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Introduction  Shareholder disputes are a major governance issue in Nigerian private companies. Because these companies are often closely held, with overlapping owners and managers, and limited ability to sell shares, disagreements can quickly turn into long legal battles. The main law for these disputes is the Companies and Allied Matters Act 2020 (CAMA 2020),[1] supported by court-made equitable rules. To set the stage for available solutions, it is important to first understand the underlying causes behind shareholder disputes in Nigerian private companies. This article examines the causes, then analyzes the statutory remedies and practical mechanisms available to resolve such conflicts. 2. Nature and Causes of Shareholder Disputes In private companies, shareholder disputes usually arise from disagreements about control, valuations, governance, fiduciary duties, dividend policies, or how to exit the company. Key causes include: a. Conflicting Company Objectives Conflicting shareholder visions can turn strategic decisions into sources of contention, eroding trust and cohesion. b. Minority Oppression Minority shareholders may feel excluded by the decisions of the majority in the company, especially if their rights and interests are neglected or ignored.[2] c. Breach of Fiduciary Duties Directors and controlling shareholders owe fiduciary duties to both the company and other shareholders. When they breach these duties, such as through self-dealing, misuse of company assets, or exclusion of others from decision-making, disputes often arise.[3] d. Poor Corporate Governance If a company lacks a detailed shareholder agreement, clear dispute-resolution procedures, and proper decision-making rules, this is a governance problem. 3. Legal Remedies for Shareholder Disputes Legal remedies are statutory or equitable measures that courts or regulators can enforce to resolve or reduce shareholder conflicts. a. Enforcement of Shareholder Agreements A strong shareholder agreement is the first defense in dispute resolution. Typical agreements cover: Voting rights Pre-emption rights Drag-along and tag-along rights Buy-sell provisions Deadlock resolution mechanisms Courts usually enforce these contract terms unless they are unconscionable or illegal.[4] b. Statutory Remedies for Minority Protection Most legal systems offer protection against unfair prejudice, also called oppression. This occurs when the company or its majority shareholders act in ways that harm, discriminate against, or treat minority shareholders unfairly.[5] Available remedies can include: Order from the Court for the company to cease the offending conduct Mandatory buy-out of the minority’s shares at fair value The appointment of inspectors or special managersc. Fiduciary Duty Claims Shareholders can take legal action if directors or controlling shareholders breach their fiduciary duties, such as the duties of loyalty and care. Possible remedies are: Account of profits Damages Removal from office Injunctions Courts have broad powers to order restitution or stop illegal actions.[6] d. Derivative Actions A shareholder may use a derivative action to sue on the company’s behalf. [7]This is used to address internal wrongdoing, so the company—not just the shareholder—benefits. CAMA details the process, allowing shareholders to act if wrongdoers control the company and the company itself will not act.[8] Court permission is needed before starting.[9] This provision modifies the effect of the common law rule in Foss v Harbottle[10], which generally restricts individual shareholders from bringing suit for wrongs committed against the company. against the company. e. Specific Performance and Injunctions i. If money cannot resolve the problem, courts may order specific performance of contractual obligations, such as those in shareholder agreements.[11] ii. Injunctions to prevent anticipated breaches or enforce governance norms Practical Options for Managing Disputes Legal remedies are important but can be costly, adversarial, and slow. Practical alternatives can save value, protect relationships, and keep the business running. a. Mediation Mediation is a dispute-resolution process in which a neutral mediator helps the parties reach common ground, generate options for mutual gain, and preserve relationships. However, it is non-binding until terms are agreed upon, mediation is flexible and confidential.[12] b. Arbitration The Arbitration and Mediation Act 2023 recognizes and gives effect to arbitration clauses in shareholders' agreements. The Act modernizes Nigerian arbitration law and gives it an international flavour. Arbitration is a private and binding alternative to court adjudication. Its Key advantages include: 1)    Confidential proceedings 2)    Expertise of arbitrators in commercial matters 3)    Finality of awards Arbitration clauses should therefore be included in shareholders’ agreements.