Jeremy Pinehart and Jeff Williams
Alias Legal LP · October 2026
Nigeria is Africa's most populous country and one of its largest economies, and it remains a leading destination for foreign capital on the continent. The law is, in principle, open to foreign investors: a non-Nigerian may establish and wholly own a business in almost every sector of the economy.
That openness is accompanied by a number of registration, licensing and reporting requirements. An investor who observes them secures important statutory protections, including the right to repatriate capital and profits. An investor who overlooks them may find those protections difficult to rely upon. This article outlines the principal rules.
The legal framework
Foreign investment in Nigeria is not governed by a single code. The rules are found in several statutes, of which the following are the most important.
- Nigerian Investment Promotion Commission Act (NIPC Act). The principal statute. It permits foreign participation in Nigerian enterprises, requires registration with the Commission and sets out the guarantees given to investors.
- Companies and Allied Matters Act 2020. Requires a foreign company that intends to carry on business in Nigeria to incorporate a Nigerian company for that purpose, subject to limited exemptions.
- Foreign Exchange (Monitoring and Miscellaneous Provisions) Act. Governs the importation of foreign capital and guarantees the repatriation of returns on it.
- Immigration Act 2015 and its regulations. Govern business permits and the employment of expatriate staff.
- Nigeria Tax Act 2025. In force from 1 January 2026, it consolidates the main taxes on companies and individuals.
- Federal Competition and Consumer Protection Act 2018. Provides for merger control, which may apply where an investor acquires an existing business.
- Sector-specific legislation. Banking, insurance, telecommunications, oil and gas, aviation and other regulated sectors have their own licensing regimes.
What a foreign investor may own
The NIPC Act permits a non-Nigerian to invest and participate in the operation of any enterprise in Nigeria. A foreign investor may therefore hold up to 100 per cent of the shares in a Nigerian company, and there is no general requirement to take a Nigerian partner.
The principal exception is the "negative list". Investment in the following activities is prohibited to Nigerians and foreigners alike:
- the production of arms and ammunition;
- the production of, and dealing in, narcotic drugs and psychotropic substances; and
- the production of military and paramilitary wear and accoutrements.
In addition, certain sectors impose their own requirements as to Nigerian ownership or participation. Oil and gas, shipping, aviation, broadcasting and private security are examples. An investor entering a regulated sector should establish the applicable rules before settling the ownership structure.
Nigeria does not operate a general screening regime under which foreign investments are reviewed and approved on national security grounds.
Establishing a business in Nigeria
A foreign investor ordinarily enters the market in one of two ways: by incorporating a new Nigerian company, or by acquiring shares in an existing one. In either case the following registrations and approvals should be considered, broadly in this order.
Step
Authority
Purpose
Incorporation
Corporate Affairs Commission
Creates the Nigerian company. A company with foreign participation is currently required to have a minimum share capital of ₦100 million.
Tax registration
Federal tax authority
Provides the Tax Identification Number needed to trade, open bank accounts and file returns.
Registration of the investment
Nigerian Investment Promotion Commission
Required before the enterprise commences business; records the investment and supports access to incentives and statutory protections.
Business permit
Federal Ministry of Interior
Authorises a company with foreign participation to carry on business in Nigeria.
Expatriate quota and residence permits
Federal Ministry of Interior and Nigeria Immigration Service
Required before foreign nationals may be employed in Nigeria.
Certificate of Capital Importation
An authorised dealer bank
Evidences the inflow of foreign capital and secures the right to repatriate it.
Sector licences
The relevant regulator
Required for regulated activities such as banking, insurance, telecommunications and energy.
Registration of technology agreements
National Office for Technology Acquisition and Promotion
Required for agreements under which a Nigerian company pays a foreign party for technology, trade marks or technical services.
Where the investment takes the form of an acquisition, the approval of the Federal Competition and Consumer Protection Commission may also be required if the transaction meets the merger notification thresholds.
Importing capital and repatriating returns
For most investors, the single most important document is the Certificate of Capital Importation (CCI). It is issued through an authorised dealer bank when foreign capital is brought into Nigeria, whether as cash for equity, as a loan or in the form of imported equipment.
