Nigeria

Adeola Oyinlade & Co is delighted to announce that it has been recognized as a Tier 1 law firm in Nigeria for the 2025 edition of the Lawyers Global 2025 Annual Legal Awards. The law firm retains the number one position as the Nigerian Law Firm of the Year 2025 after ranking first (1st) in the 2024 edition of the Annual Awards released by the Lawyers Global in Lisbon, Portugal. Adeola Oyinlade & Co. is a market-leading law firm with a strong reputation in corporate and commercial law, particularly in areas like corporate advisory, banking, finance, intellectual property, tax, dispute resolution and consistently ranked for its expertise in various practice areas. The latest ranking affirms the expertise, client satisfaction, and market presence of the lawyers at Adeola Oyinlade & Co and the firm’s commitment and reputation for, and an outstanding record of, carrying out critical, innovative and complex work to the highest standards of excellence. The Lawyers Global Annual Awards recognizes the best lawyers and law firms globally in over 95 countries across the world. Read here – Adeola Oyinlade & Co ranked Tier 1 firm, wins Nigerian Law Firm of the Year – The Lawyers Global Awards 2025  

1.0 INTRODUCTION As international trade and investment expand, disputes arising from cross-border commercial transactions are increasingly being resolved through arbitration rather than litigation. Arbitration offers parties a private, neutral, and often faster forum to resolve disputes. However, the value of arbitration lies not only in obtaining an award but in ensuring that the award can be enforced in the jurisdiction where the debtor’s assets are located. Nigeria, a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), has developed a robust legal framework for the recognition and enforcement of foreign arbitral awards. This framework is significantly enhanced by the Arbitration and Mediation Act, 2023, which repealed the Arbitration and Conciliation Act, Cap A18, Laws of the Federation of Nigeria 2004. This article provides a comprehensive overview of the meaning of arbitration and arbitral awards, Nigeria’s legal framework, procedural steps, defenses to enforcement and limitation issues. 2.0 WHAT IS ARBITRATION? Arbitration is a form of alternative dispute resolution (ADR) in which the parties to a dispute agree to submit their claims to a neutral third party (the arbitrator or arbitral tribunal) for a binding decision, rather than resorting to court litigation. Arbitration is usually governed by an agreement between the parties, known as an arbitration agreement, which stipulates the rules, seat, language, and procedure of the arbitration. 2.1 WHAT IS AN ARBITRAL AWARD? An arbitral award is the final and binding decision issued by an arbitral tribunal at the conclusion of the arbitration proceedings. The award resolves the substantive issues in dispute and may include orders for payment of money, specific performance, interest, and costs. Once issued, the award is enforceable under applicable national and international laws, similar to a court judgment. 3.0 LEGAL FRAMEWORK FOR ENFORCING FOREIGN ARBITRAL AWARDS IN NIGERIA The enforcement of foreign arbitral awards in Nigeria is governed by both international treaties and domestic legislation. 3.1 INTERNATIONAL FRAMEWORK Nigeria is a contracting state to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), having acceded to it in 1970. The Convention mandates the recognition and enforcement of arbitral awards made in other contracting states, subject to specific exceptions.[1] 3.2 DOMESTIC LEGISLATION The Arbitration and Mediation Act, 2023 (the “Act”) incorporates the provisions of the New York Convention into Nigerian law. The Act provides that the Convention applies to any award made in a country other than Nigeria, provided that: The country is a party to the New York Convention; and The differences arise out of a legal relationship, whether contractual or not, considered commercial under Nigerian law.[2] This incorporation ensures that foreign arbitral awards are recognized and enforceable in Nigeria, subject to the conditions stipulated in the Convention and the Act. 4.0 WHAT QUALIFIES AS A FOREIGN ARBITRAL AWARD IN NIGERIA? A foreign arbitral award refers to an award made outside Nigeria pursuant to a valid arbitration agreement. For such an award to be enforceable in Nigeria, the following criteria must be met:[3] The award must be final and binding on the parties. It must be made in a country that is a party to the New York Convention. The subject matter of the dispute must be commercial under Nigerian law. The arbitration agreement must be valid under the law to which the parties have subjected it. 5.0 HOW TO ENFORCE A FOREIGN ARBITRAL AWARD IN NIGERIA: STEP-BY-STEP GUIDE The enforcement process involves initiating legal proceedings in a Nigerian court. The following steps outline the procedure: 5.1 FILING THE APPLICATION An application for the recognition and enforcement of a foreign arbitral award is made on application in writing,[4] before the Federal High Court or a State High Court with appropriate jurisdiction. It may be made ex-parte or on notice.