[13] c. Internal Dispute Resolution Mechanisms Companies are adopting internal measures, such as board committees, to assess conflicts. i. Escalation matrices ii.Independent expert evaluations These options reduce escalation and encourage early resolution. d. Business and Strategic Solutions Some of the practical approaches to managing disputes include: i. Corporate governance reform i. Corporate Governance Reform Establishing clear policies and decision-making rules can greatly reduce the uncertainty that often causes conflicts or issues. ii. Share Transfer Agreements: These agreements create clear and predictable ways for shareholders to exit and lay out how shares will be valued.[14] iii. Equity Structuring Giving different classes of shares with clearly defined rights—such as voting or non-voting—helps align the interests of all parties. CAMA allows courts to order remedies for minority oppression, such as buying out minority shares or stopping unfair conduct.[15] Dispute resolution depends on strong governance and enforceable contracts. Best Practices and Recommendations To mitigate and manage disputes effectively, companies should: ii. Draft Comprehensive Shareholder Agreements The Agreement should include detailed, clear governance provisions, valuation methods, and dispute-resolution clauses. ii. Include ADR Clauses Put mediation and arbitration clauses in the agreement to avoid expensive court cases. iii. Enhance Corporate Governance Use transparent decision-making structures and systems for regular reporting. iv. Conduct an effective Periodic Review of Agreements Ensure contractual frameworks evolve the meet the business's needs. v. Engage Neutral Experts Early Get valuation experts, governance advisors, or ombudsmen to help settle technical disagreements early. Conclusion CAMA 2020 regulates shareholder disputes in Nigerian private companies. It offers remedies like unfair prejudice petitions, derivative suits, rectification orders, and winding-up. Beyond court action, arbitration, mediation, and good governance are practical ways to manage disputes. Combining legal safeguards with clear governance best manages shareholder disputes in Nigeria. [1] Act No. 3 of 2020 [2] Minority oppression doctrines are codified in the CAMA 2020 (s. 305). [3] Fiduciary duties are core obligations imposed on directors and controlling shareholders (Delaware Gen. Corp. Law § 144; Re City Equitable Fire Insurance Co [1925); Murdock, C. W. (2004). Squeeze-outs, Freeze-outs, and Discounts: Why Is Illinois in the Minority in Protecting Shareholder Interests? https://core.ac.uk/download/268429717.pdf [4] Enforceability of shareholder agreements is grounded in contract law principles (Chitty on Contracts, 34th ed.). [5] Statutory protections against unfair prejudice and oppression exist in many Jurisdictions (UK Companies Act 2006; CAMA 2020) [6] Remedies for breach of fiduciary duty include equitable relief (Gower & Davies, Principles of Modern Company Law, 10th ed.). [7] Derivative suits allow individual shareholders to vindicate company rights (Foss v Harbottle (1843)2 Hare 461). [8] CAMA 2020, Section 344-349 [9] CAMA 2020, Section 346 [10] 1843) 2 Hare 461). [11] Specific performance is available where damages are inadequate (Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998]) [12] Mediation preserves commercial relationships and confidentiality (International Mediation Institute Standards). [13] Arbitration ensures enforceable and private determination of disputes (UNCITRAL Model Law). [14] Buy-sell agreements provide exit mechanisms under predetermined conditions (Brinig & Buckley, Family Business Law, 2026). [15] Nigeria minority protection and relief against prejudice are provided under CAMA Part XXXIV. By: Oluwasileola Akinsete (Associate)

Growing populations and increasing infrastructure demands continue to create a need for large-scale projects across multiple industries, including natural resource development, energy projects, transportation, technology, and industrial plants. These projects are usually capital-intensive, making them impossible to finance using conventional loan structures[1]. Thus, project finance becomes a ready technique for funding large-scale, capital-intensive projects. Unlike traditional corporate loans, the viability of financed projects is tested on cash flow forecasts rather than the credit-worthiness of sponsors or the actual value of the project assets[2]. That is, it relies on a non-recourse or limited recourse structure, where lenders look primarily to the cash flows generated by the project for repayment. Project finance holds significant benefits for stakeholders, including: a. Efficient risk allocation among parties best able to manage specific risks[3] b. Mobilization of large capital pools c. Realization of economies of scale However, these benefits come with a corollary of legal risks. Due to the significant capital requirements, financing is typically achieved through partnerships, bonds, syndication, and risk-sharing arrangements among multiple stakeholders[4]. This complex structure opens project finance model to major legal risks. In this article, we discuss some of the legal risks at both pre-completion and post-completion stages Completion Risk (pre-operational phase): Completion risk refers to the possibility that the project is not completed on time, within budget, or to the required specifications. Since cash flow generation begins only after completion, delays or failures can jeopardize the entire financing structure. Without completion, all other risks arise, making financial losses inevitable. Financial difficulties faced by the contractor and variations by the project sponsors are the leading causes of construction delay. Other factors that extend the time required to complete projects include Severe weather conditions and changes in law.