Key Takeaways: - Overview and Business Environment - Setting up of Business and Obtaining Permits - Tax Profile and Concessions - Impact of Covid and Reforms - Key Statistics including FDI and ODI

1. Doing Business in Nigeria
CA Divakar Vijayasarathy

2. RESEARCH CREDITS
Gracelin Lita
Subash R
Sundarrajan S
CA Jugal Gala

3. Legends Used in the Presentation
CAC Corporate Affairs Commission
DTAA Double Taxation Avoidance Agreement
EODB Ease of Doing Business
FCT Federal Capital Territory
FIRS Federal Inland Revenue Service
GDP Gross Domestic Product
NIPC National Investment Promotion Commission
PCP GDP Per Capita Gross Domestic Product
TIN Taxpayer Identification Number
VAT Value Added Tax

4. Presentation Schema
Country Overview Setting Up Business Registration with CAC
Obtaining Business
Permit and Expat
Certificate
Registration with FIRS Tax Profile
Relevant Statistics
Covid-19 Impact and
Reforms
Conclusion

5. Country Overview

6. Demography and Wealth
Urbanization
51% of population is urbanized
Popular Cosmopolitan Cities:
Lagos, Ibadan, Abuja, FCT
Real GDP (2019)
-GDP $480 Billion- Largest in
Africa (27th in world ranking)
-PCP GDP $2386- 138th in
world ranking
Population
206 Million (Densely Populated)
Largest in Africa
6th Largest in the world
Real Wealth
5th in Uranium
7th in Natural Gas
11th in Oil Reserves
Other resources: Tin, Iron Ore
and Coal
Per Capita Income
USD 2229.86 (2019)

7. Business Environment
Top 5 sectors (by GDP
contribution)
Agriculture- 22%
IT- 10.1%
Oil- 8.93%
Manufacturing- 8.5%
Mining- 8.5%
Real Estate- 7.7%
Employment
Distribution
Agriculture- 21.91%
Industry- 27.38%
Services- 49.73%
Governance Score
Score: 47.9
Ranking 33rd out of
54 African countries
EODB
131st rank
As far as exports are concerned, oil industry remains the main contributor. Over
90% of Nigeria’s export value is generated by export of oil and mineral fuels.

8. Poverty and Unemployment - 2020
Poverty
40% of total population in
poverty
Inflation
13.5%
Unemployment Rate
Among total
workforce: 27%
unemployed
Among Youth aged
between 15 and 34:
35% unemployed

9. Setting Up of Business

10. Regulatory Authorities
Corporate Affairs
Commission (CAC)
Nigerian Investment
Promotion Commission
(NIPC)
Federal Inland Revenue
Service (FIRS)
• Regulates registration and work
of companies
• Fulfils provisions of Companies
and Allied Matters Act
• Encouraging, promoting and
coordinating investment in the
Nigerian economy.
• Assessing, collecting and
accounting value-added tax and
corporate income tax.
• Ensuring compliance of tax laws.

11. Preliminary Work for Starting Business
Registration with
CAC
Registration with
NIPC
Obtaining
Business Permit
and Expat Quota
Registration with
FIRS

12. Registration with CAC
(i.e. Incorporation)

13. Types of Business Structures
Types of
Registrable
Organizations in
Nigeria
Company Limited by Shares (Ltd or Pvt Ltd)
Company limited by guarantee (Ltd or Gte)
An unlimited liability company (Ultd)
Business Names- Sole Proprietorship or Partnership (LLP)
The registration process with the CAC can be completed at a cost of less than 30,000 Naira
(80 USD) within a maximum time period of 4-5 days
Any one of the above structures can be selected for pursuing business venture.
However, the most commonly registered structure for large scale operations is a company
limited by shares which comes with its inherent advantages.

14. Registration of Company Limited by Shares
In Company Registration Portal
• Check for name availability (publicsearch.cac)
• Reserve new name
• Complete online pre-registration form (Form CAC 1.1)
• Pay filing and Stamp Duty Fees
Prepare the signed scan-copy of your pre-registration documents as follows:
• Form CAC1.1
• Memorandum and Article of Association (MEMART)
• Recognized form of identification for Director(s)/Subscriber(s) and Secretary
• For Non-Nigerian Directors- Copy of International Passport and Residence Permit (if Nigerian
address is used) are also to be attached
• Evidence of fee-payment to CAC
Documents are then submitted to CAC for processing (docupload.cac).
After processing, original copies of the documents uploaded are submitted to the CAC office selected
in exchange for registration certificate and the Certified True Copies of the documents..