[5] The application must be accompanied by: The duly authenticated original award or a duly certified copy thereof; The original arbitration agreement or a duly certified copy thereof; and A certified English translation of the award and agreement, if they are not in English.[6] An affidavit verifying the authenticity of the documents and compliance with the conditions for enforcement.[7] A written address outlining the legal arguments in support of the application. 5.2 COURT PROCEEDINGS Upon filing, the court reviews the application to ensure compliance with the statutory requirements. If satisfied, the court may recognize and enforce the award as a judgment of the court. The respondent has the opportunity to oppose the application by raising any of the grounds for refusal stipulated in the Act. 5.3 INTERACTION WITH THE FOREIGN JUDGMENTS (RECIPROCAL ENFORCEMENT) ACT Where an arbitral award is made in a foreign territory to which the Foreign Judgments (Reciprocal Enforcement) Act applies, and it was rendered in accordance with the law of that place, the award may be enforced in Nigeria as if it were a foreign judgment.[8]The provisions of the Act will apply mutatis mutandis. 6.0 GROUNDS FOR REFUSING ENFORCEMENT OF A FOREIGN ARBITRAL AWARD IN NIGERIA While Nigerian courts generally favor the enforcement of foreign arbitral awards, the Act provides specific grounds upon which enforcement may be refused. These grounds, reflecting Article V of the New York Convention, are categorized as follows: 6.1 GROUNDS INVOKED BY THE RESPONDENT The court may refuse enforcement if the respondent proves that:[9] A party to the arbitration agreement was under some incapacity, or the agreement is not valid under the applicable law. The party was not given proper notice of the appointment of the arbitrator or the arbitral proceedings or was otherwise unable to present their case. The award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration. The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or the law of the country where the arbitration took place. The award has not yet become binding on the parties or has been set aside or suspended by a competent authority in the country where it was made. 6.2 GROUNDS CONSIDERED BY THE COURT SUO MOTU The court may also refuse enforcement if it finds that:[10] The subject matter of the dispute is not capable of settlement by arbitration under Nigerian law. The recognition or enforcement of the award would be contrary to the public policy of Nigeria. 7.0 TIME LIMITS AND LIMITATION ISSUES IN ENFORCING FOREIGN ARBITRAL AWARDS IN NIGERIA The Act does not specify a limitation period for enforcing foreign arbitral awards. However, by virtue of the Arbitration and Mediation Act, the Limitation Act applies to arbitral proceedings as it does to judicial proceedings.[11] It is important to note that the period between the commencement of arbitration and the final award is excluded from the computation of the limitation period.[12] This provision ensures that parties are not penalized for delays inherent in the arbitration process. 8.0 CONCLUSION Nigeria’s legal framework, underpinned by the Arbitration and Mediation Act, 2023, provides a robust mechanism for the recognition and enforcement of foreign arbitral awards. By aligning domestic legislation with international standards, Nigeria reinforces its commitment to fostering an arbitration-friendly environment conducive to international commerce. Parties seeking to enforce foreign arbitral awards in Nigeria can be assured of a legal process that upholds the sanctity of arbitration agreements and the finality of arbitral awards, subject to the limited exceptions provided by law. Written by Adeola Austin Oyinlade and Felicia Ayeomoni for Adeola Oyinlade & Co Email: [email protected] Telephone Number: +234 803 826 7683 / +234 802 686 0247 _________ Ranked as a top law firm in Nigeria, Adeola Oyinlade & Co is known for its expertise in resolving disputes through arbitration, a form of alternative dispute resolution. The firm often handle complex, high-stakes cases across various industries and jurisdictions. With a strong track record in arbitration, deep knowledge of international arbitration rules and institutions, and the ability to manage cross-border disputes effectively, our services have earned us the Nigeria Law Firm of the Year Award at the Lawyers Global 2024 Annual Legal Awards and the prestigious International Law Firm of the Year in Nigeria of Corporate INTL Global Awards for the years 2022, 2023, 2024 and 2025 (4 years in a row) among others. [1] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), 1958, Articles I–V. [2] Section 60 of the Arbitration and Mediation Act, 2023. [3] Ibid [4] Section 57 (1) of the Arbitration and Mediation Act, 2023. [5] Order 52 Rule 16 (1) of the Federal High Court Civil Procedure Rules, 2019. [6] Section 57 (2) of the Arbitration and Mediation Act, 2023. [7] Order 52 Rule 16 (2) of the Federal High Court Civil Procedure Rules, 2019. [8]  Order 52 Rule 17 of the Federal High Court Civil Procedure Rules, 2019 [9] Section 58 (2) (a) of the Arbitration and Mediation Act, 2023. [10] Section 58 (2) (b) of the Arbitration and Mediation Act, 2023. [11] Section 34 (1) of the Arbitration and Mediation Act, 2023. [12] Section 34 (4) of the Arbitration and Mediation Act, 2023