[5] At the preoperational stage, the project may require regulatory approvals, licenses, or permits. It is important to obtain these licenses before commencing the project. Failure to obtain licenses before commencement may truncate the project if regulators refuse requisite approvals, leading to abandonment. Additionally, defective title, encumbrances, or community disputes can affect site access. The financial agreement should include comprehensive conditions precedent, making the lender’s payment obligations contingent on the prior obtaining of the requisite permits, land title verifications, consents, and approvals. Also, many projects require construction contracts. Imprecise drafting may lead to disputes over scope, timelines, or performance standards. Clearly drafted fixed-price, date-certain EPC contracts with bankable standards ensure protection against delays arising from variations and unforeseen circumstances. An elaborate force majeure clause can be a good mitigating tool. Permissible non-performance during a set force majeure period (natural disasters, pandemics, political events etc) together with clear payments and settlement obligations for contractor costs if force majeure persists, can be advantageous to the contractor. The project company, on the other hand, can benefit from termination rights where the contractor abandons the project or fails to comply with key obligations under the agreement. The right to terminate and recover site materials and equipment, together with damages, can enable the project company to engage another contractor to complete the works. Unenforceable or poorly structured Liquidated Damages clauses may fail to compensate lenders. Liquidated damages should be payable if completion is not achieved by a fixed date, and those liquidated damages should be adequate and at least cover interest payable on the loan.[6] Sponsors are usually required to provide robust liquidated damages provisions and completion guarantees. The contractor should provide extensive guarantees and, if the contractor is to be released from liability for defects after a period, that period should be long and only run from the passing of a well-defined completion test.[7] Sponsors are also usually required to provide completion guarantees or sponsor support undertakings, while contractors provide performance bonds, advance payment guarantees, and maintenance bonds to secure their obligations. Additionally, contractor bonds serve as key risk mitigants, motivating performance and offering financial recourse if projects are not completed or if advance payments are misused. Certifications from independent technical advisors before drawdowns further ensure that construction milestones and performance standards are achieved. Post-completion risks (Operational Phase): After completion, the project must generate stable, predictable cash flows to service debt and provide returns. A robust system for the collection and distribution of project proceeds is essential to ensure timely debt servicing and sponsor distributions. This ensures disbursements to sponsors and timely repayment of the project loan. Some legal risks in this stage are discussed below. Offtake Agreement Risk: Offtake agreements are important for ensuring a ready buyer for the project’s products. Unenforceable or poorly drafted Offtake Agreements with buyers can pose significant risks. If an offtake agreement has weak payment obligations, it can become difficult to repay or service the loan. One way to mitigate this risk is through the use of take-or-pay structures in offtake agreements. Under a take-or-pay structure, the buyer has to pay a basic cost of the project products even if delivery is not taken[8] or the buyer commits to a fixed charge, whether or not the buyer requires the project products on an ongoing basis. The rights under this contract will usually be assigned to the lenders who will have a direct claim under it should the borrower experience payment shortfalls.[9] Operations and Maintenance (O&M) Risk Post-completion performance relies heavily on the efficiency of project operations and maintenance. Poor operational performance can decrease output levels and, in turn, revenue. This risk is mitigated through strong Operations and Maintenance (O&M) agreements, which include clearly defined performance standards, key performance indicators (KPIs), and penalty regimes for underperformance. Currency and Repatriation Risk In cross-border projects, particularly within emerging markets, restrictions on foreign exchange availability or capital repatriation can impede the ability of investors and lenders to access project revenues. This risk is mitigated through the use of hedging arrangements, and, where appropriate, political risk insurance, which collectively enhance the security and transferability of project cash flows. CHANGE IN LAW RISK Changes in regulatory policies or laws risk cutting across both the construction