How To Start A Business in Nigeria

Starting a business in Nigeria requires a few essential steps to comply with local regulations. Below is a detailed guide for both local and foreign investors, including related fees and taxes wherever applicable.

Step-by-Step Guide for Nigerian Nationals

1. Choose Your Business Structure: Common structures in Nigeria include sole proprietorship, partnership, and private limited company.
2. Register the Business Name: Register your business name with the Corporate Affairs Commission (CAC).
   Corporate Affairs Commission (CAC)
   Fees: - Business name registration: NGN10,000 to NGN20,000 (depending on the type of business).
3. Obtain a Tax Identification Number (TIN): After registering your business, obtain a Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS).
   Federal Inland Revenue Service (FIRS)
   Fees: Free.
4. Register for VAT (if applicable): If your business turnover exceeds N25 million annually, you must register for Value Added Tax (VAT).
   Fees: VAT registration fee is approximately NGN10,000.
5. Obtain Necessary Permits: Depending on your business type, you may require specific permits or licenses from relevant regulatory bodies.
   For example, businesses in the oil and gas sector must register with the Department of Petroleum Resources (DPR).
   Department of Petroleum Resources (DPR)
   Fees: Varies by industry.
6. Register with the National Social Insurance Trust Fund (NSITF): If you have employees, you must register with the NSITF for workers' compensation and other employee benefits.
   National Social Insurance Trust Fund (NSITF)
   Fees: The contribution is 1% of monthly wages for employees earning N1,000 or more.
7. Open a Business Bank Account: Open a business account at any commercial bank in Nigeria.
   Fees: Varies depending on the bank, but typically between NGN2,000 and NGN10,000.

Step-by-Step Guide for Foreign Investors

1. Choose Your Business Structure: Foreign investors typically establish a private limited company or a joint venture.
2. Obtain an Investment Permit: Foreign investors must obtain an investment permit from the Nigerian Investment Promotion Commission (NIPC).
   Nigerian Investment Promotion Commission (NIPC)
   Fees: No fee, but registration must be done through NIPC.
3. Register the Business: After obtaining the investment permit, you must register your business with the Corporate Affairs Commission (CAC).
   Fees: - Private Limited Company registration: NGN50,000 to NGN100,000.
4. Obtain a Tax Identification Number (TIN): Foreign investors are also required to obtain a TIN from the Federal Inland Revenue Service (FIRS).
5. Register for VAT (if applicable): If your business turnover exceeds N25 million annually, you must register for VAT.
   Fees: VAT registration is approximately NGN10,000.
6. Obtain the Necessary Permits: Depending on your business type, certain permits or licenses may be required. For example, businesses in the oil and gas sector must register with the Department of Petroleum Resources (DPR).
   Fees: Varies by sector and permit.
7. Register with the National Social Insurance Trust Fund (NSITF): For foreign businesses employing Nigerian workers, registration with the NSITF is required for workers' compensation and employee benefits.
   Fees: The contribution is 1% of monthly wages for employees earning N1,000 or more.
8. Open a Business Bank Account: Open a business account at a local commercial bank in Nigeria.
   Fees: Varies depending on the bank.

Estimated Duration

• For Locals: 2-3 weeks
• For Foreign Investors: 4-6 weeks (including the investment permit process)

Useful Resources

• Corporate Affairs Commission (CAC)
• Federal Inland Revenue Service (FIRS)
• Nigerian Investment Promotion Commission (NIPC)
• Department of Petroleum Resources (DPR)
• National Social Insurance Trust Fund (NSITF)