Introduction Nigeria is one of Africa’s most attractive markets for foreign direct investment, but entering the market alone can be daunting. Many foreign investors especially those in industries like oil and gas, infrastructure, agriculture, logistics, and manufacturing—opt to partner with Nigerian companies through joint ventures (JVs). Joint ventures can offer foreign investors speed to market, local market intelligence, regulatory compliance, and risk sharing. However, a poorly structured JV can lead to disputes, loss of investment, or regulatory penalties. At The Trusted Advisors, we regularly help clients structure, negotiate, and manage joint ventures that protect their interests while leveraging the power of local partnerships. This article explores the key legal considerations for foreign investors entering into joint ventures in Nigeria. Advantages of using Joint Venture for Entering Foreign Markets (Nigeria as a case study) Joint ventures are especially valuable for: Market entry with reduced risk Access to local licenses, approvals, or sectoral knowledge Meeting Nigeria content or equity participation requirements (especially in oil & gas, telecoms, mining) Leveraging an existing company’s infrastructure, client base, or distribution network Joint ventures can be contractual or equity-based, with varying levels of integration depending on the business model and risk appetite. Forms of Joint Ventures in Nigeria There are two primary structures: Equity Joint Venture This involves the creation of a new entity jointly owned by the foreign and local partners. The parties contribute equity, assets, or expertise and operate the business through the new company. In an equity joint venture, ownership is typically structured via a Shareholders’ Agreement, governance is handled through a Board of Directors and profits are shared in proportion to equity or as agreed. This is the most common model for long-term partnerships in Nigeria. Contractual Joint Venture In this model, parties do not incorporate a new entity but work together under a detailed contract to pursue a specific project (e.g., construction, EPC, logistics). This is common in one-off projects or short-term collaborations, it is easier to set up but harder to manage over time and disputes can arise if roles and risks are not clearly defined Regulatory Approvals and Compliance in Joint Ventures in Nigeria Depending on the sector, your JV may require approvals or licenses from one or more Nigerian regulators. For instance: In the oil and gas sector, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is the key regulator. Companies operating in this space are required to ensure Nigerian Content compliance and, where applicable, obtain joint venture (JV) approval. Within the telecommunications and ICT sector, regulation is overseen by the Nigerian Communications Commission (NCC). One of the major requirements in this industry is compliance with licensing conditions, particularly in relation to foreign shareholding. For the finance and fintech sector, the Central Bank of Nigeria (CBN) serves as the principal regulator. Entities in this sector must secure the necessary licenses and, in some cases, obtain shareholder approval before commencing or expanding operations. Finally, in the power and infrastructure sector, the Nigerian Electricity Regulatory Commission (NERC) regulates participation. Companies intending to operate in power generation or distribution must obtain the relevant permits from NERC. Also, equity contributions from foreign partners must be reported through authorised dealers to obtain a Certificate of Capital Importation (CCI)—essential for repatriating dividends or disinvestment proceeds.  Key Legal Documents You Must Get Right Whether equity-based or contractual, these documents are critical: Joint Venture Agreement Shareholders’ Agreement (if a company is formed) Memorandum of Understanding (MoU) for early-stage alignment Service or Technical Assistance Agreements  if IP, technology, or management is provided by one party Non-Disclosure and Non-Compete Clauses Exit Clauses and Dispute Resolution Mechanisms We strongly advise against “template” JV agreements. Your structure must reflect your unique regulatory, tax, and commercial realities. Risk Allocation and Governance Issues in Joint ventures A well-drafted JV agreement should address the following issues: Capital Contributions: cash, IP, equipment, goodwill? Decision-Making: board control, veto rights, deadlock resolution Profit Distribution: based on shareholding or custom formula? Management Roles: who appoints key executives? Exit Options: drag-along, tag-along, buyouts, termination triggers Dispute Resolution :  local courts vs arbitration, seat of arbitration Tax and IP Considerations Double taxation may arise if not structured