and operational phases of a project. For instance, carbon emission laws and standards can have significant negative impacts on ongoing energy projects, particularly those reliant on fossil fuels (coal, oil, natural gas). These regulations, including carbon taxes, cap-and-trade systems, and stricter emission limits, increase operational costs, reduce profitability, and risk turning even existing infrastructure into "stranded assets". To mitigate this risk, project agreements commonly include “change-in-law” provisions that allocate the financial consequences of such changes, often through tariff adjustments or compensation mechanisms designed to preserve the project’s economic equilibrium. "Change in Law" Clauses should explicitly include climate-related regulations (carbon taxes, new emission standards) as a "Change in Law" event, allowing for contract renegotiation, cost-sharing, or price adjustments. It is therefore germane to negotiate definitions to include sudden, extreme regulatory changes that make a project economically unviable. Also, carbon laws can influence the architecture of project agreements and may call for more tailored provisions. Where the project generates carbon credits or offsets, clearly defining which party owns, manages, and benefits from these credits or offsets can help prevent conflicts. The inclusion of emissions reporting obligations is also advisable to comply with such environmental and sustainability-driven laws, particularly in the oil sector. Continuing transparent Monitoring, Reporting, and Verification (MRV) routines to meet compliance standards and avoid penalties should be embedded in the project agreement. Some agreements are starting to include technology & retrofitting clauses. This provides for mandatory adoption of emission-reduction technology such as Carbon Capture, Utilization, and Storage - CCUS[10], and outlines responsibility for costs. Finally, government support agreements or guarantees, where available, provide additional comfort to lenders by mitigating regulatory and political risks, including adverse changes in law or indirect expropriation. CONCLUSION Project finance remains a critical tool for delivering large-scale infrastructure and industrial projects. However, its success depends on careful legal structuring and risk allocation throughout the project lifecycle. From completion risk during construction to revenue and regulatory risks during operation, each stage presents distinct challenges. Ultimately, the bankability of a project depends on the extent to which legal frameworks are able to secure, stabilize, and protect project cash flows, ensuring that lenders are repaid and investors achieve their expected returns. [1] Beidleman, Carl R; Fletcher, Donna; Veshosky, David, On Allocating Risk: The Essence of Project Finance, Sloan Management Review; Cambridge Vol. 31, Iss. 3, (Spring 1990): 47. [2] Andrew Fight, Introduction to Project Finance, 2006 Chapter 1, page 1 & 8 [3] https://www.lexology.com/library/detail.aspx?g=87dd721a-64cf-4b4f-b24d-c6846fee507b; Paul D. Clifford, Project Finance - Applications and Insights to Emerging Markets Infrastructure; Hoboken, New Jersey: Wiley 2021 [4] Yescombe, E.R. (2014) Principles of Project Finance. 2nd Edition, Elsevier Science, Burlington. Pages 16, 21, https://doi.org/10.1016/B978-0-12-391058-5.00002-3 [5] G. Sweis, R. Sweis, A. Abu Hammad, A. Shboul, Delays in construction projects: The case of Jordan, International Journal of Project Management, Volume 26, Issue 6, 2008, Pages 665-674, ISSN 0263-7863, https://doi.org/10.1016/j.ijproman.2007.09.009. (https://www.sciencedirect.com/science/article/pii/S0263786307001573)\ [6] Andrew @ page 114 [7] ibid [8] Ibid [9] ibid [10] https://ccushub.ogci.com/ccus-basics/understanding-ccus/ By: Michael Isokpehi (Associate)

Involving Nigerian Targets: A Practical Perspective Introduction Nigeria remains one of the most strategically significant M&A markets on the African continent. With Africa's largest economy, a population exceeding 220 million, and sectors ranging from upstream petroleum to high-growth fintech, the country consistently draws foreign acquirers looking for scale and first-mover advantage. But anyone who has negotiated a deal involving a Nigerian target knows that regulatory complexity not valuation is often the defining variable in whether and when a transaction closes. This article takes a practical look at how regulatory risk manifests across the lifecycle of a cross-border deal involving a Nigerian target: from early structuring decisions and due diligence design, through to the drafting of conditions precedent, MAC clauses, and indemnity regimes that can mean the difference between a clean close and a costly impasse. It draws on the regulatory developments of the past two years including the Investments and Securities Act 2025 (ISA 2025), the Nigeria Tax Act 2025, the new CBN Foreign Exchange Code, and the Federal Competition and Consumer Protection Commission's (FCCPC) increasingly assertive enforcement posture to offer guidance that is current and actionable. The article is written primarily for foreign acquirers and their counsel, though the principles are equally relevant to Nigerian sellers negotiating the allocation of regulatory risk. Download full article here: TTA Article on Nigeria MA Regulatory Risk.cdr By: Olawunmi Ojo – Managing Associate

