3:1     Relevant Statutes:
3:2      Authority to Form a Company
An alien or foreign company may join in forming a company subject to the provisions of any law regulating the rights and capacity of aliens to engage in trade or business in Nigeria (section 20(4)).

Every foreign company intending to carry on business in Nigeria must take all steps necessary to obtain incorporation as a separate entity in Nigeria and until so incorporated, the foreign company shall not have a place of business in Nigeria for any purpose other than the receipts of notices and other documents, as matters preliminary to incorporation  (section  54(1)). However, a foreign company may apply to the Federal Executive Council for exemption from the requirement to register locally if it belongs to one of the following categories, that is:
        (a)      Foreign companies (other than those specified in paragraph (d) (below) invited to Nigeria by or with the approval of the Federal Government to execute any specified loan project;
        (b)      Foreign companies, which are in Nigeria for the execution of specified individual loan project on behalf of a donor country or international organization;
        (c)      Foreign government-owned companies engaged solely in export promotion activities; and
        (d)      Engineering consultants and technical experts engaged on any individual specialist project under contract with any of the governments in the Federation or any of their agencies or with any other or person, where such contract has been approved by the Federal government (section 56(1).
Application for exemption is made to the Secretary to the Federal Government setting out eight specified particulars and such other particulars as may be required by the Secretary to the Federal government (section 56(2).  
3:3      Participation in Enterprises
A non-Nigerian may now freely invest and participate in the operation of any enterprise in Nigeria (Nigerian Investment Promotion Commission Act Cap NII7 LFN 2004: section 17 ) except enterprises in the “Negative List" (production of arms and ammunition and service uniforms, production and dealing in drugs etc.). The alien may operate alone or in joint venture with Nigerians by means of a company, which must first of all be formed and registered by the Corporate Affairs Commission (section 19) and thereafter registered with the Nigerian Investment Promotion Commission (sections 20 and 27 of Cap. NIl7). An alien not wishing to establish a business may buy shares in a Nigerian company in any convertible currency (section 21 of Cap Nl17). Investment will be effected with foreign currency imported freely into Nigeria through an Authorised Dealer and converted into the Naira at the official foreign exchange market, see Foreign Exchange (Monitoring and Miscellaneous Provisions) Act Cap F34 LFN 2004 sections 12, 13 and 15). The Authorised Dealer will issue a certificate of capital importation. Imported capital is guaranteed unconditional transferability and repatriation of funds with regard to both earnings and capital (section 15(4) of Cap. F34 of 1995 and section 24 of Cap N1l7 of 1995) .
Where a dispute arises between an investor and any Government of the Federation in respect of an enterprise, all effort shall be made to reach an amicable settlement through mutual discussion, failing which, the dispute may be submitted to arbitration at the option of the aggrieved party as follows-
     (a)      In the case of a Nigerian investor, in accordance with the Arbitration and Conciliation Act (Cap AI8); or
     (b)      In the case of a foreign investor, within the frame work of any bilateral or multilateral agreement on investment protection to which the Federal Government and the country of which the investor is a national are parties; or
     (c)     in accordance with any other national or international machinery for the settlement of  Investment dispute agreed on by the parties.
Where there is disagreement between the investor and the Federal Government as to the method of dispute settlement to be adopted, the International Centre for Settlement of Investment Disputes Rules will apply. (section 26 of Cap NI17).
The Nigerian Investment Promotion Commission will act as liaison between the foreign enterprise and relevant Government Departments (section 28 of Cap. NIl7) especially with regard to issuance of permits.
3:4      Procedure for Application to Nigerian Investment Promotion Commission
Application to Nigerian Investment Promotion Commission is on NIPC Form 1 for
1.      Business Permit and Expatriate Quota; and
2.      Pioneer Status, Technical Assistance Agreement and other fiscal incentives in this case a separate Form is to be completed.
A non - refundable deposit of 10,000 Naira  is payable for each application in Bank Draft to the nearest Nigerian Investment Promotion Commission office. The application should be forwarded to the Nigerian Investment Promotion Commission Headquarters, Abuja or State Ministries of Trade and Industries for onward transmission to Nigerian Investment Promotion Commission Headquarters, Abuja, along with two (2) copies of the receipt for purchase of the Form.
Checklist of Attachments
(i)        Completed Nigerian Investment Promotion Commission Form 1 (1 copy) (accompanied by payment of 10, 000 Naira non-refundable
(ii)       Partnership (Joint - Venture) agreement where applicable (I copy)
(iii)      Photocopy of payment receipt for application form (2 copies)
(iv)      The Certificate of Incorporation of applicant company.