15. Other Conditions
• Minimum 2 directors
• Maximum- As determined by AOA.
• It is not necessary for a company to have local directors
No of
Directors in a
company
• For Private Limited- Not more than 50 non-employee
shareholders
• For Public Limited- Unlimited
No of
Shareholders
• For Private Limited- N10,000 (USD 26)
• For Public Limited- N500,000 (USD 1310)
• For Company with Foreign Participation- N10,000,000 (USD
26,250)
Minimum
Authorised
Share Capital

16. Registration of Business Name (Partnership or Sole
Proprietorship)
Upload the scanned documents for processing.
Prepare the signed scan copy of your pre-registration documents for upload as follows:
Application form Filing fee receipt Means of identification
Pay filing fee
Complete pre-registration form – CAC-BNo1 (Online using Company Registration Portal)
Check for availability of the Business Name
• Registration of Business Name can be done by the sole proprietor himself or any one
of the partners in case of partnership.
• The registration can be completed within 48 hours at a cost of just N10,000.
Procedure for registration

17. Investing in Existing Business
Foreign investors or offshore companies can hold 100% equity stake in any Nigerian company.
Approval has to be sought from NIPC for the investment.
Dividends or profits can be freely repatriated and are also tax free for the first three years of
investment.

18. Market Players
OilProduction
• Shell Oil
• Chevron
• Total
Nigeria
Mining
• Agropet
Nigeria
• Eta-Zuma
Group
• Greenfield
Metals
Limited
IT&Communication
• MTN
Nigeria
• Globacom
Nigeria
• Airtel
• 9 Mobile
Construction
• Julius
Berger
• Reynolds
Constructi
on
• Setraco
Nigeria
• Brunelli
Constructi
on
RealEstate
• Jide Taiwo
& Co
• Cadwell
Limited
• Primrose
Developm
ent

19. Businesses Registered Across Sectors and Cities
in 2019
112
84
28
24
22
464
0 100 200 300 400 500
Wholesale and Retail…
Manufacturing
Mining and Quarrying
IT
Construction
Total
No of Foreign Companies in Major
Sectors (2019)
295
55
28
464
Popular Cities by Foreign Companies
Registered (2019)
LAGOS FCT ABUJA Total

20. Obtaining Business
Permit and Expat
Certificate

21. Registration with Nigerian Investment
Promotion Commission (NIPC)
A company with foreign participation must apply for registration with the NIPC before
commencing business in Nigeria. The following documents are required to register with the NIPC
Duly completed NIPC BRC Form I;
Certificate of Incorporation;
Memorandum & Articles of Association;
Form CAC 1.1
Power of Attorney/ Letter of Authority (where applicable); and
Evidence of Payment of Processing fee of N15,000
Upon approval, the NIPC issues a Certificate of Registration of Business with Foreign
Participation. The NIPC aims to revert within 24hours of submitting an application.

22. Business Permit
Foreign individuals and corporates planning to do business in Nigeria can do so only after seeking Business
Permit from the Ministry of Interior Affairs.
An application letter to the Permanent Secretary of the Ministry for Interior Affairs.
Certificate of registration obtained from NIPC.
Certificate of incorporation obtained from CAC.
A copy of CAC forms showing statement of share capital structure and particulars of directors.
Memorandum and articles of association.
Tax Clearance Certificate.
Evidence of acquisition of business premises (Lease Agreement or Certificate of Occupancy).
Feasibility report (should be certified or registered with CAC)
Joint Venture Agreement for partnership venture between Nigerian and foreigners
Fees for obtaining business permit is generally N180,000 (USD 475).
The following documents are required to obtain business permit

23. Expatriate Quote
Expatriate quota is the authorization to a company to employ individual expatriates to
specifically approved job designations, and also specifying the permissible duration of
such employment.
The expatriate quota forms the basis for work permit and is generally processed along
with the business permit and is therefore applied at the same time.
The documents required for obtaining expat quota is the same as in the case of
Business Permit with additional details on employees and their job profile.
Types of
Expat
Quota
Permanent Until Reviewed (PUR)
Granted to the very top management of
a Company and reserved for the
position of the Chairman or the
Managing Director
Temporary
Reserved for the position of a Director
and other employees of the Company. It
is reserved for positions that would be
occupied on a temporary basis

