. World Bank. 2009. Doing Business inof the property value. The government therefore their impact has not reached Kenya 2010. Washington, DC. Worldcould make procedures simpler and the end users. Most reformers are bad Bank Group.more transparent, so that entrepreneurs marketers. For example, El Salvador first 6. Doing Business in Nigeria 2008 reportedcould go through the process on their established a one-stop shop in 1999, but that the stamp duty tax was 3% across the country.own. They could also introduce a stan- local entrepreneurs thought it was only 7. World Bank. 2004. Doing Business 2005.dardized deed of assignment that would for foreigners. A lesson was learned. The Washington, DC. World Bank Group.be validated by a notary. These measures second time around, the president him- 8. World Bank. 2007. Doing Business inwould decrease the cost of registering self inaugurated the improved one-stop Egypt 2008. Washington, DC. Worldproperty by 10% across the board. shop and widespread media coverage Bank Group. ensured that everyone knew about the 9. World Bank. 2009. Doing Business 2010:DIGITIZE THE LAND REGISTRY Reforming through Difficult Times. Wash- new system. ington, DC. World Bank Group.In many states, property title searchesand deed registration are still donemanually. Making the registry electronicwould shorten processing times, increasetitle security, and allow for more ef-ficient use of staff time. Inspiration canbe found at home. Abuja, FCT; Lagos;Kano; Kaduna; and Kwara are using GISto capture and store land informationin a digital format. Elsewhere, Belarushas increased the number of transferredtitles three-fold since it began comput-erizing its system in 2005. Bosnia andHerzegovina has seen a 33% growth intransferred titles since all municipal landoffices started computerizing a few yearsago. Moreover, a computerized registrymakes it easier to spot overlapping titles,thus improving title security.
  • 31. 28Enforcing TABLE 5.1 Where is it easy to enforce a contract — and where not?contracts 1 2 Katsina (easiest) Yobe 14 15 Bayelsa Lagos 25 27 Kwara Delta 3 Kebbi 16 Sokoto 28 Akwa Ibom 4 Jigawa 17 Abuja, FCT 29 Benue 5 Borno 18 Ogun 30 Abia 6 Edo 18 Taraba 31 Anambra 7 Kaduna 20 Oyo 32 Adamawa 8 Nasarawa 20 Plateau 32 Ebonyi 9 Ondo 22 Rivers 34 Imo 10 Bauchi 23 Kano 35 Ekiti 11 Osun 23 Niger 36 Enugu 12 Gombe 25 Kogi 37 Cross River (most difficult) 13 Zamfara Note: The ease of enforcing contracts is a simple average of the state rankings on the procedures, time and cost to resolve a commercial dispute through the courts. See the Data notes for details.The state courts of Nigeria had a rocky Source: Doing Business database.year in 2009. Judiciary workers went onstrike twice, demanding higher salaries FCT, it takes on average 511 days and courts and regulated by state-specificand better working conditions. Both costs 36.3% of the claim value to en- civil procedure rules. Furthermore, courtstrikes immobilized the courts. Oluke force a contract. This is better than the administration also falls within the pre-runs a small business printing tradi- Sub-Saharan Africa regional average of rogative of the state’s judiciary. As ational wax textiles. He is unaware of the 644 days and 49.3%. However, Nigeria result, there are wide differences in thewider issues within the judiciary, but lags behind Tanzania, the top-ranked ease of enforcing a commercial contractsuffers the consequences. For over a economy on enforcing contracts in Sub- across Nigeria (table 5.1). In Katsina, theyear he has been suing one of his biggest Saharan Africa, where Doing Business top-ranked state, it takes 285 days andclients to recover the unpaid balance 2010: Reforming through Difficult Times costs 26% of claim value. In Cross River,under a sales agreement. He is confident records 462 days and a cost of 14.3% to it would take more than twice the timethat the law is on his side and the judge enforce a contract, or Ghana where it (835 days) and money (52.8%) to get thewill rule in his favor. But his lawyer has takes 487 days and costs 23%. same result. In addition to different rules,just told him that the case has been post- Commercial justice matters to busi- the caseload may vary substantially fromponed for the fourth time. He does not nesses. Efficient courts provide a mecha- location to location due to populationhave the cash or the courage to accept a nism by which contractual obligations size and economic activity. In Lagos, thelarge order from a new client. What if he can be enforced and thus encourage eco- most populous state in Nigeria and bynever gets paid? Entrepreneurs through- nomic activity. A study of judicial systems itself more populous than 32 of 47 Afri-out Nigeria face similar issues. in transition economies summarizes the can countries, the courts face a heavier Across Nigeria’s 36 states and Abuja, courts’ contribution to economic growth: caseload than in the smaller states. “they define the rules by which markets Like 128 of the 183 economies What is measured? function, and they provide a means to benchmarked by Doing Business,3 Nige- resolve disputes, protect economic and ria has a two-tiered, first instance civil The Doing Business enforcing contracts indicator measures the efficiency of the com- social rights, and hold governments ac- court system.4 Jurisdiction is determined mercial justice system. It records the time, countable for their actions.”1 on the basis of the claim amount, with cost and procedural complexity involved to The Nigerian constitution grants the the Magistrates’ Court (the lower court) enforce a contract through the courts up to receipt of the amount due. The standard- chief judge of each state the power to dealing with smaller claims and the High ized case study involves a claim for payment make rules for regulating its courts.2 Court dealing with higher claims. Each for goods sold and, in order to capture the This, in effect, bestows on the state’s state sets its own competence threshold. picture of contract enforcement as opposed to simple payment orders, assumes the judiciary control of proceedings as well These vary widely from NGN 10,000 in involvement of an expert witness at trial. as the responsibility for engineering re- Ekiti (about US$ 75) to NGN 1 million See the detailed description of the standard forms. Therefore, a typical commercial in Lagos (about US$ 7,500). Moreover, case in the Data Notes. contract is enforced through the state in some states like Ogun, thresholds are
  • 32. ENFORCING CONTRAC TS 29not strictly adhered to. In order to benefit the number of adjournments. Even the High Courts have different resources,from more experienced judges, litigants more dynamic state judiciaries find it including infrastructure (building, com-commonly choose to file in the High hard to curb this practice. In most state puters, and other equipment) and staff-Court even small claims falling within the courts, it is common for three to four ing. Also, while uniform civil procedurecompetence of the Magistrates’ Courts. adjournments to be granted. In Enugu, rules have existed since 1987, they serveThis results in an inconsistent judicial as many as eight adjournments are typi- only as “model” rules from which statesmap, with civil and commercial litiga- cally granted, while in Cross River they are free to depart. In fact, both Lagostion being obsolete in certain Magistrates’ may reach ten. and Abuja, FCT, have enacted separateCourts. Some states, like Oyo and Ekiti, Administrative efficiency and bud- rules. With features such as “frontload-ranked 20th and 35th, respectively, are get also explain variations in the time ing”, these may prove more efficient.considering raising the thresholds of the needed to enforce a contract across states. Enforcement is governed by theMagistrates’ Court. Best-practice econo- State courts are administered by the state Sheriffs and Civil Process Act. This fed-mies, like that of the United Kingdom, judiciary on a budget allocated by the eral law is binding on the states, whichcontinuously ensure that competence state. Therefore, both Magistrates’ and can only regulate certain administra-thresholds are up to date; in 2009 the FIGURE 5.1High Court’s minimum threshold was Time needed to enforce a contract across Nigerian statesraised from £15,000 (about US$ 25,000) Time (days)to £25,000 (US$ 41,000). 0 365 730 1,095 The constitution guarantees every Jigawa Nasarawaperson that a court or tribunal will judge Katsina Filing and Trial andall civil obligations, including contractual Edo service judgment Enforcementones, within a reasonable time frame.5 TarabaAnd yet, while commercial proceedings Kebbican be swift in some states, in others Yobe Bornothey may take years (figure 5.1). The time Riversneeded to enforce a contract varies from Abuja, FCT261 days in Jigawa to 1130 days in Niger. Ondo The enforcing contracts indicator Bayelsatracks the time needed to resolve a com- Zamfara Akwa Ibommercial dispute through the three stages Kadunaof litigation: filing and service, trial and Osunjudgment, and enforcement. On a global Oyoscale, Nigerian courts prove efficient Bauchiwhen filing a claim. It takes an average of Ogun Lagos23 days nationwide, but in Akwa Ibom, AbiaDelta, Ekiti, and Ondo the process can be Gombeas fast as seven days. Similarly to other Deltahigh-performing locations such as Hong PlateauKong, China, where filing and service Imotake five days, the procedure is consid- Kogi Ebonyiered a purely administrative process. The Anambracourt registrar’s office only ensures that Benuethe plaint fulfills certain formal require- Sokotoments, charges a fee, and assigns a date Kanofor the defendant to be summoned. Adamawa Kwara The trial and judgment stage is Ekitiwhere most delays occur (figure 5.2). Cross RiverThis stage usually takes at least one year, Enuguwith the longest delays in Niger state— Nigermore than three years. A major cause is Source: Doing Business database.
  • 33. 30 DOING BUSINESS IN NIGERIA 2010FIGURE 5.2 In contrast, Kenya regulates most TABLE 5.2Time at trial accounts for the bulk of delays Which states have reformed recently? of the costs associated with litigation,Share of total time to enforce a contract, New civilNigeria average (%) including attorney fees.8 An Advocates procedure Remuneration Order fixes a minimum State rules More courtsFiling and service fee based on the amount of the claim. Abuja, FCT(23 days) 5 Regulation does not translate into overall KadunaEnforcement lower costs, however. It costs 47.2% of the Kano 13of judgment value of the claim to enforce a contract in Note: This table records reforms that occurred between June(68 days) Nairobi compared with 32% in Lagos. 2008 and January 2010. 82 Source: Doing Business database. Since the publication of Doing Busi- ness in Nigeria 2008, three states have Trial and taken measures resulting in swifter con- 2009, Ondo adopted new High Court judgement (421 days) tract enforcement: Abuja, FCT; Kaduna; rules. Others are setting up committeesSource: Doing Business database. and Kano (table 5.2). to decide on the new rules. Among the The enactment of new civil proce- states benchmarked by Doing Businesstive matters, such as bailiff fees. As a dure rules in Abuja, FCT and Kaduna in Nigeria 2008, Abuja, FCT reduced theresult, enforcing a judgment proves to form part of an ongoing trend, observed time needed to enforce a contract by al-be relatively swift, with less variation in many states, of modernizing civil proce- most 2 months and Kaduna more than 3across states. It takes on average 68 days dure rules. The momentum was initiated months, thanks to the impact of the newto apply for a writ of execution and hold by Lagos, where new High Court Civil rules (figure 5.4). In the Sub-Saharana public sale—more than twice as fast Procedure Rules were adopted in 2004.9 Africa region, new High Court rules inthan the global average of six months.6 In This proved groundbreaking because of Botswana that emphasize pre-trial con-some states such as Akwa Ibom, Jigawa, three innovative features: frontloading of ferences and case management resultedand Kebbi the process can be finalized evidence, time limits, and pre-trial con- in a decrease of 300 days in the timewithin a month. ferences. “Frontloading” emphasizes the needed to enforce a contract, as noted in Most litigation costs are not regu- role of litigants by compelling plaintiffs Doing Business 2010: Reforming throughlated by law. Enforcing a contract costs to annex to the initial statement of claim Difficult Times.26% of the value of the claim in Katsina, all documents and witness statements in In Kano, another reforming state, ef-whereas the national average is as high support of the claim. In this way, frivo- forts have been made to broaden access toas 36.3%. Differences are mainly due to lous claims are discouraged, surprises justice and speed up proceedings by set-variations in legal fees and expert-wit- requiring adjournments are limited, and ting up new Magistrates’ Courts. The newness fees.7 Some fees associated with fil- protracted discovery is avoided. Pre-trial courts and accompanying increase in theing suit and bailiff fees are regulated ac- conferences and time limits strengthen number of magistrates have resulted in acording to the state-level Civil Procedure the role of judges as active case manag- decrease of 90 days in the time needed toRules or fee schedules. For example, the ers. Time limits impose deadlines on enforce a contract, compared to that re-Osun State High Court fee schedule pro- parties to fulfill procedural requirements. corded in Doing Business in Nigeria 2008.vides for a filing fee of NGN 100 (about Finally, pre-trial conferences aim to en- FIGURE 5.3US$ 0.75) and the Jigawa State High courage settlement and identify issues. Attorney fees— the biggest driver of costCourt for NGN 120 (about US$ 0.9). As a result of this reform, Doing Business Share of total cost to enforce a contract,These fees can be more than 10 times 2007 recorded a decrease in the time Nigeria average (%)higher in other courts. The High Court of needed to enforce a contract in Lagos EnforcementOndo would charge NGN 1,500 (US$ 11). from 730 days to 457 days. of judgment 20Nigeria is no exception to a global find- In 2006, Abuja, FCT, was amonging on the costs involved in commercial the first to follow suit and adopt newlitigation: litigants spend most on attor- rules based on the Lagos example. Since 21 59ney’s fees (figure 5.3). Fifty-nine percent then, many other states have remod-of costs paid or advanced by the plaintiff eled their rules on those of Lagos and Court costs and expert feesgo to paying the attorney. Worldwide, on Abuja, FCT. Some states, like Kadunaaverage, legal fees account for 65% of the and Nasarawa, have been faster to act Attorney feescosts of litigation. than others. Most recently, in December Source: Doing Business database.
  • 34. ENFORCING CONTRAC TS 31FIGURE 5.4 have been successful in reducing the timeNew civil procedure rules result in faster contract enforcementTime to enforce a contract (days) needed to enforce a contract by 10%.13 All 36 states and Abuja, FCT, haveBefore reform 987 a system for collecting vital statistics from the courts, such as the number of cases filed, pending, and disposed 730After reform 687 of. However, across states the uses and methods of data collection vary. In most 534 457 states, regular reports on the number of 431 432 381 new cases and cases disposed of, known as “returns,” are submitted by the magis- trates or judges to the Chief Magistrate or Chief Judge for internal purposes. In Abuja, FCT, computerized registers allow Botswana Lagos Kaduna Abuja, FCT for easy generation of returns. Vast stepsSource: Doing Business database. remain, however, including consolidat- ing the statistics in order to use them as WHAT TO REFORM? may speed up commercial contract en- performance indicators. forcement—as they grow accustomed Making statistics available to theINTRODUCE SPECIALIZED to the specific issues and terminology litigants, lawyers, and other stakehold-COMMERCIAL COURTS of commercial cases, case management, ers also strengthens accountability ofSpecialized courts are an exception. and decision making become swifter. the courts toward its users. The stateMagistrates’ Courts commonly hear both Rwanda proved successful in its 2008 judiciary could start by publishing thecriminal and civil cases. Of the state implementation of specialized commer- statistics they already collect in a sys-High Courts, only the Lagos High Court cial courts. These benefit from a sepa- tematic way. For instance, Rivers statehas created specialized divisions.10 Since rate infrastructure and resources, and has a functional Web site,14 which is up-2001, there are separate divisions for judges assigned solely to this jurisdic- dated regularly. By posting the Legal Yearcommercial cases as well as for land, tion. The result: a 16% reduction in the Ceremonial Address of the Chief Judge,family, and revenue matters. time needed to enforce a contract.11 Rivers state makes its statistics public. Doing Business in Nigeria 2008 rec- Doing so does not diminish judiciary in-ommended that other states follow the PROVIDE ANNUAL REPORTS AND dependence, but sends the message that STATISTICSLagos example by introducing special- the courts are indeed user oriented.ized commercial divisions or courts, with Why monitor the courts? Research findsjudges assigned solely to hearing com- that “monitoring and evaluation systems FACILITATE COMMERCIAL JUSTICEmercial matters. This remains a valid are not only powerful tools to ensure FOR SMALL AND MEDIUM ENTERPRISESrecommendation for states with an im- accountability but also to introduceportant commercial caseload. Each state changes.”12 Monitoring guides the allo- Doing Business looks at small and me-judiciary should therefore analyze its cation of resources, such as the number dium-size businesses. These businessescaseload to determine whether the cost of of judges. Ethiopian courts now possess go to court to secure payment of rela-setting up a specialized court is justified. a state-of-the-art computerized case- tively small sums.15 The time and costs Specialized commercial courts allow management system that allows them involved in resolving such a simple com-for resources, both in terms of personnel not only to measure delays in proceed- mercial dispute remain disproportion-and infrastructure, to be allocated in a ings but also to compare performances ately high. The costs, in particular, cantargeted way and for specific backlog between judges, chambers, and courts. reach more than 50% of the claim valuereduction programs. Setting up special- Reports are available in real time and in some states.ized courts may also result in improved oversight by the court administration Many economies are now settingefficiency in general courts, as they find ensures continuous performance evalu- up small claims tracks or courts. Thesethemselves relieved of a substantial case- ations. These reports, together with a courts deal with claims falling below aload. Finally, allowing judges to focus backlog reduction program providing ad- certain monetary threshold and, contrarytheir expertise on commercial matters ditional court sessions during vacation, to a traditional lower jurisdiction such as
  • 35. 32 DOING BUSINESS IN NIGERIA 2010Nigeria’s Magistrates’ Court, litigation 7. The Doing Business standardized case study assumes that parties will rely on anproceeds on the basis of substantially expert to give testimony on the quality ofsimplified procedural rules. Litigation is goods delivered.also made simpler by the use of standard 8. World Bank. 2009. Doing Business informs for filing claims. In the Republic of Kenya 2010. Washington, DC. WorldKorea, more than 70% of civil cases are Bank Group.solved through small claims proceed- 9. Hertveldt, Sabine. 2007. “Repairing a Car with the Engine Running.” In Worldings.16 It costs only 10.3% of claim value Bank, Celebrating Reform 2007. Wash-and takes 230 days to resolve a commer- ington, DC. World Bank Group and U.S.cial dispute in Korea.17 Agency for International Development. Another mechanism to increase ac- 10. Doing Business in Nigeria 2008 reported that Abuja, FCT, had specialized com-cess to justice is to promote Alterna- mercial courts. However, this reporttive Dispute Resolution (ADR) mecha- could not confirm that specialized divi-nisms—in particular, mediation. This sions, with judges solely assigned to hear commercial cases, are operating inis the solution implemented by Abuja, Abuja, FCT.FCT; Lagos; Kano; and a number of 11. World Bank. 2008. Doing Business 2009.other Nigerian states, which have es- Washington, DC. World Bank Group.tablished “multidoor courthouses.” They 12. “Monitoring and Evaluation of Courtare considered successful in bringing System: A Comparative Study,” CEPEJ Studies 6, p. 12 (http://www.coe.int/t/parties to the table and resolving cases dghl/cooperation/cepej/series/Etudes6-amicably. Other states could follow suit Suivi_en.pdf).and consider implementing similar ADR 13. World Bank. 2009. Doing Business 2010:frameworks and institutions. Reforming through Difficult Times. Wash- ington, DC. World Bank Group. 14. See http://www.rsjudiciary.com. 15. The Enforcing Contracts case study there- fore uses a relatively small claim value1. Anderson James H., David S. Bernstein, equivalent to NGN 309,166 (about US$ and Cheryl W. Gray. 2005. Judicial Sys- 2,322). tems in Transition Economies: Assessing the Past, Looking to the Future. Washing- 16. Supreme Court of Korea, “Proceedings,” ton, DC. World Bank. Available at http:// http://eng.scourt.go.kr/. siteresources.worldbank.org/INTECA/ 17. World Bank. 2009. Doing Business 2010: Resources/complete.pdf. Reforming through Difficult Times. Wash-2. Section 274, Constitution of the Federal ington, DC. World Bank Group. Republic of Nigeria, 1999.3. World Bank. 2009. Doing Business 2010: Reforming through Difficult Times. Wash- ington, DC. World Bank Group.4. Please note that this report considers only the formal court system. Customary courts (administered by traditional chiefs) and sharia courts are prevalent in Nigeria but fall outside the formal judiciary.5. Section 36(1), Constitution of the Federal Republic of Nigeria, 1999.6. Doing Business database.
  • 36. 33Data notes ECONOMY CHARACTERISTICS GROSS NATIONAL INCOME (GNI) PER CAPITA Doing Business in Nigeria 2010 reports 2008 income per capita and population as published in the World Bank’s World Development Indicators 2009. Income is calculated using the Atlas method (current US$). For cost indicators expressed as a percentage of income per capita, 2008 GNI in local currency units is used as the denominator. Nigeria’s GNI per capita in 2008 = US$ 1,161 EXCHANGE RATE The exchange rate used in this report is 1 US$ = 133.19 NGN (Nigerian Naira) REGION AND INCOME GROUP Doing Business uses the World Bank regional and income group classifications, available at http://www. worldbank.org/data/countryclass.The indicators presented and analyzed in ten correspondence and visits by the team. estimates, the time indicators reported inDoing Business in Nigeria 2010 measure busi- The team invited state government officials Doing Business represent the median valuesness regulation and the protection of prop- to review the preliminary results and offered of several responses given under the assump-erty rights—and their effect on businesses, them a right of reply period. The data from tions of the standardized case.especially small and medium-size domestic surveys are subjected to numerous tests for Finally, the methodology assumes thatfirms. The indicators document the degree of robustness, which lead to revisions or expan- a business has full information on what isregulation, such as the number of procedures sions of the information collected. required and does not waste time when com-to start a business, to construct a warehouse or The Doing Business methodology offers pleting procedures. In practice, completingto register and transfer commercial property. several advantages. It is transparent, using a procedure may take longer if the busi-Second, they gauge regulatory outcomes, such factual information about what laws and regu- ness lacks information or is unable to followas the time and cost to enforce a contract. For lations say and allowing multiple interactions up promptly. Alternatively, the business maydetails on how the rankings on these indica- with local respondents to clarify potential choose to disregard some burdensome pro-tors are constructed, see aggregate ranking at misinterpretations of questions. Having rep- cedures. For both reasons the time delaysthe end of this section. resentative samples of respondents is not an reported in Doing Business in Nigeria 2010 In this project, Doing Business indicators issue, as the texts of the relevant laws and reg- would differ from the recollection of entrepre-have been created for all 36 Nigerian states ulations are collected and answers checked for neurs reported in the World Bank Enterpriseand Abuja, FCT—the complete list is available accuracy. The methodology is inexpensive and Surveys or other perception surveys.on page 48. The data for all sets of indicators easily replicable, so data can be collected in ain Doing Business in Nigeria 2010 are current large sample of economies. Because standard STARTING A BUSINESSas of January 2010. assumptions are used in the data collection, comparisons and benchmarks are valid across Doing Business in Nigeria 2010 records allMETHODOLOGY economies. Finally, the data not only highlight procedures that are officially required for an the extent of specific regulatory obstacles to entrepreneur to start up and formally oper-The Doing Business in Nigeria 2010 data are doing business but also identify their source ate an industrial or commercial business.collected in a standardized way, following the and point to what might be reformed. These include obtaining all necessary licensesmethodology developed by the Doing Busi- and permits and completing any requiredness team. To start, the Doing Business team, LIMITS TO WHAT IS MEASURED notifications, verifications or inscriptions forwith academic advisers, designs a survey. The Doing Business methodology applied to the company and employees with relevantThe survey uses a simple business case to Doing Business in Nigeria 2010 has 4 limita- authorities.ensure comparability across economies and tions that should be considered when inter- After a study of laws, regulations andover time—with assumptions about the legal preting the data. First, the data often focus on publicly available information on businessform of the business, its size, its location and a specific business form—generally a limited entry, a detailed list of procedures is de-the nature of its operations. Then, the survey liability company (or its legal equivalent) of veloped, along with the time and cost ofis customized to the particular case of Nigeria. a specified size—and may not be representa- complying with each procedure under nor-Surveys are administered through more than tive of the regulation on other businesses, mal circumstances and the paid-in minimum480 local experts, including lawyers, archi- for example, sole proprietorships. Second, capital requirements. Subsequently, local in-tects, government officials and other profes- transactions described in a standardized case corporation lawyers, notaries and governmentsionals routinely administering or advising on scenario refer to a specific set of issues and officials complete and verify the data.legal and regulatory requirements. These ex- may not represent the full set of issues a busi- Information is also collected on the se-perts have several rounds of interaction with ness encounters. Third, the measures of time quence in which procedures are to be com-the Doing Business in Nigeria team, through involve an element of judgment by the expert pleted and whether procedures may be carriedface-to-face interviews, conference calls, writ- respondents. When sources indicate different out simultaneously. It is assumed that any
  • 37. 34 DOING BUSINESS IN NIGERIA 2010required information is readily available and out middlemen, facilitators, accountants or is aware of all entry regulations and theirthat all agencies involved in the start-up pro- lawyers, unless the use of such a third party sequence from the beginning but has had nocess function without corruption. If answers is mandated by law. If the services of profes- prior contact with any of the officials.by local experts differ, inquiries continue until sionals are required, procedures conducted bythe data are reconciled. such professionals on behalf of the company COST To make the data comparable across are counted separately. Each electronic pro- Cost is recorded as a percentage of the econo-economies, several assumptions about the cedure is counted separately. If 2 procedures my’s income per capita. It includes all officialbusiness and the procedures are used. can be completed through the same website fees and fees for legal or professional services but require separate filings, they are counted if such services are required by law. Fees forASSUMPTIONS ABOUT THE BUSINESS as 2 procedures. purchasing and legalizing company books areThe business: Both pre- and post-incorporation pro- included if these transactions are required cedures that are officially required for an by law. more than one type of limited liability entrepreneur to formally operate a business The company law, the commercial code company in the economy, the limited are recorded. and specific regulations and fee schedules are liability form most popular among Procedures required for official corre- used as sources for calculating costs. In the domestic firms is chosen. Information spondence or transactions with public agen- absence of fee schedules, a government of- on the most popular form is obtained cies are also included. For example, if a com- ficer’s estimate is taken as an official source. In from incorporation lawyers, notaries or pany seal or stamp is required on official the absence of a government officer’s estimate, the statistical office. documents, such as tax declarations, obtain- estimates of incorporation lawyers are used. ing the seal or stamp is counted. Similarly, if If several incorporation lawyers provide dif- city. a company must open a bank account before ferent estimates, the median reported value is registering for sales tax or value added tax, applied. In all cases the cost excludes bribes. owners, none of whom is a legal entity. this transaction is included as a procedure. Shortcuts are counted only if they fulfill 4 PAID-IN MINIMUM CAPITAL per capita at the end of 2008, paid in cash. criteria: they are legal, they are available to the The paid-in minimum capital requirement re- general public, they are used by the major- flects the amount that the entrepreneur needs - cial activities, such as the production ity of companies, and avoiding them causes to deposit in a bank or with a notary before or sale to the public of products or substantial delays. registration and up to 3 months following in- services. The business does not perform Only procedures required of all busi- corporation and is recorded as a percentage of foreign trade activities and does not nesses are covered. Industry-specific proce- the economy’s income per capita. The amount handle products subject to a special tax dures are excluded. For example, procedures is typically specified in the commercial code regime, for example, liquor or tobacco. to comply with environmental regulations or the company law. Many economies have It is not using heavily polluting produc- are included only when they apply to all a minimum capital requirement but allow tion processes. businesses conducting general commercial or businesses to pay only a part of it before industrial activities. registration, with the rest to be paid after the and is not a proprietor of real estate. Procedures that the company undergoes first year of operation. In Italy in June 2009, - to connect to electricity, water, gas and waste the minimum capital requirement for limited tives or any special benefits. disposal services are not included. liability companies was €10,000, of which at least €2,500 was payable before registration. 1 month after the commencement of TIME The paid-in minimum capital recorded for operations, all of them nationals. Time is recorded in calendar days. The mea- Italy is therefore €2,500, or 9.7% of income sure captures the median duration that in- per capita. In Mexico the minimum capital income per capita. corporation lawyers and notaries indicate is requirement was 50,000 pesos, of which one- necessary to complete a procedure with mini- fifth needed to be paid before registration. ThePROCEDURES mum follow-up with government agencies paid-in minimum capital recorded for Mexico and no extra payments. It is assumed that the is therefore 10,000 pesos, or 8.9% of incomeA procedure is defined as any interaction of minimum time required for each procedure per capita.the company founders with external parties is 1 day. Although procedures may take place(for example, government agencies, lawyers, simultaneously, they cannot start on the same The data details on starting a business canauditors or notaries). Interactions between day (that is, simultaneous procedures start on be found for each economy at http://www.company founders or company officers and consecutive days). A procedure is considered doingbusiness.org by selecting the economy inemployees are not counted as procedures. completed once the company has received the the drop-down list. This methodology was de-Procedures that must be completed in the final document, such as the company registra- veloped in Djankov, La Porta, López-Silanessame building but in different offices are tion certificate or tax number. It is assumed and Shleifer. 2002. “The Regulation of Entry”.counted as separate procedures. If founders that the entrepreneur does not waste time Quarterly Journal of Economics 117(1): 1-37;have to visit the same office several times and commits to completing each remaining and is adopted here with minor changes.for different sequential procedures, each is procedure without delay. The time that the en-counted separately. The founders are assumed trepreneur spends on gathering information isto complete all procedures themselves, with- ignored. It is assumed that the entrepreneur
  • 38. DATA NOTES 35DEALING WITH CONSTRUCTION ASSUMPTIONS ABOUT THE WARE- tion reasons; a fire extinguishing systemPERMITS HOUSE (dry system) will be used instead. If a The warehouse: wet fire protection system is requiredDoing Business in Nigeria 2010 records all by law, it is assumed that the water demand specified below also covers theprocedures required for a business in the activities, such as storage of books or water needed for fire protection.construction industry to build a standardized stationery. The warehouse will not bewarehouse. These procedures include submit- used for any goods requiring special conditions, such as food, chemicals or (175 gallons) a day and an averageting all relevant project specific documents wastewater flow of 568 liters (150 gal-(for example, building plans and site maps) to pharmaceuticals. lons) a day.the authorities; obtaining all necessary clear-ances, licenses, permits and certificates; com- a total surface of approximately 1,300.6 square meters (14,000 square feet). gallons) a day and a peak wastewaterpleting all required notifications; and receiv- flow of 1,136 liters (300 gallons) a day. Each floor is 3 meters (9 feet, 10 inches)ing all necessary inspections. Doing Business high. -in Nigeria 2010 also records procedures for mand and wastewater flow throughoutobtaining connections for electricity, water, peri-urban area of the state’s selected the year.sewerage and a fixed land line. Procedures city (that is, on the fringes of the locali-necessary to register the property so that it ties but still within their official limits). The telephone connection:can be used as collateral or transferred toanother entity are also counted. The survey industrial zone. The zoning require- the main telephone network.divides the process of building a warehouse ments for warehouses are met by build-into distinct procedures and calculates the ing in an area where similar warehousestime and cost of completing each procedure in can be found. PROCEDURESpractice under normal circumstances. A procedure is any interaction of the com- Information is collected from experts in meters (10,000 square feet) that is 100% pany’s employees or managers with externalconstruction licensing, including architects, owned by BuildCo and is accurately parties, including government agencies, no-construction lawyers, construction firms, registered in the cadastre and land taries, the land registry, the cadastre, utilityutility service providers and public officials registry. companies, public and private inspectors andwho deal with building regulations, includ- technical experts apart from in-house archi-ing approvals and inspections. To make the previous construction on the land). tects and engineers.data comparable across economies, several as- Interactions between company employ-sumptions about the business, the warehouse technical plans prepared by a licensed ees, such as development of the warehouse architect.project and the utility connections are used. plans and inspections conducted by employ- ees, are not counted as procedures. Proce-ASSUMPTIONS ABOUT THE CON- required to make the warehouse fully dures that the company undergoes to connectSTRUCTION COMPANY operational. to electricity, water, sewerage and telephoneThe business (BuildCo): ASSUMPTIONS ABOUT THE UTILITY services are included. All procedures that are CONNECTIONS legally or in practice required for building a The electricity connection: warehouse are counted, even if they may be city. avoided in exceptional cases. the main electricity network. TIME entity. Y, 140-kVA connection. Three-phase Time is recorded in calendar days. The mea- service is available in the construction sure captures the median duration that local out construction projects, such as area. experts indicate is necessary to complete a building warehouses. procedure in practice. It is assumed that the service, unless overhead service is not minimum time required for each procedure all of them nationals with the technical available in the peri-urban area. is 1 day. Although procedures may take place expertise and professional experi- simultaneously, they cannot start on the same ence necessary to obtain construction installation of a private substation day (that is, simultaneous procedures start permits and approvals. (transformer) or extension of network on consecutive days). If a procedure can be - is required. accelerated legally for an additional cost, the censed architect and registered with the fastest legal procedure available and used by local association of architects. electricity meter. the majority of construction companies is - BuildCo is assumed to have a licensed chosen. It is assumed that BuildCo does not essary insurance applicable to its general electrician on its team to complete the internal waste time and commits to completing each business activity (for example, accidental wiring for the warehouse. remaining procedure without delay. The time insurance for construction workers and The water and sewerage connection: that BuildCo spends on gathering informa- third-person liability insurance). tion is ignored. It is assumed that BuildCo is the existing water source and sewer tap. aware of all building requirements and their is built. - sequence from the beginning.
  • 39. 36 DOING BUSINESS IN NIGERIA 2010COST TIMECost is recorded as a percentage of the econ- owned. Time is recorded in calendar days. The mea-omy’s income per capita. Only official costs sure captures the median duration that prop-are recorded. All the fees associated with are nationals. erty lawyers, notaries or registry officials indi-completing the procedures to legally build cate is necessary to complete a procedure. It isa warehouse are recorded, including those assumed that the minimum time required for ASSUMPTIONS ABOUT THE PROPERTYassociated with obtaining land use approv- each procedure is 1 day. Although proceduresals and preconstruction design clearances; The property: may take place simultaneously, they cannotreceiving inspections before, during and after start on the same day. It is assumed that theconstruction; getting utility connections; and capita. The sale price equals the value. buyer does not waste time and commits toregistering the warehouse property. Nonre- completing each remaining procedure with-curring taxes required for the completion of out delay. If a procedure can be accelerated forthe warehouse project also are recorded. The been under the same ownership for the an additional cost, the fastest legal procedurebuilding code, information from local experts past 10 years. available and used by the majority of propertyand specific regulations and fee schedules are - owners is chosen. If procedures can be under-used as sources for costs. If several local part- tre, or both, and is free of title disputes. taken simultaneously, it is assumed that theyners provide different estimates, the median are. It is assumed that the parties involved arereported value is used. zone, and no rezoning is required. aware of all regulations and their sequence from the beginning. Time spent on gatheringThe data details on dealing with construction land area is 557.4 square meters (6,000 information is not considered.permits can be found for each economy at square feet). A 2-story warehouse ofhttp://www.doingbusiness.org by selecting the 929 square meters (10,000 square feet) COSTeconomy in the dropdown list. is located on the land. The warehouse Cost is recorded as a percentage of the prop- is 10 years old, is in good condition erty value, assumed to be equivalent to 50 and complies with all safety standards, REGISTERING PROPERTY building codes and other legal require- times income per capita. Only official costs ments. The property of land and build- required by law are recorded, including fees,Doing Business in Nigeria 2010 records the ing will be transferred in its entirety. transfer taxes, stamp duties and any otherfull sequence of procedures necessary for a - payment to the property registry, notaries,business (buyer) to purchase a property from ditional building following the purchase. public agencies or lawyers. Other taxes, suchanother business (seller) and to transfer the as capital gains tax or value added tax, areproperty title to the buyer’s name so that the natural reserves or historical monu- excluded from the cost measure. Both costsbuyer can use the property for expanding its ments of any kind. borne by the buyer and those borne by thebusiness, use the property as collateral in tak- seller are included. If cost estimates differing new loans or, if necessary, sell the property and no special permits, such as for among sources, the median reported valueto another business. The process starts with residential use, industrial plants, waste is used.obtaining the necessary documents, such as storage or certain types of agriculturala copy of the seller’s title if necessary, and activities, are required. The data details on registering property canconducting due diligence if required. The be found for each economy at http://www.transaction is considered complete when it is no other party holds a legal interest in it. doingbusiness.org by selecting the economy inopposable to third parties and when the buyer the drop-down list. PROCEDUREScan use the property, use it as collateral for abank loan or resell it. A procedure is defined as any interaction ENFORCING CONTRACTS Every procedure required by law or neces- of the buyer or the seller, their agents (if ansary in practice is included, whether it is the agent is legally or in practice required) or Indicators on enforcing contracts measure theresponsibility of the seller or the buyer or must be the property with external parties, includ- efficiency of the judicial system in resolving ing government agencies, inspectors, notaries a commercial dispute. The data are built byproperty lawyers, notaries and property registries and lawyers. Interactions between company following the step-by-step evolution of a com-provide information on procedures as well as the officers and employees are not considered. All mercial sale dispute before local courts. Thetime and cost to complete each of them. procedures that are legally or in practice re- data are collected through study of the codes To make the data comparable across quired for registering property are recorded, of civil procedure and other court regulationseconomies, several assumptions about the even if they may be avoided in exceptional as well as surveys completed by local litigationparties to the transaction, the property and cases. It is assumed that the buyer follows the lawyers as well as by judges.the procedures are used. fastest legal option available and used by the majority of property owners. ASSUMPTIONS ABOUT THE CASEASSUMPTIONS ABOUT THE PARTIES Although the buyer may use lawyers orThe parties (buyer and seller): other professionals where necessary in the the economy’s income per capita. registration process, it is assumed that it does - not employ an outside facilitator in the reg- tion between 2 businesses (Seller and Buyer), located in the state’s largest the state’s largest business city. istration process unless legally or in practice business city. Seller sells goods worth required to do so.