INTRODUCTION Foreign investment plays a central role within global economic development through facilitating the cross-border movement of capital, technology and expertise. However, the ability of investors to realize returns on their investments is closely tied to the foreign exchange regime of the host country. The government regulates the conversion and transfer of foreign currency primarily to manage balance-of-payments pressures, stabilize domestic currencies and preserve foreign reserves. As these measures may serve legitimate macroeconomic objectives, they might significantly affect investors’ ability to repatriate profits and capital. This article examines foreign exchange controls, the legal regime governing repatriation of funds and the consequences for foreign investors, with reference to both developed and developing economies. CONCEPT OF FOREIGN EXCHANGE CONTROLS Foreign exchange controls refer to regulatory rules imposed by governments or central banks to oversee the purchase, sale, transfer and use of foreign currency. These controls often extend to international financial transactions such as profit remittances, capital transfers and currency conversion. States typically adopt such measures to conserve foreign reserves, curb exchange rate volatility, manage inflationary rate and protect domestic financial systems from destabilizing capital flows. Historically, exchange controls have been more prevalent in developing economies, where economic-related vulnerability and limited reserves necessitate closer regulation of foreign exchange movements. [1] FORMS AND MECHANISMS OF FOREIGN EXCHANGE CONTROLS The nature of foreign exchange controls vary across jurisdictions. In some countries, investors may face restrictions on converting local currency into foreign currency or may be required to obtain regulatory approval before doing so. Other regimes limit the amount or frequency of transfers abroad or impose controls on cross-border capital movements. Certain jurisdictions operate multiple exchange rate systems, creating disparities between official and market-based rates. In addition, extensive record-keeping requirements are often imposed to guarantee compliance with tax, regulatory, and anti-money laundering obligations. Collectively, these measures can complicate investment operations and constrain capital mobility. REPATRIATION OF FUNDS Repatriation of funds refers to the transfer of investment-related earnings from the host state to the investor’s home jurisdiction. Such funds may include dividends, operational profits, capital gains, loan repayments, interest payments, or proceeds from the sale or liquidation of investments. The right to repatriate capital is a core protection under international investment law and is a major determinant of investment attractiveness. SCOPE OF REPATRIABLE INVESTMENT PROCEEDS To encourage foreign direct investment, many States provide legal guarantees for the repatriation of funds through domestic legislation and international agreements. These guarantees are commonly embedded in national investment laws, bilateral investment treaties, free trade agreements and regional investment frameworks. In Nigeria, for example, the Nigerian Investment Promotion Commission Act guarantees foreign investors the right to repatriate profits, dividends, and capital, subject to compliance with applicable tax and regulatory requirements. Similarly, the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act regulates foreign exchange transactions and permits the transfer of capital and profits through authorized channels in accordance in prescribed guidelines.[2] Such statutory assurances play an important role in building investor faith. DOMESTIC LEGAL GUARANTEES FOR REPATRIATION The central banks typically serve as the primary regulators of foreign exchange transactions and capital movements. Their duties include overseeing foreign currency markets, supervising authorized financial institutions, approving cross-border remittances and issuing operational guidelines. In Nigeria, the Central Bank of Nigeria performs these functions and regulates banks that process remittance applications for foreign investors. Repatriation is generally conditional upon satisfaction of specific paperwork and compliance requirements. Investors are often required to demonstrate lawful importation of capital, tax compliance and adherence to financial reporting standards. In Nigeria, the Certificate of Capital Importation issued by an authorized dealer bank serves as formal evidence that investment capital was brought into the country through approved channels. Possession of this certificate is essential for the subsequent repatriation of profits and capital.