properly. Nigeria has tax treaties with some countries, which can be leveraged for withholding tax relief. Determine if the JV will enjoy any pioneer status incentives, which offer tax holidays. If your JV involves technology, processes, or proprietary tools, you must protect your IP through licensing agreements, registrations, or trademark protections Cultural and Operational Alignment Beyond legal issues, many JV failures stem from misaligned expectations, communication gaps, or incompatible operational cultures. We advise our clients to: Conduct thorough due diligence on potential Nigerian partners Align expectations and objectives early Start with a pilot or phased rollout where possible Frequently Asked Questions (FAQs) Q1: Can a foreign company own 100% of a joint venture in Nigeria? A: Yes, a foreign company can wholly own a Nigerian company that enters a joint venture with another entity. However, in some regulated sectors such as oil and gas, telecoms, and aviation, Nigerian content laws may require a minimum level of local participation or ownership. Q2: Is it mandatory to incorporate a new company for a joint venture in Nigeria? A: Not necessarily. Joint ventures can be structured either through the formation of a new incorporated entity or by contract alone (contractual joint ventures). The appropriate structure depends on the nature, duration, and risk profile of the project. Q3: What legal documents are essential for a joint venture? A: At a minimum, foreign investors should ensure they have: A detailed Joint Venture Agreement A Shareholders’ Agreement (if an entity is formed) Clearly defined dispute resolution and exit clauses Non-disclosure and non-compete provisions Additional sector-specific agreements (e.g., IP licenses or technical assistance agreements) may also apply. Q4: How are disputes typically resolved in Nigerian joint ventures? A: Most JV agreements involving foreign parties include arbitration clauses. Nigeria is a signatory to the New York Convention, making international arbitration awards enforceable. Arbitration offers confidentiality, neutrality, and relative speed over local litigation. Q5: How long does it take to set up a joint venture in Nigeria? A: Timelines vary depending on the sector and complexity. A basic equity JV (with a new company) can be set up in 2–4 weeks, while contractual JVs may be quicker. If regulatory approvals or licenses are involved, allow 6–12 weeks or more. Conclusion: Strategic Partnerships Require Strategic Legal Advice Joint ventures in Nigeria can be the key to unlocking real value but only if structured thoughtfully, executed strategically, and governed wisely. At The Trusted Advisors, we bring deep experience in cross-border commercial structuring, regulatory advisory, and JV governance. Considering a joint venture in Nigeria? Let us help you get it right from day one. Contact our corporate advisory team head; Olawunmi Ojo below: Email: [email protected] Telephone: +2348038954988 By Olawunmi Ojo Corporate & Commercial Practice Group, The Trusted Advisors

By Olawunmi Ojo Introduction: Profitability Is Not Enough, Repatriation Is Key For many foreign investors entering Nigeria’s fast-growing markets, profitability is only half the battle. The real challenge lies in how much of those profits can be legally repatriated and how much will be eroded by taxes, regulatory delays, or foreign exchange restrictions. This article outlines the tax regimes highlighting the new 2025 tax reforms, planning strategies, and repatriation channels that foreign-owned businesses and foreign investments in Nigeria should understand from day one. Understanding Nigeria’s Corporate Tax Framework Nigeria operates a multi-layered corporate tax system governed by the Companies Income Tax Act (CITA), the Finance Acts (which amend tax laws annually), and regulations issued by the Federal Inland Revenue Service (FIRS). As of the latest update under the Finance Act 2024, the current corporate income tax regime is as follows: 0% for small companies with an annual turnover of ₦25 million or less. 20% for medium-sized companies with a turnover between ₦25 million and ₦100 million. (Small companies (turnover below NGN 100 million, fixed assets less than NGN 250 million) are now fully exempt from CIT, CGT, and the new Development Levy. 30% for large companies with turnover above ₦100 million. (Recent reforms aim to reduce the standard CIT rate to 5% by 2026 and 25% by 2027 for large companies. Tertiary Education Tax (TET):5% of assessable profit. National Information Technology Development Agency (NITDA) Levy: 1% for companies in specific sectors like telecoms, banking, and ICT. Capital Gains Tax: Increase from 10% to 30% for companies, aligning with CIT Withholding Tax (WHT): 10% on dividends, interests, royalties, and rent (5% for individuals/local entities). Reduced rates under double tax treaties (DTTs) may apply. Minimum Effective Tax Rate (ETR) Multinational companies (turnover greater than NGN 50 billion or group turnover greater than EUR 750 million) must ensure a 15% ETR, with a “top-up” tax to meet the threshold