  • 40. DATA NOTES 37 200% of the Country’s income per The survey allows respondents to record AGGREGATE RANKING capita to Buyer. After Seller delivers the procedures that exist in civil law but not com- goods to Buyer, Buyer refuses to pay mon law jurisdictions, and vice versa. For The aggregate ranking index is calculated as for the goods on the grounds that the example, in civil law countries the judge can the ranking on the simple average of state delivered goods were not of adequate appoint an independent expert, while in com- percentile rankings on each of the 4 topics quality. mon law countries each party submits a list covered in Doing Business in Nigeria 2010. of expert witnesses to the court. To indicate The aggregate ranking measure ranges from defendant) to recover the amount un- der the sales agreement (that is, 200% overall efficiency, 1 procedure is subtracted 1 to 37, with lower values indicating more of the economy’s income per capita). from the total number for economies that efficient regulation and stronger protection of Buyer opposes Seller’s claim, saying that have specialized commercial courts, and 1 property rights. The ranking on each topic is the quality of the goods is not adequate. procedure for economies that allow electronic the simple average of the percentile rankings The claim is disputed on the merits. filing of court cases. Some procedural steps on its component indicators. that take place simultaneously with or are The aggregate ranking index is limited city with jurisdiction over commercial included in other procedural steps are not in scope. It does not account for a state’s cases worth 200% of income per capita counted in the total number of procedures. proximity to large markets, the quality of its decides the dispute. infrastructure services (other than services - TIME related to construction permits), the security sets (for example, office equipment, Time is recorded in calendar days, counted of property from theft and looting, macroeco- vehicles) prior to obtaining a judgment from the moment the plaintiff files the lawsuit nomic conditions or the strength of underly- because Seller fears that Buyer may in court until payment. This includes both the ing institutions. There remains a large unfin- become insolvent during the law suit. days when actions take place and the waiting ished agenda for research into what regulation periods between. The average duration of dif- constitutes binding constraints, what package of the delivered goods. If it is standard ferent stages of dispute resolution is recorded: of reforms is most effective and how these is- practice in the economy for each party to call its own expert witness, the par- the completion of service of process (time to sues are shaped by the context of an economy. ties each call one expert witness. If it is file the case), the issuance of judgment (time The Doing Business indicators provide a new standard practice for the judge to ap- for the trial and obtaining the judgment) and empirical data set that may improve under- point an independent expert, the judge the moment of payment (time for enforce- standing of these issues. does so. In this case the judge does not ment of judgment). allow opposing expert testimony. COST the judge decides that the goods are of Cost is recorded as a percentage of the claim, adequate quality and that Buyer must assumed to be equivalent to 200% of income pay the agreed price. per capita. No bribes are recorded. Three types of costs are recorded: court costs, enforcement The judgment becomes final. costs and average attorney fees. Court costs include all costs Seller prompt enforcement of the judgment. (plaintiff) must advance to the court or the The money is successfully collected expert regardless of the final cost to Seller. through a public sale of Buyer’s mov- Expert fees, if required by law or necessary in able assets (for example, office equip- ment, vehicles). practice, are included in court costs. Enforce- ment costs are all costs Seller (plaintiff) mustPROCEDURES advance to enforce the judgment through aThe list of procedural steps compiled for each public sale of Buyer’s movable assets, regard-state traces the chronology of a commercial less of the final cost to Seller. Average attor-dispute before the relevant court. A procedure neys fees are the fees Seller (plaintiff) mustis defined as any interaction between the par- advance to a local attorney to represent Sellerties, or between them and the judge or court in the standardized case.officer. This includes steps to file the case,steps for trial and judgment and steps neces- The data details on enforcing contracts cansary to enforce the judgment. be found for each economy at http://www. doingbusiness.org by selecting the economy in the drop-down list. This methodology was de- veloped in Djankov, La Porta, López-de-Silanes and Shleifer. 2003. “Courts”. Quarterly Journal of Economics 118 (2): 453-517; and is adopted here with minor changes.
  • 41. Statetables
  • 42. STATE TABLES 39Abia, Aba Aggregate ranking 32Starting a business (rank) 18 Registering property (rank) 30Procedures (number) 9 Procedures (number) 13Time (days) 33 Time (days) 106Cost (% of income per capita) 67.8 Cost (% of the property value) 18.5Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 30Dealing with construction permits (rank) 30 Procedures (number) 40Procedures (number) 16 Time (days) 464Time (days) 79 Cost (% of claim) 47.6Cost (% of income per capita) 718.1Adamawa, Yola Aggregate ranking 19Starting a business (rank) 20 Registering property (rank) 25Procedures (number) 7 Procedures (number) 13Time (days) 44 Time (days) 120Cost (% of income per capita) 74.7 Cost (% of the property value) 12.2Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 32Dealing with construction permits (rank) 4 Procedures (number) 40Procedures (number) 11 Time (days) 729Time (days) 69 Cost (% of claim) 40.5Cost (% of income per capita) 395.1Akwa Ibom, Uyo Aggregate ranking 20Starting a business (rank) 7 Registering property (rank) 17Procedures (number) 8 Procedures (number) 12Time (days) 34 Time (days) 55Cost (% of income per capita) 65.1 Cost (% of the property value) 15.6Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 28Dealing with construction permits (rank) 29 Procedures (number) 40Procedures (number) 14 Time (days) 428Time (days) 111 Cost (% of claim) 46.8Cost (% of income per capita) 617.1Anambra, Onitsha Aggregate ranking 35Starting a business (rank) 27 Registering property (rank) 30Procedures (number) 9 Procedures (number) 13Time (days) 39 Time (days) 212Cost (% of income per capita) 84.4 Cost (% of the property value) 15.4Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 31Dealing with construction permits (rank) 31 Procedures (number) 40Procedures (number) 16 Time (days) 600Time (days) 99 Cost (% of claim) 42.6Cost (% of income per capita) 574.3Bauchi, Bauchi Aggregate ranking 10Starting a business (rank) 21 Registering property (rank) 12Procedures (number) 10 Procedures (number) 10Time (days) 36 Time (days) 77Cost (% of income per capita) 64.9 Cost (% of the property value) 11.1Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 10Dealing with construction permits (rank) 7 Procedures (number) 40Procedures (number) 11 Time (days) 455Time (days) 59 Cost (% of claim) 27.4Cost (% of income per capita) 564.2
  • 43. 40 DOING BUSINESS IN NIGERIA 2010Bayelsa, Yenagoa Aggregate ranking 28Starting a business (rank) 37 Registering property (rank) 23Procedures (number) 11 Procedures (number) 13Time (days) 47 Time (days) 84Cost (% of income per capita) 84.7 Cost (% of the property value) 14.3Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 14Dealing with construction permits (rank) 25 Procedures (number) 40Procedures (number) 15 Time (days) 393Time (days) 81 Cost (% of claim) 36.7Cost (% of income per capita) 632.9Benue, Makurdi Aggregate ranking 13Starting a business (rank) 10 Registering property (rank) 11Procedures (number) 8 Procedures (number) 9Time (days) 36 Time (days) 98Cost (% of income per capita) 65.0 Cost (% of the property value) 8.1Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 29Dealing with construction permits (rank) 11 Procedures (number) 40Procedures (number) 14 Time (days) 606Time (days) 83 Cost (% of claim) 39.7Cost (% of income per capita) 441.4Borno, Maiduguri Aggregate ranking 3Starting a business (rank) 11 Registering property (rank) 2Procedures (number) 8 Procedures (number) 8Time (days) 34 Time (days) 14Cost (% of income per capita) 71.4 Cost (% of the property value) 14.1Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 5Dealing with construction permits (rank) 14 Procedures (number) 40Procedures (number) 13 Time (days) 371Time (days) 65 Cost (% of claim) 26.2Cost (% of income per capita) 697.6Cross River, Calabar Aggregate ranking 33Starting a business (rank) 35 Registering property (rank) 20Procedures (number) 9 Procedures (number) 13Time (days) 47 Time (days) 70Cost (% of income per capita) 103.7 Cost (% of the property value) 15.0Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 37Dealing with construction permits (rank) 17 Procedures (number) 40Procedures (number) 14 Time (days) 835Time (days) 138 Cost (% of claim) 52.8Cost (% of income per capita) 187.4Delta, Warri Aggregate ranking 29Starting a business (rank) 31 Registering property (rank) 28Procedures (number) 9 Procedures (number) 13Time (days) 51 Time (days) 76Cost (% of income per capita) 84.4 Cost (% of the property value) 25.7Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 27Dealing with construction permits (rank) 20 Procedures (number) 40Procedures (number) 16 Time (days) 492Time (days) 97 Cost (% of claim) 37.1Cost (% of income per capita) 392.4
  • 44. STATE TABLES 41Ebonyi, Abakaliki Aggregate ranking 31Starting a business (rank) 28 Registering property (rank) 21Procedures (number) 10 Procedures (number) 12Time (days) 39 Time (days) 91Cost (% of income per capita) 68.4 Cost (% of the property value) 14.3Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 32Dealing with construction permits (rank) 28 Procedures (number) 40Procedures (number) 23 Time (days) 545Time (days) 97 Cost (% of claim) 46.3Cost (% of income per capita) 420.5Edo, Benin City Aggregate ranking 21Starting a business (rank) 16 Registering property (rank) 32Procedures (number) 8 Procedures (number) 15Time (days) 45 Time (days) 69Cost (% of income per capita) 60.5 Cost (% of the property value) 27.6Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 6Dealing with construction permits (rank) 26 Procedures (number) 40Procedures (number) 14 Time (days) 314Time (days) 89 Cost (% of claim) 28.7Cost (% of income per capita) 624.4Ekiti, Ado-Ekiti Aggregate ranking 34Starting a business (rank) 32 Registering property (rank) 29Procedures (number) 9 Procedures (number) 15Time (days) 40 Time (days) 59Cost (% of income per capita) 103.7 Cost (% of the property value) 28.3Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 35Dealing with construction permits (rank) 12 Procedures (number) 40Procedures (number) 14 Time (days) 797Time (days) 82 Cost (% of claim) 44.6Cost (% of income per capita) 451.7Enugu, Enugu Aggregate ranking 30Starting a business (rank) 21 Registering property (rank) 14Procedures (number) 9 Procedures (number) 12Time (days) 31 Time (days) 73Cost (% of income per capita) 97.5 Cost (% of the property value) 11.2Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 36Dealing with construction permits (rank) 34 Procedures (number) 40Procedures (number) 16 Time (days) 970Time (days) 88 Cost (% of claim) 45.4Cost (% of income per capita) 1,509.1FCT, Abuja Aggregate ranking 17Starting a business (rank) 1 Registering property (rank) 9Procedures (number) 5 Procedures (number) 10Time (days) 22 Time (days) 51Cost (% of income per capita) 58.5 Cost (% of the property value) 13.0Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 17Dealing with construction permits (rank) 35 Procedures (number) 40Procedures (number) 17 Time (days) 381Time (days) 98 Cost (% of claim) 42.9Cost (% of income per capita) 950.0
  • 45. 42 DOING BUSINESS IN NIGERIA 2010Gombe, Gombe Aggregate ranking 2Starting a business (rank) 4 Registering property (rank) 1Procedures (number) 8 Procedures (number) 8Time (days) 24 Time (days) 16Cost (% of income per capita) 66.2 Cost (% of the property value) 6.6Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 12Dealing with construction permits (rank) 13 Procedures (number) 40Procedures (number) 11 Time (days) 470Time (days) 97 Cost (% of claim) 27.9Cost (% of income per capita) 522.6Imo, Owerri Aggregate ranking 36Starting a business (rank) 33 Registering property (rank) 25Procedures (number) 10 Procedures (number) 9Time (days) 39 Time (days) 147Cost (% of income per capita) 85.9 Cost (% of the property value) 21.3Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 34Dealing with construction permits (rank) 32 Procedures (number) 40Procedures (number) 18 Time (days) 510Time (days) 84 Cost (% of claim) 52.9Cost (% of income per capita) 654.8Jigawa, Dutse Aggregate ranking 1Starting a business (rank) 17 Registering property (rank) 5Procedures (number) 7 Procedures (number) 11Time (days) 35 Time (days) 28Cost (% of income per capita) 81.2 Cost (% of the property value) 11.1Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 4Dealing with construction permits (rank) 1 Procedures (number) 40Procedures (number) 10 Time (days) 261Time (days) 47 Cost (% of claim) 28.6Cost (% of income per capita) 396.7Kaduna, Kaduna Aggregate ranking 22Starting a business (rank) 14 Registering property (rank) 23Procedures (number) 9 Procedures (number) 12Time (days) 31 Time (days) 130Cost (% of income per capita) 69.5 Cost (% of the property value) 13.6Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 7Dealing with construction permits (rank) 33 Procedures (number) 40Procedures (number) 15 Time (days) 431Time (days) 125 Cost (% of claim) 26.2Cost (% of income per capita) 643.8Kano, Kano Aggregate ranking 8Starting a business (rank) 26 Registering property (rank) 4Procedures (number) 9 Procedures (number) 11Time (days) 38 Time (days) 31Cost (% of income per capita) 77.8 Cost (% of the property value) 10.8Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 23Dealing with construction permits (rank) 3 Procedures (number) 40Procedures (number) 14 Time (days) 720Time (days) 56 Cost (% of claim) 29.7Cost (% of income per capita) 94.6
  • 46. STATE TABLES 43Katsina, Katsina Aggregate ranking 7Starting a business (rank) 25 Registering property (rank) 8Procedures (number) 9 Procedures (number) 11Time (days) 37 Time (days) 33Cost (% of income per capita) 77.8 Cost (% of the property value) 11.0Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 1Dealing with construction permits (rank) 15 Procedures (number) 40Procedures (number) 16 Time (days) 285Time (days) 70 Cost (% of claim) 26.0Cost (% of income per capita) 435.6Kebbi, Birnin Kebbi Aggregate ranking 4Starting a business (rank) 3 Registering property (rank) 16Procedures (number) 8 Procedures (number) 9Time (days) 30 Time (days) 195Cost (% of income per capita) 61.7 Cost (% of the property value) 12.0Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 3Dealing with construction permits (rank) 8 Procedures (number) 40Procedures (number) 13 Time (days) 356Time (days) 68 Cost (% of claim) 26.2Cost (% of income per capita) 445.3Koji, Lokoja Aggregate ranking 5Starting a business (rank) 2 Registering property (rank) 10Procedures (number) 8 Procedures (number) 9Time (days) 28 Time (days) 33Cost (% of income per capita) 61.8 Cost (% of the property value) 15.7Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 25Dealing with construction permits (rank) 6 Procedures (number) 40Procedures (number) 12 Time (days) 534Time (days) 78 Cost (% of claim) 36.6Cost (% of income per capita) 424.2Kwara, Ilorin Aggregate ranking 14Starting a business (rank) 19 Registering property (rank) 15Procedures (number) 8 Procedures (number) 8Time (days) 34 Time (days) 78Cost (% of income per capita) 87.5 Cost (% of the property value) 20.9Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 25Dealing with construction permits (rank) 5 Procedures (number) 40Procedures (number) 13 Time (days) 774Time (days) 52 Cost (% of claim) 30.0Cost (% of income per capita) 473.7Lagos, Lagos Aggregate ranking 25Starting a business (rank) 8 Registering property (rank) 27Procedures (number) 8 Procedures (number) 13Time (days) 31 Time (days) 82Cost (% of income per capita) 77 Cost (% of the property value) 20.9Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 15Dealing with construction permits (rank) 35 Procedures (number) 39Procedures (number) 18 Time (days) 457Time (days) 350 Cost (% of claim) 32.0Cost (% of income per capita) 580.3
  • 47. 44 DOING BUSINESS IN NIGERIA 2010Nasarawa, Lafia Aggregate ranking 18Starting a business (rank) 12 Registering property (rank) 18Procedures (number) 7 Procedures (number) 11Time (days) 29 Time (days) 102Cost (% of income per capita) 87.6 Cost (% of the property value) 13.7Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 8Dealing with construction permits (rank) 27 Procedures (number) 40Procedures (number) 16 Time (days) 275Time (days) 86 Cost (% of claim) 36.4Cost (% of income per capita) 512.2Niger, Minna Aggregate ranking 16Starting a business (rank) 9 Registering property (rank) 19Procedures (number) 7 Procedures (number) 11Time (days) 32 Time (days) 86Cost (% of income per capita) 74.7 Cost (% of the property value) 15.4Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 23Dealing with construction permits (rank) 10 Procedures (number) 40Procedures (number) 12 Time (days) 1,130Time (days) 66 Cost (% of claim) 26.5Cost (% of income per capita) 584.3Ogun, Abeokuta Aggregate ranking 37Starting a business (rank) 36 Registering property (rank) 35Procedures (number) 10 Procedures (number) 15Time (days) 40 Time (days) 101Cost (% of income per capita) 90.9 Cost (% of the property value) 16.2Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 18Dealing with construction permits (rank) 37 Procedures (number) 40Procedures (number) 18 Time (days) 455Time (days) 102 Cost (% of claim) 37.1Cost (% of income per capita) 713.9Ondo, Akure Aggregate ranking 24Starting a business (rank) 33 Registering property (rank) 34Procedures (number) 10 Procedures (number) 16Time (days) 37 Time (days) 62Cost (% of income per capita) 90.9 Cost (% of the property value) 33.6Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 9Dealing with construction permits (rank) 19 Procedures (number) 40Procedures (number) 17 Time (days) 382Time (days) 71 Cost (% of claim) 31.4Cost (% of income per capita) 428.4Osun, Osogbo Aggregate ranking 23Starting a business (rank) 30 Registering property (rank) 36Procedures (number) 10 Procedures (number) 14Time (days) 35 Time (days) 93Cost (% of income per capita) 86.1 Cost (% of the property value) 22.3Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 11Dealing with construction permits (rank) 9 Procedures (number) 40Procedures (number) 14 Time (days) 438Time (days) 84 Cost (% of claim) 30.7Cost (% of income per capita) 278.9
  • 48. STATE TABLES 45Oyo, Ibadan Aggregate ranking 26Starting a business (rank) 24 Registering property (rank) 33Procedures (number) 9 Procedures (number) 17Time (days) 31 Time (days) 65Cost (% of income per capita) 110.2 Cost (% of the property value) 24.0Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 20Dealing with construction permits (rank) 23 Procedures (number) 40Procedures (number) 12 Time (days) 439Time (days) 137 Cost (% of claim) 37.2Cost (% of income per capita) 527.7Plateau, Jos Aggregate ranking 15Starting a business (rank) 4 Registering property (rank) 13Procedures (number) 8 Procedures (number) 9Time (days) 31 Time (days) 66Cost (% of income per capita) 63.7 Cost (% of the property value) 17.6Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 20Dealing with construction permits (rank) 24 Procedures (number) 40Procedures (number) 15 Time (days) 498Time (days) 84 Cost (% of claim) 34.6Cost (% of income per capita) 552.0Rivers, Port Harcourt Aggregate ranking 27Starting a business (rank) 29 Registering property (rank) 37Procedures (number) 10 Procedures (number) 13Time (days) 38 Time (days) 201Cost (% of income per capita) 71.7 Cost (% of the property value) 23.2Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 22Dealing with construction permits (rank) 15 Procedures (number) 40Procedures (number) 11 Time (days) 375Time (days) 148 Cost (% of claim) 46.7Cost (% of income per capita) 429.1Sokoto, Sokoto Aggregate ranking 12Starting a business (rank) 23 Registering property (rank) 21Procedures (number) 9 Procedures (number) 12Time (days) 31 Time (days) 86Cost (% of income per capita) 103.7 Cost (% of the property value) 15.0Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 16Dealing with construction permits (rank) 2 Procedures (number) 40Procedures (number) 13 Time (days) 638Time (days) 63 Cost (% of claim) 27.1Cost (% of income per capita) 154.2Taraba, Jalingo Aggregate ranking 11Starting a business (rank) 6 Registering property (rank) 5Procedures (number) 8 Procedures (number) 12Time (days) 33 Time (days) 22Cost (% of income per capita) 60.0 Cost (% of the property value) 8.2Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 18Dealing with construction permits (rank) 21 Procedures (number) 40Procedures (number) 15 Time (days) 327Time (days) 84 Cost (% of claim) 52.6Cost (% of income per capita) 464.7
  • 49. 46 DOING BUSINESS IN NIGERIA 2010Yobe, Damaturu Aggregate ranking 6Starting a business (rank) 13 Registering property (rank) 5Procedures (number) 8 Procedures (number) 9Time (days) 38 Time (days) 80Cost (% of income per capita) 61.9 Cost (% of the property value) 5.2Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 2Dealing with construction permits (rank) 22 Procedures (number) 40Procedures (number) 18 Time (days) 368Time (days) 65 Cost (% of claim) 26.1Cost (% of income per capita) 475.7Zamfara, Gusau Aggregate ranking 9Starting a business (rank) 15 Registering property (rank) 3Procedures (number) 8 Procedures (number) 10Time (days) 36 Time (days) 32Cost (% of income per capita) 71.5 Cost (% of the property value) 8.1Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 13Dealing with construction permits (rank) 18 Procedures (number) 40Procedures (number) 14 Time (days) 402Time (days) 57 Cost (% of claim) 36.0Cost (% of income per capita) 1,052.5
  • 50. Doing BusinessIndicators
  • 51. 48 DOING BUSINESS IN NIGERIA 2010 Starting a business Dealing with construction permits Paid-in Ease of minimum Ease of Cost dealing with Cost capital starting a (% of construction Procedures Time (% of income (% of income business Procedures Time income permits (number) (days) per capita) per capita) (rank) (number) (days) per capita) (rank)Abia, Aba 9 33 67.8 0 18 16 79 718.1 30Adamawa, Yola 7 44 74.7 0 20 11 69 395.1 4Akwa Ibom , Uyo 8 34 65.1 0 7 14 111 617.1 29Anambra, Onitsha 9 39 84.4 0 27 16 99 574.3 31Bauchi, Bauchi 10 36 64.9 0 21 11 59 564.2 7Bayelsa, Yenagoa 11 47 84.7 0 37 15 81 632.9 25Benue, Makurdi 8 36 65.0 0 10 14 83 441.4 11Borno, Maiduguri 8 34 71.4 0 11 13 65 697.6 14Cross River, Calabar 9 47 103.7 0 35 14 138 187.4 17Delta, Warri 9 51 84.4 0 31 16 97 392.4 20Ebonyi, Abakaliki 10 39 68.4 0 28 23 97 420.5 28Edo, Benin City 8 45 60.5 0 16 14 89 624.4 26Ekiti, Ado-Ekiti 9 40 103.7 0 32 14 82 451.7 12Enugu, Enugu 9 31 97.5 0 21 16 88 1,509.1 34FCT, Abuja 5 22 58.5 0 1 17 98 950.0 35Gombe, Gombe 8 24 66.2 0 4 11 97 522.6 13Imo , Owerri 10 39 85.9 0 33 18 84 654.8 32Jigawa, Dutse 7 35 81.2 0 17 10 47 396.7 1Kaduna, Kaduna 9 31 69.5 0 14 15 125 643.8 33Kano, Kano 9 38 77.8 0 26 14 56 94.6 3Katsina, Katsina 9 37 77.8 0 25 16 70 435.6 15Kebbi, Birnin Kebbi 8 30 61.7 0 3 13 68 445.3 8Kogi, Lokoja 8 28 61.8 0 2 12 78 424.2 6Kwara, Ilorin 8 34 87.5 0 19 13 52 473.7 5Lagos, Lagos 8 31 77.0 0 8 18 350 580.3 35Nasarawa, Lafia 7 29 87.6 0 12 16 86 512.2 27Niger, Minna 7 32 74.7 0 9 12 66 584.3 10Ogun, Abeokuta 10 40 90.9 0 36 18 102 713.9 37Ondo, Akure 10 37 90.9 0 33 17 71 428.4 19Osun, Osogbo 10 35 86.1 0 30 14 84 278.9 9Oyo , Ibadan 9 31 110.2 0 24 12 137 527.7 23Plateau, Jos 8 31 63.7 0 4 15 84 552.0 24Rivers , Port Harcourt 10 38 71.7 0 29 11 148 429.1 15Sokoto, Sokoto 9 31 103.7 0 23 13 63 154.2 2Taraba, Jalingo 8 33 60.0 0 6 15 84 464.7 21Yobe, Damaturu 8 38 61.9 0 13 18 65 475.7 22Zamfara, Gusau 8 36 71.5 0 15 14 57 1,052.5 18
  • 52. DOING BUSINESS INDICATORS 49 Registering property Enforcing contracts Cost Ease of Ease of (% of registering enforcing Procedures Time property property Procedures Time Cost contracts (number) (days) value) (rank) (number) (days) (% of claim) (rank)Abia, Aba 13 106 18.5 30 40 464 47.6 30Adamawa, Yola 13 120 12.2 25 40 729 40.5 32Akwa Ibom , Uyo 12 55 15.6 17 40 428 46.8 28Anambra, Onitsha 13 212 15.4 30 40 600 42.6 31Bauchi, Bauchi 10 77 11.1 12 40 455 27.4 10Bayelsa, Yenagoa 13 84 14.3 23 40 393 36.7 14Benue, Makurdi 9 98 8.1 11 40 606 39.7 29Borno, Maiduguri 8 14 14.1 2 40 371 26.2 5Cross River, Calabar 13 70 15.0 20 40 835 52.8 37Delta, Warri 13 76 25.7 28 40 492 37.1 27Ebonyi, Abakaliki 12 91 14.3 21 40 545 46.3 32Edo, Benin City 15 69 27.6 32 40 314 28.7 6Ekiti, Ado-Ekiti 15 59 28.3 29 40 797 44.6 35Enugu, Enugu 12 73 11.2 14 40 970 45.4 36FCT, Abuja 10 51 13.0 9 40 381 42.9 17Gombe, Gombe 8 16 6.6 1 40 470 27.9 12Imo , Owerri 9 147 21.3 25 40 510 52.9 34Jigawa, Dutse 11 28 11.1 5 40 261 28.6 4Kaduna, Kaduna 12 130 13.6 23 40 431 26.2 7Kano, Kano 11 31 10.8 4 40 720 29.7 23Katsina, Katsina 11 33 11.0 8 40 285 26.0 1Kebbi, Birnin Kebbi 9 195 12.0 16 40 356 26.2 3Kogi, Lokoja 9 33 15.7 10 40 534 36.6 25Kwara, Ilorin 8 78 20.9 15 40 774 30.0 25Lagos, Lagos 13 82 20.9 27 39 457 32.0 15Nasarawa, Lafia 11 102 13.7 18 40 275 36.4 8Niger, Minna 11 86 15.4 19 40 1130 26.5 23Ogun, Abeokuta 15 101 16.2 35 40 455 37.1 18Ondo, Akure 16 62 33.6 34 40 382 31.4 9Osun, Osogbo 14 93 22.3 36 40 438 30.7 11Oyo , Ibadan 17 65 24.0 33 40 439 37.2 20Plateau, Jos 9 66 17.6 13 40 498 34.6 20Rivers , Port Harcourt 13 201 23.2 37 40 375 46.7 22Sokoto, Sokoto 12 86 15.0 21 40 638 27.1 16Taraba, Jalingo 12 22 8.2 5 40 327 52.6 18Yobe, Damaturu 9 80 5.2 5 40 368 26.1 2Zamfara, Gusau 10 32 8.1 3 40 402 36.0 13
  • 53. LIST OF PROCEDURES List of Starting a business procedures ABIA, AbaStandard company legal form: Limited Liability Company Starting a businessPaid-in minimum capital requirement: noneData as of: January 2010 Dealing withProcedure 1. Check the availability of company’s name with theCorporate Affairs Commission (CAC) construction permitsTime: 2 daysCost: NGN 200 Registering propertyComments: The Corporate Affairs Commission online system allows for onlinesearch of unique company names upon the purchase of an e-payment card for aflat fee of NGN 200 from an accredited bank. The system is widely used but in mostcases, applicants have to go to the CAC office to complete this procedure. The timeto conduct the availability of name search, receive confirmation and reserve thecompany name is usually 2 days. The company’s name reservation lasts 60 days butcan be renewed for a similar period.Procedure 2. Prepare the requisite incorporation documents andpay the stamp dutyTime: 7 daysCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrastamped copy of memorandum and articles of association + NGN 500 for incorpora-tion forms)Comments: This procedure involves the following tasks:a. Preparing and printing the memorandum and articles of association;b. Completing the requisite statutory forms, and;c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. There is a stamp duty office located in the state capital in Umuahia and housed inthe same premises with the CAC.Procedure 3. Declaration of Compliance (Form CAC 4) signedbefore a Commissioner for Oaths or notary publicTime: 1 dayCost: NGN 500Comments: A sworn declaration that the requirements of the Companies and AlliedMatters Act have been met must be sworn to by (i) a barrister or solicitor engagedin the formation of the company or (ii) by a person named in the memorandum andarticles of association as a director or secretary of the company. This procedure canbe done before a notary public or filed at the state or federal High Court. The com-mon practice is for this declaration to be sworn before a Commissioner of Oaths atthe state High Court.Procedure 4*. Pay incorporation fees to the Corporate AffairsCommission at a designated bankTime: 1 dayCost: NGN 27,000 ( NGN 20,000 filing fees for company whose share capital is NGN1,546,353 + NGN 3,000 for certified true copy of memorandum and articles of asso-ciation + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 forcertified true copy of particulars of shareholders)Comments: Payment is made to any of the receiving banks designated by the Cor-porate Affairs Commission.Procedure 5. Register the company with the Corporate AffairsCommissionTime: 16 daysCost: NGN 60,000 (legal fees)Comments: The applicant must file with the CAC the required incorporation docu-ments and forms, which include:a. Stamped memorandum and articles of association (2 copies);b. Form CAC 3, Notice of registered address;c. Form CAC 7, Particulars of directors;d. Form CAC 4, Declaration of compliance and the prescribed registration fees;e. Copy of the reservation of company name approval;f. Form CAC 2, Statement of share capital and return of allotment of shares.
  • 54. 52 DOING BUSINESS IN NIGERIA 2010The CAC introduced a same-day incorporation option at an increased statutory Procedure 9. Pay registration fees for business premises into afee (5 times that of standard incorporation). The fee schedule for registration is thefollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every government account at a designated bankNGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Time: 1 day10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Cost: No costNGN 7,000. Comments: Fees for the business premises permit are paid into a government ac-There is a legal requirement for the companys incorporators to hire a CAC accredited count at a designated bank.professional usually a lawyer to undertake the administrative incorporation proce-dures. Given that the use of lawyers for such purposes is mandatory throughout the *This procedure can be completed simultaneously with previous procedures.country, lawyer fees are accounted for in the overall incorporation costs. On average,a lawyer will charge NGN 60,000 to handle the entire incorporation process in thisstate. STARTING A BUSINESS ADAMAWA, YolaProcedure 6. Register with the integrated Tax Office of the Standard company legal form: Limited Liability CompanyFederal Board of Inland Revenue for income tax and VAT Paid in minimum capital requirement: noneTime: 5 days Data as of: January 2010Cost: No costComments: Entrepreneurs can register for both corporate income tax and VAT at Procedure 1. Check the availability of company’s name with thethe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Corporate Affairs Commission (CAC)Service (FIRS) will require the applicant to complete tax registration forms. The new Time: 7 dayscompany registers at a Federal Tax Office nearest to its place of business or registeredoffice. A letter is written to the tax authority applying for a tax clearance certificate. Cost: NGN 200A form obtained from the tax office is filled and the following documents submitted Comments: The Corporate Affairs Commission online system allows for onlinewith it: search of unique company names upon the purchase of an e-payment card for aa. Taxpayer registration input form (TRIF/2006/001 COYS); flat fee of NGN 200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The timeb. Completed FIRS questionnaire; to conduct the availability of name search, receive confirmation and reserve thec. Copy of memorandum and articles of association; company name is usually a week in this state. The company’s name reservation lastsd. Names and addresses of directors; 60 days but can be renewed for a similar period.e. Copy of the certificate of incorporation; Procedure 2. Prepare the requisite incorporation documents andf. Name, address of tax adviser; pay the stamp dutyg. Letter of appointment of tax adviser and a letter of acceptance. Time: 14 daysThe application forms must be in triplicate and the original certificate of incorpora-tion must be presented for sighting by the controller before registration can be Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extracompleted. Upon receipt of the completed taxpayer registration input form and all stamped copy of memorandum and articles of association + NGN 500 for incorpora-documents, a tax reference number is allocated. An application must be filed for the tion forms)tax clearance certificate. Its issuance is not automatic. Comments: This procedure involves the following tasks:The fees for the tax clearance issuance are as follows: for newly registered companies a. Preparing and printing the memorandum and articles of association;within 6 months of incorporation: no fee; for companies that are yet to commence b. Completing the requisite statutory forms, and;business and show up for registration after 6 months of incorporation, if they request c. Having the memorandum and articles of association stamped by the Federalfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Board of Inland Revenue Service.time and NGN 20,000 is payable for subsequent years until it files a notice of com-mencement of business. There is a stamp duty office located in the state capital in Yola and it is not housed in the same premises with the CAC. The reason why this procedure is lengthy is theCompanies required to register for VAT should complete the VAT registration form poor capacity of those who prepare the incorporation documents. The inexperience(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the of the lawyers and poor exposure of the promoters of the company is a major chal-nearest integrated tax office, which will issue a taxpayer identification number (TIN). lenge. The promoters do not always have the requisite information, documents orAccording to the VAT Act, companies required to register for VAT must do so within 6 understanding, required to prepare the memorandum and articles of association andmonths from the date of starting business operations. The TIN is issued in 1-2 days, therefore have to source professional help, adding time to this procedure.but it is mailed with the VAT certificate, which is issued in a week. Procedure 3. Declaration of Compliance (Form CAC 4) signedProcedure 7*. Register for personal income tax PAYE at the State before a Commissioner for Oaths or notary publicTax Office Time: 1 dayTime: 2 days Cost: NGN 200Cost: No cost Comments: A sworn declaration that the requirements of the Companies and AlliedComments: The employers in the newly incorporated company are required to reg- Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedister with the relevant state tax authority for the purposes of deducting income tax in the formation of the company or (ii) by a person named in the memorandum andfrom employees. Once an application is filed with a copy of the certificate of incor- articles of association as a director or secretary of the company. This procedure canporation attached, a reference file is then opened for the company. There is no cost be done before a notary public or filed at the state or federal High Court. The com-related to this registration. mon practice is for this declaration to be sworn before a Commissioner of Oaths at the state High Court.Procedure 8*. Obtain a business premises permit from the state’sMinistry of Commerce and Industry Procedure 4. Register the company with the Corporate AffairsTime: 3 days CommissionCost: NGN 4,000 Time: 18 daysComments: Following incorporation with the CAC, a newly established business Cost: NGN 92,000 (NGN 65,000 for legal fees + registration fees of NGN 10,000 formust register and obtain a business premises permit from the Ministry of Commerce first 1,000,000 share capital and NGN 10,000 for each additional 1,000,000 + NGNand Industry. The fees vary from NGN 400 to NGN 100,000. The registration fee for 7,000 for certified true copies of memorandum and articles of association and par-a medium sized manufacturing or commercial company is NGN 4,000 for the initial ticulars of directors and shareholders)registration and NGN 2,000 for the subsequent annual renewals. Comments: The applicant must file with the CAC, the required incorporation docu- ments and forms, which include: a. Stamped memorandum and articles of association (2 copies); b. Form CAC 3, Notice of registered address;
  • 55. LIST OF PROCE STARTING A BUSINESS 53 STARTING A BUSINESSc. Form CAC 7, Particulars of directors;d. Form CAC 4, Declaration of compliance and the prescribed registration fees; AKWA IBOM, Uyoe. Copy of the reservation of company name approval; Standard company legal form: Limited Liability Companyf. Form CAC 2, Statement of share capital and return of allotment of shares. Paid in minimum capital requirement: noneThe CAC introduced a same-day incorporation option at an increased statutory Data as of: January 2010fee (5 times that of standard incorporation). The fee schedule for registration is thefollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Procedure 1. Check the availability of company’s name with theNGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Corporate Affairs Commission (CAC)10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Time: 4 daysNGN 7,000.Payment is received at the cashiers desk in the CAC. Cost: NGN 200There is a legal requirement for the companys incorporators to hire a CAC accredited Comments: The Corporate Affairs Commission online system allows for onlineprofessional usually a lawyer to undertake the administrative incorporation proce- search of unique company names upon the purchase of an e-payment card for adures. Given that the use of lawyers for such purposes is mandatory throughout the flat fee of NGN 200 from an accredited bank. The system is widely used but in mostcountry, lawyer fees are accounted for in the overall incorporation costs. On average, cases, applicants have to go to the CAC office to complete this procedure. The timea lawyer will charge NGN 65,000 to handle the entire incorporation process in this to conduct the availability of name search, receive confirmation and reserve thestate. company name is usually 3 to 4 days. The company’s name reservation lasts 60 days but can be renewed for a similar period.Procedure 5. Register with the integrated Tax Office of theFederal Board of Inland Revenue for income tax and VAT Procedure 2. Prepare the requisite incorporation documents andTime: 2 days pay the stamp dutyCost: No cost Time: 7 daysComments: Entrepreneurs can register for both corporate income tax and VAT at Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrathe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue stamped copy of memorandum and articles of association + NGN 500 for incorpora-Service (FIRS) will require the applicant to complete tax registration forms. The new tion forms)company registers at a Federal Tax Office nearest to its place of business or registered Comments: This procedure involves the following tasks:office. A letter is written to the tax authority applying for a tax clearance certificate.A form obtained from the tax office is filled and the following documents submitted a. Preparing and printing the memorandum and articles of association;with it: b. Completing the requisite statutory forms, and;a. Taxpayer registration input form (TRIF/2006/001 COYS); c. Having the memorandum and articles of association stamped by the Federalb. Completed FIRS questionnaire; Board of Inland Revenue Service.c. Copy of memorandum and articles of association; There is no stamp duty office in this state and the procedure is usually done in the nearest city where there is one. The time for preparation of documents and stamp-d. Names and addresses of directors; ing presented here is based on an assumption that the stamping is conducted at thee. Copy of the certificate of incorporation; stamp duty office in Umuahia or Port Harcourt and accounts for the travel time. Ad-f. Name, address of tax adviser; ditional costs for handling this procedure out of state is not charged separately butg. Letter of appointment of tax adviser and a letter of acceptance. included in the professional charges of the lawyer or incorporation agent used.The application forms must be in triplicate and the original certificate of incorpora- Procedure 3. Declaration of Compliance (Form CAC 4) signedtion must be presented for sighting by the controller before registration can becompleted. Upon receipt of the completed taxpayer registration input form and all before a Commissioner for Oaths or notary publicdocuments, a tax reference number is allocated. An application must be filed for the Time: 1 daytax clearance certificate. Its issuance is not automatic. Cost: NGN 200The fees for the tax clearance issuance are as follows: for newly registered companies Comments: A sworn declaration that the requirements of the Companies and Alliedwithin 6 months of incorporation: no fee; for companies that are yet to commence Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedbusiness and show up for registration after 6 months of incorporation, if they request in the formation of the company or (ii) by a person named in the memorandum andfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first articles of association as a director or secretary of the company. This procedure cantime and NGN 20,000 is payable for subsequent years until it files a notice of com- be done before a notary public or filed at the state or federal High Court. The com-mencement of business. mon practice is for this declaration to be sworn before a Commissioner of Oaths atCompanies required to register for VAT should complete the VAT registration form the state High Court.(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to thenearest integrated tax office, which will issue a taxpayer identification number (TIN). Procedure 4*. Obtain bank draft from a bank for payment of theAccording to the VAT Act, companies required to register for VAT must do so within 6 registration feesmonths from the date of starting business operations. The TIN is issued in 1-2 days, Time: 1 daybut it is mailed with the VAT certificate, which is issued in a week. Cost: NGN 27,200 ( NGN 200 for bank draft charges + NGN 20,000 filing fees for com- pany whose share capital is NGN 1,546,353 + NGN 3,000 for certified true copy ofProcedure 6. Register for personal income tax PAYE at the State memorandum and articles of association + NGN 2,000 for certified true copy of par-Tax Office ticulars of directors + NGN 2,000 for certified true copy of particulars of shareholders)Time: 1 day Comments: Applicant is required to obtain a bank draft in the name of the Corpo-Cost: No cost rate Affairs Commission as the mode of payment of registration fees. The cost of theComments: The employers in the newly incorporated company are required to reg- bank draft may vary slightly depending on the bank but it is typically around NGNister with the relevant state tax authority for the purposes of deducting income tax 200 for a draft in the amount of the CAC registration fees.from employees. Once an application is filed with a copy of the certificate of incor-poration attached, a reference file is then opened for the company. There is no cost Procedure 5. Register the company with the Corporate Affairsrelated to this registration. Commission Time: 14 daysProcedure 7. Register business premises with the Ministry of Cost: NGN 50,000 (legal fees)Commerce and Industry Comments: The applicant must file with the Corporate Affairs Commission the re-Time: 1 day quired incorporation documents and forms, which include:Cost: NGN 10,000 a. Stamped memorandum and articles of association (2 copies);Comments: The newly incorporated company is required to register its business b. Form CAC 3, Notice of registered address;premises with the state’s Ministry of Commerce. Payments are made in cash directlyto the Ministry of Commerce and Industry and a permit for business premises regis- c. Form CAC 7, Particulars of directors;tration is issued.