24. Registration with FIRS

25. Registration with Tax Authorities
Every company or business name must be registered with the FIRS and obtain Tax Identification
Number (TIN) and Value Added Tax (VAT) Number.
However new businesses are exempt from paying corporate tax during the first four years of
taking registration.
Apply for TIN (generally
applied along with CAC
registration)
Obtain VAT number by
filling Form 001 at the
nearest FIRS office
Obtain e-Tax Clearance
Certificate from FIRS as
a proof that no dues
are payable by you
during the first four
years (explained
subsequently)
Steps for registration:

26. Tax Profile
CorporateTax
• 30%
20%-if
turnover
below
100Mn
• Capital
Gains Tax-
10%
• DTAA
entered
with 13
countries
(not with
India)
PersonalTax
• Rate of tax
ranges from
7%-24%
• Relief
Allowance
is higher of
N200,000
or 1% of
gross
income
VAT
• Flat rate of
5% (no
threshold
for
registration)
• Non-oil
Exports are
zero rated
WithholdingTax(WHT)
• 10% for
dividend,
interest and
royalty.
7.5% if
DTAA is in
place.
• In any case
does not
exceed
10%.
Duedateforfilingreturns
• Corporate-
Within 6m
from the
end of Acc.
year
• Personal-
31st March
of every
year
• VAT and
WHT- Not
later than
21st day of
every
succeeding
month
Newly incorporated companies are exempt from corporate tax for first four calendar years.
Small businesses having turnover of N25 million or less are also exempt from corporate tax.

27. Tax Holiday and Concessions
Companies investing in specified industrial activities (glass and glassware manufacturing, manufacturing
of fertilisers and steel manufacturing) may, on application, be granted tax holiday for 3 years + 2 years
subject to specified conditions
A new company that engages in the mining of solid minerals is exempt from tax for the first three years
of its operation.
Companies carrying out agricultural production are exempt from income tax for a period of five years
(which can be further extended for an additional three years)
Company engaged in an approved manufacturing activity in an EPZ and incurs expenditure in qualifying
building and plant equipment is entitled for 100% capital allowance

28. Contd
25% of the income derived from tourism by hotels in convertible currencies is exempt from tax if such
income is put in a reserve fund to be utilised within five years for expansion or construction of new
hotels and other facilities for tourism development.
Interest accruing on deposit accounts of a non-resident company is tax-exempt, provided the depositor
does not become non-resident after making the deposit while in Nigeria. Interest on foreign-currency
domiciliary accounts is also tax-exempt.
An investment allowance of 10% on the cost of qualifying expenditures in respect of plant and
machinery is available as a deduction from assessable profits in the year of purchase.
Companies engaged in gas utilization are entitled to a tax free period upto 5 years and tax free dividends
during this period

29. Key Statistics

30. GDP Growth
6.31
2.65
-1.62
0.81
1.92
2.21
-3
-2
-1
0
1
2
3
4
5
6
7
2014 2015 2016 2017 2018 2019
GDP Growth (Annual %)
GDP Growth (Annual %)

31. Tax Revenue
3307.46
4027.94
5320.9 5263.11
2478.65
0
1000
2000
3000
4000
5000
6000
2016 2017 2018 2019 2020
Tax Collection (NGN in billion)
Petroleum profit tax Non-oil taxes Total
Note: Data for 2020 includes tax revenue for Q1 and Q2

32. Tax to GDP Ratio
7.6
6.1
5.3
5.7 5.7
0
1
2
3
4
5
6
7
8
2014 2015 2016 2017 2018
Components of tax Revenue as % of GDP
Tax on Goods and Services Tax on income and profits
Social security contributions Total Tax revenue

33. Net Trade in Goods and Services
2014, -1.86
2015, -22.9
2016, -8.551
2017, -0.8613
2018, -5.6
2019, -30.893
-35
-30
-25
-20
-15
-10
-5
0
Net Trade in Goods and Services (US $ in billion)
Net Trade in Goods and Services

34. Capital Importation
1446.62
1044.02
981.75 1194.67 934.34 362.84
6005.43
1812.88
7329.06
11802.27
16365.46
4694.79
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2015 2016 2017 2018 2019 2020
Capital Importation (US$ in million)
FDI FPI Other investments
Note: Data for 2020 relates to Q1 and Q2