(v)      Memorandum and Articles of Association of the applicant company.
(vi)      Tax clearance certificate of applicant company.
(vii) Receipt for payment of stamp duties on the authorized share capital of the company as at the date of application.
(viii) Feasibility Report and Project Implementation Programme of the company for its proposed business.
(ix)     Title deeds of land evidencing firm commitment to acquire requisite business premises for
the company's operations.
(x)      Training Programme for Nigerian staff or Personnel Policy of the company, incorporating
Management succession schedule for qualified Nigerians.
(xi)     Names, addresses, nationalities and occupations of the proposed Directors of the Company, including non-resident directors which should be marked "NRD"
(xii) Job title designations of expatriate quota positions required, and the academic and working experience required for the occupants of such positions.
(xiii) Information brochure, if any, on the foreign partner.
See Abdulai  Taiwo and  Co. Solicitors - Registration of Foreign Investments and Enterprises: Nigeria
Practice Note Series, pp 11 - 14 for a detailed checklist of steps for establishing in Nigeria new companies with foreign shareholding.
3:5      Summary of Procedure for Establishment of Business
    (1)     Prepare Joint - Venture agreement and any other necessary pre-incorporation agreement.
    (2)     Take steps to form a company to be registered by the Corporate Affairs Commission.
    (3)     Application to the Nigerian Investment promotion Commission (NIPC)
    (4)     Application to the Securities and Exchange Commission for registration of the
    (5)     Application for other permits including application to the Nigerian Embassy in the
country of the investor for grant of BUSINESS VISA "Subject to Regularization" (STR).
    (6)      Importation of capital through an authorized dealer and obtaining certificate of capital
3:6      Importation of capital through the Debt- Equity Conversion Programme.
This entails the exchange of a country's foreign currency debt for local currency that can be used for:
(a)              Establishment of new enterprises
(b)              Purchase of shares in existing business concerns whether privately or publicly owned.
It is a feature of the deregulation programme introduced by the federal Military Government in 1988.
If for e.g. a foreigner needs to invest $30 million but he has only $10 millions, he can take his $10 million to any stock exchange anywhere in the world to buy Nigeria's debt instrument at a discounted value, i.e. he could pay $10 million for a debt instrument with a face value of  $30 million and obtain the certificate at the face value and not the discounted value, the certificate is brought into Nigeria, taken to a Bank as proof of their capital importation into Nigeria, he can obtain the Naira equivalent of $30 million.
It must be pointed out that the repatriation of part of the profits derived from the initial capital outlay i.e. ($30 million) is postponed until after a minimum of five years, while the capital proceeds cannot be repatriated until after 10 years, even then only 20 per cent per annum of such capital outlay can be repatriated.
It is implemented by the Debt Conversion Committee (DCC) in CBN .
3:7      Summary of Procedure for Purchase of Shares
    (1)     Application for shares by the alien
    (2)     Pass resolution of the Directors allotting the shares to the alien subject to requisite approvals being obtained.
    (3)     Apply to the Securities and Exchange Commission for registration of security
    (4)     Importation of the capital through an authorized dealer and obtaining certificate of capital importation.
3:7   Status of an exempted company
It has the status of an unregistered company: Section 58.
This provision does not affect the liability of a foreign company to be sued by Nigerians in Nigeria or their right to sue Nigerians in Nigeria: section 60 Companies and Allied Matters Act . RITZ PUMENFABRlK GMBH & CO  KG V TECHNO CONTINENTAL ENGINEERS NIG. LTD (1999) 4 NWLR (Pt.598) 298
        (1)     Business permit
No person other than a Nigerian citizen shall on his own account or in partnership with any other person practice a profession or establish or take over any trade or business whatsoever or register or take over any company with limited liability for any such purpose without the written consent of the Minister of Internal Affairs (Immigration Act section 8(l)(b) and Immigration Regulations).
        (2)      Expatiate Quota
No person other than a citizen of Nigeria shall accept employment (not being employment with the Federal or a State government) without the written consent of the Chief Federal Immigration Officer (Immigration Act section 8(l)(a). Initial expatriate quota is sought and obtained usually along with the Business Permit. There are two types of expatriate quota:
(a) Permanent Until Reviewed ("PUR") - usually for the post of Chairman of the company's Board of Directors or the Managing Director.
(b) Temporary - Directors and other employees of the company. The maximum number of years granted in the first instance is five years renewable for a further period of two years.