  • 56. 54 DOING BUSINESS IN NIGERIA 2010d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESSe. Copy of the reservation of company name approval; ANAMBRA, Onitshaf. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability CompanyThe CAC introduced a same-day incorporation option at an increased statutory fee Paid in minimum capital requirement: none(5 times that of standard incorporation). The fee schedule for registration is the fol- Data as of: January 2010lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Procedure 1. Check the availability of company’s name with the10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Corporate Affairs Commission (CAC)NGN 7,000.Payment is received at the cashiers desk in the CAC. Time: 2 daysThere is a legal requirement for the companys incorporators to hire a CAC accreditedprofessional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for onlinecountry, lawyer fees are accounted for in the overall incorporation costs. On average, a search of unique company names upon the purchase of an e-payment card for alawyer will charge NGN 50,000 to handle the entire incorporation process in this state. flat fee of NGN 200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The timeProcedure 6. Register with the integrated Tax Office of the to conduct the availability of name search, receive confirmation and reserve theFederal Board of Inland Revenue for income tax and VAT company name is usually 2 days. The company’s name reservation lasts 60 days but can be renewed for a similar period.Time: 2 daysCost: No cost Procedure 2. Prepare the requisite incorporation documents andComments: Entrepreneurs can register for both corporate income tax and VAT at pay the stamp dutythe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 7 daysService (FIRS) will require the applicant to complete tax registration forms. The newcompany registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extraoffice. A letter is written to the tax authority applying for a tax clearance certificate. stamped copy of memorandum and articles of association + NGN 500 for incorpora-A form obtained from the tax office is filled and the following documents submitted tion forms)with it: Comments: This procedure involves the following tasks:a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association;b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and;c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federald. Names and addresses of directors; Board of Inland Revenue Service.e. Copy of the certificate of incorporation; There is no stamp duty office in this state and the procedure is usually done in the nearest city where there is one. The time for preparation of documents and stamp-f. Name, address of tax adviser; ing presented here is based on an assumption that the stamping is conducted atg. Letter of appointment of tax adviser and a letter of acceptance. the stamp duty office in Enugu and accounts for the travel time. Additional costs forThe application forms must be in triplicate and the original certificate of incorpora- handling this procedure out of state are not charged separately but included in thetion must be presented for sighting by the controller before registration can be professional charges of the lawyer or incorporation agent used.completed. Upon receipt of the completed taxpayer registration input form and alldocuments, a tax reference number is allocated. An application must be filed for the Procedure 3. Declaration of Compliance (Form CAC 4) signedtax clearance certificate. Its issuance is not automatic. before a Commissioner for Oaths or notary publicThe fees for the tax clearance issuance are as follows: for newly registered companies Time: 1 daywithin 6 months of incorporation: no fee; for companies that are yet to commence Cost: NGN 200business and show up for registration after 6 months of incorporation, if they requestfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Comments: A sworn declaration that the requirements of the Companies and Alliedtime and NGN 20,000 is payable for subsequent years until it files a notice of com- Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedmencement of business. in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure canCompanies required to register for VAT should complete the VAT registration form be done before a notary public or filed at the state or federal High Court. The com-(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the mon practice is for this declaration to be sworn before a Commissioner of Oaths atnearest integrated tax office, which will issue a taxpayer identification number (TIN). the state High Court.According to the VAT Act, companies required to register for VAT must do so within 6months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 4. Pay incorporation fees to the Corporate Affairsbut it is mailed with the VAT certificate, which is issued in a week. Commission at a designated bankProcedure 7. Register for personal income tax PAYE at the State Time: 1 dayTax Office Cost: NGN 27,000 (NGN 20,000 filing fees for company whose share capital isTime: 2 days NGN1,546,353 + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified true copy of particulars of directors + NGNCost: No cost 2,000 for certified true copy of particulars of shareholders)Comments: The employers in the newly incorporated company are required to reg- Comments: Payment is made to any of the receiving banks designated by the Cor-ister with the relevant state tax authority for the purposes of deducting income tax porate Affairs Commission.from employees. Once an application is filed with a copy of the certificate of incor-poration attached, a reference file is then opened for the company. There is no cost Procedure 5. Register the company with the Corporate Affairsrelated to this registration. CommissionProcedure 8. Register business premises with the Ministry of Time: 16 daysCommerce and Industry Cost: NGN 80,000 (legal fees)Time: 3 days Comments: The applicant must file with the Corporate Affairs Commission the re-Cost: NGN 10,000 quired incorporation documents and forms, which include:Comments: The newly incorporated company is required to register its business a. Stamped memorandum and articles of association (2 copies);premises with the state’s Ministry of Commerce. Payments are made in cash directly b. Form CAC 3, Notice of registered address;to the Ministry of Commerce and Industry and a permit for business premises regis- c. Form CAC 7, Particulars of directors;tration is issued. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval;*This procedure can be completed simultaneously with previous procedures.
  • 57. LIST OF PROCE STARTING A BUSINESS 55f. Form CAC 2, Statement of share capital and return of allotment of shares. Procedure 9*. Pay registration fees for business premises into aThe CAC introduced a same-day incorporation option at an increased statutory fee government account at a designated bank(5 times that of standard incorporation). The fee schedule for registration is the fol- Time: 1 daylowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Cost: NGN 10,0001,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Comments: The business premises permit fees for first time registration are set atNGN 7,000.Payment is received at the cashiers desk in the CAC. NGN 10,000 for business situated in urban areas and NGN 5,000 for rural areas. The renewal fees are NGN 5,000 and NGN 1,000 respectively. Fees for the business prem-There is a legal requirement for the companys incorporators to hire a CAC accredited ises permit are paid into a government account at a designated bank.professional usually a lawyer to undertake the administrative incorporation proce-dures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average, *This procedure can be completed simultaneously with previous procedures.a lawyer will charge NGN 80,000 to handle the entire incorporation process in this BAUCHI, Bauchistate. Standard company legal form: Limited Liability CompanyProcedure 6. Register with the integrated Tax Office of the Paid in minimum capital requirement: noneFederal Board of Inland Revenue for income tax and VAT Data as of: January 2010Time: 5 days Procedure 1. Check the availability of company’s name with theCost: No cost Corporate Affairs Commission (CAC)Comments: Entrepreneurs can register for both corporate income tax and VAT at Time: 3 daysthe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Cost: NGN 200Service (FIRS) will require the applicant to complete tax registration forms. The newcompany registers at a Federal Tax Office nearest to its place of business or registered Comments: The Corporate Affairs Commission online system allows for onlineoffice. A letter is written to the tax authority applying for a tax clearance certificate. search of unique company names upon the purchase of an e-payment card for aA form obtained from the tax office is filled and the following documents submitted flat fee of NGN 200 from an accredited bank. The system is widely used but in mostwith it: cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve thea. Taxpayer registration input form (TRIF/2006/001 COYS); company name usually is 3 days in this state. The company name reservation lasts 60b. Completed FIRS questionnaire; days but can be renewed for a similar period.c. Copy of memorandum and articles of association;d. Names and addresses of directors; Procedure 2. Prepare the requisite incorporation documentse. Copy of the certificate of incorporation; Time: 4 daysf. Name, address of tax adviser; Cost: NGN 500 (costs of incorporation forms)g. Letter of appointment of tax adviser and a letter of acceptance. Comments: This procedure involves the following tasks:The application forms must be in triplicate and the original certificate of incorpora- a. Preparing and printing the memorandum and articles of association;tion must be presented for sighting by the controller before registration can be b. Completing the requisite statutory forms, and;completed. Upon receipt of the completed taxpayer registration input form and all c. Having the memorandum and articles of association stamped by the Federaldocuments, a tax reference number is allocated. An application must be filed for the Board of Inland Revenue Service.tax clearance certificate. Its issuance is not automatic. There is a stamp duty office located in the state capital in Bauchi and housed in theThe fees for the tax clearance issuance are as follows: for newly registered companies same premises with the CACwithin 6 months of incorporation: no fee; for companies that are yet to commencebusiness and show up for registration after 6 months of incorporation, if they request Procedure 3. Pay stamp duty into a government account at afor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firsttime and NGN 20,000 is payable for subsequent years until it files a notice of com- designated bankmencement of business. Time: 1 dayCompanies required to register for VAT should complete the VAT registration form Cost: NGN 12,598 (stamp duty at 0.75% of share capital + NGN 1,000 for extra(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the stamped copy of memorandum and articles of association)nearest integrated tax office, which will issue a taxpayer identification number (TIN). Comments: Payment is made at any of the receiving banks designated by the stampAccording to the VAT Act, companies required to register for VAT must do so within 6 duty office of the Federal Board of Inland Revenue.months from the date of starting business operations. The TIN is issued in 1-2 days,but it is mailed with the VAT certificate, which is issued in a week. Procedure 4. Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary publicProcedure 7*. Register for personal income tax PAYE at the State Time: 1 dayTax Office Cost: NGN 100Time: 2 days Comments: A sworn declaration that the requirements of the Companies and AlliedCost: No cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedComments: The employers in the newly incorporated company are required to reg- in the formation of the company or (ii) by a person named in the memorandum andister with the relevant state tax authority for the purposes of deducting income tax articles of association as a director or secretary of the company. This procedure canfrom employees. Once an application is filed with a copy of the certificate of incor- be done before a notary public or filed at the state or federal High Court. The com-poration attached, a reference file is then opened for the company. There is no cost mon practice is for this declaration to be sworn before a Commissioner of Oaths atrelated to this registration. the state High Court.Procedure 8. Obtain a business premises permit from the state’s Procedure 5. Pay incorporation fees to the Corporate AffairsMinistry of Commerce and Industry Commission at a designated bankTime: 7 days Time: 1 dayCost: No cost Cost: NGN 27,000 (NGN 10,000 Incorporation fees for the first 1,000,000 share capitalComments: Following incorporation with Corporate Affairs Commission, a newly + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000established business must register and obtain a business premises permit from the for certified true copy of memorandum and articles of association, + NGN 2,000 forMinistry of Commerce and Industry. certified true copy of particulars of directors, +NGN 2,000 for certified true copy of particulars of shareholders) Comments: Payment is made to any of the receiving banks designated by the Cor- porate Affairs Commission.
  • 58. 56 DOING BUSINESS IN NIGERIA 2010Procedure 6. Register the company with the Corporate Affairs Procedure 9. Receive an inspection from the Ministry ofCommission Commerce and Industry for business premises registrationTime: 14 days Time: 4 daysCost: NGN 50,000 (legal fees) Cost: No costComments: The applicant must file with the Corporate Affairs Commission the re- Comments: After the submission of all application documents, an inspection of thequired incorporation documents and forms, which include: business premises is carried out by an officer from the Ministry of Commerce anda. Stamped memorandum and articles of association (2 copies); Industry. The Ministry of Commerce may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity.b. Form CAC 3, Notice of registered address;c. Form CAC 7, Particulars of directors; Procedure 10. Pay registration fees and obtain business premisesd. Form CAC 4, Declaration of compliance and the prescribed registration fees; permit from the Ministry of Commerce and Industrye. Copy of the reservation of company name approval; Time: 1 dayf. Form CAC 2, Statement of share capital and return of allotment of shares. Cost: NGN 10,000The CAC introduced a same-day incorporation option at an increased statutory Comments: The cost of business premises registration is a fixed charge dependingfee (5 times that of standard incorporation). The fee schedule for registration is the on the type of company. In this case the company is considered to be in Category Afollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every and located in the suburbs of the city. For category A which includes a company car-NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN rying out general commercial activities, the fee is NGN 10,000 for first time registra-10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): tion upon incorporation, and subsequent annual payments of NGN 5,000 as renewalNGN 7,000.Payment is received at the cashiers desk in the CAC. fee. The fees are paid directly to the Ministry of Commerce and Industry. A businessThere is a legal requirement for the companys incorporators to hire a CAC accredited premises permit is issued to the applicant after payment is made.professional usually a lawyer to undertake the administrative incorporation proce-dures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average, BAYELSA, Yenagoaa lawyer will charge NGN 50,000 to handle the entire incorporation process in this Standard company legal form: Limited Liability Companystate. Paid in minimum capital requirement: noneProcedure 7. Register with the integrated Tax Office of the Data as of: January 2010Federal Board of Inland Revenue for income tax and VAT Procedure 1. Check the availability of company’s name with theTime: 5 days Corporate Affairs Commission (CAC)Cost: No cost Time: 5 daysComments: Entrepreneurs can register for both corporate income tax and VAT at Cost: NGN 200the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Comments: The Corporate Affairs Commission online system allows for onlineService (FIRS) will require the applicant to complete tax registration forms. The new search of unique company names upon the purchase of an e-payment card for acompany registers at a Federal Tax Office nearest to its place of business or registered flat fee of NGN 200 from an accredited bank. The system is widely used but in mostoffice. A letter is written to the tax authority applying for a tax clearance certificate. cases, applicants have to go to the CAC office to complete this procedure. The timeA form obtained from the tax office is filled and the following documents submitted to conduct the availability of name search, receive confirmation and reserve thewith it:– company name is usually no more than 5 days. The company name reservation lastsa. Taxpayer registration input form (TRIF/2006/001 COYS); 60 days but can be renewed for a similar period.b. Completed FIRS questionnaire;c. Copy of memorandum and articles of association; Procedure 2. Prepare the requisite incorporation documents andd. Names and addresses of directors; pay the stamp dutye. Copy of the certificate of incorporation; Time: 10 daysf. Name, address of tax adviser; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra stamped copy of memorandum and articles of association + NGN 500 for incorpora-g. Letter of appointment of tax adviser and a letter of acceptance. tion forms)The application forms must be in triplicate and the original certificate of incorpora- Comments: This procedure involves the following tasks:tion must be presented for sighting by the controller before registration can becompleted. Upon receipt of the completed taxpayer registration input form and all a. Preparing and printing the memorandum and articles of association;documents, a tax reference number is allocated. An application must be filed for the b. Completing the requisite statutory forms, and;tax clearance certificate. Its issuance is not automatic. c. Having the memorandum and articles of association stamped by the FederalThe fees for the tax clearance issuance are as follows: for newly registered companies Board of Inland Revenue Service.within 6 months of incorporation: no fee; for companies that are yet to commence The recent reduction in stamp duty payment to 0.75% of the nominal share capital isbusiness and show up for registration after 6 months of incorporation, if they request still not widely disseminated in the state. As such, the lawyers still obtain stamp dutyfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first payments at 1.5% of share capital from entrepreneurs and only pay over the amounttime and NGN 20,000 is payable for subsequent years until it files a notice of com- of the official rate to the stamp duty office. Since this procedure is usually handled bymencement of business. the lawyers, the entrepreneurs in this state who are not aware of the reduced officialCompanies required to register for VAT should complete the VAT registration form costs associated with handling the stamping of the incorporation documents pay(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the more than their counterparts in other states.nearest integrated tax office, which will issue a taxpayer identification number (TIN).According to the VAT Act, companies required to register for VAT must do so within 6 Procedure 3. Declaration of Compliance (Form CAC 4) signedmonths from the date of starting business operations. The TIN is issued in 1-2 days, before a Commissioner for Oaths or notary publicbut it is mailed with the VAT certificate, which is issued in a week. Time: 1 dayProcedure 8. Register for personal income tax PAYE at the State Cost: NGN 500Tax Office Comments: A sworn declaration that the requirements of the Companies and Allied Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedTime: 2 days in the formation of the company or (ii) by a person named in the memorandum andCost: No cost articles of association as a director or secretary of the company. This procedure canComments: The employers in the newly incorporated company are required to reg- be done before a notary public or filed at the state or federal High Court. The com-ister with the relevant state tax authority for the purposes of deducting income tax mon practice is for this declaration to be sworn before a Commissioner of Oaths atfrom employees. Once an application is filed with a copy of the certificate of incor- the state High Court.poration attached, a reference file is then opened for the company. There is no costrelated to this registration.
  • 59. LIST OF PROCE STARTING A BUSINESS 57Procedure 4*. Obtain bank draft from a bank for payment of the According to the VAT Act, companies required to register for VAT must do so within 6registration fees months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week.Time: 1 dayCost: NGN 27,200 (NGN 200 for bank draft charges + NGN 10,000 for incorporation Procedure 7. Register for personal income tax PAYE at the Statefees for the first 1,000,000 share capital + NGN 10,000 for each additional 1,000,000 Tax Officeshare capital or less thereof + NGN 3,000 for certified true copy of memorandum andarticles of association + NGN 2,000 for certified true copy of particulars of directors + Time: 2 daysNGN 2,000 for certified true copy of particulars of shareholders) Cost: No costComments: Applicant is required to obtain a bank draft in the name of the Corpo- Comments: The employers in the newly incorporated company are required to reg-rate Affairs Commission as the mode of payment of registration fees. The cost of ister with the relevant state tax authority for the purposes of deducting income taxthe bank draft may vary slightly depending on the bank but it is typically within the from employees. Once an application is filed with a copy of the certificate of incor-range of NGN 200 for a draft in the amount of the CAC registration fees. poration attached, a reference file is then opened for the company. There is no cost related to this registration.Procedure 5. Register the company with the Corporate AffairsCommission Procedure 8. Receive an inspection from the Ministry ofTime: 15 days Commerce and Industry for business premises registrationCost: NGN 80,000 (legal fees) Time: 4 daysComments: The applicant must file with the Corporate Affairs Commission the re- Cost: No costquired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of thea. Stamped memorandum and articles of association (2 copies); business premises is carried out by an officer from the Ministry of Commerce and Industry. The Ministry of Commerce may conduct an inspection of the premises tob. Form CAC 3, Notice of registered address; confirm the location of the business and determine the type of business activity.c. Form CAC 7, Particulars of directors;d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Procedure 9. Pay registration fees for business premises into ae. Copy of the reservation of company name approval; government account at a designated bankf. Form CAC 2, Statement of share capital and return of allotment of shares. Time: 1 dayThe CAC introduced a same-day incorporation option at an increased statutory Cost: NGN 10,000fee (5 times that of standard incorporation). The fee schedule for registration is the Comments: The payment of the business premises registration fees is made directlyfollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every into the government bank account at a designated bank. NGN 10,000 is the approxi-NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN mate cost of business premises registration for a medium sized company carrying on10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): general commercial activities.NGN 7,000.Payment is received at the cashiers desk in the CAC.There is a legal requirement for the companys incorporators to hire a CAC accredited Procedure 10. Obtain treasury receipt from the Federal Board ofprofessional usually a lawyer to undertake the administrative incorporation proce- Inland Revenuedures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 1 daycountry, lawyer fees are accounted for in the overall incorporation costs. On average,a lawyer will charge NGN 80,000 to handle the entire incorporation process in this Cost: No coststate. Comments: A bank teller issued by the designated bank is presented to the Federal Board of Inland Revenue as proof that payment was made into the designated gov-Procedure 6. Register with the integrated Tax Office of the ernment account. FIRS, thereafter issues an official treasury receipt which must beFederal Board of Inland Revenue for income tax and VAT presented to the Ministry of Commerce and Industry.Time: 6 days Procedure 11. Obtain a business premises permit from the state’sCost: No cost Ministry of Commerce and IndustryComments: Entrepreneurs can register for both corporate income tax and VAT at Time: 1 daythe new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueService (FIRS) will require the applicant to complete tax registration forms. The new Cost: No costcompany registers at a Federal Tax Office nearest to its place of business or registered Comments: An official treasury receipt issued by the FIRS is required to be presentedoffice. A letter is written to the tax authority applying for a tax clearance certificate. to the Ministry of Commerce to evidence payment. Thereafter, a business premisesA form obtained from the tax office is filled and the following documents submitted permit is issued.with it:a. Taxpayer registration input form (TRIF/2006/001 COYS); *This procedure can be completed simultaneously with previous procedures.b. Completed FIRS questionnaire;c. Copy of memorandum and articles of association; STARTING A BUSINESSd. Names and addresses of directors; BENUE, Makurdie. Copy of the certificate of incorporation; Standard company legal form: Limited Liability Companyf. Name, address of tax adviser; Paid in minimum capital requirement: noneg. Letter of appointment of tax adviser and a letter of acceptance. Data as of: January 2010The application forms must be in triplicate and the original certificate of incorpora-tion must be presented for sighting by the controller before registration can be Procedure 1. Check the availability of company’s name with thecompleted. Upon receipt of the completed taxpayer registration input form and all Corporate Affairs Commission (CAC)documents, a tax reference number is allocated. An application must be filed for the Time: 3 daystax clearance certificate. Its issuance is not automatic. Cost: NGN 200The fees for the tax clearance issuance are as follows: for newly registered companieswithin 6 months of incorporation: no fee; for companies that are yet to commence Comments: The Corporate Affairs Commission online system allows for onlinebusiness and show up for registration after 6 months of incorporation, if they request search of unique company names upon the purchase of an e-payment card for afor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first flat fee of NGN 200 from an accredited bank. The system is widely used but in mosttime and NGN 20,000 is payable for subsequent years until it files a notice of com- cases, applicants have to go to the CAC office to complete this procedure. The timemencement of business. to conduct the availability of name search, receive confirmation and reserve the company name usually takes 3 days. The company name reservation lasts 60 daysCompanies required to register for VAT should complete the VAT registration form but can be renewed for a similar period.(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to thenearest integrated tax office, which will issue a taxpayer identification number (TIN).
  • 60. 58 DOING BUSINESS IN NIGERIA 2010Procedure 2. Prepare the requisite incorporation documents and vice (FIRS) will require the applicant to complete tax registration forms. The new com- pany registers at a Federal Tax Office nearest to its place of business or registered office.pay the stamp duty A letter is written to the tax authority applying for a tax clearance certificate. A formTime: 7 days obtained from the tax office is filled and the following documents submitted with it:Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra a. Taxpayer registration input form (TRIF/2006/001 COYS);stamped copy of memorandum and articles of association + NGN 500 for incorpora- b. Completed FIRS questionnaire;tion forms) c. Copy of memorandum and articles of association;Comments: This procedure involves the following tasks: d. Names and addresses of directors;a. Preparing and printing the memorandum and articles of association; e. Copy of the certificate of incorporation;b. Completing the requisite statutory forms, and; f. Name, address of tax adviser;c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. g. Letter of appointment of tax adviser and a letter of acceptance. There is a stamp duty office located in the state capital in Makurdi and housed in the The application forms must be in triplicate and the original certificate of incorpora-same premises with the CAC. tion must be presented for sighting by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and allProcedure 3. Declaration of Compliance (Form CAC 4) signed documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic.before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companiesTime: 1 day within 6 months of incorporation: no fee; for companies that are yet to commenceCost: NGN 50 business and show up for registration after 6 months of incorporation, if they requestComments: A sworn declaration that the requirements of the Companies and Allied for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged time and NGN 20,000 is payable for subsequent years until it files a notice of com-in the formation of the company or (ii) by a person named in the memorandum and mencement of business.articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration formbe done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to themon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN).the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days,Procedure 4. Obtain bank draft from a bank for payment of the but it is mailed with the VAT certificate, which is issued in a week.registration feesTime: 1 day Procedure 7. Register for personal income tax PAYE at the StateCost: NGN 27,200 (NGN 200 for bank draft charges + NGN 10,000 for Incorporation Tax Officefees for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 Time: 1 dayshare capital or less thereof + NGN 3,000 for certified true copy of memorandum and Cost: No costarticles of association + NGN 2,000 for certified true copy of particulars of directors + Comments: The employers in the newly incorporated company are required to reg-NGN 2,000 for certified true copy of particulars of shareholders) ister with the relevant state tax authority for the purposes of deducting income taxComments: Applicant is required to obtain a bank draft in the name of the Corpo- from employees. Once an application is filed with a copy of the certificate of incor-rate Affairs Commission as the mode of payment of registration fees. The cost of the poration attached, a reference file is then opened for the company. There is no costbank draft may vary slightly depending on the bank but it is typically around NGN related to this registration.200 for a draft in the amount of the CAC registration fees. Procedure 8. Register business premises with the Ministry ofProcedure 5. Register the company with the Corporate Affairs Commerce and IndustryCommission Time: 1 dayTime: 21 days Cost: NGN 10,000Cost: NGN 50,000 (legal fees) Comments: The newly incorporated company is required to register its businessComments: The applicant must file with the Corporate Affairs Commission the re- premises with the state’s Ministry of Commerce and Industry. Payments are madequired incorporation documents and forms, which include: in cash directly to the Ministry of Commerce and Industry and a permit for businessa. Stamped memorandum and articles of association (2 copies); premises registration is thereafter issued.b. Form CAC 3, Notice of registered address;c. Form CAC 7, Particulars of directors; STARTING A BUSINESSd. Form CAC 4, Declaration of compliance and the prescribed registration fees; BORNO, Maidugurie. Copy of the reservation of company name approval; Standard company legal form: Limited Liability Companyf. Form CAC 2, Statement of share capital and return of allotment of shares. Paid in minimum capital requirement: noneThe CAC introduced a same-day incorporation option at an increased statutory fee Data as of: January 2010(5 times that of standard incorporation). The fee schedule for registration is the fol-lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Procedure 1. Check the availability of company’s name with the1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Corporate Affairs Commission (CAC)10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Time: 4 daysNGN 7,000.Payment is received at the cashiers desk in the CAC. Cost: NGN 200There is a legal requirement for the companys incorporators to hire a CAC accredited Comments: The Corporate Affairs Commission online system allows for onlineprofessional usually a lawyer to undertake the administrative incorporation proce- search of unique company names upon the purchase of an e-payment card for adures. Given that the use of lawyers for such purposes is mandatory throughout the flat fee of NGN 200 from an accredited bank. The system is widely used but in mostcountry, lawyer fees are accounted for in the overall incorporation costs. On average, a cases, applicants have to go to the CAC office to complete this procedure. The timelawyer will charge NGN 50,000 to handle the entire incorporation process in this state. to conduct the availability of name search, receive confirmation and reserve the company name is usually 4 days. The company name reservation lasts 60 days butProcedure 6. Register with the integrated Tax Office of the can be renewed for a similar period.Federal Board of Inland Revenue for income tax and VATTime: 1 dayCost: No costComments: Entrepreneurs can register for both corporate income tax and VAT at thenew Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Ser-
  • 61. LIST OF PROCE STARTING A BUSINESS 59Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenuepay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The newTime: 7 days company registers at a Federal Tax Office nearest to its place of business or registeredCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra office. A letter is written to the tax authority applying for a tax clearance certificate.stamped copy of memorandum and articles of association + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submittedtion forms) with it:Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS);a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire;b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association;c. Having the memorandum and articles of association stamped by the Federal d. Names and addresses of directors; Board of Inland Revenue Service. e. Copy of the certificate of incorporation;There is no stamp duty office in this state and the procedure is usually done in the f. Name, address of tax adviser;nearest city where there is one. The time for preparation of documents and stamp- g. Letter of appointment of tax adviser and a letter of acceptance.ing presented here is based on an assumption that the stamping is conducted at thestamp duty office in Bauchi or Adamawa and accounts for the travel time. Additional The application forms must be in triplicate and the original certificate of incorpora-costs for handling this procedure out of state are not charged separately but includ- tion must be presented for sighting by the controller before registration can beed in the professional charges of the lawyer or incorporation agent used. completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for theProcedure 3. Declaration of Compliance (Form CAC 4) signed tax clearance certificate. Its issuance is not automatic.before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commenceTime: 1 day business and show up for registration after 6 months of incorporation, if they requestCost: NGN 100 for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstComments: A sworn declaration that the requirements of the Companies and Allied time and NGN 20,000 is payable for subsequent years until it files a notice of com-Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged mencement of business.in the formation of the company or (ii) by a person named in the memorandum and Companies required to register for VAT should complete the VAT registration formarticles of association as a director or secretary of the company. This procedure can (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to thebe done before a notary public or filed at the state or federal High Court. The com- nearest integrated tax office, which will issue a taxpayer identification number (TIN).mon practice is for this declaration to be sworn before a Commissioner of Oaths at According to the VAT Act, companies required to register for VAT must do so within 6the state High Court. months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week.Procedure 4. Pay incorporation fees to the Corporate AffairsCommission at a designated bank Procedure 7. Register for personal income tax PAYE at the StateTime: 1 day Tax OfficeCost: NGN 27,000 (NGN 10,000 for incorporation fees for the first 1,000,000 share Time: 2 dayscapital + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN Cost: No cost3,000 for certified true copy of memorandum and articles of association + NGN2,000 Comments: The employers in the newly incorporated company are required to reg-for certified true copy of particulars of directors + NGN 2,000 for certified true copy ister with the relevant state tax authority for the purposes of deducting income taxof particulars of shareholders) from employees. Once an application is filed with a copy of the certificate of incor-Comments: Payment is made to any of the receiving banks designated by the Cor- poration attached, a reference file is then opened for the company. There is no costporate Affairs Commission. related to this registration.Procedure 5. Register the company with the Corporate Affairs Procedure 8. Register business premises with the Ministry ofCommission Commerce and IndustryTime: 14 days Time: 1 dayCost: NGN 60,000 (legal fees) Cost: NGN 10,000Comments: The applicant must file with the Corporate Affairs Commission the re- Comments: The newly incorporated company is required to register its businessquired incorporation documents and forms, which include: premises with the state Ministry of Commerce. Payments are made in cash directly toa. Stamped memorandum and articles of association (2 copies); the Ministry of Commerce and Industry and a permit for business premises registra-b. Form CAC 3, Notice of registered address; tion is issued.c. Form CAC 7, Particulars of directors; STARTING A BUSINESSd. Form CAC 4, Declaration of compliance and the prescribed registration fees;e. Copy of the reservation of company name approval; CROSS RIVER, Calabarf. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability CompanyThe CAC introduced a same-day incorporation option at an increased statutory fee Paid in minimum capital requirement: none(5 times that of standard incorporation). The fee schedule for registration is the fol- Data as of: January 2010lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Procedure 1. Check the availability of company’s name with the10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Corporate Affairs Commission (CAC)NGN 7,000.Payment is received at the cashiers desk in the CAC. Time: 4 daysThere is a legal requirement for the companys incorporators to hire a CAC accredited Cost: NGN 200professional usually a lawyer to undertake the administrative incorporation proce- Comments: The Corporate Affairs Commission online system allows for onlinedures. Given that the use of lawyers for such purposes is mandatory throughout the search of unique company names upon the purchase of an e-payment card for acountry, lawyer fees are accounted for in the overall incorporation costs. On average, a flat fee of NGN 200 from an accredited bank. The system is widely used but in mostlawyer will charge NGN 60,000 to handle the entire incorporation process in this state. cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve theProcedure 6. Register with the integrated Tax Office of the company name is usually 4 days in this state. The company name reservation lasts 60Federal Board of Inland Revenue for income tax and VAT days but can be renewed for a similar period.Time: 4 daysCost: No cost
  • 62. 60 DOING BUSINESS IN NIGERIA 2010Procedure 2. Prepare the requisite incorporation documents and Procedure 6. Register with the integrated Tax Office of thepay the stamp duty Federal Board of Inland Revenue for income tax and VATTime: 9 days Time: 5 daysCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Cost: No coststamped copy of memorandum and articles of association + NGN 500 for incorpora- Comments: Entrepreneurs can register for both corporate income tax and VAT attion forms) the new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueComments: This procedure involves the following tasks: Service (FIRS) will require the applicant to complete tax registration forms. The newa. Preparing and printing the memorandum and articles of association; company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate.b. Completing the requisite statutory forms, and; A form obtained from the tax office is filled and the following documents submittedc. Having the memorandum and articles of association stamped by the Federal with it: Board of Inland Revenue Service. a. Taxpayer registration input form (TRIF/2006/001 COYS);There is no stamp duty office in Cross River State, and incorporation documents have b. Completed FIRS questionnaire;to be stamped at the closest stamp duty office in Port Harcourt, adding time to thisprocedure. c. Copy of memorandum and articles of association;The recent reduction in stamp duty payment to 0.75% of the nominal share capital is d. Names and addresses of directors;still not widely disseminated in the state. As such, the lawyers still obtain stamp duty e. Copy of the certificate of incorporation;payments at 1.5% of share capital from entrepreneurs and only pay over the amount f. Name, address of tax adviser;of the official rate to the stamp duty office. Since this procedure is usually handled by g. Letter of appointment of tax adviser and a letter of acceptance.the lawyers, the entrepreneurs in this state who are not aware of the reduced officialcosts associated with handling the stamping of the incorporation documents pay The application forms must be in triplicate and the original certificate of incorpora-more than their counterparts in other states. tion must be presented for sighting by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and allProcedure 3. Declaration of Compliance (Form CAC 4) signed documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic.before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companiesTime: 1 day within 6 months of incorporation: no fee; for companies that are yet to commenceCost: NGN 50 business and show up for registration after 6 months of incorporation, if they requestComments: A sworn declaration that the requirements of the Companies and Allied for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged time and NGN 20,000 is payable for subsequent years until it files a notice of com-in the formation of the company or (ii) by a person named in the memorandum and mencement of business.articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration formbe done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to themon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN).the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days,Procedure 4. Pay incorporation fees to the Corporate Affairs but it is mailed with the VAT certificate, which is issued in a week.Commission at a designated bankTime: 1 day Procedure 7. Register for personal income tax PAYE at the StateCost: NGN 27,000 (NGN 10,000 for incorporation fees per 1,000,000 share capital + Tax OfficeNGN 10,000 for every 1,000,000 share capital thereafter + NGN 3,000 for certified Time: 2 daystrue copy of memorandum and articles of association + NGN 2,000 for certified true Cost: No costcopy of particulars of directors + NGN 2,000 for certified true copy of particulars of Comments: The employers in the newly incorporated company are required to reg-shareholders) ister with the relevant state tax authority for the purposes of deducting income taxComments: Payment is made at any of the receiving banks designated by the Cor- from employees. Once an application is filed with a copy of the certificate of incor-porate Affairs Commission. poration attached, a reference file is then opened for the company. There is no cost related to this registration.Procedure 5. Register the company with the Corporate AffairsCommission Procedure 8. Obtain a business premises permit from theTime: 21 days Department of Investment PromotionCost: NGN 100,000 (legal fees) Time: 3 daysComments: The applicant must file with the Corporate Affairs Commission the re- Cost: No costquired incorporation documents and forms, which include: Comments: Following incorporation with Corporate Affairs Commission, a newlya. Stamped memorandum and articles of association (2 copies); established business must register and obtain a business premises permit from theb. Form CAC 3, Notice of registered address; Department of Investment Promotion.c. Form CAC 7, Particulars of directors; Procedure 9. Pay registration fees for business premises into ad. Form CAC 4, Declaration of compliance and the prescribed registration fees; government account at a designated banke. Copy of the reservation of company name approval; Time: 1 dayf. Form CAC 2, Statement of share capital and return of allotment of shares. Cost: NGN 20,000The CAC introduced a same-day incorporation option at an increased statutory fee Comments: There is no fee schedule and an individual assessment is made for each(5 times that of standard incorporation). The fee schedule for registration is the fol- business. The fees can range from NGN 1,500 to NGN 250,000. Fees for the businesslowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN premises permit are paid into a government account at a designated bank.1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):NGN 7,000.Payment is received at the cashiers desk in the CAC.There is a legal requirement for the companys incorporators to hire a CAC accreditedprofessional usually a lawyer to undertake the administrative incorporation proce-dures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average,a lawyer will charge NGN 100,000 to handle the entire incorporation process in thisstate.
