Investor Presentaiton
The Country and its
institutions
COVID-19 Economic
Business Organisation Labour and Social
and Regulation
Security Regulations
The Nigerian Financial
Services Industry
Tax System
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods
Exportation of Goods
and Fiscal Measures
Foreign investment capital, both in cash and in kind (e.g., by way of machinery and
equipment, technical expertise and services), plays a vital role in the development of
Nigeria.
In theory, there are different kinds of investment vehicles used for carrying on business in
Nigeria. These include partnerships, unincorporated joint ventures and corporate entities.
In practice, investment by foreign investors is made through a limited liability company.
7.1
Exemption from Incorporation
Under Section 54 of CAMA, no foreign company may carry on business in Nigeria
unless it incorporates a local company in Nigeria. However, the Federal Executive
Council (FEC) is empowered by Section 56 to grant exemption from this mandatory
requirement.
The categories of foreign companies that are eligible for exemption are:
•
Foreign companies invited by or with the approval of the Federal Government to
execute special projects;
Foreign companies which are in Nigeria for the execution of specific loan
projects on behalf of donor countries or international organisations;
• Foreign government-owned companies engaged solely in export promotion
activities; and
Engineering consultants and technical experts engaged in specialist projects
under contracts with any of the Governments of the Federation or any of their
agencies or under contracts with any person where such contracts have been
approved by the Federal Government.
Exemption from the local incorporation requirement may confer tax-free status
on the beneficiary for the duration of the exemption. However, it does not confer
automatic tax-exempt status in the absence of a certificate to that effect. The
grant of exemption status has become increasingly rare, and entities previously
granted this status have, generally, been unable to renew their status on expiration
of the initial period. The ability to perform as a local entity is an important factor in
contract awards as bid requirements usually include certificate of incorporation of
the bidders in Nigeria.
7.2
7.3
Investments and Securities Act
The Investments and Securities Act (ISA) 200753 contains comprehensive provisions
on matters relating to securities and investments in Nigeria.
Among other things, ISA 54 regulates transfer of registered shares, capital market
operations in all their ramifications, borrowing by States, Local Government and
other Government agencies, etc.
ISA provides for the establishment of:
•
•
the Securities and Exchange Commission
an Investor Protection Fund for compensation of investors who suffer pecuniary
loss from any defalcation committed by a member of a stock exchange and any
directors/employees of capital market operators; and
an Investment and Securities Tribunal to settle any dispute arising from the
operators of capital trade points and exchanges in Nigeria.
Nigerian Investment Promotion Commission (NIPC) Act
This Act established the NIPC as an investment promotion agency of the
Government. The agency is responsible for registering foreign investments
in Nigeria. It is also responsible for liaison between investors and ministries,
government departments, institutional lenders and other institutions concerned
with investments.
Following the repeal of the Nigerian Enterprises Promotion Act, 1990, the NIPC Act
has removed the ceiling on foreign investment in Nigerian companies. The only
surviving restriction, which also affects local investors, relates to enterprises on the
"negative list", which are reserved exclusively for the Government. The negative list
includes enterprises engaged in:
i.
the production of arms and ammunition;
ii.
narcotics and psychotropic substances; and
iii.
military, para-military, police, customs, immigration and prison service uniforms
and accoutrements.
KPMG
TAX
EXEMPT
Notable among the positive changes introduced by the NIPC Act are:
•
• foreign portfolio investment in Nigerian-quoted companies through the NSE;
enlargement of the modes of payment for foreign equity to include spare parts,
raw materials and other business assets acquired without initial disbursement
of foreign exchange from Nigeria;
53 The Investments and Securities Act 2007 repealed the Investments and Securities Act 1999.
54 Mergers, acquisitions and other forms of business combination which were previously under the purview of the ISA are now regulated by
the Federal Competition and Consumer Protection Act, 2019.
Investment in Nigeria Guide - 8th Edition 66View entire presentation