The Republic of Nigeria is an economically attractive country located in the west of Africa that shares the Gulf of Guinea with Benin and Cameroon. The oil-rich country is the most populous in Africa, with over 220 million people. Nigeria is the 12th largest producer of crude oil in the world and the 8th largest exporter.

The state's main economic sectors are represented in the form of: natural resource extraction, agriculture, fishing, light industry and heavy industry.
The state's currency is the Nigerian naira (NGN). English is legally recognised as the state language.
Nigeria has an active foreign policy aimed at rapid international integration and cooperation. The fruits of this policy can be seen in the participation in a large number of international organisations. International organisations in which Nigeria is directly involved: African Development Bank, ECOWAS, IAEA, WTO, Organisation of Islamic Cooperation (OIC) and others.

6 simple steps to purchase a company

  1. choosing a country

  2. choosing a bank

  3. payment (by any method)

  4. sending documents

  5. company registration

  6. bank account opening

Main advantages

Out of the the advantages that are open to founders when incorporating a company in Nigeria, it is worth noting in particular:

  1. Annual growth in economic performance;
  2. Existence of double taxation agreements with most countries;
  3. Availability of inexpensive labour;
  4. Availability of special economic zones;
  5. Relatively flexible taxation.
  6. There are currently no specific rules for controlled foreign companies in Nigeria.

Type of legal entity:

According to current legislation in Nigeria, incorporation of such companies would be very attractive to foreign founders:

Private Limited Company (LTD)

Shareholders enjoy limited liability, which means that their personal assets are not subject to charges in the event of insufficient assets for liabilities incurred against the company's creditors, and their risk is reduced to their shares in the company only. Shareholders are not allowed to dispose of their part of the company to the general public on any stock exchange. Due to the simplicity of this structure and the advantages of the company, it is one of the most common forms of registered business in Nigeria.

Public Limited Company (PLC)

A public limited company differs from a private limited company in that it is able to sell its shares to the public through a stock exchange. In such a company, the shareholders are only liable for the amount of capital they have invested in the company. There is no limit to the maximum number of participants who can join the company.

Legal Entity Features:

Founders should consider the specifics of incorporating a company in Nigeria:

  1. A unique company name (the ending must include the chosen form of incorporation);
  2. Required number of directors: minimum 2 (legal persons/individuals);
  3. Number of shareholders required: minimum 2 (individuals/companies);
  4. Resident status of a director/shareholder: Any;
  5. Requirement of a secretary: mandatory;
  6. Requirement of a physical local office: mandatory;
  7. Annual reporting: yes.
  8. Corporate shareholders are allowed

Taxation Features:

The Finance Act 2019 divides companies into three categories for the purpose of paying corporation tax. They include the following:

  1. Small companies: these are companies with an annual income of less than 25 million naira (NGN), with a tax rate of 0%.
  2. Medium companies: these are companies with annual revenues between 25 million and 100 million. NGN, with a 20% payable tax rate.
  3. Large companies: These are companies with annual revenues of 100 million or more. NGN and above, with a 30% payable tax rate.

The value added tax rate in Nigeria is 7.5%.

Capital gains tax rate: 10%.

Dividends paid by resident companies to other resident companies are subject to a 10% tax at source.

The above does not constitute tax or legal advice for your specific situation.

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