  • 63. LIST OF PROCE STARTING A BUSINESS 61STARTING A BUSINESS The CAC introduced a same-day incorporation option at an increased statutory fee DELTA, Warri (5 times that of standard incorporation). The fee schedule for registration is the fol-Standard company legal form: Limited Liability Company lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNPaid in minimum capital requirement: none 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Data as of: January 2010 NGN 7,000.Payment is received at the cashiers desk in the CAC.Procedure 1. Check the availability of company’s name with the There is a legal requirement for the companys incorporators to hire a CAC accreditedCorporate Affairs Commission (CAC) professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout theTime: 7 days country, lawyer fees are accounted for in the overall incorporation costs. On average,Cost: NGN 200 a lawyer will charge NGN 70,000 to handle the entire incorporation process in thisComments: The Corporate Affairs Commission online system allows for online state.search of unique company names upon the purchase of an e-payment card for aflat fee of NGN 200 from an accredited bank. The system is widely used but in most Procedure 5. Register with the integrated Tax Office of thecases, applicants have to go to the CAC office to complete this procedure. The time Federal Board of Inland Revenue for income tax and VATto conduct the availability of name search, receive confirmation and reserve the Time: 7 dayscompany name is usually a week in this state. The company name reservation lasts Cost: No cost60 days but can be renewed for a similar period. Comments: Entrepreneurs can register for both corporate income tax and VAT atProcedure 2. Prepare the requisite incorporation documents and the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenuepay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registeredTime: 5 days office. A letter is written to the tax authority applying for a tax clearance certificate.Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra A form obtained from the tax office is filled and the following documents submittedstamped copy of memorandum and articles of association + NGN 500 for incorpora- with it:tion forms + NGN 3,000 transport costs to Asaba) a. Taxpayer registration input form (TRIF/2006/001 COYS);Comments: This procedure involves the following tasks: b. Completed FIRS questionnaire;a. Preparing and printing the memorandum and articles of association; c. Copy of memorandum and articles of association;b. Completing the requisite statutory forms, and; d. Names and addresses of directors;c. Having the memorandum and articles of association stamped by the Federal e. Copy of the certificate of incorporation; Board of Inland Revenue Service. f. Name, address of tax adviser;There is a stamp duty office located in the state capital in Asaba and is not housed in g. Letter of appointment of tax adviser and a letter of acceptance.the same premises with the CAC. The application forms must be in triplicate and the original certificate of incorpora-The recent reduction in stamp duty payment to 0.75% of the nominal share capital is tion must be presented for sighting by the controller before registration can bestill not widely disseminated in the state. As such, the lawyers still obtain stamp duty completed. Upon receipt of the completed taxpayer registration input form and allpayments at 1.5% of share capital from entrepreneurs and only pay over the amount documents, a tax reference number is allocated. An application must be filed for theof the official rate to the stamp duty office. Since this procedure is usually handled by tax clearance certificate. Its issuance is not automatic.the lawyers, the entrepreneurs in this state who are not aware of the reduced officialcosts associated with handling the stamping of the incorporation documents pay The fees for the tax clearance issuance are as follows: for newly registered companiesmore than their counterparts in other states. within 6 months of incorporation: no fee; for companies that are yet to commence business and show up for registration after 6 months of incorporation, if they requestProcedure 3. Declaration of Compliance (Form CAC 4) signed for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstbefore a Commissioner for Oaths or notary public time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business.Time: 2 days Companies required to register for VAT should complete the VAT registration formCost: NGN 200 (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to theComments: A sworn declaration that the requirements of the Companies and Allied nearest integrated tax office, which will issue a taxpayer identification number (TIN).Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged According to the VAT Act, companies required to register for VAT must do so within 6in the formation of the company or (ii) by a person named in the memorandum and months from the date of starting business operations. The TIN is issued in 1-2 days,articles of association as a director or secretary of the company. This procedure can but it is mailed with the VAT certificate, which is issued in a week.be done before a notary public or filed at the state or federal High Court. The com-mon practice is for this declaration to be sworn before a Commissioner of Oaths at Procedure 6. Register for personal income tax PAYE at the Statethe state High Court. Tax Office Time: 4 daysProcedure 4. Register the company with the Corporate AffairsCommission Cost: No cost Comments: The employers in the newly incorporated company are required to reg-Time: 20 days ister with the relevant state tax authority for the purposes of deducting income taxCost: NGN 97,000 (NGN 70,000 for legal fees + NGN 20,000 for incorporation fees + from employees. Once an application is filed with a copy of the certificate of incor-NGN 2,000 for certified true copy of particulars of directors + NGN 3,000 for certified poration attached, a reference file is then opened for the company. There is no costtrue copy of the memorandum and articles of association + NGN 2,000 for certified related to this registration.true copy of particulars of shareholders)Comments: The applicant must file with the Corporate Affairs Commission the re- Procedure 7. Receive an inspection from the Ministry ofquired incorporation documents and forms, which include: Commerce and Industry for business premises registrationa. Stamped memorandum and articles of association (2 copies); Time: 4 daysb. Form CAC 3, Notice of registered address; Cost: No costc. Form CAC 7, Particulars of directors; Comments: After the submission of all application documents, an inspection of thed. Form CAC 4, Declaration of compliance and the prescribed registration fees; business premises is carried out by an officer from the Ministry of Commerce ande. Copy of the reservation of company name approval; Industry. The Ministry of Commerce may conduct an inspection of the premises tof. Form CAC 2, Statement of share capital and return of allotment of shares. confirm the location of the business and determine the type of business activity.
  • 64. 62 DOING BUSINESS IN NIGERIA 2010Procedure 8. Pay registration fees for business premises into a Procedure 4. Obtain bank draft from a bank for payment of thegovernment account at a designated bank registration feesTime: 1 day Time: 1 dayCost: NGN 20,000 Cost: NGN 27,200 (NGN 200 for bank draft charges + incorporation fees of NGNComments: The payment of the business premises registration fees is made directly 10,000 for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000into the government bank account at a designated bank. NGN 20,000 is the approxi- share capital or less thereof + NGN 3,000 for certified true copy of memorandum andmate cost of business premises registration for a medium sized company carrying on articles of association + NGN 2,000 for certified true copy of particulars of directors +general commercial activities. NGN 2,000 for certified true copy of particulars of shareholders) Comments: Applicant is required to obtain a bank draft in the name of the Corpo-Procedure 9. Obtain a business premises permit from the state’s rate Affairs Commission as the mode of payment of registration fees. The cost of theMinistry of Commerce and Industry bank draft may vary slightly depending on the bank but it is typically around NGN 200 for a draft in the amount of the CAC registration fees.Time: 1 dayCost: No cost Procedure 5. Register the company with the Corporate AffairsComments: Following payment of the assessed registration fees for business prem- Commissionises permit into a designated government account, the Ministry of Commerce and Time: 21 daysIndustry issues a business premises permit to the new business. Cost: NGN 60,000 (legal fees)STARTING A BUSINESS Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: EBONYI, Abakaliki a. Stamped memorandum and articles of association (2 copies);Standard company legal form: Limited Liability Company b. Form CAC 3, Notice of registered address;Paid in minimum capital requirement: none c. Form CAC 7, Particulars of directors;Data as of: January 2010 d. Form CAC 4, Declaration of compliance and the prescribed registration fees;Procedure 1. Check the availability of company’s name with the e. Copy of the reservation of company name approval;Corporate Affairs Commission (CAC) f. Form CAC 2, Statement of share capital and return of allotment of shares.Time: 2 days The CAC introduced a same-day incorporation option at an increased statutory feeCost: NGN 200 (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGNComments: The Corporate Affairs Commission online system allows for online 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNsearch of unique company names upon the purchase of an e-payment card for a 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):flat fee of NGN 200 from an accredited bank. The system is widely used but in most NGN 7,000.cases, applicants have to go to the CAC office to complete this procedure. The timeto conduct the availability of name search, receive confirmation and reserve the There is a legal requirement for the companys incorporators to hire a CAC accreditedcompany name is usually 2 days. The company’s name reservation lasts 60 days but professional usually a lawyer to undertake the administrative incorporation proce-can be renewed for a similar period. dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, aProcedure 2. Prepare the requisite incorporation documents and lawyer will charge NGN 60,000 to handle the entire incorporation process in this state.pay the stamp duty Procedure 6. Register with the integrated Tax Office of theTime: 7 days Federal Board of Inland Revenue for income tax and VATCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Time: 4 daysstamped copy of memorandum and articles of association + NGN 500 for incorpora-tion forms) Cost: No costComments: This procedure involves the following tasks: Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenuea. Preparing and printing the memorandum and articles of association; Service (FIRS) will require the applicant to complete tax registration forms. The newb. Completing the requisite statutory forms, and; company registers at a Federal Tax Office nearest to its place of business or registeredc. Having the memorandum and articles of association stamped by the Federal office. A letter is written to the tax authority applying for a tax clearance certificate. Board of Inland Revenue Service. A form obtained from the tax office is filled and the following documents submittedThere is no stamp duty office in this state and the procedure is usually done in the with it:nearest city where there is one. The time for preparation of documents and stamp- a. Taxpayer registration input form (TRIF/2006/001 COYS);ing presented here is based on an assumption that the stamping is conducted at b. Completed FIRS questionnaire;the stamp duty office in Enugu and accounts for the travel time. Additional costs for c. Copy of memorandum and articles of association;handling this procedure out of state are not charged separately but included in theprofessional charges of the lawyer or incorporation agent used. d. Names and addresses of directors; e. Copy of the certificate of incorporation;Procedure 3. Declaration of Compliance (Form CAC 4) signed f. Name, address of tax adviser;before a Commissioner for Oaths or notary public g. Letter of appointment of tax adviser and a letter of acceptance.Time: 1 day The application forms must be in triplicate and the original certificate of incorpora-Cost: NGN 200 tion must be presented for sighting by the controller before registration can beComments: A sworn declaration that the requirements of the Companies and Allied completed. Upon receipt of the completed taxpayer registration input form and allMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged documents, a tax reference number is allocated. An application must be filed for thein the formation of the company or (ii) by a person named in the memorandum and tax clearance certificate. Its issuance is not automatic.articles of association as a director or secretary of the company. This procedure can The fees for the tax clearance issuance are as follows: for newly registered companiesbe done before a notary public or filed at the state or federal High Court. The com- within 6 months of incorporation: no fee; for companies that are yet to commencemon practice is for this declaration to be sworn before a Commissioner of Oaths at business and show up for registration after 6 months of incorporation, if they requestthe state High Court. for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the nearest integrated tax office, which will issue a taxpayer identification number (TIN). According to the VAT Act, companies required to register for VAT must do so within 6
  • 65. LIST OF PROCE STARTING A BUSINESS 63months from the date of starting business operations. The TIN is issued in 1-2 days, c. Having the memorandum and articles of association stamped by the Federalbut it is mailed with the VAT certificate, which is issued in a week. Board of Inland Revenue Service. There is a stamp duty office located in the state capital in Benin and is not housed inProcedure 7*. Register for personal income tax PAYE at the State the same premises with the CAC.Tax OfficeTime: 2 days Procedure 3. Declaration of Compliance (Form CAC 4) signedCost: No cost before a Commissioner for Oaths or notary publicComments: The employers in the newly incorporated company are required to reg- Time: 1 dayister with the relevant state tax authority for the purposes of deducting income tax Cost: NGN 200from employees. Once an application is filed with a copy of the certificate of incor- Comments: A sworn declaration that the requirements of the Companies and Alliedporation attached, a reference file is then opened for the company. There is no cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedrelated to this registration. in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure canProcedure 8. Receive an inspection from the Ministry of be done before a notary public or filed at the state or federal High Court. The com-Commerce and Industry for business premises registration mon practice is for this declaration to be sworn before a Commissioner of Oaths atTime: 1 day the state High Court.Cost: No cost Procedure 4. Register the company with the Corporate AffairsComments: After the submission of all application documents, an inspection of the Commissionbusiness premises is carried out by an officer from the Ministry of Commerce andIndustry. The Ministry of Commerce may conduct an inspection of the premises to Time: 21 daysconfirm the location of the business and determine the type of business activity. Cost: NGN 67,000 (NGN 40,000 for legal fees + registration fees of NGN 10,000 for first 1,000,000 share capital and NGN 10,000 for each additional 1,000,000 + NGNProcedure 9. Pay registration fees for business premises into a 7,000 for certified true copies of memorandum and articles of association and par-government account at a designated bank ticulars of directors and shareholders)Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include:Cost: NGN 5,000 a. Stamped memorandum and articles of association (2 copies);Comments: The payment of the business premises registration fees is made directlyinto the government bank account at a designated bank. NGN 5,000 is the approxi- b. Form CAC 3, Notice of registered address;mate cost of business premises registration for a medium sized company carrying on c. Form CAC 7, Particulars of directors;general commercial activities. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval;Procedure 10. Obtain a business premises permit from the state’s f. Form CAC 2, Statement of share capital and return of allotment of shares.Ministry of Commerce and Industry The CAC introduced a same-day incorporation option at an increased statutory feeTime: 1 day (5 times that of standard incorporation). The fee schedule for registration is the fol-Cost: No cost lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGNComments: Following payment of the assessed registration fees for business prem- 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNises permit into a designated government account, the Ministry of Commerce and 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Industry issues a business premises permit to the new business. NGN 7,000.Payment is received at the cashiers desk in the CAC. There is a legal requirement for the companys incorporators to hire a CAC accredited*This procedure can be completed simultaneously with previous procedures. professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average,STARTING A BUSINESS a lawyer will charge NGN 40,000 to handle the entire incorporation process in this EDO, Benin City state.Standard company legal form: Limited Liability Company Procedure 5. Register with the integrated Tax Office of thePaid in minimum capital requirement: none Federal Board of Inland Revenue for income tax and VATData as of: January 2010 Time: 7 daysProcedure 1. Check the availability of company’s name with the Cost: No costCorporate Affairs Commission (CAC) Comments: Entrepreneurs can register for both corporate income tax and VAT atTime: 7 days the new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueCost: NGN 200 Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registeredComments: The Corporate Affairs Commission online system allows for online office. A letter is written to the tax authority applying for a tax clearance certificate.search of unique company names upon the purchase of an e-payment card for a A form obtained from the tax office is filled and the following documents submittedflat fee of NGN 200 from an accredited bank. The system is widely used but in most with it:cases, applicants have to go to the CAC office to complete this procedure. The timeto conduct the availability of name search, receive confirmation and reserve the a. Taxpayer registration input form (TRIF/2006/001 COYS);company name usually is a week in this state. The company name reservation lasts b. Completed FIRS questionnaire;60 days but can be renewed for a similar period. c. Copy of memorandum and articles of association; d. Names and addresses of directors;Procedure 2. Prepare the requisite incorporation documents and e. Copy of the certificate of incorporation;pay the stamp duty f. Name, address of tax adviser;Time: 7 days g. Letter of appointment of tax adviser and a letter of acceptance.Cost: NGN 16,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrastamped copy of memorandum and articles of association + NGN 500 for incorpora- The application forms must be in triplicate and the original certificate of incorpora-tion forms + NGN 3,000 transport costs to Asaba) tion must be presented for sighting by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and allComments: This procedure involves the following tasks: documents, a tax reference number is allocated. An application must be filed for thea. Preparing and printing the memorandum and articles of association; tax clearance certificate. Its issuance is not automatic.b. Completing the requisite statutory forms, and;
  • 66. 64 DOING BUSINESS IN NIGERIA 2010The fees for the tax clearance issuance are as follows: for newly registered companies c. Having the memorandum and articles of association stamped by the Federalwithin 6 months of incorporation: no fee; for companies that are yet to commence Board of Inland Revenue Service.business and show up for registration after 6 months of incorporation, if they request There is no stamp duty office in this state and the procedure is usually done in thefor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first nearest city where there is one. The time for preparation of documents and stamp-time and NGN 20,000 is payable for subsequent years until it files a notice of com- ing presented here is based on an assumption that the stamping is conducted at themencement of business. stamp duty office in Akure, Ondo and accounts for the travel time. Additional costsCompanies required to register for VAT should complete the VAT registration form for handling this procedure out of state are not charged separately but included in(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the the professional charges of the lawyer or incorporation agent used.nearest integrated tax office, which will issue a taxpayer identification number (TIN).According to the VAT Act, companies required to register for VAT must do so within 6 Procedure 3. Declaration of Compliance (Form CAC 4) signedmonths from the date of starting business operations. The TIN is issued in 1-2 days, before a Commissioner for Oaths or notary publicbut it is mailed with the VAT certificate, which is issued in a week. Time: 1 day Cost: NGN 20Procedure 6*. Register for personal income tax PAYE at the State Comments: A sworn declaration that the requirements of the Companies and AlliedTax Office Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedTime: 2 days in the formation of the company or (ii) by a person named in the memorandum andCost: No cost articles of association as a director or secretary of the company. This procedure canComments: The employers in the newly incorporated company are required to reg- be done before a notary public or filed at the state or federal High Court. The com-ister with the relevant state tax authority for the purposes of deducting income tax mon practice is for this declaration to be sworn before a Commissioner of Oaths atfrom employees. Once an application is filed with a copy of the certificate of incor- the state High Court.poration attached, a reference file is then opened for the company. There is no costrelated to this registration. Procedure 4. Register the company with the Corporate Affairs CommissionProcedure 7. Register business premises with the Ministry of Time: 21 daysCommerce and Industry Cost: NGN 127,000 (NGN 100,000 for legal fees + Incorporation fees of NGN 10,000Time: 1 day for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 shareCost: No cost capital or less thereof + NGN 3,000 for certified true copy of memorandum and ar- ticles of association + NGN 2,000 for certified true copy of particulars of directors +Comments: Following incorporation with Corporate Affairs Commission, a newly NGN 2,000 for certified true copy of particulars of shareholders)established business must register and obtain a business premises permit from theMinistry of Commerce and Industry. Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include:Procedure 8. Pay registration fees for business premises into a a. Stamped memorandum and articles of association (2 copies);government account at a designated bank b. Form CAC 3, Notice of registered address;Time: 1 day c. Form CAC 7, Particulars of directors;Cost: NGN 10,000 d. Form CAC 4, Declaration of compliance and the prescribed registration fees;Comments: The payment of the business premises registration fees is made directly e. Copy of the reservation of company name approval;into the government bank account at a designated bank. NGN 10,000 is the approxi- f. Form CAC 2, Statement of share capital and return of allotment of shares.mate cost of business premises registration for a medium sized company carrying ongeneral commercial activities. The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the fol-*This procedure can be completed simultaneously with previous procedures. lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNSTARTING A BUSINESS 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashiers desk in the CAC. EKITI, Ado-Ekiti There is a legal requirement for the companys incorporators to hire a CAC accreditedStandard company legal form: Limited Liability Company professional usually a lawyer to undertake the administrative incorporation proce-Paid in minimum capital requirement: none dures. Given that the use of lawyers for such purposes is mandatory throughout theData as of: January 2010 country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 100,000 to handle the entire incorporation process in thisProcedure 1. Check the availability of company’s name with the state.Corporate Affairs Commission (CAC)Time: 7 days Procedure 5. Register with the integrated Tax Office of theCost: NGN 200 Federal Board of Inland Revenue for income tax and VATComments: The Corporate Affairs Commission online system allows for online Time: 5 dayssearch of unique company names upon the purchase of an e-payment card for a Cost: No costflat fee of NGN 200 from an accredited bank. The system is widely used but in most Comments: Entrepreneurs can register for both corporate income tax and VAT atcases, applicants have to go to the CAC office to complete this procedure. The time the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenueto conduct the availability of name search, receive confirmation and reserve the Service (FIRS) will require the applicant to complete tax registration forms. The newcompany name usually takes about 7 days. The company name reservation lasts 60 company registers at a Federal Tax Office nearest to its place of business or registereddays but can be renewed for a similar period. office. A letter is written to the tax authority applying for a tax clearance certificate. A form obtained from the tax office is filled and the following documents submittedProcedure 2. Prepare the requisite incorporation documents and with it:pay the stamp duty a. Taxpayer registration input form (TRIF/2006/001 COYS);Time: 3 days b. Completed FIRS questionnaire;Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra c. Copy of memorandum and articles of association;stamped copy of memorandum and articles of association + NGN 500 for incorpora- d. Names and addresses of directors;tion forms) e. Copy of the certificate of incorporation;Comments: This procedure involves the following tasks: f. Name, address of tax adviser;a. Preparing and printing the memorandum and articles of association; g. Letter of appointment of tax adviser and a letter of acceptance.b. Completing the requisite statutory forms, and;
  • 67. LIST OF PROCE STARTING A BUSINESS 65The application forms must be in triplicate and the original certificate of incorpora- to conduct the availability of name search, receive confirmation and reserve thetion must be presented for sighting by the controller before registration can be company name usually takes 2 days. The company name reservation lasts 60 dayscompleted. Upon receipt of the completed taxpayer registration input form and all but can be renewed for a similar period.documents, a tax reference number is allocated. An application must be filed for thetax clearance certificate. Its issuance is not automatic. Procedure 2. Prepare the requisite incorporation documents andThe fees for the tax clearance issuance are as follows: for newly registered companies pay the stamp dutywithin 6 months of incorporation: no fee; for companies that are yet to commence Time: 6 daysbusiness and show up for registration after 6 months of incorporation, if they request Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrafor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first stamped copy of memorandum and articles of association + NGN 500 for incorpora-time and NGN 20,000 is payable for subsequent years until it files a notice of com- tion forms)mencement of business. Comments: This procedure involves the following tasks:Companies required to register for VAT should complete the VAT registration form(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the a. Preparing and printing the memorandum and articles of association;nearest integrated tax office, which will issue a taxpayer identification number (TIN). b. Completing the requisite statutory forms, and;According to the VAT Act, companies required to register for VAT must do so within 6 c. Having the memorandum and articles of association stamped by the Federalmonths from the date of starting business operations. The TIN is issued in 1-2 days, Board of Inland Revenue Service.but it is mailed with the VAT certificate, which is issued in a week. There is a stamp duty office located in the state capital in Enugu and housed in the same premises with the CAC.Procedure 6*. Register for personal income tax PAYE at the StateTax Office Procedure 3. Declaration of Compliance (Form CAC 4) signedTime: 2 days before a Commissioner for Oaths or notary publicCost: No cost Time: 1 dayComments: The employers in the newly incorporated company are required to reg- Cost: NGN 200ister with the relevant state tax authority for the purposes of deducting income tax Comments: A sworn declaration that the requirements of the Companies and Alliedfrom employees. Once an application is filed with a copy of the certificate of incor- Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedporation attached, a reference file is then opened for the company. There is no cost in the formation of the company or (ii) by a person named in the memorandum andrelated to this registration. articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the state or federal High Court. The com-Procedure 7. Receive an inspection from the Ministry of mon practice is for this declaration to be sworn before a Commissioner of Oaths atCommerce and Industry for business premises registration the state High Court.Time: 1 dayCost: No cost Procedure 4. Obtain bank draft from a bank for payment of theComments: After the submission of all application documents, an inspection of the registration feesbusiness premises is carried out by an officer from the Ministry of Commerce and Time: 1 dayIndustry. The Ministry of Commerce may conduct an inspection of the premises to Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 20,000 Incorporationconfirm the location of the business and determine the type of business activity. fees (NGN 10,000 for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000 for certified true copy of memo-Procedure 8. Pay registration fees for business premises into a randum and articles of association + NGN 2,000 for certified true copy of particularsgovernment account at a designated bank of directors, + NGN 2,000 for certified true copy of particulars of shareholders)Time: 1 day Comments: Applicant is required to obtain a bank draft in the name of the Corpo-Cost: NGN 20,000 rate Affairs Commission as the mode of payment of registration fees. The cost of the bank draft may vary slightly depending on the bank but it is typically around NGNComments: The payment of the business premises registration fees is made directly 200 for a draft in the amount of the CAC registration fees.into the government bank account at a designated bank. NGN 20,000 is the approxi-mate cost of business premises registration for a medium sized company carrying ongeneral commercial activities. Procedure 5. Register the company with the Corporate Affairs CommissionProcedure 9*. Obtain a business premises permit from the state’s Time: 14 daysMinistry of Commerce and Industry Cost: NGN 100,000 (legal fees)Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re-Cost: No cost quired incorporation documents and forms, which include:Comments: Following payment of the assessed registration fees for business prem- a. Stamped memorandum and articles of association (2 copies);ises permit into a designated government account, the Ministry of Commerce and b. Form CAC 3, Notice of registered address;Industry issues a business premises permit to the new business. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees;*This procedure can be completed simultaneously with previous procedures. e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares.STARTING A BUSINESS The CAC introduced a same-day incorporation option at an increased statutory ENUGU, Enugu fee (5 times that of standard incorporation). The fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for everyStandard company legal form: Limited Liability Company NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNPaid in minimum capital requirement: none 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Data as of: January 2010 NGN 7,000. There is a legal requirement for the companys incorporators to hire a CAC accreditedProcedure 1. Check the availability of company’s name with the professional usually a lawyer to undertake the administrative incorporation proce-Corporate Affairs Commission (CAC) dures. Given that the use of lawyers for such purposes is mandatory throughout theTime: 2 days country, lawyer fees are accounted for in the overall incorporation costs. On average,Cost: NGN 200 a lawyer will charge NGN 100,000 to handle the entire incorporation process in thisComments: The Corporate Affairs Commission online system allows for online state.search of unique company names upon the purchase of an e-payment card for aflat fee of NGN 200 from an accredited bank. The system is widely used but in mostcases, applicants have to go to the CAC office to complete this procedure. The time
  • 68. 66 DOING BUSINESS IN NIGERIA 2010 STARTING A BUSINESSProcedure 6. Register with the integrated Tax Office of theFederal Board of Inland Revenue for income tax and VAT FEDERAL CAPITAL TERRITORY, AbujaTime: 5 days Standard company legal form: Limited Liability CompanyCost: No cost Paid in minimum capital requirement: noneComments: Entrepreneurs can register for both corporate income tax and VAT at Data as of: January 2010the new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueService (FIRS) will require the applicant to complete tax registration forms. The new Procedure 1. Check the availability of company’s name with thecompany registers at a Federal Tax Office nearest to its place of business or registered Corporate Affairs Commission (CAC)office. A letter is written to the tax authority applying for a tax clearance certificate. Time: 1 dayA form obtained from the tax office is filled and the following documents submitted Cost: NGN 200with it: Comments: The Corporate Affairs Commission online system allows for onlinea. Taxpayer registration input form (TRIF/2006/001 COYS); search of unique company names upon the purchase of an e-payment card for a flatb. Completed FIRS questionnaire; fee of NGN 200 from an accredited bank. The system is widely used and works muchc. Copy of memorandum and articles of association; faster in this city since the CAC headquarters is here. Applicants prefer to go to the CAC office physically to use their systems to complete this procedure. The time tod. Names and addresses of directors; conduct the availability of name search, receive confirmation and reserve the com-e. Copy of the certificate of incorporation; pany name usually takes 1-2 days. The company name reservation lasts 60 days butf. Name, address of tax adviser; can be renewed for a similar period.g. Letter of appointment of tax adviser and a letter of acceptance.The application forms must be in triplicate and the original certificate of incorpora- Procedure 2. Prepare the requisite incorporation documents andtion must be presented for sighting by the controller before registration can be pay the stamp dutycompleted. Upon receipt of the completed taxpayer registration input form and all Time: 6 daysdocuments, a tax reference number is allocated. An application must be filed for the Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extratax clearance certificate. Its issuance is not automatic. stamped copy of memorandum and articles of association + NGN 500 for incorpora-The fees for the tax clearance issuance are as follows: for newly registered companies tion forms)within 6 months of incorporation: no fee; for companies that are yet to commence Comments: This procedure involves the following tasks:business and show up for registration after 6 months of incorporation, if they request a. Preparing and printing the memorandum and articles of association;for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firsttime and NGN 20,000 is payable for subsequent years until it files a notice of com- b. Completing the requisite statutory forms, and;mencement of business. c. Having the memorandum and articles of association stamped by the FederalCompanies required to register for VAT should complete the VAT registration form Board of Inland Revenue Service.(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the There is a stamp duty office located in Abuja and housed in the same premises withnearest integrated tax office, which will issue a taxpayer identification number (TIN). the CAC.According to the VAT Act, companies required to register for VAT must do so within 6months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 3. Declaration of Compliance (Form CAC 4) signedbut it is mailed with the VAT certificate, which is issued in a week. before a Commissioner for Oaths or notary public Time: 1 dayProcedure 7*. Register for personal income tax PAYE at the State Cost: NGN 200Tax Office Comments: A sworn declaration that the requirements of the Companies and AlliedTime: 2 days Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedCost: No cost in the formation of the company or (ii) by a person named in the memorandum andComments: The employers in the newly incorporated company are required to reg- articles of association as a director or secretary of the company. This procedure canister with the relevant state tax authority for the purposes of deducting income tax be done before a notary public or filed at the state or federal High Court. The com-from employees. Once an application is filed with a copy of the certificate of incor- mon practice is for this declaration to be sworn before a Commissioner of Oaths atporation attached, a reference file is then opened for the company. There is no cost the state High Court.related to this registration. Procedure 4. Register the company with the Corporate AffairsProcedure 8. Obtain a business premises permit from the state’s CommissionMinistry of Commerce and Industry Time: 9 daysTime: 1 day Cost: NGN 77,000 (NGN 50,000 for legal fees + NGN 20,000 incorporation fees [NGNCost: No cost 10,000 for company whose nominal share capital is NGN 1,000,000 or less + NGNComments: Following incorporation with Corporate Affairs Commission, a newly 10,000 for the remaining NGN 263,870 share capital] + NGN 3,000 for certified trueestablished business must register and obtain a business premises permit from the copy of memorandum and articles of association + NGN 2,000 for certified true copyMinistry of Commerce and Industry. of particulars of directors + NGN 2,000 for certified true copy of particulars of share- holders)Procedure 9. Pay registration fees for business premises into a Comments: The applicant must file with the Corporate Affairs Commission the re-government account at a designated bank quired incorporation documents and forms, which include:Time: 1 day a. Stamped memorandum and articles of association (2 copies);Cost: NGN 10,000 b. Form CAC 3, Notice of registered address;Comments: The payment of the business premises registration fees is made directly c. Form CAC 7, Particulars of directors;into the government bank account at a designated bank. NGN 10,000 is the approxi- d. Form CAC 4, Declaration of compliance and the prescribed registration fees;mate cost of business premises registration for a medium sized company carrying on e. Copy of the reservation of company name approval;general commercial activities. f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory fee*This procedure can be completed simultaneously with previous procedures. (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashiers desk in the CAC.