[3] In addition, investors must discharge all relevant tax liabilities, including corporate income tax, withholding tax on dividends and capital gains tax, before funds may be transferred abroad. IMPLICATIONS OF FOREIGN EXCHANGE CONTROLS FOR INVESTORS Foreign exchange controls have several implications for investors. Restrictions on currency convertibility may delay or limit access to foreign currency, thus affecting the timing and certainty of profit repatriation. Compliance and documentation requirements can increase transaction costs and administrative obligations, while capital transfer restrictions may constrain liquidity and reduce investment flexibility. Exchange rate volatility, often associated with controlled regimes, can further erode the value of repatriated funds. Moreover, stringent foreign exchange controls may denote underlying economic or political instability, heightening sovereign and regulatory risk. In such environments, investors must thoroughly evaluate the availability of treaty protections and the likelihood of recourse to international dispute resolution mechanisms. From the perspective of host countries, foreign exchange controls present both advantages and disadvantages. While they can help preserve foreign reserves, stabilize domestic currencies and lessen financial crises, overly restrictive regimes may deter foreign investment, encourage capital flight through informal channels and undermine confidence in the financial system. Experience suggests that well-balanced and transparent foreign exchange policies are more effective in attracting stable, long-term investment. [4] ROLE OF INTERNATIONAL INVESTMENT AGREEMENTS AND ARBITRATION International investment agreements play a key role in reducing the risks linked to foreign exchange controls. Bilateral investment treaties commonly guarantee the free transfer of investment-related funds and provide protections against expropriation and unfair treatment. Where host states impose arbitrary or discriminatory restrictions on capital transfers, investors may seek redress through international arbitration under frameworks such as the ICSID Convention or the UNCITRAL Arbitration Rules. RISK CONTROL STRATEGIES FOR FOREIGN INVESTORS To manage foreign exchange risks, investors often adopt strategies designed to protect capital and returns. These may include structuring investments through jurisdictions with favourable treaty protections, employing currency hedging instruments, maintaining meticulous documentation of capital inflows and financing operations partly through local borrowing. Strict conformity with regulatory and tax requirements is also necessary to minimize delays and disputes during repatriation. EMERGING TRENDS IN FOREIGN EXCHANGE POLICIES Globally, foreign exchange control policies continue to evolve. While many countries have liberalized their regimes to attract foreign capital, phases of economic stress often prompt renewed restrictions. Recent reforms in several jurisdictions indicate that measured relaxation of foreign exchange controls can enhance investor assurance and stimulate capital inflows, provided that adequate regulatory safeguards remain in place.[5] CONCLUSION In conclusion, foreign exchange controls and repatriation rules remain fundamental components of the international investment environment. Although such controls serve legitimate economic purposes, they also present legal and monetary challenges for foreign investors. The ability to repatriate profits and capital efficiently is a decisive factor in investment decision-making. Accordingly, host countries must strike a fine balance between regulatory supervision and investor protection, while investors must engage in informed legal planning, regulatory compliance, and risk management for succeed in controlled foreign exchange environments. [1] (Hartmann, 1994) [2] Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 [3] Investor Rights – Nigerian Investment Promotion Commission [4] Joshua et al., 2025 [5] FX reforms ignite confidence as inflows hit $20.98bn, 2025 By: Olawunmi Ojo (Managing Associate)

INTRODUCTION In an increasingly digitized and globalized economy, the transfer of personal data across national borders has become an operational necessity for businesses. Nigerian companies and businesses are not left out, as they routinely rely on offshore cloud infrastructure, foreign service providers, and multinational data ecosystems to deliver services efficiently. However, these data flows raise significant legal and regulatory concerns, particularly regarding the protection of the privacy rights of Nigerian data subjects. The enactment of the Nigeria Data Protection Act, 2023 (NDPA) and the subsequent NDPA General Application and Implementation Directive, 2025 (GAID) marked a decisive shift from a fragmented regulatory approach to a comprehensive statutory regime governing cross-border data processing and transfers. The NDPA and GAID, enforced by the Nigeria Data Protection Commission (NDPC), establish a restrictive framework for cross-border data transfers, premised on the principle that personal data should not leave Nigeria without adequate safeguards. Cross-border data transfers are therefore no longer routine technical operations; they are regulated legal activities requiring demonstrable compliance with statutory conditions. It is against this background that this piece aims to examine the legal requirements governing cross-border data transfers and the practical compliance challenges faced by organizations operating in Nigeria. LEGAL REQUIREMENTS FOR CROSS-BORDER DATA TRANSFER IN NIGERIA Cross-border data transfer in Nigeria is governed