The certificate matters because the right to take money out depends upon it. Under the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, an investor who imported capital through an authorised dealer is guaranteed the unconditional transfer, in freely convertible currency, of:
- dividends and profits attributable to the investment, net of taxes;
- payments of principal and interest on foreign loans; and
- the proceeds of sale or liquidation of the investment, net of taxes.
An investor without a certificate may be unable to obtain foreign exchange through official channels to repatriate returns. A certificate should accordingly be obtained for every inflow, including later capital injections and shareholder loans, and the details on it should be checked for accuracy when it is issued.
Taxation and incentives
Nigeria's tax system was substantially reformed with effect from 1 January 2026, when the Nigeria Tax Act 2025 and its companion legislation came into force. The headline position for a Nigerian company with foreign shareholders is as follows.
Tax
Position from 1 January 2026
Companies income tax
30 per cent of taxable profits. Qualifying small companies are taxed at 0 per cent.
Development levy
4 per cent of assessable profits, replacing several earlier levies. Small companies are exempt.
Value added tax
7.5 per cent on taxable supplies of goods and services.
Withholding tax
Generally 10 per cent on dividends, interest and rent, subject to any applicable double taxation treaty.
Minimum effective tax rate
15 per cent for members of large multinational groups and the largest Nigerian companies.
The former Pioneer Status tax holiday has been replaced by the Economic Development Tax Incentive, under which qualifying capital investment in priority sectors earns tax credits. Enterprises established in free trade zones benefit from a separate set of concessions.
Nigeria has double taxation treaties with a number of countries, including the United Kingdom, which may reduce the tax payable on cross-border payments. The reforms are recent and detailed, and specific tax advice should be taken before an investment is structured.
Investor protections and dispute resolution
The NIPC Act gives foreign investors two guarantees of particular importance.
- Protection against expropriation. No enterprise may be nationalised or expropriated by any government of the Federation, and no investor may be compelled to surrender an interest in an enterprise, except in the national interest or for a public purpose and under a law that provides for fair and adequate compensation and a right of access to the courts.
- Access to arbitration. Where a dispute arises between a foreign investor and the government and cannot be settled amicably, it may be referred to arbitration, including under an applicable investment treaty or under the rules of the International Centre for Settlement of Investment Disputes (ICSID).
Nigeria is a party to the ICSID Convention and to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and has concluded bilateral investment treaties with a number of countries. Domestic arbitration is governed by the Arbitration and Mediation Act 2023.
For disputes between private parties, a well-drafted arbitration clause in the shareholders' agreement and principal contracts remains the most reliable protection.
Other matters to consider
- Land. Land is held under rights of occupancy granted under the Land Use Act, and transfers require the consent of the State Governor. Some States impose additional requirements where the acquirer is a non-Nigerian.
- Employment. Expatriate positions must be approved in advance, and the employer is generally expected to train Nigerians to succeed the expatriates in those positions. Nigerian labour, pension and employee compensation laws apply to local staff.
- Local content. In oil and gas and certain other sectors, operators must give preference to Nigerian goods, services and personnel.
- Data protection. A business that processes personal data in Nigeria must comply with the Nigeria Data Protection Act 2023.
- Corporate transparency. Nigerian companies must disclose persons with significant control to the Corporate Affairs Commission, and banks apply anti-money laundering checks to incoming funds.
- Currency. Exchange rate movements affect the value of returns. Investors should consider how the investment is denominated and how returns will be converted.
Conclusion
Nigerian law is open to foreign investment, and the protections it offers are substantial. Those protections depend, however, on the investor having taken the correct steps at the correct time: incorporating properly, registering the investment, obtaining the necessary permits and, above all, securing a Certificate of Capital Importation for every inflow of capital.
Alias Legal LP advises foreign investors and Nigerian businesses on the structuring, establishment and regulatory compliance of investments in Nigeria. To discuss a proposed investment, please contact us at Advice@aliaslegal.com.
This article is provided for general information only and does not constitute legal or tax advice. The law is stated as understood at October 2026 and is subject to change. Specific advice should be obtained before any investment is made.