  • 69. LIST OF PROCE STARTING A BUSINESS 67There is a legal requirement for the companys incorporators to hire a CAC accredited Comments: This procedure involves the following tasks:professional usually a lawyer to undertake the administrative incorporation proce- a. Preparing and printing the memorandum and articles of association;dures. Given that the use of lawyers for such purposes is mandatory throughout the b. Completing the requisite statutory forms, and;country, lawyer fees are accounted for in the overall incorporation costs. On average,a lawyer will charge NGN 50,000 to handle the entire incorporation process in this c. Having the memorandum and articles of association stamped by the Federalstate. Board of Inland Revenue Service. There is no stamp duty office in this state and the procedure is usually done in theProcedure 5. Register at the integrated Tax Office for corporate nearest city where there is one. The time for preparation of documents and stamp-income tax, VAT, and PAYE ing presented here is based on an assumption that the stamping is conducted at the stamp duty office in Bauchi and accounts for the travel time. Additional costs forTime: 5 days handling this procedure out of state are not charged separately but included in theCost: No cost professional charges of the lawyer or incorporation agent used.Comments: In Abuja, entrepreneurs can register for corporate income tax, VAT andPAYE at the new Integrated Tax Office. For corporate income tax: The Federal Inland Procedure 3. Declaration of Compliance (Form CAC 4) signedRevenue Service (FIRS) will require the applicant to complete tax registration forms. before a Commissioner for Oaths or notary publicThe new company registers at a Federal Tax Office nearest to its place of business or Time: 1 dayregistered office. A letter is written to the tax authority applying for a tax clearancecertificate. A form obtained from the tax office is filled and the following documents Cost: NGN 20submitted with it: Comments: A sworn declaration that the requirements of the Companies and Allieda. Taxpayer registration input form (TRIF/2006/001 COYS); Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum andb. Completed FIRS questionnaire; articles of association as a director or secretary of the company. This procedure canc. Copy of memorandum and articles of association; be done before a notary public or filed at the state or federal High Court. The com-d. Names and addresses of directors; mon practice is for this declaration to be sworn before a Commissioner of Oaths ate. Copy of the certificate of incorporation; the state High Court.f. Name, address of tax adviser; Procedure 4. Pay incorporation fees to the Corporate Affairsg. Letter of appointment of tax adviser and a letter of acceptance. Commission at a designated bankThe application forms must be in triplicate and the original certificate of incorpora- Time: 1 daytion must be presented for sighting by the controller before registration can becompleted. Upon receipt of the completed taxpayer registration input form and all Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capitaldocuments, a tax reference number is allocated. An application must be filed for the + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000tax clearance certificate. Its issuance is not automatic. for certified true copy of memorandum and articles of association, + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for certified true copy ofThe fees for the tax clearance issuance are as follows: for newly registered companies particulars of shareholders)within 6 months of incorporation, tax clearance certificate: no fee; for companiesthat are yet to commence business and show up for registration after 6 months of in- Comments: Payment is made to any of the receiving banks designated by the Cor-corporation, if they request for tax clearance certificate a pre-operation levy of NGN porate Affairs Commission.25,000 is payable for the first time and NGN 20,000 is payable for subsequent yearsuntil it files a notice of commencement of business. Procedure 5. Register the company with the Corporate AffairsCompanies required to register for VAT should complete the VAT registration form Commission(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Time: 5 daysnearest integrated tax office, which will issue a taxpayer identification number (TIN). Cost: NGN 50,000 (legal fees)According to the VAT Act, companies required to register for VAT must do so within 6 Comments: The applicant must file with the Corporate Affairs Commission the re-months from the date of starting business operations. The TIN is issued in 1-2 days, quired incorporation documents and forms, which include:but it is mailed with the VAT certificate, which is issued in a week. For PAYE’s regis-tration, all employers shall register with the Integrated Tax Office for the purposes a. Stamped memorandum and articles of association (2 copies);of deducting income tax from employees. Once the application is filed with a copy b. Form CAC 3, Notice of registered address;of the certificate of incorporation attached, a reference file is then opened for the c. Form CAC 7, Particulars of directors;company. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval;STARTING A BUSINESS f. Form CAC 2, Statement of share capital and return of allotment of shares. GOMBE, Gombe The CAC introduced a same-day incorporation option at an increased statutory feeStandard company legal form: Limited Liability Company (5 times that of standard incorporation). The fee schedule for registration is the fol-Paid in minimum capital requirement: none lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGNData as of: January 2010 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Procedure 1. Check the availability of company’s name with the NGN 7,000.Payment is received at the cashiers desk in the CAC.Corporate Affairs Commission (CAC) There is a legal requirement for the companys incorporators to hire a CAC accreditedTime: 5 days professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout theCost: NGN 200 country, lawyer fees are accounted for in the overall incorporation costs. On average, aComments: The Corporate Affairs Commission online system allows for online lawyer will charge NGN 50,000 to handle the entire incorporation process in this state.search of unique company names upon the purchase of an e-payment card for aflat fee of NGN 200 from an accredited bank. The system is widely used but in most Procedure 6. Register with the integrated Tax Office of thecases, applicants have to go to the CAC office to complete this procedure. The time Federal Board of Inland Revenue for income tax and VATto conduct the availability of name search, receive confirmation and reserve thecompany name is usually no more than 5 days. The company name reservation lasts Time: 4 days60 days but can be renewed for a similar period. Cost: No cost Comments: Entrepreneurs can register for both corporate income tax and VAT atProcedure 2. Prepare the requisite incorporation documents and the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenuepay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The newTime: 5 days company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate.Cost: NGN 15,098 (NGN 500 for incorporation forms + stamp duty at 0.75% + NGN A form obtained from the tax office is filled and the following documents submitted1,000 for stamping of extra copy of memorandum and articles of association + NGN with it:2,000 for transport costs to and from Bauchi where stamping is handled)
  • 70. 68 DOING BUSINESS IN NIGERIA 2010a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association;b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and;c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service.d. Names and addresses of directors; There is no stamp duty office in this state and the procedure is usually done in thee. Copy of the certificate of incorporation; nearest city where there is one. The time for preparation of documents and stamp-f. Name, address of tax adviser; ing presented here is based on an assumption that the stamping is conducted at theg. Letter of appointment of tax adviser and a letter of acceptance. stamp duty office in Umuahia or Port Harcourt and accounts for the travel time. Ad-The application forms must be in triplicate and the original certificate of incorpora- ditional costs for handling this procedure out of state are not charged separately buttion must be presented for sighting by the controller before registration can be included in the professional charges of the lawyer or incorporation agent used.completed. Upon receipt of the completed taxpayer registration input form and alldocuments, a tax reference number is allocated. An application must be filed for the Procedure 3. Declaration of Compliance (Form CAC 4) signedtax clearance certificate. Its issuance is not automatic. before a Commissioner for Oaths or notary publicThe fees for the tax clearance issuance are as follows: for newly registered companies Time: 1 daywithin 6 months of incorporation: no fee; for companies that are yet to commence Cost: NGN 500business and show up for registration after 6 months of incorporation, if they request Comments: A sworn declaration that the requirements of the Companies and Alliedfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedtime and NGN 20,000 is payable for subsequent years until it files a notice of com- in the formation of the company or (ii) by a person named in the memorandum andmencement of business. articles of association as a director or secretary of the company. This procedure canCompanies required to register for VAT should complete the VAT registration form be done before a notary public or filed at the state or federal High Court. The com-(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the mon practice is for this declaration to be sworn before a Commissioner of Oaths atnearest integrated tax office, which will issue a taxpayer identification number (TIN). the state High Court.According to the VAT Act, companies required to register for VAT must do so within 6months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 4. Pay incorporation fees to the Corporate Affairsbut it is mailed with the VAT certificate, which is issued in a week. Commission at a designated bankProcedure 7. Register for personal income tax PAYE at the State Time: 1 dayTax Office Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capi- tal + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000Time: 2 days for certified true copy of memorandum and articles of association, + NGN 2,000 forCost: No cost certified true copy of particulars of directors, + NGN 2,000 for certified true copy ofComments: The employers in the newly incorporated company are required to reg- particulars of shareholders)ister with the relevant state tax authority for the purposes of deducting income tax Comments: Payment is made to any of the receiving banks designated by the Cor-from employees. Once an application is filed with a copy of the certificate of incor- porate Affairs Commission.poration attached, a reference file is then opened for the company. There is no costrelated to this registration. Procedure 5. Register the company with the Corporate Affairs CommissionProcedure 8. Register business premises with the Ministry of Time: 21 daysCommerce and Industry Cost: NGN 80,000 (legal fees)Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re-Cost: NGN 10,000 quired incorporation documents and forms, which include:Comments: The newly incorporated company is required to register its business a. Stamped memorandum and articles of association (2 copies);premises with the state Ministry of Commerce. Payments are made in cash directly tothe Ministry of Commerce and Industry and a permit for business premises registra- b. Form CAC 3, Notice of registered address;tion is issued. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees;STARTING A BUSINESS e. Copy of the reservation of company name approval; IMO, Owerri f. Form CAC 2, Statement of share capital and return of allotment of shares.Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the fol-Paid in minimum capital requirement: none lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGNData as of: January 2010 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Procedure 1. Check the availability of company’s name with the NGN 7,000.Payment is received at the cashiers desk in the CAC.Corporate Affairs Commission (CAC) There is a legal requirement for the companys incorporators to hire a CAC accreditedTime: 2 days professional usually a lawyer to undertake the administrative incorporation proce-Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout theComments: The Corporate Affairs Commission online system allows for online country, lawyer fees are accounted for in the overall incorporation costs. On average,search of unique company names upon the purchase of an e-payment card for a a lawyer will charge NGN 80,000 to handle the entire incorporation process in thisflat fee of NGN 200 from an accredited bank. The system is widely used but in most state.cases, applicants have to go to the CAC office to complete this procedure. The timeto conduct the availability of name search, receive confirmation and reserve the Procedure 6. Register with the integrated Tax Office of thecompany name is usually 2 days. The company name reservation lasts 60 days but Federal Board of Inland Revenue for income tax and VATcan be renewed for a similar period. Time: 4 days Cost: No costProcedure 2. Prepare the requisite incorporation documents andpay the stamp duty Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueTime: 7 days Service (FIRS) will require the applicant to complete tax registration forms. The newCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra company registers at a Federal Tax Office nearest to its place of business or registeredstamped copy of memorandum and articles of association + NGN 500 for incorpora- office. A letter is written to the tax authority applying for a tax clearance certificate.tion forms) A form obtained from the tax office is filled and the following documents submittedComments: This procedure involves the following tasks: with it:
  • 71. LIST OF PROCE STARTING A BUSINESS 69a. Taxpayer registration input form (TRIF/2006/001 COYS); STARTING A BUSINESSb. Completed FIRS questionnaire; JIGAWA, Dutsec. Copy of memorandum and articles of association; Standard company legal form: Limited Liability Companyd. Names and addresses of directors; Paid in minimum capital requirement: nonee. Copy of the certificate of incorporation; Data as of: January 2010f. Name, address of tax adviser; Procedure 1. Check the availability of company’s name with theg. Letter of appointment of tax adviser and a letter of acceptance. Corporate Affairs Commission (CAC)The application forms must be in triplicate and the original certificate of incorpora-tion must be presented for sighting by the controller before registration can be Time: 4 dayscompleted. Upon receipt of the completed taxpayer registration input form and all Cost: NGN 200documents, a tax reference number is allocated. An application must be filed for the Comments: The Corporate Affairs Commission online system allows for onlinetax clearance certificate. Its issuance is not automatic. search of unique company names upon the purchase of an e-payment card for aThe fees for the tax clearance issuance are as follows: for newly registered companies flat fee of NGN 200 from an accredited bank. The system is widely used but in mostwithin 6 months of incorporation: no fee; for companies that are yet to commence cases, applicants have to go to the CAC office to complete this procedure. The timebusiness and show up for registration after 6 months of incorporation, if they request to conduct the availability of name search, receive confirmation and reserve thefor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first company name usually takes about 4 days in this state. The company name reserva-time and NGN 20,000 is payable for subsequent years until it files a notice of com- tion lasts 60 days but can be renewed for a similar period.mencement of business.Companies required to register for VAT should complete the VAT registration form Procedure 2. Prepare the requisite incorporation documents and(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the pay the stamp dutynearest integrated tax office, which will issue a taxpayer identification number (TIN). Time: 5 daysAccording to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 18,098 (stamp duty of 0.75% of the share capital + NGN 1,000 for extramonths from the date of starting business operations. The TIN is issued in 1-2 days, stamping of a copy of the memorandum and articles of association + NGN 500 forbut it is mailed with the VAT certificate, which is issued in a week. the incorportaion forms + NGN 5,000 to and from Kano where stamping is handled) Comments: This procedure involves the following tasks:Procedure 7*. Register for personal income tax PAYE at the StateTax Office a. Preparing and printing the memorandum and articles of association;Time: 2 days b. Completing the requisite statutory forms, and;Cost: No cost c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service.Comments: The employers in the newly incorporated company are required to reg-ister with the relevant state tax authority for the purposes of deducting income tax There is no stamp duty office in this state and the procedure is usually done in thefrom employees. Once an application is filed with a copy of the certificate of incor- nearest city where there is one. The time for preparation of documents and stamp-poration attached, a reference file is then opened for the company. There is no cost ing presented here is based on an assumption that the stamping is conducted atrelated to this registration. the stamp duty office in Kano and accounts for the travel time. Additional costs for handling this procedure out of state is not charged separately but included in the professional charges of the lawyer or incorporation agent used.Procedure 8. Receive an inspection from the Ministry ofCommerce and Industry for business premises registration Procedure 3. Declaration of Compliance (Form CAC 4) signedTime: 1 day before a Commissioner for Oaths or notary publicCost: No cost Time: 1 dayComments: After the submission of all application documents, an inspection of the Cost: NGN 200business premises is carried out by an officer from the Ministry of Commerce andIndustry. The Ministry of Commerce may conduct an inspection of the premises to Comments: A sworn declaration that the requirements of the Companies and Alliedconfirm the location of the business and determine the type of business activity. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure canProcedure 9. Pay registration fees for business premises into a be done before a notary public or filed at the state or federal High Court. The com-government account at a designated bank mon practice is for this declaration to be sworn before a Commissioner of Oaths atTime: 1 day the state High Court.Cost: NGN 12,000Comments: The payment of the business premises registration fees is made directly Procedure 4. Register the company with the Corporate Affairsinto the government bank account at a designated bank. NGN 12,000 is the approxi- Commissionmate cost of business premises registration for a medium sized company carrying on Time: 18 daysgeneral commercial activities. Cost: NGN 87,000 (NGN 60,000 for legal fees + NGN 20,000 incorporation fees [NGN 10,000 for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000Procedure 10*. Obtain a business premises permit from the share capital or less thereof] + NGN 3,000 for certified true copy of memorandumstate’s Ministry of Commerce and Industry and articles of association + NGN 2,000 for certified true copy of particulars of direc-Time: 1 day tors + NGN 2,000 for certified true copy of particulars of shareholders)Cost: No cost Comments: The applicant must file with the Corporate Affairs Commission the re-Comments: Following payment of the assessed registration fees for business prem- quired incorporation documents and forms, which include:ises permit into a designated government account, the Ministry of Commerce and a. Stamped memorandum and articles of association (2 copies);Industry issues a business premises permit to the new business. b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors;*This procedure can be completed simultaneously with previous procedures. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashiers desk in the CAC.
  • 72. 70 DOING BUSINESS IN NIGERIA 2010There is a legal requirement for the companys incorporators to hire a CAC accredited STARTING A BUSINESSprofessional usually a lawyer to undertake the administrative incorporation proce- KADUNA, Kadunadures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average, Standard company legal form: Limited Liability Companya lawyer will charge NGN 60,000 to handle the entire incorporation process in this Paid in minimum capital requirement: nonestate. Data as of: January 2010Procedure 5. Register with the integrated Tax Office of the Procedure 1. Check the availability of company’s name with theFederal Board of Inland Revenue for income tax and VAT Corporate Affairs Commission (CAC)Time: 4 days Time: 2 daysCost: No cost Cost: NGN 200Comments: Entrepreneurs can register for both corporate income tax and VAT at Comments: The Corporate Affairs Commission online system allows for onlinethe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue search of unique company names upon the purchase of an e-payment card for aService (FIRS) will require the applicant to complete tax registration forms. The new flat fee of NGN 200 from an accredited bank. The system is widely used but in mostcompany registers at a Federal Tax Office nearest to its place of business or registered cases, applicants have to go to the CAC office to complete this procedure. The timeoffice. A letter is written to the tax authority applying for a tax clearance certificate. to conduct the availability of name search, receive confirmation and reserve theA form obtained from the tax office is filled and the following documents submitted company name usually takes 2 days. The company name reservation lasts 60 dayswith it: but can be renewed for a similar period.a. Taxpayer registration input form (TRIF/2006/001 COYS); Procedure 2. Prepare the requisite incorporation documents andb. Completed FIRS questionnaire; pay the stamp dutyc. Copy of memorandum and articles of association; Time: 4 daysd. Names and addresses of directors; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrae. Copy of the certificate of incorporation; stamped copy of memorandum and articles of association + NGN 500 for incorpora-f. Name, address of tax adviser; tion forms)g. Letter of appointment of tax adviser and a letter of acceptance. Comments: This procedure involves the following tasks:The application forms must be in triplicate and the original certificate of incorpora- a. Preparing and printing the memorandum and articles of association;tion must be presented for sighting by the controller before registration can be b. Completing the requisite statutory forms, and;completed. Upon receipt of the completed taxpayer registration input form and alldocuments, a tax reference number is allocated. An application must be filed for the c. Having the memorandum and articles of association stamped by the Federaltax clearance certificate. Its issuance is not automatic. Board of Inland Revenue Service.The fees for the tax clearance issuance are as follows: for newly registered companies There is a stamp duty office located in the state capital in Kaduna and housed in thewithin 6 months of incorporation: no fee; for companies that are yet to commence same premises with the CAC.business and show up for registration after 6 months of incorporation, if they requestfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Procedure 3. Declaration of Compliance (Form CAC 4) signedtime and NGN 20,000 is payable for subsequent years until it files a notice of com- before a Commissioner for Oaths or notary publicmencement of business. Time: 1 dayCompanies required to register for VAT should complete the VAT registration form Cost: NGN 100(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Comments: A sworn declaration that the requirements of the Companies and Alliednearest integrated tax office, which will issue a taxpayer identification number (TIN). Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedAccording to the VAT Act, companies required to register for VAT must do so within 6 in the formation of the company or (ii) by a person named in the memorandum andmonths from the date of starting business operations. The TIN is issued in 1-2 days, articles of association as a director or secretary of the company. This procedure canbut it is mailed with the VAT certificate, which is issued in a week. be done before a notary public or filed at the state or federal High Court. The com- mon practice is for this declaration to be sworn before a Commissioner of Oaths atProcedure 6. Register for personal income tax PAYE at the State the state High Court.Tax OfficeTime: 2 days Procedure 4. Pay incorporation fees to the Corporate AffairsCost: No cost Commission at a designated bankComments: The employers in the newly incorporated company are required to reg- Time: 1 dayister with the relevant state tax authority for the purposes of deducting income tax Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capi-from employees. Once an application is filed with a copy of the certificate of incor- tal + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000poration attached, a reference file is then opened for the company. There is no cost for certified true copy of memorandum and articles of association + NGN 2,000 forrelated to this registration. certified true copy of particulars of directors, + NGN 2,000 for certified true copy of particulars of shareholders)Procedure 7. Register business premises with the Ministry of Comments: Payment is made to any of the receiving banks designated by the Cor-Commerce and Industry porate Affairs Commission.Time: 1 dayCost: NGN 20,000 Procedure 5. Register the company with the Corporate AffairsComments: The newly incorporated company is required to register its business Commissionpremises with the state’s Ministry of Commerce and industry. Payments are made Time: 14 daysin cash directly to the Ministry of Commerce and Industry and a permit for business Cost: NGN 60,000 (legal fees)premises registration is thereafter issued. Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares.
  • 73. LIST OF PROCE STARTING A BUSINESS 71The CAC introduced a same-day incorporation option at an increased statutory fee Procedure 9. Obtain a business premises permit from the state’s(5 times that of standard incorporation). The fee schedule for registration is the fol- Ministry of Commerce and Industrylowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Time: 1 day1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Cost: NGN 7,100 (NGN 100 for application form + NGN 7,000 for business premisesNGN 7,000. Payment is received at the cashiers desk in the CAC. registration fee)There is a legal requirement for the companys incorporators to hire a CAC accredited Comments: The following documents must be submitted: application form, evi-professional usually a lawyer to undertake the administrative incorporation proce- dence of registration with Corporate Affairs Commission and tax clearance certifi-dures. Given that the use of lawyers for such purposes is mandatory throughout the cate. In Kaduna town the fees for business premises registration range between NGNcountry, lawyer fees are accounted for in the overall incorporation costs. On average, 700 and NGN 20,000. For a medium size manufacturing company, the fee amountsa lawyer will charge NGN 60,000 to handle the entire incorporation process in this to NGN 7,000 and NGN 5,000 for subsequent annual renewals of the permit.state. *This procedure can be completed simultaneously with previous procedures.Procedure 6. Register with the integrated Tax Office of theFederal Board of Inland Revenue for income tax and VAT STARTING A BUSINESSTime: 5 days KANO, KanoCost: No cost Standard company legal form: Limited Liability CompanyComments: Entrepreneurs can register for both corporate income tax and VAT at Paid in minimum capital requirement: nonethe new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueService (FIRS) will require the applicant to complete tax registration forms. The new Data as of: January 2010company registers at a Federal Tax Office nearest to its place of business or registered Procedure 1. Check the availability of company’s name with theoffice. A letter is written to the tax authority applying for a tax clearance certificate.A form obtained from the tax office is filled and the following documents submitted Corporate Affairs Commission (CAC)with it: Time: 2 daysa. Taxpayer registration input form (TRIF/2006/001 COYS); Cost: NGN 200b. Completed FIRS questionnaire; Comments: The Corporate Affairs Commission online system allows for onlinec. Copy of memorandum and articles of association; search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in mostd. Names and addresses of directors; cases, applicants have to go to the CAC office to complete this procedure. The timee. Copy of the certificate of incorporation; to conduct the availability of name search, receive confirmation and reserve thef. Name, address of tax adviser; company name usually takes 2 days. The company name reservation lasts 60 daysg. Letter of appointment of tax adviser and a letter of acceptance. but can be renewed for a similar period.The application forms must be in triplicate and the original certificate of incorpora-tion must be presented for sighting by the controller before registration can be Procedure 2. Prepare the requisite incorporation documents andcompleted. Upon receipt of the completed taxpayer registration input form and all pay the stamp dutydocuments, a tax reference number is allocated. An application must be filed for the Time: 7 daystax clearance certificate. Its issuance is not automatic. Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extraThe fees for the tax clearance issuance are as follows: for newly registered companies stamped copy of memorandum and articles of association + NGN 500 for incorpora-within 6 months of incorporation: no fee; for companies that are yet to commence tion forms)business and show up for registration after 6 months of incorporation, if they request Comments: This procedure involves the following tasks:for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first a. Preparing and printing the memorandum and articles of association;time and NGN 20,000 is payable for subsequent years until it files a notice of com-mencement of business. b. Completing the requisite statutory forms, and;Companies required to register for VAT should complete the VAT registration form c. Having the memorandum and articles of association stamped by the Federal(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Board of Inland Revenue Service.nearest integrated tax office, which will issue a taxpayer identification number (TIN). There is a stamp duty office located in the state capital in Kano and housed in theAccording to the VAT Act, companies required to register for VAT must do so within 6 same premises with the CAC.months from the date of starting business operations. The TIN is issued in 1-2 days,but it is mailed with the VAT certificate, which is issued in a week. Procedure 3. Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary publicProcedure 7*. Register for personal income tax PAYE at the State Time: 1 dayTax Office Cost: NGN 50Time: 3 days Comments: A sworn declaration that the requirements of the Companies and AlliedCost: No cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedComments: The employers in the newly incorporated company are required to reg- in the formation of the company or (ii) by a person named in the memorandum andister with the relevant state tax authority for the purposes of deducting income tax articles of association as a director or secretary of the company. This procedure canfrom employees. Once an application is filed with a copy of the certificate of incor- be done before a notary public or filed at the state or federal High Court. The com-poration attached, a reference file is then opened for the company. There is no cost mon practice is for this declaration to be sworn before a Commissioner of Oaths atrelated to this registration. the state High Court.Procedure 8. Receive an inspection from the Ministry of Procedure 4. Pay incorporation fees to the Corporate AffairsCommerce/SBIR for business premises registration Commission at a designated bankTime: 3 days Time: 1 dayCost: No cost Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capitalComments: After the submission of all application documents, an inspection of the + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000business premises is carried out by an officer from the Ministry of Commerce and for certified true copy of memorandum and articles of association + NGN 2,000 forIndustry. The Ministry of Commerce may conduct an inspection of the premises to certified true copy of particulars of directors + NGN 2,000 for certified true copy ofconfirm the location of the business and determine the type of business activity. particulars of shareholders) Comments: Payment is made to any of the receiving banks designated by the Cor- porate Affairs Commission.
  • 74. 72 DOING BUSINESS IN NIGERIA 2010Procedure 5. Register the company with the Corporate Affairs Procedure 8. Receive an inspection from the Ministry ofCommission Commerce and Industry for business premises registrationTime: 18 days Time: 1 dayCost: NGN 60,000 (legal fees) Cost: No costComments: The applicant must file with the Corporate Affairs Commission the re- Comments: After the submission of all application documents, an inspection of thequired incorporation documents and forms, which include: business premises is carried out by an officer from the Ministry of Commerce anda. Stamped memorandum and articles of association (2 copies); Industry. The Ministry of Commerce may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity.b. Form CAC 3, Notice of registered address;c. Form CAC 7, Particulars of directors; Procedure 9. Obtain a business premises permit from the state’sd. Form CAC 4, Declaration of compliance and the prescribed registration fees; Ministry of Commerce and Industrye. Copy of the reservation of company name approval; Time: 3 daysf. Form CAC 2, Statement of share capital and return of allotment of shares. Cost: NGN 20,000The CAC introduced a same-day incorporation option at an increased statutory fee Comments: The fees for the business premises permit are paid directly to the Min-(5 times that of standard incorporation). The fee schedule for registration is the fol- istry. The fees depend on the type of activity, category of business (limited liabilitylowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN company, partnership or sole proprietorship), size of the business, and its location,1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN and range from NGN 600 to NGN 100,000. For a medium manufacturing company10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): located in Kano metropolis the business premises permit costs NGN 20,000. The an-NGN 7,000.Payment is received at the cashiers desk in the CAC. nual renewal fee is the same as initial registration.There is a legal requirement for the companys incorporators to hire a CAC accreditedprofessional usually a lawyer to undertake the administrative incorporation proce- *This procedure can be completed simultaneously with previous procedures.dures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average,a lawyer will charge NGN 60,000 to handle the entire incorporation process in this STARTING A BUSINESSstate. KATSINA, KatsinaProcedure 6. Register with the integrated Tax Office of the Standard company legal form: Limited Liability CompanyFederal Board of Inland Revenue for income tax and VAT Paid in minimum capital requirement: noneTime: 5 days Data as of: January 2010Cost: No cost Procedure 1. Check the availability of company’s name with theComments: Entrepreneurs can register for both corporate income tax and VAT at Corporate Affairs Commission (CAC)the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 5 daysService (FIRS) will require the applicant to complete tax registration forms. The newcompany registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 200office. A letter is written to the tax authority applying for a tax clearance certificate. Comments: The Corporate Affairs Commission online system allows for onlineA form obtained from the tax office is filled and the following documents submitted search of unique company names upon the purchase of an e-payment card for awith it: flat fee of NGN 200 from an accredited bank. The system is widely used but in mosta. Taxpayer registration input form (TRIF/2006/001 COYS); cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve theb. Completed FIRS questionnaire; company name is usually no more than 5 days. The company name reservation lastsc. Copy of memorandum and articles of association; 60 days but can be renewed for a similar period.d. Names and addresses of directors;e. Copy of the certificate of incorporation; Procedure 2. Prepare the requisite incorporation documentsf. Name, address of tax adviser; Time: 4 daysg. Letter of appointment of tax adviser and a letter of acceptance. Cost: NGN 500 (cost of incorporation forms)The application forms must be in triplicate and the original certificate of incorpora- Comments: This procedure involves the following tasks:tion must be presented for sighting by the controller before registration can be a. Preparing and printing the memorandum and articles of association;completed. Upon receipt of the completed taxpayer registration input form and all b. Completing the requisite statutory forms, and;documents, a tax reference number is allocated. An application must be filed for the c. Having the memorandum and articles of association stamped by the Federaltax clearance certificate. Its issuance is not automatic. Board of Inland Revenue Service.The fees for the tax clearance issuance are as follows: for newly registered companies There is a stamp duty office located in the state capital in Katsina and housed in thewithin 6 months of incorporation: no fee; for companies that are yet to commence same premises with the CAC. The stamp duty office does not accept cash paymentbusiness and show up for registration after 6 months of incorporation, if they request over a certain threshold.for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firsttime and NGN 20,000 is payable for subsequent years until it files a notice of com-mencement of business. Procedure 3. Pay stamp duty into a government account at a designated bankCompanies required to register for VAT should complete the VAT registration form(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Time: 1 daynearest integrated tax office, which will issue a taxpayer identification number (TIN). Cost: NGN 12,598 (stamp duty of 0.75% of share capital + NGN 1,000 for extraAccording to the VAT Act, companies required to register for VAT must do so within 6 stamped copy of memorandum and articles of association)months from the date of starting business operations. The TIN is issued in 1-2 days, Comments: Payment is made at any of the receiving banks designated by the stampbut it is mailed with the VAT certificate, which is issued in a week. duty office of the Federal Board of Inland Revenue Department.Procedure 7*. Register for personal income tax PAYE at the State Procedure 4. Stamping the memorandum and articles ofTax Office association at the stamp duty officeTime: 2 days Time: 1 dayCost: No cost Cost: No costComments: The employers in the newly incorporated company are required to reg- Comments: Upon payment of the stamp duty fee at a designated bank, a bank de-ister with the relevant state tax authority for the purposes of deducting income tax posit slip is issued. The deposit slip is presented at the stamp duty office and thereaf-from employees. Once an application is filed with a copy of the certificate of incor- ter 2 copies of the memorandum and articles of association are stamped.poration attached, a reference file is then opened for the company. There is no costrelated to this registration.
  • 75. LIST OF PROCE STARTING A BUSINESS 73Procedure 5*. Declaration of Compliance (Form CAC 4) signed Companies required to register for VAT should complete the VAT registration formbefore a Commissioner for Oaths or notary public (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the nearest integrated tax office, which will issue a taxpayer identification number (TIN).Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6Cost: NGN 50 months from the date of starting business operations. The TIN is issued in 1-2 days,Comments: A sworn declaration that the requirements of the Companies and Allied but it is mailed with the VAT certificate, which is issued in a week.Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedin the formation of the company or (ii) by a person named in the memorandum and Procedure 8*. Register for personal income tax PAYE at the Statearticles of association as a director or secretary of the company. This procedure can Tax Officebe done before a notary public or filed at the state or federal High Court. The com- Time: 2 daysmon practice is for this declaration to be sworn before a Commissioner of Oaths atthe state High Court. Cost: No cost Comments: The employers in the newly incorporated company are required to reg-Procedure 6. Register the company with the Corporate Affairs ister with the relevant state tax authority for the purposes of deducting income taxCommission from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no costTime: 21 days related to this registration.Cost: NGN 87,000 (NGN 20,000 for CAC registration fees + NGN 7,000 for obtainingcertified true copies of the company documents + NGN 60,000 for legal fees) Procedure 9. Register business premises with the Ministry ofComments: The applicant must file with the Corporate Affairs Commission the re- Commerce and Industryquired incorporation documents and forms, which include: Time: 1 daya. Stamped memorandum and articles of association (2 copies); Cost: NGN 20,000b. Form CAC 3, Notice of registered address; Comments: The newly incorporated company is required to register its businessc. Form CAC 7, Particulars of directors; premises with the state Ministry of Commerce. Payments are made in cash directlyd. Form CAC 4, Declaration of compliance and the prescribed registration fees; to the Ministry of Commerce and Industry and a permit for business premises regis-e. Copy of the reservation of company name approval; tration is issued.f. Form CAC 2, Statement of share capital and return of allotment of shares.The CAC introduced a same-day incorporation option at an increased statutory fee *This procedure can be completed simultaneously with previous procedures.(5 times that of standard incorporation). The fee schedule for registration is the fol-lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN STARTING A BUSINESS1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): KEBBI, Birnin KebbiNGN 7,000.Payment is received at the cashiers desk in the CAC. Standard company legal form: Limited Liability CompanyThere is a legal requirement for the companys incorporators to hire a CAC accredited Paid in minimum capital requirement: noneprofessional usually a lawyer to undertake the administrative incorporation proce- Data as of: January 2010dures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average, Procedure 1. Check the availability of company’s name with thea lawyer will charge NGN 60,000 to handle the entire incorporation process in this Corporate Affairs Commission (CAC)state. Time: 3 days Cost: NGN 200Procedure 7. Register with the integrated Tax Office of theFederal Board of Inland Revenue for income tax and VAT Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for aTime: 3 days flat fee of NGN 200 from an accredited bank. The system is widely used but in mostCost: No cost cases, applicants have to go to the CAC office to complete this procedure. The timeComments: Entrepreneurs can register for both corporate income tax and VAT at to conduct the availability of name search, receive confirmation and reserve thethe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue company name is usually 3 days in this state. The company’s name reservation lastsService (FIRS) will require the applicant to complete tax registration forms. The new 60 days but can be renewed for a similar period.company registers at a Federal Tax Office nearest to its place of business or registeredoffice. A letter is written to the tax authority applying for a tax clearance certificate. Procedure 2. Prepare the requisite incorporation documents andA form obtained from the tax office is filled and the following documents submitted pay the stamp dutywith it: Time: 7 daysa. Taxpayer registration input form (TRIF/2006/001 COYS); Cost: NGN 23,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrab. Completed FIRS questionnaire; stamped copy of memorandum and articles of association + NGN 500 for incorpo-c. Copy of memorandum and articles of association; ration forms + NGN 10,000 transport costs to Sokoto to handle stamping of docu-d. Names and addresses of directors; ments)e. Copy of the certificate of incorporation; Comments: This procedure involves the following tasks:f. Name, address of tax adviser; a. Preparing and printing the memorandum and articles of association;g. Letter of appointment of tax adviser and a letter of acceptance. b. Completing the requisite statutory forms, and;The application forms must be in triplicate and the original certificate of incorpora- c. Having the memorandum and articles of association stamped by the Federaltion must be presented for sighting by the controller before registration can be Board of Inland Revenue Service.completed. Upon receipt of the completed taxpayer registration input form and all There is no stamp duty office in this state and the procedure is usually done in thedocuments, a tax reference number is allocated. An application must be filed for the nearest city where there is one. The time for preparation of documents and stamp-tax clearance certificate. Its issuance is not automatic. ing presented here is based on an assumption that the stamping is conducted at theThe fees for the tax clearance issuance are as follows: for newly registered companies stamp duty office in Sokoto and accounts for the travel time. Transportation costs towithin 6 months of incorporation: no fee; for companies that are yet to commence and from Sokoto are included in the cost for this procedure and the common prac-business and show up for registration after 6 months of incorporation, if they request tice is for the lawyers to charge this separately from the professional fees.for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firsttime and NGN 20,000 is payable for subsequent years until it files a notice of com- Procedure 3. Declaration of Compliance (Form CAC 4) signedmencement of business. before a Commissioner for Oaths or notary public Time: 1 day Cost: NGN 50
  • 76. 74 DOING BUSINESS IN NIGERIA 2010Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companiesMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commencein the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they requestarticles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstbe done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com-mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business.the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to theProcedure 4. Pay incorporation fees to the Corporate Affairs nearest integrated tax office, which will issue a taxpayer identification number (TIN).Commission at a designated bank According to the VAT Act, companies required to register for VAT must do so within 6Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week.Cost: NGN 27,000 (NGN 20,000 registration fees [NGN 10,000 for first 1 million sharesand then NGN 10,000 for every 1 million or part thereof]+ NGN 3,000 certified true Procedure 7. Register for personal income tax PAYE at the Statecopy of memorandum and articles of association + NGN 2,000 certified true copy ofparticulars of directors + NGN 2,000 certified true copy of particulars of sharehold- Tax Officeers) Time: 1 dayComments: Payment is made to any of the receiving banks designated by the Cor- Cost: No costporate Affairs Commission. Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income taxProcedure 5. Register the company with the Corporate Affairs from employees. Once an application is filed with a copy of the certificate of incor-Commission poration attached, a reference file is then opened for the company. There is no costTime: 14 days related to this registration.Cost: NGN 35,000 (legal fees) Procedure 8. Register business premises with the Ministry ofComments: The applicant must file with the Corporate Affairs Commission the re- Commerce and Industryquired incorporation documents and forms, which include: Time: 1 daya. Stamped memorandum and articles of association (2 copies); Cost: NGN 10,000b. Form CAC 3, Notice of registered address; Comments: The newly incorporated company is required to register its businessc. Form CAC 7, Particulars of directors; premises with the state Ministry of Commerce. Payments are made in cash directlyd. Form CAC 4, Declaration of compliance and the prescribed registration fees; to the Ministry of Commerce and Industry and a permit for business premises regis-e. Copy of the reservation of company name approval; tration is issued.f. Form CAC 2, Statement of share capital and return of allotment of shares.The CAC introduced a same-day incorporation option at an increased statutory fee STARTING A BUSINESS(5 times that of standard incorporation). The fee schedule for registration is the fol- KOGI, Lokojalowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Standard company legal form: Limited Liability Company10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Paid in minimum capital requirement: noneNGN 7,000.Payment is received at the cashiers desk in the CAC. Data as of: January 2010There is a legal requirement for the companys incorporators to hire a CAC accreditedprofessional usually a lawyer to undertake the administrative incorporation proce- Procedure 1. Check the availability of company’s name with thedures. Given that the use of lawyers for such purposes is mandatory throughout the Corporate Affairs Commission (CAC)country, lawyer fees are accounted for in the overall incorporation costs. On average, Time: 3 daysa lawyer will charge NGN 35,000 to handle the entire incorporation process in this Cost: NGN 200state. Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for aProcedure 6. Register with the integrated Tax Office of the flat fee of NGN 200 from an accredited bank. The system is widely used but in mostFederal Board of Inland Revenue for income tax and VAT cases, applicants have to go to the CAC office to complete this procedure. The timeTime: 2 days to conduct the availability of name search, receive confirmation and reserve theCost: No cost company name is usually 2 to 3 days in this state. The company’s name reservation lasts 60 days but can be renewed for a similar period.Comments: Entrepreneurs can register for both corporate income tax and VAT atthe new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueService (FIRS) will require the applicant to complete tax registration forms. The new Procedure 2. Prepare the requisite incorporation documents andcompany registers at a Federal Tax Office nearest to its place of business or registered pay the stamp dutyoffice. A letter is written to the tax authority applying for a tax clearance certificate. Time: 6 daysA form obtained from the tax office is filled and the following documents submitted Cost: NGN 18,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrawith it: stamped copy of memorandum and articles of association + NGN 500 for incorpora-a. Taxpayer registration input form (TRIF/2006/001 COYS); tion forms + NGN 5,000 transport costs to Abuja to handle stamping)b. Completed FIRS questionnaire; Comments: This procedure involves the following tasks:c. Copy of memorandum and articles of association; a. Preparing and printing the memorandum and articles of association;d. Names and addresses of directors; b. Completing the requisite statutory forms, and;e. Copy of the certificate of incorporation; c. Having the memorandum and articles of association stamped by the Federalf. Name, address of tax adviser; Board of Inland Revenue Service.g. Letter of appointment of tax adviser and a letter of acceptance. There is no stamp duty office in this state and the procedure is usually done in the nearest city where there is one. The time for preparation of documents and stamp-The application forms must be in triplicate and the original certificate of incorpora- ing presented here is based on an assumption that the stamping is conducted at thetion must be presented for sighting by the controller before registration can be stamp duty office in Abuja and accounts for the travel time. Transportation costs tocompleted. Upon receipt of the completed taxpayer registration input form and all and from Abuja are included in the cost for this procedure and the common practicedocuments, a tax reference number is allocated. An application must be filed for the is for the lawyers to charge this separately from the professional fees.tax clearance certificate. Its issuance is not automatic.