35. Capital Importation - Sectorwise
5726.29
1466.04
7502.52
10425.18
5335.3
1281.95
913.54
932.51
937.12
2022.76
7658.49
3130.42
0 2000 4000 6000 8000 10000 12000
2015
2016
2017
2018
2019
2020
Capital importation – Sector/Nature of business (US$ in million)
Trading Telecom Servicing Production Financing Banking Agriculture Shares
Note: Data for 2020 relates to Q1 and Q2

36. Other Relevant Numbers
Time taken to register property
92 days
Time taken to trade across borders:
Time to export:
Documentary compliance 74 hours
Border compliance 128 hours
Time to import:
Documentary compliance 120 hours
Border compliance 242 hours

37. Covid-19 Impact and
Reforms

38. Covid-19 Impact
• Contracted by
6.1% in Q2-2020
GDP
• Avg. daily oil production
in Q2 2020 has declined
by 10% QoQ.
• Growth rate of oil
sector in Q2 declined by
11%.
Oil production
• Confirmed cases:
60,834
• Recovery Rate:
99%
Covid Cases
• Recovery to be long
and steep
• Nigeria’s economy to
shrink by 3.3% at the
end of 2020
Post-Covid
Recovery (World
Bank estimate)

39. Covid-19 Reforms
• 1 year extension of a moratorium on principal repayments for Central Bank of Nigeria (CBN)
intervention facilities (subsidised finance facility)
• Reduction of the interest rate on intervention loans from 9 percent to 5 percent
• Granting regulatory forbearance to banks to restructure terms of facilities in affected sectors
• Additional NGN* 100 billion intervention fund in healthcare loans to pharmaceutical
companies and healthcare practitioners intending to expand/build capacity
• Strengthening of the Loan to Deposit ratio policy (i.e. stepped up enforcement of directive to
extend more credit to the private sector)
• Release of NGN 1 trillion in loans to boost local manufacturing and production across critical
sectors
Economic
stimulus
measures
• The crude oil benchmark price was reduced from USD 57 to USD 30
• CBN pledged to pump NGN 1.1 trillion (USD 3 billion) into critical sectors of the economy
• Commencement of a three month repayment moratorium for all TraderMoni, MarketMoni
and FarmerMoni loans (collateral free loans offered to petty traders and farmers)
• Similar moratorium to be given to all Federal Government funded loans issued by the Bank
of Industry, Bank of Agriculture and the Nigeria Export-Import Bank
Fiscal Policy

40. Contd
• Extension of the due date for filing of value added tax (VAT) and withholding tax returns
from the 21st day of the month to the last business day of the month, following the month
of deduction
• Use of electronic platforms for paying taxes and processing tax clearance certificates and
enabling e-filing of tax returns by taxpayers
• Waiver of late returns penalty for taxpayers who pay their tax liabilities early but submit
their tax returns later. Evidence of tax payment can be forwarded to the relevant Federal
Inland Revenue Service (FIRS) e-mail address, or submitted later to the appropriate tax
office
Tax measures
• Federal Government seeks to cut planned spending in the 2020 budget by about ₦GN 1.5
trillion (USD 4 billion), including a 20 percent cut to capital expenditure and a 25 percent
cut to recurrent expenditure
• Suspension of payment of the new electricity tariffs scheduled to commence on 2nd April
2020 citing poor electricity supply, wide metering gap and the impact of the COVID-19
pandemic
• Federal Government further slashed the price of Premium Motor Spirit (petrol) from
NGN 125 to NGN 123.50 per liter, with effect from April 1, 2020
Other Measures

41. Conclusion
Currently Oil, Mining, Quarrying, Manufacturing and IT are sectors which can be easily ventured
into by foreigners to make profits.
The abundance of workforce under the age of 34 is a factor contributing to development.
However the same is subdued by increase in unemployment and underemployment.
There are criticisms among the business fraternity regarding the requirement of Business
permit, NIPC permission, and Work Permit all of which serve similar purposes and are yet to be
consolidated as a single procedure.
Low tax rates and tax incentives for new and small businesses help in incubating start-ups.
Federal Government in Nigeria is taking all steps to improve EODB. Automation has been the
forefront of developing EODB as is the case with many developing countries.

42. Thank You!
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