Applications is made on Immigration Form T/2. It is the duty of the company and not that of the employee, to apply for expatriate quota. See Oilfields Supply Center Ltd. versus   Johnson (No.2) [1987] 2 NWLR 625; (1987) 18 NSCC 725; [1987] 1 All NLR (part 1) 321.
        (3)      Resident Permit
Every alien may enter Nigerian and stay therein for three months without a residence visa (Tourist Visa). Any person who is not a citizen of Nigeria who desires to enter Nigeria for purpose of residence (i.e. beyond three months) must obtain a residence permit.
Application is by letter (2 copies) accompanied by a valid passport of the alien from the company requesting permission to employ the alien, to the Immigration Department (via Consular Authorities).
Combined Expatriate Residence Permit and Aliens Card (CERPAC)
The combined CERPAC scheme was introduced in 2002, providing for foreigners (except ECOWAS citizens accredited diplomats and children below the age of 15 years) working or living in Nigeria to carry CERPAC card, the scheme is expected to simplify the process of acquiring residence permit and alien registration certificate. It provides a computerized unit at various points of entries like airports, that is linked to a central database centre containing information on every foreigner residing in Nigeria. the residence permit allows a foreigner and his dependants or family to reside in Nigeria. This is in addition to the visa requirement as stated above, while every foreigner resident in Nigeria or visiting with the intention to remain in Nigeria for more than 56 days is required to register:[1]. Unlike the residence permit, the alien registration certificate is essentially a movement chart Under the CERPAC scheme, registration is valid for one year, after which application for revalidation must be made.
Foreigners relocating to a different part of Nigeria must inform the nearest Aliens Office of the move. Also if a foreigner holding an Aliens Card leaves Nigeria permanently then the Card has to be handed to the Aliens Office.
The fee is US$350. On payment and submitting the completed application form, a temporary receipt is given. This receipt should be carried at all times as proof of residence. Applicants will then be told when and where to collect their cards.
In conclusion, a foreigner doing business is required to have business permit, residence permit, alien registration card and visa (3 types). Only residence permit and alien registration have been combined.
        (4)      Registration of Securities by SEC
The Securities and Exchange Commission is required to keep and maintain separate registers of foreign direct investments and foreign portfolio investments. Investments and Securities Act, Cap. 124 LFN 2004 section 8(k).
        (5)      Transfer of Technology
Every contract or agreement entered into by any person in Nigeria with another person outside Nigeria involving the transfer of foreign technology to Nigerian partners shall be registered with the National Office of Technology Acquisition and Promotion (NOTAP) in the prescribed manner not later than sixty days from the execution or conclusion of the agreement (National Office of Technology Acquisition and Promotion Act (section 5(2)). An agreement involves transfer of technology if its purpose or intent is, in the opinion of NOTAP, wholly or partially connected with any of the following matters:
9.      The use of trade marks
10.  The right to use patented inventions
11.  The supply of technical expertise in the form of the preparation of plans, diagrams,
12.  operating manuals or any other form of technical assistance of any description whatsoever.
13.  The supply of basic or detailed engineering The supply of machinery and plant, and
14.  The provision of operating staff or managerial assistance and the training of personnel: (section 4(d)).        
Every application for the registration of a contract or agreement shall be addressed to the Director of NOTAP and shall be accompanied by such number of certified true copies of such contract or agreement and by all other related documents and information as may be specified in any particular case by the Director (section 6(1)).
The director may refuse to register a contract which falls within 18 specifications, e.g.
        (a)      Where its purpose is the transfer of the technology freely available in Nigeria.
        (b)      Where the price is not commensurate with the technology in question (section 6(2)
3:9                  Effect of non- registration (section 7).
Non - registration does not render the contract void or unenforceable between the parties but merely frustrates transfer of any fees or payment due under the contract to the account of the aliens outside Nigeria.
        (6)      Intention to Incur Capital Expenditure
Any person proposing to start a new undertaking or in the case of an existing undertaking, to incur additional expenditure, of not less than 20,000 Naira must give to the Director of the Industrial Inspectorate Division of the Federal Ministry of Industry notice of his intention (Industrial Inspectorate Act (section 3(1). Application is on Form 1 (2 copies) obtainable from the Federal Ministry of Industries, Inspectorate Division. If the Director is satisfied with the valuation for the property, he issues a certificate of acceptance which binds other government agencies e.g. The Board of Customs and Excise, the Federal Board of Inland Revenue.
(7)  Fiscal Approval- in respect of fess for management, technical, consultancy agreement etc.