  • 77. LIST OF PROCE STARTING A BUSINESS 75Procedure 3. Declaration of Compliance (Form CAC 4) signed The application forms must be in triplicate and the original certificate of incorpora-before a Commissioner for Oaths or notary public tion must be presented for sighting by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and allTime: 1 day documents, a tax reference number is allocated. An application must be filed for theCost: NGN 200 tax clearance certificate. Its issuance is not automatic.Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companiesMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commencein the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they requestarticles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstbe done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com-mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business.the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to theProcedure 4*. Pay incorporation fees to the Corporate Affairs nearest integrated tax office, which will issue a taxpayer identification number (TIN).Commission at a designated bank According to the VAT Act, companies required to register for VAT must do so within 6Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days,Cost: NGN 27,000 (NGN 20,000 registration fees (NGN 10,000 for first 1 million shares but it is mailed with the VAT certificate, which is issued in a week.and then NGN 10,000 for every 1 million or part thereof)+ NGN 3,000 for certifiedtrue copy of memorandum and articles of association + NGN 2,000 certified true Procedure 7. Register for personal income tax PAYE at the Statecopy of particulars of directors + NGN 2,000 certified true copy of particulars of Tax Officeshareholders) Time: 1 dayComments: Payment is made to any of the receiving banks designated by the Cor- Cost: No costporate Affairs Commission. Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income taxProcedure 5. Register the company with the Corporate Affairs from employees. Once an application is filed with a copy of the certificate of incor-Commission poration attached, a reference file is then opened for the company. There is no costTime: 14 days related to this registration.Cost: NGN 40,000 (legal fees)Comments: The applicant must file with the Corporate Affairs Commission the re- Procedure 8. Register business premises with the Ministry ofquired incorporation documents and forms, which include: Commerce and Industrya. Stamped memorandum and articles of association (2 copies); Time: 1 dayb. Form CAC 3, Notice of registered address; Cost: NGN 10,000c. Form CAC 7, Particulars of directors; Comments: The newly incorporated company is required to register its business premises with the state Ministry of Commerce. Payments are made in cash directly tod. Form CAC 4, Declaration of compliance and the prescribed registration fees; the Ministry of Commerce and Industry and a permit for business premises registra-e. Copy of the reservation of company name approval; tion is issued.f. Form CAC 2, Statement of share capital and return of allotment of shares.The CAC introduced a same-day incorporation option at an increased statutory fee *This procedure can be completed simultaneously with previous procedures.(5 times that of standard incorporation). The fee schedule for registration is the fol-lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN STARTING A BUSINESS1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): KWARA, IlorinNGN 7,000. Standard company legal form: Limited Liability CompanyThere is a legal requirement for the companys incorporators to hire a CAC accredited Paid in minimum capital requirement: noneprofessional usually a lawyer to undertake the administrative incorporation proce- Data as of: January 2010dures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average, Procedure 1. Check the availability of company’s name with thea lawyer will charge NGN 40,000 to handle the entire incorporation process in this Corporate Affairs Commission (CAC)state. Time: 3 daysProcedure 6. Register with the integrated Tax Office of the Cost: NGN 200Federal Board of Inland Revenue for income tax and VAT Comments: The Corporate Affairs Commission online system allows for onlineTime: 1 day search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in mostCost: No cost cases, applicants have to go to the CAC office to complete this procedure. The timeComments: Entrepreneurs can register for both corporate income tax and VAT at to conduct the availability of name search, receive confirmation and reserve thethe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue company name is usually 3 days in this state. The company’s name reservation lastsService (FIRS) will require the applicant to complete tax registration forms. The new 60 days but can be renewed for a similar period.company registers at a Federal Tax Office nearest to its place of business or registeredoffice. A letter is written to the tax authority applying for a tax clearance certificate. Procedure 2. Prepare the requisite incorporation documents andA form obtained from the tax office is filled and the following documents submitted pay the stamp dutywith it: Time: 7 daysa. Taxpayer registration input form (TRIF/2006/001 COYS); Cost: NGN 18,098 (stamp duty of 0.75% per share capital + NGN 500 for incorpora-b. Completed FIRS questionnaire; tion forms + NGN 1,000 for stamping of extra copies of memorandum and articles ofc. Copy of memorandum and articles of association; association + NGN 5,000 transport costs to and from Ibadan to handle the stamping)d. Names and addresses of directors; Comments: This procedure involves the following tasks:e. Copy of the certificate of incorporation; a. Preparing and printing the memorandum and articles of association;f. Name, address of tax adviser; b. Completing the requisite statutory forms, and;g. Letter of appointment of tax adviser and a letter of acceptance. c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service.
  • 78. 76 DOING BUSINESS IN NIGERIA 2010There is no stamp duty office in this state and the procedure is usually done in the The application forms must be in triplicate and the original certificate of incorpora-nearest city where there is one. The time for preparation of documents and stamp- tion must be presented for sighting by the controller before registration can being presented here is based on an assumption that the stamping is conducted at the completed. Upon receipt of the completed taxpayer registration input form and allstamp duty office in Ibadan, Oyo State and accounts for the travel time. Transporta- documents, a tax reference number is allocated. An application must be filed for thetion costs to and from Ibadan are included in the cost for this procedure and the com- tax clearance certificate. Its issuance is not automatic.mon practice is for the lawyers to charge this separately from the professional fees. The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commenceProcedure 3. Declaration of Compliance (Form CAC 4) signed business and show up for registration after 6 months of incorporation, if they requestbefore a Commissioner for Oaths or notary public for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstTime: 1 day time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business.Cost: NGN 50 Companies required to register for VAT should complete the VAT registration formComments: A sworn declaration that the requirements of the Companies and Allied (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to theMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged nearest integrated tax office, which will issue a taxpayer identification number (TIN).in the formation of the company or (ii) by a person named in the memorandum and According to the VAT Act, companies required to register for VAT must do so within 6articles of association as a director or secretary of the company. This procedure can months from the date of starting business operations. The TIN is issued in 1-2 days,be done before a notary public or filed at the state or federal High Court. The com- but it is mailed with the VAT certificate, which is issued in a week.mon practice is for this declaration to be sworn before a Commissioner of Oaths atthe state High Court. Procedure 7. Register for personal income tax PAYE at the StateProcedure 4*. Pay incorporation fees to the Corporate Affairs Tax OfficeCommission at a designated bank Time: 2 daysTime: 1 day Cost: No costCost: NGN 27,000 (NGN 20,000 registration fees [NGN 10,000 for first 1 million shares Comments: The employers in the newly incorporated company are required to reg-and then NGN 10,000 for every 1 million or part thereof]+ NGN 3,000 certified true ister with the relevant state tax authority for the purposes of deducting income taxcopy of memorandum and articles of association + NGN 2,000 certified true copy of from employees. Once an application is filed with a copy of the certificate of incor-particulars of directors + NGN 2,000 certified true copy of particulars of shareholders) poration attached, a reference file is then opened for the company. There is no cost related to this registration.Comments: Payment is made at any of the receiving banks designated by the Cor-porate Affairs Commission. Procedure 8. Register business premises with the Ministry ofProcedure 5. Register the company with the Corporate Affairs Commerce and IndustryCommission Time: 1 dayTime: 14 days Cost: NGN 40,000Cost: NGN 50,000 Comments: The newly incorporated company is required to register its business premises with the state Ministry of Commerce. Payments are made in cash directlyComments: The applicant must file with the Corporate Affairs Commission the re- to the Ministry of Commerce and Industry and a permit for business premises regis-quired incorporation documents and forms, which include: tration is thereafter issued.a. Stamped memorandum and articles of association (2 copies);b. Form CAC 3, Notice of registered address; *This procedure can be completed simultaneously with previous procedures.c. Form CAC 7, Particulars of directors;d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESSe. Copy of the reservation of company name approval; LAGOS, Lagosf. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability CompanyThe CAC introduced a same-day incorporation option at an increased statutory fee(5 times that of standard incorporation). The fee schedule for registration is the fol- Paid in minimum capital requirement: nonelowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Data as of: January 20101,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedure 1. Check the availability of company’s name with theNGN 7,000. Payment is received at the cashiers desk in the CAC. Corporate Affairs Commission (CAC)There is a legal requirement for the companys incorporators to hire a CAC accredited Time: 2 daysprofessional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for onlinecountry, lawyer fees are accounted for in the overall incorporation costs. On average, a search of unique company names upon the purchase of an e-payment card for alawyer will charge NGN 50,000 to handle the entire incorporation process in this state. flat fee of NGN 200 from an accredited bank. The system is widely used, but in most cases applicants have to go to the CAC office to complete this procedure. The time toProcedure 6. Register with the integrated Tax Office of the conduct the availability of name search, receive confirmation and reserve the com-Federal Board of Inland Revenue for income tax and VAT pany name is usually 2 days. The company name reservation lasts 60 days, but can beTime: 5 days renewed for a similar period.Cost: No cost Procedure 2. Prepare the requisite incorporation documents andComments: Entrepreneurs can register for both corporate income tax and VAT at thenew Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Ser- pay the stamp dutyvice (FIRS) require the applicant to complete tax registration forms. The new compa- Time: 7 daysny registers at a Federal Tax Office nearest to its place of business or registered office. Cost: NGN 13,098 (stamp duty at 0.75% per share capital + NGN 500 for incorpora-A letter is written to the tax authority applying for a tax clearance certificate. A form tion forms + NGN 1,000 for stamping of extra copies of memorandum and articles ofobtained from the tax office is filled and the following documents submitted with it: association)a. Taxpayer registration input form (TRIF/2006/001 COYS); Comments: This procedure involves the following tasks:b. Completed FIRS questionnaire; a. Preparing and printing the memorandum and articles of association;c. Copy of memorandum and articles of association; b. Completing the requisite statutory forms, and;d. Names and addresses of directors; c. Having the memorandum and articles of association stamped by the Federale. Copy of the certificate of incorporation; Board of Inland Revenue Service.f. Name, address of tax adviser; There are two stamp duty offices located in the state. One of the stamp duty officesg. Letter of appointment of tax adviser and a letter of acceptance. is housed in the same premises as the CAC.
  • 79. LIST OF PROCE STARTING A BUSINESS 77Procedure 3. Declaration of Compliance (Form CAC 4) signed Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to thebefore a Commissioner for Oaths or notary public nearest integrated tax office, which will issue a taxpayer identification number (TIN).Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6Cost: NGN 200 months from the date of starting business operations. The TIN is issued in 1-2 days,Comments: A sworn declaration that the requirements of the Companies and Allied but it is mailed with the VAT certificate, which is issued in a week.Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedin the formation of the company or (ii) by a person named in the memorandum and Procedure 6*. Register for personal income tax PAYE at the Statearticles of association as a director or secretary of the company. This procedure can Tax Officebe done before a notary public or filed at the state or federal High Court. The com- Time: 2 daysmon practice is for this declaration to be sworn before a Commissioner of Oaths at Cost: No costthe state High Court. Comments: The employers in the newly incorporated company are required to reg-Procedure 4. Register the company with the Corporate Affairs ister with the relevant state tax authority for the purposes of deducting income tax from employees. Once an application is filed with a copy of the certificate of incor-Commission poration attached, a reference file is then opened for the company. There is no costTime: 11 days related to this registration.Cost: NGN 87,000 (NGN 60,000 for legal fees + NGN 20,000 registration fees (NGN10,000 for first 1 million shares and then NGN 10,000 for every 1 million or part Procedure 7*. Receive a visit from a local government inspectionthereof)+ NGN 3,000 for certified true copy of memorandum and articles of associa- officertion + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for Time: 7 dayscertified true copy of particulars of shareholders) Cost: No costComments: The applicant must file with the Corporate Affairs Commission the re-quired incorporation documents and forms, which include: Comments: The inspector visits the premises to determine their size and to ascer- tain that the business is not in an area prohibited or restricted by any law. The locala. Stamped memorandum and articles of association (2 copies); government issues a demand notice of any fees or taxes to be paid, with details onb. Form CAC 3, Notice of registered address; the payment method, the receiving bank, and the due date. Upon payment, thec. Form CAC 7, Particulars of directors; company has in effect fulfilled its obligation. The local government periodicallyd. Form CAC 4, Declaration of compliance and the prescribed registration fees; checks payment and enforces court action on any default. The state and the local government determine through physical inspections which businesses are operatinge. Copy of the reservation of company name approval; within its jurisdiction and issue various levies, assessments, and charges for paymentf. Form CAC 2, Statement of share capital and return of allotment of shares. by the company concerned. Failure to pay can lead to legal action in state and lowerThe Corporate Affairs Commission introduced a same-day incorporation option at division courts.an increased statutory fee (5 times that of standard incorporation). Fee schedulefor registration is the following: for the first NGN 1,000,000 of nominal capital: NGN Procedure 8. Pay fees at a designated bank10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN Time: 1 day1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2and CAC 7): NGN 7,000. Payment is received at the cashiers desk in the CAC. Cost: NGN 18,500There is a legal requirement for the companys incorporators to hire a CAC accredited Comments: The initial registration fee varies depending on the company size be-professional, usually a lawyer, to undertake the administrative incorporation proce- tween NGN 5,000 for small businesses and NGN 50,000 for large-scale businesses.dures. Given that the use of lawyers for such purposes is mandatory throughout the NGN 18,500 is the approximate cost of business premises registration for a mediumcountry, lawyer fees are accounted for in the overall incorporation costs. On average, sized company carrying on general commercial activities in the city. The registrationa lawyer will charge NGN 60,000 to handle the entire incorporation process in this must be renewed each year (NGN 5,000 for each renewal). Fees are paid into a gov-state. ernment account in a designated bank.Procedure 5. Register with the integrated Tax Office of the *This procedure can be completed simultaneously with previous procedures.Federal Board of Inland Revenue for income tax and VATTime: 4 days STARTING A BUSINESSCost: No cost NASARAWA, LafiaComments: Entrepreneurs can register for both corporate income tax and VAT at Standard company legal form: Limited Liability Companythe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Paid in minimum capital requirement: noneService (FIRS) will require the applicant to complete tax registration forms. The newcompany registers at a Federal Tax Office nearest to its place of business or registered Data as of: January 2010office. A letter is written to the tax authority applying for a tax clearance certificate. Procedure 1. Check the availability of company’s name with theA form obtained from the tax office is filled and the following documents submittedwith it: Corporate Affairs Commission (CAC)a. Taxpayer registration input form (TRIF/2006/001 COYS); Time: 5 daysb. Completed FIRS questionnaire; Cost: NGN 200c. Copy of memorandum and articles of association; Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for ad. Names and addresses of directors; flat fee of NGN 200 from an accredited bank. The system is widely used, but in moste. Copy of the certificate of incorporation; cases applicants have to go to the CAC office to complete this procedure. The timef. Name, address of tax adviser; to conduct the availability of name search, receive confirmation and reserve theg. Letter of appointment of tax adviser and a letter of acceptance. company name is usually as much as 5 days. The company name reservation lasts 60 days, but can be renewed for a similar period.The application forms must be in triplicate and the original certificate of incorpora-tion must be presented for sighting by the controller before registration can becompleted. Upon receipt of the completed taxpayer registration input form and all Procedure 2. Prepare the requisite incorporation documents anddocuments, a tax reference number is allocated. An application must be filed for the pay the stamp dutytax clearance certificate. Its issuance is not automatic. Time: 7 daysThe fees for the tax clearance issuance are as follows: for newly registered companies Cost: NGN 18,098 (NGN 500 for incorporation forms + stamp duty at 0.75% of sharewithin 6 months of incorporation: no fee; for companies that are yet to commence capital + NGN 5,000 for transportation costs to Abuja + NGN 1,000 for stamping ofbusiness and show up for registration after 6 months of incorporation, if they request additional copies each of the memorandum and articles of association)for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Comments: This procedure involves the following tasks:time and NGN 20,000 is payable for subsequent years until it files a notice of com- a. Preparing and printing the memorandum and articles of association;mencement of business.
  • 80. 78 DOING BUSINESS IN NIGERIA 2010b. Completing the requisite statutory forms, and: The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for sighting by the controller before registration can bec. Having the memorandum and articles of association stamped by the Federal completed. Upon receipt of the completed taxpayer registration input form and all Board of Inland Revenue Service. documents, a tax reference number is allocated. An application must be filed for theThere is no stamp duty office in this state and the procedure is usually done in the tax clearance certificate. Its issuance is not automatic.nearest city where there is one. The fees for the tax clearance issuance are as follows: for newly registered companiesThe time for preparation of documents and stamping presented here is based on an within 6 months of incorporation: no fee; for companies that are yet to commenceassumption that the stamping is conducted at the stamp duty office in Abuja and business and show up for registration after 6 months of incorporation, if they requestaccounts for the travel time. Transportation costs to and from Abuja are included in for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstthe cost for this procedure and the common practice is for the lawyers to charge this time and NGN 20,000 is payable for subsequent years until it files a notice of com-separately from the professional fees. mencement of business. Companies required to register for VAT should complete the VAT registration formProcedure 3. Declaration of Compliance (Form CAC 4) signed (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to thebefore a Commissioner for Oaths or notary public nearest integrated tax office, which will issue a taxpayer identification number (TIN).Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6Cost: NGN 200 months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week.Comments: A sworn declaration that the requirements of the Companies and AlliedMatters Act have been met must be sworn to by (i) a barrister or solicitor engagedin the formation of the company or (ii) by a person named in the memorandum and Procedure 6. Register for personal income tax PAYE at the Statearticles of association as a director or secretary of the company. This procedure can Tax Officebe done before a notary public or filed at the state or federal High Court. The com- Time: 1 daymon practice is for this declaration to be sworn before a Commissioner of Oaths at Cost: No costthe state High Court. Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income taxProcedure 4. Register the company with the Corporate Affairs from employees. Once an application is filed with a copy of the certificate of incor-Commission poration attached, a reference file is then opened for the company. There is no costTime: 12 days related to this registration.Cost: NGN 107,000 (NGN 80,000 for legal fees + NGN 27,000 registration fees con-sisting of NGN 10,000 for the first 1 million shares and NGN10,000 for every 1 million Procedure 7. Register business premises with the Ministry ofor part thereof + NGN 7,000 for certified copies of memorandum and articles of as- Commerce and Industrysociation, particulars of directors and shareholders) Time: 1 dayComments: The applicant must file with the Corporate Affairs Commission the re- Cost: NGN 10,000quired incorporation documents and forms, which include: Comments: The newly incorporated company is required to register its businessa. Stamped memorandum and articles of association ( 2 copies); premises with the state Ministry of Commerce. Payments are made in cash directlyb. Form CAC 3, Notice of registered address; to the Ministry of Commerce and Industry and a permit for business premises regis-c. Form CAC 7, Particulars of directors; tration is issued.d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESSe. Copy of the reservation of company name approval;f. Form CAC 2, Statement of share capital and return of allotment of shares. NIGER, MinnaThe CAC introduced a same-day incorporation option at an increased statutory Standard company legal form: Limited Liability Companyfee (5 times that of standard incorporation). The fee schedule for registration is the Paid in minimum capital requirement: nonefollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Data as of: January 2010NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedure 1. Check the availability of company’s name with theNGN 7,000. Payment is received at the cashiers desk in the CAC. Corporate Affairs Commission (CAC)There is a legal requirement for the companys incorporators to hire a CAC accredited Time: 5 daysprofessional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200dures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average, Comments: The Corporate Affairs Commission online system allows for onlinea lawyer will charge NGN 80,000 to handle the entire incorporation process in this search of unique company names upon the purchase of an e-payment card for astate. flat fee of NGN 200 from an accredited bank. The system is widely used, but in most cases applicants have to go to the CAC office to complete this procedure. The time toProcedure 5. Register with the integrated Tax Office of the conduct the availability of name search, receive confirmation and reserve the com-Federal Board of Inland Revenue for income tax and VAT pany name is usually as much as 5 days in this state. The company name reservation lasts 60 days, but can be renewed for a similar period.Time: 2 daysCost: No cost Procedure 2. Prepare the requisite incorporation documents andComments: Entrepreneurs can register for both corporate income tax and VAT at pay the stamp dutythe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 7 daysService (FIRS) will require the applicant to complete tax registration forms. The new Cost: NGN 18,098 (NGN 500 for the incorporation forms + stamp duty at 0.75% ofcompany registers at a Federal Tax Office nearest to its place of business or registered share capital + NGN 5, 000 transport costs to Abuja for stamping + NGN 1,000 foroffice. A letter is written to the tax authority applying for a tax clearance certificate. stamping of extra copies of memorandum and articles of association)A form obtained from the tax office is filled and the following documents submittedwith it: Comments: This procedure involves the following tasks:a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association;b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and;c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service.d. Names and addresses of directors; There is no stamp duty office in this state and the procedure is usually done in thee. Copy of the certificate of incorporation; nearest city where there is one. The time for preparation of documents and stampingf. Name, address of tax adviser; shown here is based on an assumption that the stamping is conducted at the stampg. Letter of appointment of tax adviser and a letter of acceptance. duty office in Kaduna or Abuja and accounts for the travel time. Transportation cost to handle the stamping out-of-state is included in the cost for this procedure and the common practice is for lawyers to charge this separately from the professional fees.
  • 81. LIST OF PROCE STARTING A BUSINESS 79Procedure 3. Declaration of Compliance (Form CAC 4) signed Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to thebefore a Commissioner for Oaths or notary public nearest integrated tax office, which will issue a taxpayer identification number (TIN).Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6Cost: NGN 200 months from the date of starting business operations. The TIN is issued in 1-2 days,Comments: A sworn declaration that the requirements of the Companies and Allied but it is mailed with the VAT certificate, which is issued in a week.Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedin the formation of the company or (ii) by a person named in the memorandum and Procedure 6*. Register for personal income tax PAYE at the Statearticles of association as a director or secretary of the company. This procedure can Tax Officebe done before a notary public or filed at the state or federal High Court. The com- Time: 1 daymon practice is for this declaration to be sworn before a Commissioner of Oaths at Cost: No costthe state High Court. Comments: The employers in the newly incorporated company are required to reg-Procedure 4. Register the company with the Corporate Affairs ister with the relevant state tax authority for the purposes of deducting income tax from employees. Once an application is filed with a copy of the certificate of incor-Commission poration attached, a reference file is then opened for the company. There is no costTime: 14 days related to this registration.Cost: NGN 87,000 (NGN 60,000 for legal fees + NGN 20,000 registration fees [NGN10,000 for first 1 million shares and then NGN 10,000 for every 1 million or part Procedure 7. Register business premises with the Ministry ofthereof)+ NGN 3,000 for certified true copy of memorandum and articles of associa- Commerce and Industrytion + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for Time: 3 dayscertified true copy of particulars of shareholders) Cost: NGN 10,000Comments: The applicant must file with the Corporate Affairs Commission the re-quired incorporation documents and forms, which include: Comments: The newly incorporated company is required to register its business premises with the state Ministry of Commerce. Payments are made in cash directlya. Stamped memorandum and articles of association ( 2 copies); to the Ministry of Commerce and Industry and a permit for business premises regis-b. Form CAC 3, Notice of registered address; tration is issued.c. Form CAC 7, Particulars of directors;d. Form CAC 4, Declaration of compliance and the prescribed registration fees; *This procedure can be completed simultaneously with previous procedures.e. Copy of the reservation of company name approval;f. Form CAC 2, Statement of share capital and return of allotment of shares. STARTING A BUSINESSThe CAC introduced a same-day incorporation option at an increased statutory OGUN, Abeokutafee (5 times that of standard incorporation). The fee schedule for registration is thefollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Standard company legal form: Limited Liability CompanyNGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Paid in minimum capital requirement: none10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Data as of: January 2010NGN 7,000. Payment is received at the cashiers desk in the CAC.There is a legal requirement for the companys incorporators to hire a CAC accredited Procedure 1. Check the availability of company’s name with theprofessional usually a lawyer to undertake the administrative incorporation proce- Corporate Affairs Commission (CAC)dures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 2 dayscountry, lawyer fees are accounted for in the overall incorporation costs. On average, Cost: NGN 200a lawyer will charge NGN 60,000 to handle the entire incorporation process in this Comments: The Corporate Affairs Commission online system allows for onlinestate. search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used, but in mostProcedure 5. Register with the integrated Tax Office of the cases applicants have to go to the CAC office to complete this procedure. The time toFederal Board of Inland Revenue for income tax and VAT conduct the availability of name search, receive confirmation and reserve the com-Time: 2 days pany name is usually 2 days. The company name reservation lasts 60 days, but can beCost: No cost renewed for a similar period.Comments: Entrepreneurs can register for both corporate income tax and VAT atthe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Procedure 2. Prepare the requisite incorporation documents andService (FIRS) will require the applicant to complete tax registration forms. The new pay the stamp dutycompany registers at a Federal Tax Office nearest to its place of business or registered Time: 9 daysoffice. A letter is written to the tax authority applying for a tax clearance certificate. Cost: NGN 13,098 (stamp duty at 0.75% per share capital + NGN 500 for incorpora-A form obtained from the tax office is filled and the following documents submitted tion forms + NGN 1,000 for stamping of extra copies of memorandum and articles ofwith it: association)a. Taxpayer registration input form (TRIF/2006/001 COYS); Comments: This procedure involves the following tasks:b. Completed FIRS questionnaire; a. Preparing and printing the memorandum and articles of association;c. Copy of memorandum and articles of association; b. Completing the requisite statutory forms, and;d. Names and addresses of directors; c. Having the memorandum and articles of association stamped by the Federale. Copy of the certificate of incorporation; Board of Inland Revenue Service.f. Name, address of tax adviser; There is no stamp duty office in this state and the procedure is usually done in theg. Letter of appointment of tax adviser and a letter of acceptance. nearest city where there is one. The time for preparation of documents and stamp- ing presented here is based on an assumption that the stamping is conducted at theThe application forms must be in triplicate and the original certificate of incorpora- stamp duty office in Lagos or Ibadan and accounts for the travel time. Most incor-tion must be presented for sighting by the controller before registration can be porators have shown a preference to stamp the documents in Ibadan because it hascompleted. Upon receipt of the completed taxpayer registration input form and all less volume of transactions than Lagos and time is saved this way. The transportationdocuments, a tax reference number is allocated. An application must be filed for the cost is not charged separately, but is included in the final bill charged by the lawyerstax clearance certificate. Its issuance is not automatic. for handling the incorporation.The fees for the tax clearance issuance are as follows: for newly registered companieswithin 6 months of incorporation: no fee; for companies that are yet to commencebusiness and show up for registration after 6 months of incorporation, if they requestfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firsttime and NGN 20,000 is payable for subsequent years until it files a notice of com-mencement of business.
  • 82. 80 DOING BUSINESS IN NIGERIA 2010Procedure 3. Declaration of Compliance (Form CAC 4) signed documents, a tax reference number is allocated. An application must be filed for thebefore a Commissioner for Oaths or notary public tax clearance certificate. Its issuance is not automatic.Time: 1 day The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commenceCost: NGN 200 business and show up for registration after 6 months of incorporation, if they requestComments: A sworn declaration that the requirements of the Companies and Allied for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged time and NGN 20,000 is payable for subsequent years until it files a notice of com-in the formation of the company or (ii) by a person named in the memorandum and mencement of business.articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration formbe done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to themon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN).the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days,Procedure 4. Pay incorporation fees to the Corporate Affairs but it is mailed with the VAT certificate, which is issued in a week.Commission at a designated bankTime: 1 day Procedure 7*. Register for personal income tax PAYE at the StateCost: NGN 27,000 (NGN 20,000 incorporation fees (NGN 10,000 for company whose Tax Officenominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGN Time: 2 days546,350 share capital + NGN 3,000 for certified true copy of memorandum and ar- Cost: No costticles of association + NGN 2,000 for certified true copy of particulars of directors +NGN 2,000 for certified true copy of particulars of shareholders) Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income taxComments: Payment is made to any of the receiving banks designated by the Cor- from employees. Once an application is filed with a copy of the certificate of incor-porate Affairs Commission. poration attached, a reference file is then opened for the company. There is no cost related to this registration.Procedure 5. Register the company with the Corporate AffairsCommission Procedure 8. Receive an inspection from the Ministry ofTime: 18 days Commerce and Industry for business premises registrationCost: NGN 80,000 (legal fees) Time: 1 dayComments: The applicant must file with the Corporate Affairs Commission the re- Cost: No costquired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of thea. Stamped memorandum and articles of association ( 2 copies); business premises is carried out by an officer from the Ministry of Commerce andb. Form CAC 3, Notice of registered address; Industry. The Ministry of Commerce may conduct an inspection of the premises toc. Form CAC 7, Particulars of directors; confirm the location of the business and determine the type of business activity.d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Procedure 9. Pay registration fees for business premises into ae. Copy of the reservation of company name approval; government account at a designated bankf. Form CAC 2, Statement of share capital and return of allotment of shares. Time: 1 dayThe CAC introduced a same-day incorporation option at an increased statutoryfee (5 times that of standard incorporation). The fee schedule for registration is the Cost: NGN 20,000following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Comments: The business permit fee for a general merchant in urban areas of OgunNGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN state is NGN 20,000 for first time registration and NGN 10,000 for a renewal. Fees are10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): paid directly into a government account in a designated bank.NGN 7,000.There is a legal requirement for the companys incorporators to hire a CAC accredited Procedure 10. Obtain a business premises permit from the state’sprofessional usually a lawyer to undertake the administrative incorporation proce- Ministry of Commerce and Industrydures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 2 dayscountry, lawyer fees are accounted for in the overall incorporation costs. On average, Cost: No costa lawyer will charge NGN 80,000 to handle the entire incorporation process in this Comments: Following payment of the assessed registration fees for business prem-state. ises permit into a designated government account, the Ministry of Commerce and Industry registers and issues a business premises permit to the new business.Procedure 6. Register with the integrated Tax Office of theFederal Board of Inland Revenue for income tax and VAT *This procedure can be completed simultaneously with previous procedures.Time: 5 daysCost: No cost STARTING A BUSINESSComments: Entrepreneurs can register for both corporate income tax and VAT atthe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue ONDO, AkureService (FIRS) will require the applicant to complete tax registration forms. The new Standard company legal form: Limited Liability Companycompany registers at a Federal Tax Office nearest to its place of business or registered Paid in minimum capital requirement: noneoffice. A letter is written to the tax authority applying for a tax clearance certificate.A form obtained from the tax office is filled and the following documents submitted Data as of: January 2010with it: Procedure 1. Check the availability of company’s name with thea. Taxpayer registration input form (TRIF/2006/001 COYS); Corporate Affairs Commission (CAC)b. Completed FIRS questionnaire; Time: 2 daysc. Copy of memorandum and articles of association; Cost: NGN 200d. Names and addresses of directors; Comments: The Corporate Affairs Commission online system allows for onlinee. Copy of the certificate of incorporation; search of unique company names upon the purchase of an e-payment card for af. Name, address of tax adviser; flat fee of NGN 200 from an accredited bank. The system is widely used, but in mostg. Letter of appointment of tax adviser and a letter of acceptance. cases applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the com-The application forms must be in triplicate and the original certificate of incorpora- pany name is usually 2 days. The company name reservation lasts 60 days, but can betion must be presented for sighting by the controller before registration can be renewed for a similar period.completed. Upon receipt of the completed taxpayer registration input form and all
  • 83. LIST OF PROCE STARTING A BUSINESS 81Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenuepay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The newTime: 4 days company registers at a Federal Tax Office nearest to its place of business or registeredCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra office. A letter is written to the tax authority applying for a tax clearance certificate.stamped copy of memorandum and articles of association + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submittedtion forms) with it:Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS);a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire;b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association;c. Having the memorandum and articles of association stamped by the Federal d. Names and addresses of directors; Board of Inland Revenue Service. e. Copy of the certificate of incorporation;There is a stamp duty office located in the state capital in Akure and housed in the f. Name, address of tax adviser;same premises with the CAC. g. Letter of appointment of tax adviser and a letter of acceptance.Procedure 3. Declaration of Compliance (Form CAC 4) signed The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for sighting by the controller before registration can bebefore a Commissioner for Oaths or notary public completed. Upon receipt of the completed taxpayer registration input form and allTime: 1 day documents, a tax reference number is allocated. An application must be filed for theCost: NGN 50 tax clearance certificate. Its issuance is not automatic.Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companiesMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commencein the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they requestarticles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstbe done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com-mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business.the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to theProcedure 4*. Obtain bank draft from a bank for payment of the nearest integrated tax office, which will issue a taxpayer identification number (TIN).registration fees According to the VAT Act, companies required to register for VAT must do so within 6Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week.Cost: NGN 200Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Procedure 7*. Register for personal income tax PAYE at the Staterate Affairs Commission as the mode of payment of registration fees. The cost of the Tax Officebank draft may vary slightly depending on the bank, but it is typically around NGN200 for a draft in the amount of the CAC registration fees. Time: 2 days Cost: No costProcedure 5. Register the company with the Corporate Affairs Comments: The employers in the newly incorporated company are required to reg-Commission ister with the relevant state tax authority for the purposes of deducting income taxTime: 21 days from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no costCost: NGN 107,000 (NGN 80,000 for legal fees + NGN 20,000 iIncorporation fees related to this registration.(NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less +NGN 10,000 for the remaining NGN 546,350 share capital + NGN 3,000 for certifiedtrue copy of memorandum and articles of association + NGN 2,000 for certified true Procedure 8. Receive assessment by the State Board of Internalcopy of particulars of directors + NGN 2,000 for certified true copy of particulars of Revenue for Registration of Business Premisesshareholders) Time: 1 dayComments: The applicant must file with the Corporate Affairs Commission the re- Cost: No costquired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of thea. Stamped memorandum and articles of association ( 2 copies); business premises is carried out by officers from the State Board of Internal Revenueb. Form CAC 3, Notice of registered address; (SBIR). The SBIR may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity.c. Form CAC 7, Particulars of directors;d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Procedure 9. Pay registration fees for business premises into ae. Copy of the reservation of company name approval; government account at a designated bankf. Form CAC 2, Statement of share capital and return of allotment of shares. Time: 1 dayThe CAC introduced a same-day incorporation option at an increased statutory Cost: NGN 20,000fee (5 times that of standard incorporation). The fee schedule for registration is the Comments: The payment of the business premises registration fees is made directlyfollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every into the government bank account at a designated bank. NGN 20,000 is the approxi-NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN mate cost of business premises registration for a medium sized company carrying on10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): general commercial activities.NGN 7,000.There is a legal requirement for the companys incorporators to hire a CAC accredited Procedure 10. Register business premises with the State Board ofprofessional usually a lawyer to undertake the administrative incorporation proce- Internal Revenuedures. Given that the use of lawyers for such purposes is mandatory throughout thecountry, lawyer fees are accounted for in the overall incorporation costs. On average, Time: 2 daysa lawyer will charge NGN 80,000 to handle the entire incorporation process in this Cost: No coststate. Comments: Following payment of the assessed registration fees for business prem- ises permit into a designated government account, the State Board of Internal Rev-Procedure 6. Register with the integrated Tax Office of the enue registers and issues a business premises permit to the new business.Federal Board of Inland Revenue for income tax and VATTime: 4 days *This procedure can be completed simultaneously with previous procedures.Cost: No cost
  • 84. 82 DOING BUSINESS IN NIGERIA 2010STARTING A BUSINESS c. Form CAC 3, Notice of registered address; OSUN, Osogbo d. Form CAC 7, Particulars of directors;Standard company legal form: Limited Liability Company e. Form CAC 4, Declaration of compliance and the prescribed registration fees;Paid in minimum capital requirement: none f. Copy of the reservation of company name approval:Data as of: January 2010 g. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutoryProcedure 1. Check the availability of company’s name with the fee (5 times that of standard incorporation). The fee schedule for registration is theCorporate Affairs Commission (CAC) following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for everyTime: 2 days NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNCost: NGN 200 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Comments: The Corporate Affairs Commission online system allows for onlinesearch of unique company names upon the purchase of an e-payment card for a There is a legal requirement for the companys incorporators to hire a CAC accreditedflat fee of NGN 200 from an accredited bank. The system is widely used, but in most professional usually a lawyer to undertake the administrative incorporation proce-cases, applicants have to go to the CAC office to complete this procedure. The time dures. Given that the use of lawyers for such purposes is mandatory throughout theto conduct the availability of name search, receive confirmation and reserve the country, lawyer fees are accounted for in the overall incorporation costs. On average, acompany name is usually 2 days. The company name reservation lasts 60 days, but lawyer will charge NGN 80,000 to handle the entire incorporation process in this state.can be renewed for a similar period. Procedure 6. Register with the integrated Tax Office of theProcedure 2. Prepare the requisite incorporation documents and Federal Board of Inland Revenue for income tax and VATpay the stamp duty Time: 4 daysTime: 3 days Cost: No costCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Comments: Entrepreneurs can register for both corporate income tax and VAT atstamped copy of memorandum and articles of association + NGN 500 for incorpora- the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenuetion forms) Service (FIRS) will require the applicant to complete tax registration forms. The newComments: This procedure involves the following tasks: company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate.a. Preparing and printing the memorandum and articles of association; A form obtained from the tax office is filled and the following documents submittedb. Completing the requisite statutory forms, and; with it:c. Having the memorandum and articles of association stamped by the Federal a. Taxpayer registration input form (TRIF/2006/001 COYS); Board of Inland Revenue Service. b. Completed FIRS questionnaire;There is no stamp duty office in this state and the procedure is usually done in the c. Copy of memorandum and articles of association;nearest city where there is one. The time for preparation of documents and stamp-ing presented here is based on an assumption that the stamping is conducted at the d. Names and addresses of directors;stamp duty office in Ibadan and accounts for the travel time. In practice, lawyers do e. Copy of the certificate of incorporation;not charge a separate transportation fee to stamp the documents in Ibadan. Trans- f. Name, address of tax adviser;portation costs are billed into the lawyers legal fees. g. Letter of appointment of tax adviser and a letter of acceptance. The application forms must be in triplicate and the original certificate of incorpora-Procedure 3. Declaration of Compliance (Form CAC 4) signed tion must be presented for sighting by the controller before registration can bebefore a Commissioner for Oaths or notary public completed. Upon receipt of the completed taxpayer registration input form and allTime: 1 day documents, a tax reference number is allocated. An application must be filed for theCost: NGN 100 tax clearance certificate. Its issuance is not automatic.Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companiesMatters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commencein the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they requestarticles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firstbe done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com-mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business.the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to theProcedure 4*. Obtain bank draft from a bank for payment of the nearest integrated tax office, which will issue a taxpayer identification number (TIN).registration fees According to the VAT Act, companies required to register for VAT must do so within 6Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week.Cost: NGN 200Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Procedure 7*. Register for personal income tax PAYE at the Staterate Affairs Commission as the mode of payment of registration fees. The cost of the Tax Officebank draft may vary slightly depending on the bank but it is typically around NGN200 for a draft in the amount of the CAC registration fees. Time: 2 days Cost: No costProcedure 5. Register the company with the Corporate Affairs Comments: The employers in the newly incorporated company are required to reg-Commission ister with the relevant state tax authority for the purposes of deducting income taxTime: 21 days from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no costCost: NGN 107,000 (NGN 80,000 for legal fees + NGN 20,000 incorporation fees related to this registration.[NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less +NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified Procedure 8. Receive an inspection from the Ministry oftrue copy of memorandum and articles of association + NGN 2,000 for certified truecopy of particulars of directors + NGN 2,000 for certified true copy of particulars of Commerce and Industry for business premises registrationshareholders) Time: 1 dayComments: The applicant must file with the Corporate Affairs Commission the re- Cost: No costquired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of thea. Stamped memorandum and articles of association ( 2 copies); business premises is carried out by an officer from the Ministry of Commerce andb. Form CAC 2, statement of share capital; Industry. The Ministry of Commerce may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity.