Investors must also register for Value Added Tax (VAT), which is currently at 7.5%, and ensure compliance with Transfer Pricing Regulations for related-party transactions. Tax Planning for Foreign Investors Foreign investors can legally optimize their tax obligations in Nigeria through: Tax Incentives & Reliefs: Pioneer Status Incentive (PSI): Offers a 3 to 5-year tax holiday for companies in eligible sectors. Export Expansion Grant (EEG): Incentive for exporters through tax credits. Free Trade Zones (FTZs): Companies operating in FTZs enjoy 100% tax exemptions and unrestricted capital repatriation. Double Tax Treaties (DTTs): Nigeria has treaties with countries like the UK, China, South Africa, etc., reducing withholding tax rates and preventing double taxation. Group Structuring: Holding companies in tax-efficient jurisdictions like Mauritius or the Netherlands can help manage tax exposure. Structuring with Special Purpose Vehicles (SPVs) for capital raising, project finance, or asset protection. Strategic Use of Transfer Pricing: Ensure all intercompany transactions are conducted at arm’s length. Prepare and maintain appropriate documentation to avoid penalties. Capital Allowances & Investment Deductions: Leverage accelerated depreciation on qualifying capital expenditure to reduce taxable income. How Foreign Investors Can Legally Repatriate Their Profits Out of Nigeria Foreign investors in Nigeria are permitted to repatriate capital, dividends, interest, and profits through legitimate channels, provided they comply with the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and Central Bank of Nigeria (CBN) regulations. Key Repatriation Channels and Requirements: Certificate of Capital Importation (CCI): Issued by Nigerian banks on behalf of the CBN within 24–48 hours of capital inflow. It is the primary evidence that funds were imported through official channels and is mandatory for repatriation of proceeds. Dividend and Profit Repatriation: Profits, dividends, and interest earned can be repatriated net of applicable taxes (WHT and corporate tax). Dividends attract a 10% withholding tax (or a lower rate under DTTs). Sale or Liquidation Proceeds: In the event of divestment or liquidation, the proceeds (capital and gains) may be repatriated upon presentation of the CCI and tax clearance. Loan Repayments and Interest: Foreign loans must be registered with the CBN via Form M and be backed by proper agreements. Interest payments can be repatriated, subject to applicable WHT (usually 10%). Use of Authorized Dealers: All remittances must be processed through licensed banks (authorized dealers) and must comply with anti-money laundering and tax compliance documentation. Investment via Free Zones: Businesses operating in Free Zones enjoy unrestricted repatriation without FX restrictions. Common Pitfalls to Avoid Failure to Obtain CCI: Without a CCI, capital and returns may be trapped or face regulatory delays. Non-compliance with Transfer Pricing: Can lead to audits, penalties, and disallowance of intercompany expenses. Inadequate Tax Planning: May lead to higher tax exposure and repatriation delays. Misalignment with BOFIA and SEC Regulations: Especially for financial and capital market investments. FAQs: Tax and Repatriation in Nigeria Q1: Can foreign investors repatriate 100% of their profits from Nigeria? A: Yes, provided they obtained a Certificate of Capital Importation (CCI) and have fulfilled all tax obligations, including withholding and corporate income taxes. Q2: What happens if I didn’t get a CCI? A: Repatriation becomes difficult or impossible. A CCI is a precondition for legal remittance of funds abroad. Q3: What are the new tax updates in the Finance Act 2023? A: Key updates include increased tertiary education tax from 2% to 2.5%, clarification on digital service taxes, and tax reliefs for startups and MSMEs. Q4: Are there sectors where tax holidays apply? A: Yes, under the Pioneer Status Incentive, eligible sectors such as manufacturing, agro-processing, ICT, and infrastructure may enjoy 3 to 5 years of tax holidays. Q5: Are capital gains from foreign investors taxed when exiting investments? A: Yes, capital gains tax at 10% applies unless exemptions under restructuring provisions or tax treaties apply. Q6: How long does it take to repatriate profits? A: Typically 1–2 weeks, depending on documentation completeness and bank processing times. Q7: Can I repatriate in foreign currency? A: Yes. CBN allows repatriation in the currency of the original investment, often USD, EUR, or GBP. Conclusion: Plan Repatriation Now to Keep Your Profits Tax and repatriation planning can't be an afterthought—you need to build it into your investment structure. With Nigeria’s reforms coming into effect by January 2026, preparation today is essential for tomorrow’s success. At The Trusted Advisors, we specialise in tax structuring, repatriation strategy, and cross-border investment planning to protect your returns and secure your investment. Ready to map out your repatriation plan? Let’s get started. Contact Olawunmi Ojo: [email protected] Tel: +2348038954988