A wide range of incentives and reliefs have been designed by the Federal government to boost industrial and agricultural production for export. These include:
 1.      Pioneer Status Certificate is issued by NIPC to the effect that the company is exempted from payment of tax for (3 years - 5 years : see Industrial Development (Income Tax Relief) Act Cap. 17 LFN 2004. To qualify, the applicant must show that: 
(i) the industry is not carried on Nigeria on a scale suitable to economic development of Nigeria;
(ii) there are prospects for further development of such industry in Nigeria; or
(iii)                it is expedient in the public interest, to encourage development or establishment of such industry in Nigeria.  
(iv)                The line of business of the applicant industry is listed as a pioneer industry
Pioneer Status Certificate is issued only to companies listed as such: INDUSTRIAL DEVELOPMENT (LIST OF PIONEER INDUSTRIES) NOTICE S.I. 9  of 1982.        
 2.      Tax Reliefs under the Companies Income Tax Act, Cap. C21 LFN 2004 as amended:
3..    Profit exempted from taxation (section 23) e.g. co-operative societies, religious/charitable, etc. organization, sporting activities. Similarly the profits of any Nigerian company in respect of goods exported from Nigeria are exempted from taxation, provided that the proceeds from such export are repatriated to Nigeria and are used exclusively for the purchase of' raw materials, plants, equipment. and spare parts. - (See also Finance (Miscellaneous Taxation Provisions) (No.3) Decree No. 32, 1996.)
4.  Relief from tax for the first 6,000.00 Naira of the total profit (section 42)
5.  Relief in respect of Commonwealth Income Tax (section 44);
Double Taxation Treaties
If a Nigerian company has paid or is, liable to pay tax, proves that it has paid the tax in a Commonwealth or another country that has double taxation agreement with Nigeria, then, such a company will be entitled to relief from tax paid or payable by it.
See also Double Taxation Relief (Between The Federal Republic Of Nigeria And The Governments Of Canada ; France; Pakistan; Romania; Belgium; Netherlands; United Kingdom Of Great Britain And Northern Ireland: (sections 44-45) of CITA
If the foreign rate is less than that of Nigeria, the rate of relief would be one half of the foreign rate.  But if the foreign rate is more than the Nigerian rate, the relief will be equal to the amount by which the foreign rate exceeds the Nigeria rate: section 44 of CITA
6.  Relief in respect of interest on:
  •    Foreign Loans - Companies Income Tax Act, section 11(1)
  • Bank loans for agriculture - Companies Income Tax Act, section 11(7)
  • Bank loan to a company engaged in agricultural business, the fabrication of local plant or machinery or as working capital for any cottage industry established under  the Family Economic Advancement Programme Establishment, etc. Act Cap. F3 LFN 2004 section 11(7) of CITA
  • Deposit accounts or domiciliary accounts of a foreign non-resident company are exempted from tax, provided the accounts consist mainly of foreign currencies, imported into Nigeria on or after 1st January, 1990 through Central Bank of Nigeria or any of the authorized banks.   section 23(1)(m)  of CITA
  • Bank loans for manufacture of goods for export (section 9)
  • Interest payable on any loan granted by a bank on or after 1 April, 1980 for the purpose of manufacturing goods for export, shall be exempted from tax on the presentation of a certificate issued by the Nigerian Export Promotion Council stating that the level of export specified has been achieved by the company. A company shall be deemed to be engaged in manufacturing for export if the Nigerian Export Promotion Council certifies that no less than one half of its manufactured goods disposed of in its year of account is sold outside Nigeria and is not re-exported to Nigeria. section 11(10) of CITA
Note: Stock and shares of every description have been removed from the list of assets liable to capital gains tax (1998 Budget).
Duty Drawback/Suspension Scheme:
The scheme provides for the refund of import duties on:
·         Raw materials including packaging materials used in manufacturing goods that are exported - 100% of import duty.
·         Paper used for the manufacture of goods supplied for educational purposes to educational establishments recognized by the Federal Adviser on Education ­100% of import duty.
·         Goods exported in the same state as that in which they were imported - See Customs and Excise Management Act Cap. C45 LFN 2004 and DRAWBACK (CUSTOMS) REGULATIONS  L.N 70 1959 .
        (a)     Companies engaged in R and  D activities for commercialization are allowed 20% investment tax credit on their qualifying expenditure ­Companies Income Tax Act, section 26
        (b)      Expenses incurred on research and development including the amount paid to the national Science and Technology Fund are allowed as deductible expenses - Companies Income Tax Act, section 26
    (c)    Rural Investment Allowance (section 34) of the Companies Income Tax Act, which provides graduated allowances for capital expenditure on such facilities as electricity, water, tarred road and telephone located at least 20 kilometers away from such facilities provided by the government.

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