  • 85. LIST OF PROCE STARTING A BUSINESS 83Procedure 9. Pay registration fees for business premises into a NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified truegovernment account at a designated bank copy of particulars of directors + NGN 2,000 for certified true copy of particulars ofTime: 1 day shareholders)Cost: NGN 12,500 Comments: The applicant must file with the Corporate Affairs Commission the re-Comments: The payment of the business premises registration fees is made directly quired incorporation documents and forms, which include:into the government bank account at a designated bank. NGN 12,500 is the approxi- a. Stamped memorandum and articles of association ( 2 copies);mate cost of business premises registration for a medium sized company carrying on b. Form CAC 3, Notice of registered address;general commercial activities. c. Form CAC 7, Particulars of directors;Procedure 10. Obtain a business premises permit from the state’s d. Form CAC 4, Declaration of compliance and the prescribed registration fees;Ministry of Commerce and Industry e. Copy of the reservation of company name approval;Time: 1 day f. Form CAC 2, Statement of share capital and return of allotment of shares.Cost: No cost The CAC introduced a same-day incorporation option at an increased statutoryComments: Following payment of the assessed registration fees for business prem- fee (5 times that of standard incorporation). The fee schedule for registration is theises permit into a designated government account, the Ministry of Commerce and following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for everyIndustry registers and issues a business premises permit to the new business. NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000. Payment is received at the cashiers desk in the CAC.*This procedure can be completed simultaneously with previous procedures. There is a legal requirement for the companys incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce-STARTING A BUSINESS dures. Given that the use of lawyers for such purposes is mandatory throughout the OYO, Ibadan country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 80,000 to handle the entire incorporation process in thisStandard company legal form: Limited Liability Company state.Paid in minimum capital requirement: noneData as of: January 2010 Procedure 5. Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VATProcedure 1. Check the availability of company’s name with the Time: 4 daysCorporate Affairs Commission (CAC) Cost: No costTime: 2 days Comments: Entrepreneurs can register for both corporate income tax and VAT atCost: NGN 200 the new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueComments: The Corporate Affairs Commission online system allows for online Service (FIRS) will require the applicant to complete tax registration forms. The newsearch of unique company names upon the purchase of an e-payment card for a company registers at a Federal Tax Office nearest to its place of business or registeredflat fee of NGN 200 from an accredited bank. The system is widely used, but in most office. A letter is written to the tax authority applying for a tax clearance certificate.cases, applicants have to go to the CAC office to complete this procedure. The time A form obtained from the tax office is filled and the following documents submittedto conduct the availability of name search, receive confirmation and reserve the with it:company name is usually 2 days. The company name reservation lasts 60 days, but a. Taxpayer registration input form (TRIF/2006/001 COYS);can be renewed for a similar period. b. Completed FIRS questionnaire;Procedure 2. Prepare the requisite incorporation documents and c. Copy of memorandum and articles of association;pay the stamp duty d. Names and addresses of directors;Time: 4 days e. Copy of the certificate of incorporation;Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra f. Name, address of tax adviser;stamped copy of memorandum and articles of association + NGN 500 for incorpora- g. Letter of appointment of tax adviser and a letter of acceptance.tion forms) The application forms must be in triplicate and the original certificate of incorpora-Comments: This procedure involves the following tasks: tion must be presented for sighting by the controller before registration can bea. Preparing and printing the memorandum and articles of association; completed. Upon receipt of the completed taxpayer registration input form and allb. Completing the requisite statutory forms, and; documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic.c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commenceThere is a stamp duty office located in the state capital in Ibadan and housed in the business and show up for registration after 6 months of incorporation, if they requestsame premises with the CAC. for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com-Procedure 3. Declaration of Compliance (Form CAC 4) signed mencement of business.before a Commissioner for Oaths or notary public Companies required to register for VAT should complete the VAT registration formTime: 1 day (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to theCost: NGN 50 nearest integrated tax office, which will issue a taxpayer identification number (TIN).Comments: A sworn declaration that the requirements of the Companies and Allied According to the VAT Act, companies required to register for VAT must do so within 6Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged months from the date of starting business operations. The TIN is issued in 1-2 days,in the formation of the company or (ii) by a person named in the memorandum and but it is mailed with the VAT certificate, which is issued in a week.articles of association as a director or secretary of the company. This procedure canbe done before a notary public or filed at the state or federal High Court. The com- Procedure 6*. Register for personal income tax PAYE at the Statemon practice is for this declaration to be sworn before a Commissioner of Oaths at Tax Officethe state High Court. Time: 2 days Cost: No costProcedure 4. Register the company with the Corporate Affairs Comments: The employers in the newly incorporated company are required to reg-Commission ister with the relevant state tax authority for the purposes of deducting income taxTime: 15 days from employees. Once an application is filed with a copy of the certificate of incor-Cost: NGN 107,000 (NGN 80,000 for legal fees + NGN 20,000 incorporation fees poration attached, a reference file is then opened for the company. There is no cost[NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + related to this registration.
  • 86. 84 DOING BUSINESS IN NIGERIA 2010Procedure 7. Receive an inspection from the Ministry of Comments: A sworn declaration that the requirements of the Companies and AlliedCommerce and Industry for business premises registration Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum andTime: 1 day articles of association as a director or secretary of the company. This procedure canCost: No cost be done before a notary public or filed at the state or federal High Court. The com-Comments: After the submission of all application documents, an inspection of the mon practice is for this declaration to be sworn before a Commissioner of Oaths atbusiness premises is carried out by an officer from the Ministry of Commerce and the state High Court.Industry. The Ministry of Commerce may conduct an inspection of the premises toconfirm the location of the business and determine the type of business activity. Procedure 4. Obtain bank draft from a bank for payment of the registration feesProcedure 8. Pay registration fees for business premises into a Time: 1 daygovernment account at a designated bank Cost: NGN 27,200 (NGN 200 for bank draft charges+ NGN 20,000 incorporation feesTime: 1 day [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less +Cost: NGN 50,000 NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certifiedComments: The payment of the business premises registration fees is made directly true copy of memorandum and articles of association + NGN 2,000 for certified trueinto the government bank account at a designated bank. NGN 50,000 is the approxi- copy of particulars of directors + NGN 2,000 for certified true copy of particulars ofmate cost of business premises registration for a medium sized company carrying on shareholders)general commercial activities. Comments: Applicant is required to obtain a bank draft in the name of the Corpo- rate Affairs Commission as the mode of payment of registration fees. The cost of theProcedure 9. Obtain a business premises permit from the state’s bank draft may vary slightly depending on the bank, but it is typically around NGNMinistry of Commerce and Industry 200 for a draft in the amount of the CAC registration fees.Time: 3 days Procedure 5. Register the company with the Corporate AffairsCost: No cost CommissionComments: Following payment of the assessed registration fees for business prem- Time: 14 daysises permit into a designated government account, the Ministry of Commerce andIndustry registers and issues a business premises permit to the new business. Cost: NGN 50,000 (legal fees) Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include:*This procedure can be completed simultaneously with previous procedures. a. Stamped memorandum and articles of association ( 2 copies);STARTING A BUSINESS b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; PLATEAU, Jos d. Form CAC 4, Declaration of compliance and the prescribed registration fees;Standard company legal form: Limited Liability Company e. Copy of the reservation of company name approval;Paid in minimum capital requirement: none f. Form CAC 2, Statement of share capital and return of allotment of shares.Data as of: January 2010 The CAC introduced a same-day incorporation option at an increased statutoryProcedure 1. Check the availability of company’s name with the fee (5 times that of standard incorporation). The fee schedule for registration is theCorporate Affairs Commission (CAC) following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNTime: 5 days 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Cost: NGN 200 NGN 7,000.Comments: The Corporate Affairs Commission online system allows for online There is a legal requirement for the companys incorporators to hire a CAC accreditedsearch of unique company names upon the purchase of an e-payment card for a professional usually a lawyer to undertake the administrative incorporation proce-flat fee of NGN 200 from an accredited bank. The system is widely used, but in most dures. Given that the use of lawyers for such purposes is mandatory throughout thecases applicants have to go to the CAC office to complete this procedure. The time to country, lawyer fees are accounted for in the overall incorporation costs. On average,conduct the availability of name search, receive confirmation and reserve the com- a lawyer will charge NGN 50,000 to handle the entire incorporation process in thispany name is usually as long as 5 days. The company name reservation lasts 60 days, state.but can be renewed for a similar period. Procedure 6. Register with the integrated Tax Office of theProcedure 2. Prepare the requisite incorporation documents and Federal Board of Inland Revenue for income tax and VATpay the stamp duty Time: 1 dayTime: 7 days Cost: No costCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Comments: Entrepreneurs can register for both corporate income tax and VAT atstamped copy of memorandum and articles of association + NGN 500 for incorpora- the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenuetion forms) Service (FIRS) will require the applicant to complete tax registration forms. The newComments: This procedure involves the following tasks: company registers at a Federal Tax Office nearest to its place of business or registereda. Preparing and printing the memorandum and articles of association; office. A letter is written to the tax authority applying for a tax clearance certificate.b. Completing the requisite statutory forms, and; A form obtained from the tax office is filled and the following documents submitted with it:c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. a. Taxpayer registration input form (TRIF/2006/001 COYS);There is no stamp duty office in this state and the procedure is usually done in the b. Completed FIRS questionnaire;nearest city where there is one. The time for preparation of documents and stamp- c. Copy of memorandum and articles of association;ing presented here is based on an assumption that the stamping is conducted at d. Names and addresses of directors;the stamp duty office in Abuja and accounts for the travel time. The transportation e. Copy of the certificate of incorporation;cost and out of pocket expenses associated with this procedure are not chargedseparately, but are included in the final bill charged by the lawyers for handling the f. Name, address of tax adviser;incorporation. g. Letter of appointment of tax adviser and a letter of acceptance. The application forms must be in triplicate and the original certificate of incorpora-Procedure 3*. Declaration of Compliance (Form CAC 4) signed tion must be presented for sighting by the controller before registration can bebefore a Commissioner for Oaths or notary public completed. Upon receipt of the completed taxpayer registration input form and allTime: 1 day documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic.Cost: NGN 50
  • 87. LIST OF PROCE STARTING A BUSINESS 85The fees for the tax clearance issuance are as follows: for newly registered companies Procedure 3. Declaration of Compliance (Form CAC 4) signedwithin 6 months of incorporation: no fee; for companies that are yet to commencebusiness and show up for registration after 6 months of incorporation, if they request before a Commissioner for Oaths or notary publicfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Time: 1 daytime and NGN 20,000 is payable for subsequent years until it files a notice of com- Cost: NGN 500mencement of business. Comments: A sworn declaration that the requirements of the Companies and AlliedCompanies required to register for VAT should complete the VAT registration form Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the in the formation of the company or (ii) by a person named in the memorandum andnearest integrated tax office, which will issue a taxpayer identification number (TIN). articles of association as a director or secretary of the company. This procedure canAccording to the VAT Act, companies required to register for VAT must do so within 6 be done before a notary public or filed at the state or federal High Court. The com-months from the date of starting business operations. The TIN is issued in 1-2 days, mon practice is for this declaration to be sworn before a Commissioner of Oaths atbut it is mailed with the VAT certificate, which is issued in a week. the state High Court.Procedure 7. Register for personal income tax PAYE at the State Procedure 4. Pay incorporation fees to the Corporate AffairsTax Office Commission at a designated bankTime: 1 day Time: 1 dayCost: No cost Cost: NGN 27,000 (NGN 20,000 incorporation fees [NGN 10,000 for company whoseComments: The employers in the newly incorporated company are required to reg- nominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGNister with the relevant state tax authority for the purposes of deducting income tax 546,350 share capital] + NGN 3,000 for certified true copy of memorandum and ar-from employees. Once an application is filed with a copy of the certificate of incor- ticles of association + NGN 2,000 for certified true copy of particulars of directors +poration attached, a reference file is then opened for the company. There is no cost NGN 2,000 for certified true copy of particulars of shareholders)related to this registration. Comments: Payment is made to any of the receiving banks designated by the Cor- porate Affairs Commission.Procedure 8. Register business premises with the Ministry ofCommerce and Industry Procedure 5. Register the company with the Corporate AffairsTime: 2 days CommissionCost: NGN 8,000 Time: 11 daysComments: The newly incorporated company is required to register its business Cost: NGN 60,000 (legal fees)premises with the state Ministry of Commerce. Payments are made in cash directly Comments: The applicant must file with the Corporate Affairs Commission the re-to the Ministry of Commerce and Industry and a permit for business premises regis- quired incorporation documents and forms, which include:tration is issued. a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address;*This procedure can be completed simultaneously with previous procedures. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees;STARTING A BUSINESS e. Copy of the reservation of company name approval; RIVERS, Port Harcourt f. Form CAC 2, Statement of share capital and return of allotment of shares.Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutoryPaid in minimum capital requirement: none fee (5 times that of standard incorporation). The fee schedule for registration is theData as of: January 2010 following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNProcedure 1. Check the availability of company’s name with the 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Corporate Affairs Commission (CAC) NGN 7,000.Time: 10 days There is a legal requirement for the companys incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce-Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout theComments: The Corporate Affairs Commission online system allows for online country, lawyer fees are accounted for in the overall incorporation costs. On average, asearch of unique company names upon the purchase of an e-payment card for a lawyer will charge NGN 60,000 to handle the entire incorporation process in this state.flat fee of NGN 200 from an accredited bank. The system is widely used, but in mostcases applicants have to go to the CAC office to complete this procedure. The time Procedure 6. Register with the integrated Tax Office of theto conduct the availability of name search, receive confirmation and reserve the Federal Board of Inland Revenue for income tax and VATcompany name is usually as long as 10 days. The company name reservation lasts 60days, but can be renewed for a similar period. Time: 3 days Cost: No costProcedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT atpay the stamp duty the new Integrated Tax Office. For corporate income tax, the Federal Inland RevenueTime: 7 days Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registeredCost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra office. A letter is written to the tax authority applying for a tax clearance certificate.stamped copy of memorandum and articles of association + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submittedtion forms) with it:Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS);a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire;b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association;c. Having the memorandum and articles of association stamped by the Federal d. Names and addresses of directors; Board of Inland Revenue Service. e. Copy of the certificate of incorporation;There is a stamp duty office located in the state capital in Port Harcourt and housedin the same premises with the CAC. f. Name, address of tax adviser; g. Letter of appointment of tax adviser and a letter of acceptance. The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for sighting by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic.
  • 88. 86 DOING BUSINESS IN NIGERIA 2010The fees for the tax clearance issuance are as follows: for newly registered companies Procedure 2. Prepare the requisite incorporation documents andwithin 6 months of incorporation: no fee; for companies that are yet to commence pay the stamp dutybusiness and show up for registration after 6 months of incorporation, if they request Time: 5 daysfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the firsttime and NGN 20,000 is payable for subsequent years until it files a notice of com- Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extramencement of business. stamped copy of memorandum and articles of association + NGN 500 for incorpora- tion forms)Companies required to register for VAT should complete the VAT registration form(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Comments: This procedure involves the following tasks:nearest integrated tax office, which will issue a taxpayer identification number (TIN). a. Preparing and printing the memorandum and articles of association;According to the VAT Act, companies required to register for VAT must do so within 6 b. Completing the requisite statutory forms, and;months from the date of starting business operations. The TIN is issued in 1-2 days, c. Having the memorandum and articles of association stamped by the Federalbut it is mailed with the VAT certificate, which is issued in a week. Board of Inland Revenue Service.Procedure 7. Register for personal income tax PAYE at the State There is a stamp duty office located in the state capital in Sokoto and housed in the same premises with the CAC.Tax OfficeTime: 2 days Procedure 3. Declaration of Compliance (Form CAC 4) signedCost: No cost before a Commissioner for Oaths or notary publicComments: The employers in the newly incorporated company are required to reg- Time: 1 dayister with the relevant state tax authority for the purposes of deducting income tax Cost: NGN 20from employees. Once an application is filed with a copy of the certificate of incor-poration attached, a reference file is then opened for the company. There is no cost Comments: A sworn declaration that the requirements of the Companies and Alliedrelated to this registration. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum andProcedure 8. Receive an inspection from the Ministry of articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the state or federal High Court. The com-Commerce and Industry for business premises registration mon practice is for this declaration to be sworn before a Commissioner of Oaths atTime: 1 day the state High Court.Cost: No costComments: After the submission of all application documents, an inspection of the Procedure 4. Pay incorporation fees to the Corporate Affairsbusiness premises is carried out by an officer from the Ministry of Commerce and Commission at a designated bankIndustry. The Ministry of Commerce may conduct an inspection of the premises to Time: 1 dayconfirm the location of the business and determine the type of business activity. Cost: NGN 27,000 (NGN 20,000 Incorporation fees [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGNProcedure 9. Pay registration fees for business premises into a 546,350 share capital] + NGN 3,000 for certified true copy of Memorandum and Ar-government account at a designated bank ticles of Association + NGN 2,000 for certified true copy of particulars of directors +Time: 1 day NGN 2,000 for certified true copy of particulars of shareholders)Cost: NGN 10,000 Comments: Payment is made to any of the receiving banks designated by the Cor-Comments: The payment of the business premises registration fees is made directly porate Affairs Commission.into the government bank account at a designated bank. NGN 10,000 is the approxi-mate cost of business premises registration for a medium sized company carrying on Procedure 5. Register the company with the Corporate Affairsgeneral commercial activities. Commission Time: 11 daysProcedure 10. Obtain a business premises permit from the state’s Cost: NGN 100,000 (legal fees)Ministry of Commerce and Industry Comments: The applicant must file with the Corporate Affairs Commission the re-Time: 1 day quired incorporation documents and forms, which include:Cost: No cost a. Stamped memorandum and articles of association ( 2 copies);Comments: Following payment of the assessed registration fees for business prem- b. Form CAC 3, Notice of registered address;ises permit into a designated government account, the Ministry of Commerce and c. Form CAC 7, Particulars of directors;Industry registers and issues a business premises permit to the new business. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval;STARTING A BUSINESS f. Form CAC 2, Statement of share capital and return of allotment of shares. SOKOTO, Sokoto The CAC introduced a same-day incorporation option at an increased statutoryStandard company legal form: Limited Liability Company fee (5 times that of standard incorporation). The fee schedule for registration is thePaid in minimum capital requirement: none following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for everyData as of: January 2010 NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7):Procedure 1. Check the availability of company’s name with the NGN 7,000.Corporate Affairs Commission (CAC) There is a legal requirement for the companys incorporators to hire a CAC accreditedTime: 2 days professional usually a lawyer to undertake the administrative incorporation proce-Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average,Comments: The Corporate Affairs Commission online system allows for online a lawyer will charge NGN 100,000 to handle the entire incorporation process in thissearch of unique company names upon the purchase of an e-payment card for a state.flat fee of NGN 200 from an accredited bank. The system is widely used, but in mostcases applicants have to go to the CAC office to complete this procedure. The time to Procedure 6. Register with the integrated Tax Office of theconduct the availability of name search, receive confirmation and reserve the com-pany name is usually 2 days. The company name reservation lasts 60 days, but can be Federal Board of Inland Revenue for income tax and VATrenewed for a similar period. Time: 4 days Cost: No cost Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new
  • 89. LIST OF PROCE STARTING A BUSINESS 87company registers at a Federal Tax Office nearest to its place of business or registered Comments: The Corporate Affairs Commission online system allows for onlineoffice. A letter is written to the tax authority applying for a tax clearance certificate. search of unique company names upon the purchase of an e-payment card for aA form obtained from the tax office is filled and the following documents submitted flat fee of NGN 200 from an accredited bank. The system is widely used, but in mostwith it: cases applicants have to go to the CAC office to complete this procedure. The time toa. Taxpayer registration input form (TRIF/2006/001 COYS); conduct the availability of name search, receive confirmation and reserve the com- pany name is usually 3-4 days. The company name reservation lasts 60 days, but canb. Completed FIRS questionnaire; be renewed for a similar period.c. Copy of memorandum and articles of association;d. Names and addresses of directors; Procedure 2. Prepare the requisite incorporation documents ande. Copy of the certificate of incorporation; pay the stamp dutyf. Name, address of tax adviser; Time: 4 daysg. Letter of appointment of tax adviser and a letter of acceptance. Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extraThe application forms must be in triplicate and the original certificate of incorpora- stamped copy of memorandum and articles of association + NGN 500 for incorpora-tion must be presented for sighting by the controller before registration can be tion forms)completed. Upon receipt of the completed taxpayer registration input form and all Comments: This procedure involves the following tasks:documents, a tax reference number is allocated. An application must be filed for the a. Preparing and printing the memorandum and articles of association;tax clearance certificate. Its issuance is not automatic. b. Completing the requisite statutory forms, and;The fees for the tax clearance issuance are as follows: for newly registered companies c. Having the memorandum and articles of association stamped by the Federalwithin 6 months of incorporation: no fee; for companies that are yet to commence Board of Inland Revenue Service.business and show up for registration after 6 months of incorporation, if they requestfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first There is no stamp duty office in this state and the procedure is usually done in thetime and NGN 20,000 is payable for subsequent years until it files a notice of com- nearest city where there is one.The time for preparation of documents and stamp-mencement of business. ing presented here is based on an assumption that the stamping is conducted at the stamp duty office in Yola and accounts for the travel time. The transportationCompanies required to register for VAT should complete the VAT registration form cost and out of pocket expenses associated with this procedure are not charged(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the separately, but are included in the final bill charged by the lawyers for handling thenearest integrated tax office, which will issue a taxpayer identification number (TIN). incorporation.According to the VAT Act, companies required to register for VAT must do so within 6months from the date of starting business operations. The TIN is issued in 1-2 days,but it is mailed with the VAT certificate, which is issued in a week. Procedure 3. Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary publicProcedure 7*. Register for personal income tax PAYE at the State Time: 1 dayTax Office Cost: NGN 200Time: 2 days Comments: A sworn declaration that the requirements of the Companies and AlliedCost: No cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum andComments: The employers in the newly incorporated company are required to reg- articles of association as a director or secretary of the company. This procedure canister with the relevant state tax authority for the purposes of deducting income tax be done before a notary public or filed at the state or federal High Court. The com-from employees. Once an application is filed with a copy of the certificate of incor- mon practice is for this declaration to be sworn before a Commissioner of Oaths atporation attached, a reference file is then opened for the company. There is no cost the state High Court.related to this registration.Procedure 8. Receive an inspection from the Ministry of Procedure 4*. Obtain bank draft from a bank for payment of theCommerce and Industry for business premises registration registration fees Time: 1 dayTime: 7 days Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 20,000 Incorporation feesCost: No cost [NGN 10,000 for company whose nominal share capital is NGN1,000,000 or less +Comments: After the submission of all application documents, an inspection of the NGN10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certifiedbusiness premises is carried out by an officer from the Ministry of Commerce and true copy of memorandum and articles of association + NGN 2,000 for certified trueIndustry. The Ministry of Commerce may conduct an inspection of the premises to copy of particulars of directors + NGN 2,000 for certified true copy of particulars ofconfirm the location of the business and determine the type of business activity. shareholders) Comments: Applicant is required to obtain a bank draft in the name of the Corpo-Procedure 9*. Obtain a business premises permit from the state’s rate Affairs Commission as the mode of payment of registration fees. The cost of theMinistry of Commerce and Industry bank draft may vary slightly depending on the bank, but it is typically around NGNTime: 1 day 200 for a draft in the amount of the CAC registration fees.Cost: NGN 20,000Comments: The owner applies at the Ministry of Commerce and Industry for a Procedure 5. Register the company with the Corporate Affairsbusiness premises permit. The fees are paid at the Ministry. The business permit fee Commissionfor general business activities is NGN 20,000 for initial registration, and 50% of this Time: 14 daysamount for subsequent annual renewals. Cost: NGN 50,000 (legal fees) Comments: The applicant must file with the Corporate Affairs Commission the re-*This procedure can be completed simultaneously with previous procedures. quired incorporation documents and forms, which include: a. Stamped memorandum and articles of association (2 copies);STARTING A BUSINESS b. Form CAC 3, Notice of registered address; TARABA, Jalingo c. Form CAC 7, Particulars of directors;Standard company legal form: Limited Liability Company d. Form CAC 4, Declaration of compliance and the prescribed registration fees;Paid in minimum capital requirement: none e. Copy of the reservation of company name approval;Data as of: January 2010 f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutoryProcedure 1. Check the availability of company’s name with the fee (5 times that of standard incorporation). The fee schedule for registration is theCorporate Affairs Commission (CAC) following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for everyTime: 4 days NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGNCost: NGN 200 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.
  • 90. 88 DOING BUSINESS IN NIGERIA 2010 STARTING A BUSINESSThere is a legal requirement for the companys incorporators to hire a CAC accreditedprofessional usually a lawyer to undertake the administrative incorporation proce- YOBE, Damaturudures. Given that the use of lawyers for such purposes is mandatory throughout the Standard company legal form: Limited Liability Companycountry, lawyer fees are accounted for in the overall incorporation costs. On average, Paid in minimum capital requirement: nonea lawyer will charge NGN 50,000 to handle the entire incorporation process in thisstate. Data as of: January 2010 Procedure 1. Check the availability of company’s name with theProcedure 6. Register with the integrated Tax Office of the Corporate Affairs Commission (CAC)Federal Board of Inland Revenue for income tax and VAT Time: 3 daysTime: 5 days Cost: NGN 200Cost: No cost Comments: The Corporate Affairs Commission online system allows for onlineComments: Entrepreneurs can register for both corporate income tax and VAT at search of unique company names upon the purchase of an e-payment card for athe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue flat fee of NGN 200 from an accredited bank. The system is widely used, but in mostService (FIRS) will require the applicant to complete tax registration forms. The new cases applicants have to go to the CAC office to complete this procedure. The time tocompany registers at a Federal Tax Office nearest to its place of business or registered conduct the availability of name search, receive confirmation and reserve the com-office. A letter is written to the tax authority applying for a tax clearance certificate. pany name is usually 3 days. The company name reservation lasts 60 days, but can beA form obtained from the tax office is filled and the following documents submitted renewed for a similar period.with it:a. Taxpayer registration input form (TRIF/2006/001 COYS); Procedure 2. Prepare the requisite incorporation documents andb. Completed FIRS questionnaire; pay the stamp dutyc. Copy of memorandum and articles of association; Time: 20 daysd. Names and addresses of directors; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extrae. Copy of the certificate of incorporation; stamped copy of memorandum and articles of association + NGN 500 for incorpora-f. Name, address of tax adviser; tion forms)g. Letter of appointment of tax adviser and a letter of acceptance. Comments: This procedure involves the following tasks:The application forms must be in triplicate and the original certificate of incorpora- a. Preparing and printing the memorandum and articles of association;tion must be presented for sighting by the controller before registration can be b. Completing the requisite statutory forms, and;completed. Upon receipt of the completed taxpayer registration input form and all c. Having the memorandum and articles of association stamped by the Federaldocuments, a tax reference number is allocated. An application must be filed for the Board of Inland Revenue Service.tax clearance certificate. Its issuance is not automatic. The time for preparation of documents and stamping presented here is based on anThe fees for the tax clearance issuance are as follows: for newly registered companies assumption that the stamping is conducted at the stamp duty office in Maiduguri,within 6 months of incorporation: no fee; for companies that are yet to commence Borno State, and accounts for the travel time. The transportation cost and out ofbusiness and show up for registration after 6 months of incorporation, if they request pocket expenses associated with this procedure are not charged separately, but arefor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first included in the final bill charged by the lawyers for handling the incorporation.time and NGN 20,000 is payable for subsequent years until it files a notice of com-mencement of business. Procedure 3. Declaration of Compliance (Form CAC 4) signedCompanies required to register for VAT should complete the VAT registration form before a Commissioner for Oaths or notary public(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Time: 1 daynearest integrated tax office, which will issue a taxpayer identification number (TIN).According to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 200months from the date of starting business operations. The TIN is issued in 1-2 days, Comments: A sworn declaration that the requirements of the Companies and Alliedbut it is mailed with the VAT certificate, which is issued in a week. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum andProcedure 7. Register for personal income tax PAYE at the State articles of association as a director or secretary of the company. This procedure canTax Office be done before a notary public or filed at the state or federal High Court. The com- mon practice is for this declaration to be sworn before a Commissioner of Oaths atTime: 2 days the state High Court.Cost: No costComments: The employers in the newly incorporated company are required to reg- Procedure 4. Obtain bank draft from a bank for payment of theister with the relevant state tax authority for the purposes of deducting income tax registration feesfrom employees. Once an application is filed with a copy of the certificate of incor- Time: 1 dayporation attached, a reference file is then opened for the company. There is no costrelated to this registration. Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 20,000 incorporation fees [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less +Procedure 8. Register business premises with the Ministry of NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified trueCommerce and Industry copy of particulars of directors + NGN 2,000 for certified true copy of particulars ofTime: 2 days shareholders)Cost: NGN 2,000 Comments: Applicant is required to obtain a bank draft in the name of the Corpo-Comments: The newly incorporated company is required to register its business rate Affairs Commission as the mode of payment of registration fees. The cost of thepremises with the state Ministry of Commerce. Payments are made in cash directly bank draft may vary slightly depending on the bank but it is typically around NGNto the Ministry of Commerce and Industry and a permit for business premises regis- 200 for a draft in the amount of the CAC registration fees.tration is thereafter issued. Procedure 5. Register the company with the Corporate Affairs*This procedure can be completed simultaneously with previous procedures. Commission Time: 7 days Cost: NGN 50,000 (legal fees) Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors;
  • 91. LIST OF PROCE STARTING A BUSINESS 89d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESSe. Copy of the reservation of company name approval; ZAMFARA, Gusauf. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability CompanyThe CAC introduced a same-day incorporation option at an increased statutory Paid in minimum capital requirement: nonefee (5 times that of standard incorporation). The fee schedule for registration is the Data as of: January 2010following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for everyNGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Procedure 1. Check the availability of company’s name with the10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Corporate Affairs Commission (CAC)NGN 7,000. Time: 3 daysThere is a legal requirement for the companys incorporators to hire a CAC accreditedprofessional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for onlinecountry, lawyer fees are accounted for in the overall incorporation costs. On average, a search of unique company names upon the purchase of an e-payment card for a flatlawyer will charge NGN 50,000 to handle the entire incorporation process in this state. fee of NGN200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The time to con-Procedure 6. Register with the integrated Tax Office of the duct the availability of name search, receive confirmation and reserve the companyFederal Board of Inland Revenue for income tax and VAT name usually takes 3 days. The company name reservation lasts 60 days but can be renewed for a similar period.Time: 5 daysCost: No cost Procedure 2. Prepare the requisite incorporation documents andComments: Entrepreneurs can register for both corporate income tax and VAT at pay the stamp dutythe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 8 daysService (FIRS) will require the applicant to complete tax registration forms. The newcompany registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 23,098 (stamp duty at 0.75% of share capital + NGN 500 for incorporationoffice. A letter is written to the tax authority applying for a tax clearance certificate. forms + NGN 1,000 for stamping extra copies each of the memorandum and articlesA form obtained from the tax office is filled and the following documents submitted of association + NGN 10,000 transport costs to Sokoto to handle stamping of thewith it: incorporation documents)a. Taxpayer registration input form (TRIF/2006/001 COYS); Comments: This procedure involves the following tasks:b. Completed FIRS questionnaire; a. Preparing and printing the memorandum and articles of association;c. Copy of memorandum and articles of association; b. Completing the requisite statutory forms, and;d. Names and addresses of directors; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service.e. Copy of the certificate of incorporation; There is no stamp duty office in this state and the procedure is usually done in thef. Name, address of tax adviser; nearest city where there is one. The time for preparation of documents and stamp-g. Letter of appointment of tax adviser and a letter of acceptance. ing presented here is based on an assumption that the stamping is conducted at theThe application forms must be in triplicate and the original certificate of incorpora- stamp duty office in Sokoto and accounts for the travel time. Transportation cost totion must be presented for sighting by the controller before registration can be handle the stamping out-of-state is included in the cost for this procedure and thecompleted. Upon receipt of the completed taxpayer registration input form and all common practice is for the lawyers to charge this separately from the professionaldocuments, a tax reference number is allocated. An application must be filed for the fees.tax clearance certificate. Its issuance is not automatic.The fees for the tax clearance issuance are as follows: for newly registered companies Procedure 3. Declaration of Compliance (Form CAC 4) signedwithin 6 months of incorporation: no fee; for companies that are yet to commence before a Commissioner for Oaths or notary publicbusiness and show up for registration after 6 months of incorporation, if they request Time: 1 dayfor tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Cost: NGN 200time and NGN 20,000 is payable for subsequent years until it files a notice of com-mencement of business. Comments: A sworn declaration that the requirements of the Companies and Allied Matters Act have been met must be sworn to by (i) a barrister or solicitor engagedCompanies required to register for VAT should complete the VAT registration form in the formation of the company or (ii) by a person named in the memorandum and(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the articles of association as a director or secretary of the company. This procedure cannearest integrated tax office, which will issue a taxpayer identification number (TIN). be done before a notary public or filed at the state or federal High Court. The com-According to the VAT Act, companies required to register for VAT must do so within 6 mon practice is for this declaration to be sworn before a Commissioner of Oaths atmonths from the date of starting business operations. The TIN is issued in 1-2 days, the state High Court.but it is mailed with the VAT certificate, which is issued in a week. Procedure 4. Pay incorporation fees to the Corporate AffairsProcedure 7*. Register for personal income tax PAYE at the State Commission at a designated bankTax Office Time: 1 dayTime: 2 days Cost: NGN 27,000 (NGN 20,000 registration fees [NGN 10,000 for first 1 million sharesCost: No cost and then NGN 10,000 for every 1 million of part thereof] + NGN 3,000 for certifiedComments: The employers in the newly incorporated company are required to reg- true copy of memorandum and articles of association + NGN 2,000 for certified trueister with the relevant state tax authority for the purposes of deducting income tax copy of particulars of directors + NGN 2,000 for certified true copy of particulars offrom employees. Once an application is filed with a copy of the certificate of incor- shareholders)poration attached, a reference file is then opened for the company. There is no cost Comments: Payment is made to any of the receiving banks designated by the Cor-related to this registration. porate Affairs Commission.Procedure 8. Register business premises with the Ministry of Procedure 5. Register the company with the Corporate AffairsCommerce and Industry CommissionTime: 1 day Time: 14 daysCost: NGN 5,000 Cost: NGN 50,000 (legal fees)Comments: The newly incorporated company is required to register its business Comments: The applicant must file with the Corporate Affairs Commission the re-premises with the state Ministry of Commerce. Payments are made in cash directly quired incorporation documents and forms, which include:to the Ministry of Commerce and Industry and a permit for business premises regis-tration is issued. a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address;*This procedure can be completed simultaneously with previous procedures. c. Form CAC 7, Particulars of directors;
  • 92. 90 DOING BUSINESS IN NIGERIA 2010d. Form CAC 4, Declaration of compliance and the prescribed registration fees; LIST OF PROCEDURESe. Copy of the reservation of company name approval;f. Form CAC 2, Statement of share capital and return of allotment of shares. Dealing with construction permitsThe CAC introduced a same-day incorporation option at an increased statutoryfee (5 times that of standard incorporation). The fee schedule for registration is thefollowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for everyNGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN ABIA, Aba10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedures to build a warehouseNGN 7,000. Warehouse value: US$ 443,000 = NGN 59,003,170There is a legal requirement for the companys incorporators to hire a CAC accredited Data as of: January 2010professional usually a lawyer to undertake the administrative incorporation proce-dures. Given that the use of lawyers for such purposes is mandatory throughout the Procedure 1. Obtain an environmental impact assessment reportcountry, lawyer fees are accounted for in the overall incorporation costs. On average, a from a registered town plannerlawyer will charge NGN 50,000 to handle the entire incorporation process in this state. Time: 14 daysProcedure 6. Register with the integrated Tax Office of the Cost: NGN 100,000 (town planner fee)Federal Board of Inland Revenue for income tax and VAT Comments: BuildCo hires a registered town planner to analyze the site and draftTime: 5 days an environmental impact assessment (EIA) report. The EIA report lists the potential impact of the project on the environment, such as the noise, traffic and increaseCost: No cost in human density issues that might arise as a result of the development. In orderComments: Entrepreneurs can register for both corporate income tax and VAT at to draft the report, the town planner first verifies the survey plan (attached to thethe new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue certificate of occupancy) as well as the preliminary drawings prepared by BuildCosService (FIRS) will require the applicant to complete tax registration forms. The new architects and engineers, before conducting an on-site inspection. If deemed neces-company registers at a Federal Tax Office nearest to its place of business or registered sary, he may conduct interviews with relevant stakeholders living in the area. Afteroffice. A letter is written to the tax authority applying for a tax clearance certificate. the inspection, the town planner drafts the EIA report. Site Analysis Reports are onlyA form obtained from the tax office is filled and the following documents submitted required of residential buildings. Commercial buildings require an EIA.with it:a. Taxpayer registration input form (TRIF/2006/001 COYS); Procedure 2. Apply for a building permit at the Aba Townb. Completed FIRS questionnaire; Planning Authorityc. Copy of memorandum and articles of association; Time: 1 dayd. Names and addresses of directors; Cost: NGN 248,990 (NGN 55,740 planning rate + NGN 146,250 inspection fee + NGNe. Copy of the certificate of incorporation; 5,000 registration fee + NGN 2,000 charting fee + NGN 10,000 fencing fee + NGNf. Name, address of tax adviser; 5,000 certificate of fitness for habitation fee + NGN 10,000 stage permits + NGN 5,000 commencement of foundation fee + NGN 5,000 local government fee + NGNg. Letter of appointment of tax adviser and a letter of acceptance. 5,000 administration fee)The application forms must be in triplicate and the original certificate of incorpora- Comments: In order to obtain a building permit, BuildCo must submit a duly com-tion must be presented for sighting by the controller before registration can be pleted application form to the Aba Town Planning Authority, along with the follow-completed. Upon receipt of the completed taxpayer registration input form and all ing documents:documents, a tax reference number is allocated. An application must be filed for thetax clearance certificate. Its issuance is not automatic. a. Proof of ownership (such as a certificate of occupancy);The fees for the tax clearance issuance are as follows: for newly registered companies b. Survey plan (attached to the certificate of occupancy);within 6 months of incorporation: no fee; for companies that are yet to commence c. Five sets of drawings duly signed by a registered architect, including:business and show up for registration after 6 months of incorporation, if they request -for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first age system, construction details, doors and windows schedules);time and NGN 20,000 is payable for subsequent years until it files a notice of com-mencement of business. beams, columns, staircases, etc.);Companies required to register for VAT should complete the VAT registration form(VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the lighting point layout, schedule of fittings and fixtures);nearest integrated tax office, which will issue a taxpayer identification number (TIN).According to the VAT Act, companies required to register for VAT must do so within 6 disposal layout, schedule of sanitary fittings);months from the date of starting business operations. The TIN is issued in 1-2 days,but it is mailed with the VAT certificate, which is issued in a week. d. Environmental impact assessment report; e. Three-year tax clearance certificate;Procedure 7. Register for personal income tax PAYE at the State f. Certificate of structural stability signed by a registered engineer.Tax Office The documents are reviewed by the Aba Town Planning Authority. An on-site inspec-Time: 3 days tion will follow. Once the building approval has been granted, two copies of theCost: No cost drawing are given back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies of its building plans when inspections occur during construc-Comments: The employers in the newly incorporated company are required to reg- tion.ister with the relevant state tax authority for the purposes of deducting income taxfrom employees. Once an application is filed with a copy of the certificate of incor-poration attached, a reference file is then opened for the company. There is no cost Procedure 3. Receive a pre-approval inspection from the Abarelated to this registration. Town Planning Authority Time: 1 dayProcedure 8. Register business premises with the Ministry of Cost: No costCommerce and Industry Comments: Within 7 working days after BuildCo has submitted its application, theTime: 1 day Aba Town Planning Authority conducts an on-site inspection to verify that the plotCost: NGN 10,000 reflects the details provided in the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback de-Comments: The newly incorporated company is required to register its business tails, adjoining land and power and water connections are described. The inspectionpremises with the state Ministry of Commerce. Payments are made in cash directly report is then attached to the documents and drawings BuildCo submitted originally,to the Ministry of Commerce and Industry and a permit for business premises regis- and forwarded to the Town Planning Authority for final review and approval.tration is thereafter issued.*This procedure can be completed simultaneously with previous procedures.
  • 93. LIST OF PROCE DEALING WITH CONSTRUCTION PERMITS 91Procedure 4. Obtain a building permit from the Aba Town Procedure 10. Receive an inspection at second floor level by thePlanning Authority Aba Town Planning AuthorityTime: 21 days Time: 1 dayCost: No cost Cost: No costComments: After the inspection and the payments have been completed, the Aba Comments: Once the walls of the second floor are complete, BuildCos architectTown Planning Authority examines the documents submitted and issues BuildCo a must notify the Aba Town Planning Authority. A team of inspectors visits the con-building permit, along with signed copies of the plan. BuildCo must keep one copy struction-site to ensure that the project is duly supervised and that the constructionon the construction-site, to be presented when inspectors from the Aba Town Plan- follows the specifications mentioned in the building plan previously provided byning Authority come during construction for inspection. When BuildCo retrieves its BuildCo. Construction work does not stop during the inspection. If a problem is iden-building permit, it informs the Town Planning Authority of the day when the con- tified, the inspection teams issues a stop order requesting the issue to be resolvedstruction starts, so as to schedule an initial inspection. before construction proceeds further. If there is no problem, the Town Planning Authority issues BuildCo a receipt stating that the construction has been carried outProcedure 5. Dig a borehole to obtain water according to the approved building plans.Time: 7 days Procedure 11. Receive an inspection at roof level by the AbaCost: NGN 500,000 Town Planning AuthorityComments: The public water supply system is very unreliable. It is common practicefor construction companies to hire the services of a private borehole company to drill Time: 1 dayand install a borehole of commercial capacity. Cost: No cost Comments: Once the roof of the building is complete, BuildCos architect mustProcedure 6*. Pay a compensation to the natives notify the Aba Town Planning Authority. A team of inspectors visits the construction-Time: 1 day site to ensure that the project is duly supervised and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo.Cost: NGN 200,000 Construction work does not stop during the inspection. If a problem is identified, theComments: With the Land Use Act of 1978, the government appropriated land on inspection teams issues a stop order requesting the issue to be resolved before con-which local tribes lived. Since then, in Aba, construction companies wishing to de- struction proceeds further. If there is no problem, the Town Planning Authority issuesvelop a project must pay compensation to those natives, and hire some of them as BuildCo a receipt stating that the construction has been carried out according to themasons or security guards on the site. Cost varies on a case by case basis, and highly approved building plans.depends on the negotiation skills of the construction company. Procedure 12. Obtain a certificate of fitness for habitation fromProcedure 7. Receive an inspection at setting out level by the Aba the Aba Town Planning AuthorityTown Planning Authority Time: 7 daysTime: 1 day Cost: No costCost: No cost Comments: After the building has been completed, the Aba Town Planning Author-Comments: Before the construction starts. BuildCo must wait for the Aba Town Plan- ity issues BuildCo a certificate of fitness for habitation that certifies that the construc-ning Authority to send a team of inspectors to the construction-site to conduct an in- tion has been carried out according to the approved building plans, and that BuildCospection. The purpose of the inspection is to ensure that the related stage has been can now occupy the building.completed successfully, that the project is duly supervised, and that the constructionfollows the specifications mentioned in the building plan previously provided by Procedure 13*. Obtain a permanent phone connectionBuildCo. At the end of the inspection, the Town Planning Authority issues BuildCo areceipt stating that the construction has been carried out according to the approved Time: 1 daybuilding plans. Cost: NGN 5,000 (wireless land line) Comments: Nigerian Telecommunications Limited (NITEL), the public companyProcedure 8. Receive an inspection at foundation level by the historically in charge of providing phone landlines in Nigeria, is no longer function-Aba Town Planning Authority ing. Most Nigerian companies use a cell phone, with a subscription to one of theTime: 1 day operators available in the country (MTN, ZAIN, GLO or ETISALAT). In Aba, Nigerian companies also have the option of using a fixed wireless phone (MULTILINKS), at aCost: No cost higher cost (NGN 5,000). The phone line can be connected at any time before andComments: Once the setting out is complete, BuildCos architect must notify the during the construction.Aba Town Planning Authority. A team of inspectors visits the construction-site to en-sure that the project is duly supervised and that the construction follows the specifi- Procedure 14. Apply to the Power Holding Company of Nigeriacations mentioned in the building plan previously provided by BuildCo. Construction (PHCN) for a permanent electricity connectionwork does not stop during the inspection. If a problem is identified, the inspectionteams issues a stop order requesting the issue to be resolved before construction Time: 1 dayproceeds further. If there is no problem, the Town Planning Authority issues BuildCo Cost: NGN 31,500 (3 phase credit meter)a receipt stating that the construction has been carried out according to the ap- Comments: BuildCo applies for a permanent electricity connection by submitting aproved building plans. form and the relevant company documents to PHCN. On the application form, Build- Co must indicate its consumption capacity as well as the 3 phase meter required. AnProcedure 9. Receive an inspection at first floor level by the Aba inspection is then conducted. PHCN has not yet started introducing 3 phase pre-paidTown Planning Authority meters in Abia. At the moment, new connections are supplied with a credit meter.Time: 1 day Procedure 15. Receive an inspection from PHCN and pay theCost: No cost electricity fees at the bankComments: Once the ceiling of the first floor is complete, BuildCos architect mustnotify the Aba Town Planning Authority. A team of inspectors visits the construction- Time: 1 daysite to ensure that the project is duly supervised and that the construction follows Cost: No costthe specifications mentioned in the building plan previously provided by BuildCo. Comments: After submitting the documents to PHCN, an electrical contractorConstruction work does not stop during the inspection. If a problem is identified, the licensed by LECAN (Licensed Electrical Contractors of Nigeria) carries out an inspec-inspection teams issues a stop order requesting the issue to be resolved before con- tion on behalf of PHCN. After the inspection, the electrical contractor drafts a reportstruction proceeds further. If there is no problem, the Town Planning Authority issues and submits it to PHCN.BuildCo a receipt stating that the construction has been carried out according to theapproved building plans.
  • 94. 92 DOING BUSINESS IN NIGERIA 2010Procedure 16. Obtain a permanent electricity connection from Procedure 5. Receive a pre-approval inspection from thePHCN Adamawa State Urban Planning and Development AuthorityTime: 21 days Time: 1 dayCost: NGN 25,000 (contractor fees) Cost: No costComments: Once the inspection and the payment have been completed, PHCN con- Comments: After BuildCos application has been reviewed, the Adamawa State Ur-nects BuildCos warehouse to electricity. ban Planning and Development Authority conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suit- able for the proposed project. The inspectors draft a report in which the plot, roads,*This procedure can be completed simultaneously with previous procedures. setback details, adjoining land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted forDEALING WITH CONSTRUCTION PERMITS approval, and forwarded to the Adamawa State Urban Planning and Development ADAMAWA, Yola Authority for final review and approval.Procedures to build a warehouse Procedure 6. Obtain a building permit from the Adamawa StateWarehouse value: US$ 443,000 = NGN 59,003,170 Urban Planning and Development AuthorityData as of: January 2010 Time: 5 daysProcedure 1. Obtain an environmental impact assessment report Cost: No costfrom a registered town planner Comments: After the inspection and the payments have been completed, BuildCosTime: 19 days application is reviewed by the housing department, the engineering department and the health department. Once each department has endorsed the drawings, theCost: NGN 43,000 (0.25% of the first NGN 2 million of the warehouse value + 0.2% of application goes to the director of planning for final approval.the next NGN 3 million + 0.1% of the next 15 million + 0.05% of the next 30 million+ 0.02% of the next NGN 50 million) Procedure 7. Dig a borehole to obtain waterComments: BuildCo hires a registered town planner to analyze the site and draft anenvironmental impact assessment (EIA) report. The EIA report lists the potential im- Time: 7 dayspact of the project on the environment, such as the noise, traffic and increase in hu- Cost: NGN 500,000man density issues that might arise as a result of the development. In order to draft Comments: The public water supply system is very unreliable. It is common practicethe report, the town planner first verifies the site plan (attached to the certificate of for construction companies to hire the services of a private borehole company to drilloccupancy) as well as the preliminary drawings prepared by BuildCos architects and and install a borehole of commercial capacity.engineers, before conducting an on-site inspection. If deemed necessary, he mayconduct interviews with relevant stakeholders living in the area. After the inspection, Procedure 8*. Obtain a permanent phone connectionthe town planner drafts the EIA report, and gives 3 copies to Buildco, and retains one Time: 1 daycopy for himself. The cost of the EIA depends on the size of the project. Cost: NGN 6,000 (handset + connection)Procedure 2. Obtain a proof of ownership from the Ministry of Comments: Nigerian Telecommunications Limited (NITEL), the public company his-Land and Survey torically in charge of providing phone landlines in Nigeria, is no longer functioning. Most Nigerian companies use a cell phone, with a subscription to one of the opera-Time: 5 days tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can beCost: No cost connected at any time before and during the construction.Comments: In addition to the certificate of ownership, which BuildCo already pos-sesses, BuildCo must obtain a proof of ownership from the Ministry of Lands and Sur- Procedure 9. Apply to the Power Holding Company of Nigeriavey, in order to ensure that all ground rent payments on the property are up to date. (PHCN) for a permanent electricity connection Time: 1 dayProcedure 3. Obtain a building plan approval from the Ministry Cost: NGN 52,500 (3 phase pre-paid meter)of Works Comments: BuildCo applies for a permanent electricity connection by submittingTime: 5 days a form and the relevant company documents to PHCN. On the application form,Cost: NGN 5,000 BuildCo must indicate its consumption capacity as well as the meter (3 phase pre-Comments: Since the project involves a multi-storied building, BuildCo must submit paid) required. An inspection is then conducted. Payment for the meter is made at aall drawings and proofs of ownership to the Ministry of Works, where public archi- designated bank.tects and engineers review and approve the drawings. Procedure 10. Receive an inspection from PHCN and pay theProcedure 4. Apply for a building permit at the Adamawa State electricity fees at the bankUrban Planning and Development Authority Time: 1 dayTime: 1 day Cost: No costCost: NGN 4,500 (NGN 2,500 building plan approval + NGN 2,000 insurance of build- Comments: The PHCN business unit sends out a team to inspect the building. Ining permit) practice this is usually done on the same day the application is made. After the in-Comments: In order to obtain a building permit, BuildCo must submit a duly com- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at apleted application form to the Adamawa State Urban Planning and Development designated bank. BuildCo must then submit the receipt of the payment to the localAuthority, along with the following documents: PHCN for the electricity connection to proceed.a. Proof of ownership (such as a certificate of occupancy);b. Survey plan (attached to the certificate of occupancy); Procedure 11. Obtain a permanent electricity connection from PHCNc. Drawings duly signed by a registered architect, including: Time: 24 days - age system, construction details, doors and windows schedules); Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN con- beams, columns, staircases, etc.); nects BuildCos warehouse to electricity. Even though the actual connection can be made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- lighting point layout, schedule of fittings and fixtures); ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN disposal layout, waste disposal layout, schedule of sanitary fittings). (Licensed Electrical Contractors of Nigeria).The documents are reviewed by officers at the Adamawa State Urban Planning andDevelopment Authority. An on-site inspection will follow. *This procedure can be completed simultaneously with previous procedures.
  • 95. LIST OF PROCE DEALING WITH CONSTRUCTION PERMITS 93DEALING WITH CONSTRUCTION PERMITS Procedure 5. Obtain a building plan approval from the Uyo AKWA IBOM, Uyo Capital City Development Authority and pay the setting out feeProcedures to build a warehouse Time: 60 daysWarehouse value: US$ 443,000 = NGN 59,003,170 Cost: NGN 1,000 (setting out fee)Data as of: January 2010 Comments: After the inspection and the payments have been completed, the Direc- tor of Development Control makes a recommendation to the Chairman, in chargeProcedure 1. Obtain an environmental impact assessment report of the final approval. Before approval is given, the Uyo Capital City Developmentand a site analysis report from a registered town planner Authority (UCCDA) sends the drawings to an external consultant for review, whichTime: 10 days explains why this procedure is time consuming. If granted, the UCCDA gives BuildCoCost: NGN 115,000 (NGN 100,000 environmental impact assessment report + NGN a set of buildings plans marked with stamps of approval, along with a letter of ap-15,000 site analysis report) proval bearing the signature of the Director and the Executive Secretary and a regis- tration number to be displayed on the construction-site. The approval is valid for 18Comments: BuildCo hires a registered town planner to analyze the site and draft an months, after which a revalidation will be required. When coming to the Authority toenvironmental impact assessment (EIA) report. The EIA report lists the potential im- obtain its building plan approval, BuildCo pays a setting out inspection fee of NGNpact of the project on the environment, such as the noise, traffic and increase in hu- 1,000 at the cash office.man density issues that might arise as a result of the development. In order to draftthe report, the town planner first verifies the site plan (attached to the certificateof occupancy) as well as the preliminary drawings prepared by BuildCos architects Procedure 6. Dig a borehole to obtain waterand engineers, before conducting an on-site inspection. If deemed necessary, he Time: 14 daysmay conduct interviews with relevant stakeholders living in the area. The same town Cost: NGN 500,000planner also prepares a site analysis report (SAR), which details the location, acces- Comments: The public water supply system is very unreliable. It is common practicesibility and topography of the site, as well as the proximity of the site to essential for construction companies to hire the services of a private borehole company to drillservices: electricity source, water source, hospital, commercial area, airport, etc. After and install a borehole of commercial capacity.the inspection, the town planner drafts the EIA report and SAR, and gives 2 copies ofeach report to Buildco, and retains one copy for himself. Procedure 7*. Pay a compensation to the nativesProcedure 2. Swear an affidavit of plot ownership at the High Time: 7 daysCourt Cost: NGN 200,000Time: 1 day Comments: With the Land Use Act of 1978, the government appropriated land on which local tribes lived. Since then, in Uyo, construction companies wishing to de-Cost: NGN 200 (court fee) velop a project must pay compensation to those natives, and hire some of them asComments: BuildCo must swear an affidavit at the State High Court deposing to cer- masons or security guards on the site. Cost varies on a case by case basis, and highlytify his ownership of the land on which the construction is to be made. depends on the negotiation skills of the construction company.Procedure 3. Apply for a building plan approval at the Uyo Procedure 8. Receive an inspection at setting out level from theCapital City Development Authority Uyo Capital City Development AuthorityTime: 1 day Time: 1 dayCost: NGN 79,500 (NGN 10,000 inspection fee + NGN 60,000 approval fee [NGN Cost: No cost50,000 for the first floor level and NGN 10,000 for each additional floor level] + NGN Comments: Once the construction reaches the setting out stage, BuildCos architect7,500 fencing fee + NGN 2,000 security post fee) must notify the Uyo Capital City Development Authority that sends a team of inspec-Comments: In order to obtain a building plan approval, BuildCo must submit a duly tors to the construction-site. The purpose of the inspection is to ensure that the re-completed application form to the Uyo Capital City Development Authority, along lated stage has been completed successfully, that the project is duly supervised, andwith the following documents: that the construction follows the specifications mentioned in the building plan pre-a. Proof of ownership (such as a certificate of occupancy); viously provided by BuildCo. Construction work does not stop during the inspection.b. Survey plan (attached to the certificate of occupancy);c. Drawings duly signed by a registered architect, including: Procedure 9. Receive an inspection during construction from the Uyo Capital City Development Authority - age system, construction details, doors and windows schedules); Time: 1 day Cost: No cost beams, columns, staircases, etc.); Comments: Although the National Building code lists a precise inspection schedule, inspections in Uyo do not follow any particular order. During construction, a team lighting point layout, schedule of fittings and fixtures); of inspectors from the Uyo Capital City Development Authority randomly visits the site to ensure that the construction company has a building permit, that the project is duly supervised, and that the construction follows the specifications mentioned in disposal layout, waste disposal layout, schedule of sanitary fittings). the building plan previously provided by BuildCo. Construction work does not stopThe documents are reviewed by officers at the Uyo Capital City Development Au- during the inspection. In practice, during construction, 2 of these random inspec-thority (UCCDA). An on-site inspection will follow. After the inspection, BuildCo is tions occur.required to make the necessary payment at the accounts department in the UCCDApremises. Procedure 10. Receive an inspection during construction from the Uyo Capital City Development AuthorityProcedure 4. Receive a pre-approval inspection from the UyoCapital City Development Authority Time: 1 day Cost: No costTime: 1 day Comments: Same as above.Cost: No costComments: After BuildCos application has been reviewed, the Uyo Capital City De- Procedure 11*. Obtain a permanent phone connectionvelopment Authority conducts an on-site inspection to verify that the plot reflectsthe details provided in the drawings and that the land is suitable for the proposed Time: 1 dayproject. The inspectors draft a report in which the plot, roads, setback details, adjoin- Cost: NGN 6,000 (handset + connection)ing land and power and water connections are described. The report is then attached Comments: Nigerian Telecommunications Limited (NITEL), the public company his-to the documents and drawings BuildCo submitted for approval, and forwarded to torically in charge of providing phone landlines in Nigeria, is no longer functioning.the Director of Development Control for final review and approval. Most Nigerian companies use a cell phone, with a subscription to one of the opera- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be connected at any time before and during the construction.
  • 96. 94 DOING BUSINESS IN NIGERIA 2010Procedure 12. Apply to the Power Holding Company of Nigeria lighting point layout, schedule of fittings and fixtures);(PHCN) for a permanent electricity connectionTime: 1 day disposal layout, schedule of sanitary fittings);Cost: NGN 52,500 (3 phase pre-paid meter) d. Site analysis report;Comments: BuildCo applies for a permanent electricity connection by submitting a e. Three-year tax clearance certificate;form and the relevant company documents to PHCN. On the application form, Build-Co must indicate its consumption capacity as well as the meter (3 phase pre-paid) f. Certificate of structural stability signed by a registered engineer;required. Electricity connection fees are usually paid with a bank draft. g. Receipt of payment of fees. The documents are reviewed by Anambra State Urban Development Board. An on-Procedure 13. Receive an inspection from PHCN and pay the site inspection will follow. Once the building approval has been granted, two copieselectricity fees at the bank of the drawing are given back to BuildCo to be kept on-site. BuildCo may need toTime: 1 day present the stamped copies of its building plans when inspections occur during construction.Cost: No costComments: The PHCN business unit sends out a team to inspect the building. In Procedure 3. Pay the building plan approval fees at a designatedpractice this is usually done on the same day the application is made. bankProcedure 14. Obtain a permanent electricity connection from Time: 1 dayPHCN Cost: NGN 57,010 (NGN 500 application form + NGN 5,000 registration fee + NGN 19,510 inspection fee [NGN 5 per cubic meter] + NGN 100 filing fee + NGN 300 build-Time: 18 days ing regulation fee + NGN 10,000 development fee [NGN 10 per square meter of theCost: No cost area of the plot] + NGN 2,000 approval fee + NGN 5,000 building completion fee +Comments: Once the inspection and the payment have been completed, PHCN con- NGN 5,000 setting out fee + NGN 9,600 fencing fee)nects BuildCos warehouse to electricity. Even though the actual connection can be Comments: BuildCo is given a payment order to be submitted to and paid at amade in a matter of days, due to supply problems of 3 phase pre-paid meters, it can designated bank. After payment, BuildCo is given a teller – or bank receipt – to betake longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- submitted back to the Anambra State Urban Development Board. The Board thened consumption monthly fee to PHCN. Except for the application and the inspection, schedules a pre-approval inspection at BuildCos development site.all other electricity related processes are handled by a contractor licensed by LECAN(Licensed Electrical Contractors of Nigeria). Procedure 4. Receive a pre-approval inspection from the Anambra State Urban Development Board*This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: No costDEALING WITH CONSTRUCTION PERMITS Comments: After BuildCos application has been reviewed, the Anambra State Urban ANAMBRA, Onitsha Development Board conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the proposed project.Procedures to build a warehouse The inspectors draft a report in which the plot, roads, setback details, adjoining landWarehouse value: US$ 443,000 = NGN 59,003,170 and power and water connections are described. The report is then attached to theData as of: January 2010 documents and drawings BuildCo submitted for approval, and forwarded to the Ana- mbra State Urban Development Board for final review and approval.Procedure 1. Obtain a site analysis report and a town plannerTechnical Report (TPTR) from a registered town planner Procedure 5. Obtain a building plan approval from the AnambraTime: 14 days State Urban Development BoardCost: NGN 62,500 (NGN 22,500 site analysis report + NGN 40,000 TPTR) Time: 21 daysComments: BuildCo hires a registered town planner to draft a site analysis report Cost: No costand a town planners Technical Report (TPTR), documents both drafted by the same Comments: After the inspection and the payments have been completed, the docu-town planner at the same time. To obtain the site analysis report, BuildCo must ments submitted for approval - along with the inspection report, the receipt issuedprovide the town planner with the survey plan (usually attached to the Certificate by the bank and the remaining copies of the plan - are scrutinized by the engineersof Occupancy) and the site plan (prepared by BuildCos architect). The town planner and architects working for the Anambra State Urban Development Board. After eachthen checks his records, conducts an on-site inspection and drafts the report. For the professional has cleared BuildCos application, the zonal town planner of the Ana-TPTR, BuildCo must provide the architectural plan, the location plan and the survey mbra Urban Development Board puts a final stamp on the application, granting theplan to the town planner, who will verify the location, the access to roads and the approval. If the approval hasnt been granted in 21 days, BuildCo can assume thatsurrounding car parks. After this inspection, the town planner drafts a report con- the permission has been granted de facto and proceed with the construction. Withtaining the layout plan (position of the warehouse within the plot) and the percent- the building plan approval, BuildCo is given a Work Progress Chart on which inspec-age of the built area within the plot of land. Contrary to the site analysis report, the tors will record every inspection conducted during construction. The inspectionTPTR is required only for commercial and industrial buildings, and contrary to the schedule mentioned on the Work Progress Chart is not followed dutifully, but servesenvironmental impact assessment report, the TPTR is required even of warehouses as a guideline.storing non hazardous material Procedure 6. Dig a borehole to obtain waterProcedure 2. Apply for a building plan approval at the Anambra Time: 7 daysState Urban Development Board Cost: NGN 500,000Time: 1 day Comments: The public water supply system is very unreliable. It is common practiceCost: No cost for construction companies to hire the services of a private borehole company to drillComments: In order to obtain a building plan approval, BuildCo must submit a duly and install a borehole of commercial capacity.completed application form to the Anambra State Urban Development Board, alongwith the following documents: Procedure 7*. Pay a compensation to the nativesa. Proof of ownership (such as a certificate of occupancy); Time: 1 dayb. Survey plan (attached to the certificate of occupancy); Cost: NGN 200,000c. Five sets of drawings duly signed by a registered architect, including: Comments: With the Land Use Act of 1978, the government appropriated land on - which local tribes lived. Since then, in Onitsha, construction companies wishing to age system, construction details, doors and windows schedules); develop a project must pay compensation to those natives, and hire some of them as masons or security guards on the site. Cost varies on a case by case basis, and highly beams, columns, staircases, etc.); depends on the negotiation skills of the construction company.
  • 97. LIST OF PROCE DEALING WITH CONSTRUCTION PERMITS 95Procedure 8. Receive an inspection at setting out level from the Comments: BuildCo applies for a permanent electricity connection by submitting a form and the relevant company documents to PHCN. On the application form,Anambra State Urban Development Board BuildCo must indicate its consumption capacity as well as the meter (3 phase pre-Time: 2 days paid) required. An inspection is then conducted. Payment for the meter is made at aCost: No cost designated bank.Comments: Once the setting out is complete, BuildCos architect must notify the An-ambra State Urban Development Board. A team of inspectors visits the construction- Procedure 15. Receive an inspection from PHCN and pay thesite to ensure that the project is duly supervised and that the construction follows electricity fees at the bankthe specifications mentioned in the building plan previously provided by BuildCo. Time: 1 dayConstruction work does not stop during the inspection. If a problem is identified, the Cost: No costinspection teams issues a stop order requesting the issue to be resolved before con-struction proceeds further. If there is no problem, the inspecting team signs the work Comments: The PHCN business unit sends out a team to inspect the building. Inprogress chart kept on-site by the supervising architect. practice this is usually done on the same day the application is made. After the in- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present atProcedure 9. Receive an inspection at first floor level from the a designated bank.Anambra State Urban Development Board Procedure 16. Obtain a permanent electricity connection fromTime: 1 day PHCNCost: No cost Time: 26 daysComments: Once the foundation is complete, BuildCos architect must notify the Cost: No costAnambra State Urban Development Board. A team of inspectors visits the construc-tion-site to ensure that the project is duly supervised and that the construction fol- Comments: Once the inspection and the payment have been completed, PHCN con-lows the specifications mentioned in the building plan previously provided by Build- nects BuildCos warehouse to electricity. Even though the actual connection can beCo. Construction work does not stop during the inspection. If a problem is identified, made in a matter of days, due to supply problems of 3 phase pre-paid meters, it canthe inspection teams issues a stop order requesting the issue to be resolved before take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat-construction proceeds further. If there is no problem, the inspecting team signs the ed consumption monthly fee to PHCN. Except for the application and the inspection,work progress chart kept on-site by the supervising architect. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria).Procedure 10. Receive an inspection at second floor level fromthe Anambra State Urban Development Board *This procedure can be completed simultaneously with previous procedures.Time: 1 dayCost: No cost DEALING WITH CONSTRUCTION PERMITSComments: Once the first floor is complete, BuildCos architect must notify the Ana- BAUCHI, Bauchimbra State Urban Development Board. A team of inspectors visits the construction- Procedures to build a warehousesite to ensure that the project is duly supervised and that the construction follows Warehouse value: US$ 443,000 = NGN 59,003,170the specifications mentioned in the building plan previously provided by BuildCo.Construction work does not stop during the inspection. If a problem is identified, the Data as of: January 2010inspection teams issues a stop order requesting the issue to be resolved before con-struction proceeds further. If there is no problem, the inspecting team signs the work Procedure 1. Obtain an environmental impact assessment reportprogress chart kept on-site by the supervising architect. and a site analysis report from a town planner at the Bauchi State Urban Development BoardProcedure 11. Request and receive a final inspection from the Time: 5 daysAnambra State Urban Development Board Cost: NGN 50,000 (town planner fees)Time: 1 day Comments: BuildCo hires a registered town planner to analyze the site and draft anCost: No cost environmental impact assessment (EIA) report. The EIA report lists the potential im-Comments: BuildCo notifies the Anambra State Urban Development Board that the pact of the project on the environment, such as the noise, traffic and increase in hu-construction is completed. A final inspection ensues, during which the Urban Devel- man density issues that might arise as a result of the development. In order to draftopment Board ensures that BuildCos warehouse abide by the details provided in the the report, the town planner first verifies the site plan (attached to the certificatedrawings and by the safety/construction standards described in the law. of occupancy) as well as the preliminary drawings prepared by BuildCos architects and engineers, before conducting an on-site inspection. If deemed necessary, he may conduct interviews with relevant stakeholders living in the area. The same townProcedure 12. Obtain a certificate of completion from the planner also prepares a site analysis report (SAR), which details the location, acces-Anambra State Urban Development Board sibility and topography of the site, as well as the proximity of the site to essentialTime: 21 days services: electricity source, water source, hospital, commercial area, airport, etc. AfterCost: No cost the inspection, the town planner drafts the EIA report and SAR, and gives 2 copiesComments: After the final inspection, the Anambra State Urban Development Board of each report to Buildco, and retains one copy for himself. BuildCo has the choiceissues BuildCo a certificate of completion attesting that the construction has been between hiring a professional from the Bauchi State Urban Development Board, acarried out according to the building plans submitted, and that BuildCo can now oc- common practice, or hire a private professional.cupy the building. Procedure 2. Apply for a building plan approval at the BauchiProcedure 13*. Obtain a permanent phone connection State Urban Development BoardTime: 1 day Time: 1 dayCost: NGN 6,000 (handset + connection) Cost: No costComments: Nigerian Telecommunications Limited (NITEL), the public company his- Comments: In order to obtain a building plan approval, BuildCo must submit a dulytorically in charge of providing phone landlines in Nigeria, is no longer functioning. completed application form to the Bauchi State Urban Development Board, alongMost Nigerian companies use a cell phone, with a subscription to one of the opera- with the following documents:tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be a. Proof of ownership (such as a certificate of occupancy);connected at any time before and during the construction. b. Survey plan (attached to the certificate of occupancy); c. Four sets of drawings duly signed by a registered architect, including:Procedure 14. Apply to the Power Holding Company of Nigeria -(PHCN) for a permanent electricity connection age system, construction details, doors and windows schedules);Time: 1 dayCost: NGN 62,500 (NGN 10,000 processing fee + NGN 52,500 pre-paid 3 phase meter) beams, columns, staircases, etc.);
  • 98. 96 DOING BUSINESS IN NIGERIA 2010 Procedure 9. Apply to the Power Holding Company of Nigeria lighting point layout, schedule of fittings and fixtures); (PHCN) for a permanent electricity connection disposal layout, schedule of sanitary fittings); Time: 1 dayd. Environmental impact assessment report; Cost: NGN 52,500 (3 phase pre-paid meter)e. Site analysis report. Comments: BuildCo applies for a permanent electricity connection by submitting a form and the relevant company documents to PHCN. On the application form, Build-The documents are reviewed by Bau