by the combined provisions of the NDPA and GAID[1]. Under the NDPA, cross-border data transfer is allowed provided[2]: a. The recipient affords an adequate level of protection b. There is an Adequacy Decision by the Commission. c. There exists a Cross-Border Data Transfer Instrument (CBDTI) approved by the Commission; and d. Other lawful bases as provided under section 43 of the NDPA apply[3] In light of the above, the recipient must provide an adequate level of protection to safeguard personal data for cross-border transfers to Nigeria. Where this is not in place, it must fall under the exceptions set out in section 43 of the NDPA. Where a data controller lacks the adequacy of protection requirement, it must ensure: i. The data subject has provided and not withdrawn consent to such transfer after having been informed of the possible risks of such transfers due to the absence of adequate protections: ii. The transfer is necessary for the performance of a contract to which a data subject is a party or in order to take steps at the request of a data subject, prior to entering into a contract. iii. The transfer is for the sole benefit of a data subject and — (i) it is not reasonably practicable to obtain the consent of the data subject to that transfer, and (ii) if it were reasonably practicable to obtain such consent, the data subject would likely give it iv. The transfer is necessary for important reasons of public interest. v. The transfer is necessary for the establishment, exercise, or defence of legal claims; or vi. The transfer is necessary to protect the vital interests of a data subject or of other persons, where a data subject is physically or legally incapable of giving consent. The GAID, in its own case, reiterates the overarching nature of Part VIII of the NDPA on cross-border transfer of personal data[4]. However, given that the NDPC has yet to issue any regulatory CBDTI, the provisions of Schedule 5[5] of the GAID shall be used the evaluate countries for the purposes of determining their level of adequacy and for other grounds of cross-border data transfer recognized under the NDPA.[6] By virtue of the Guidance on Cross-Border data transfer as contained under Schedule 5 of the GAID, the NDPC may adjudge a country as affording adequate data protection based on the following conditions: a) Availability of enforceable data subject rights, the ability of a data subject to enforce such rights through administrative or judicial redress, and the rule of law; b) Existence of any appropriate instrument between the NDPC and a competent authority in the recipient jurisdiction that ensures adequate data protection[7]; C) Access of a public authority to personal data; d) Existence of an effective data protection law; e) Existence and functioning of an independent, competent data protection, or similar supervisory authority with adequate enforcement powers; f) International commitments and conventions binding on the relevant country and its membership of any multilateral or regional organizations Despite the provisions of the NDPA and GAID on cross-border transfer of personal data, there are still gaps that require clarity from the NDPC, such as the issuance of CBDTI. Some of these gaps often pose challenges for businesses navigating cross-border transfers in Nigeria. CONCLUSION It is not in dispute that cross-border data transfers are indispensable to modern business operations. Nevertheless, they are among the most heavily regulated aspects of data protection law in Nigeria. The NDPA’s approach is restrictive and accountability-driven, thereby requiring organizations to justify and safeguard every transfer of personal data outside Nigeria. While the legal requirements are conceptually clear, practical compliance remains challenging due to technological dependence, regulatory uncertainty, and operational constraints. Ultimately, organizations must treat cross-border data transfer compliance not as a technical afterthought but as a core legal and risk management function. Businesses that embed robust governance structures and proactive compliance strategies will be better positioned to navigate Nigeria’s evolving data protection landscape while maintaining operational efficiency in a global digital economy. [1] See Sections 41 – 43 of the Nigeria Data Protection Act, 2023 (NDPA) and Article 45 of the GAID, 2025 [2] See Sections41 – 43 of the NDPA [3] These lawful bases would only apply for cross-border data transfer where the data controller lacks the adequacy of protection requirement [4] Article 45 (1) of the GAID [5] Schedule 5 contains the Guidance on Cross-Border Data Transfer [6] See Article 45(2) of GAID [7] This means the Commission may enter into an agreement with the Data Protection Authority of the jurisdiction for the purposes of Mutual Legal Assistance on (i) Investigation of data breaches (ii) Enforcement of cross-border decision; and (iii) Intergovernmental information sharing

A holding company remains one of the most efficient structures for investors—local or foreign—who want to centralise ownership, streamline governance and manage multiple businesses under a single entity. In Nigeria, holding companies are widely used across energy, manufacturing, fintech, real estate, hospitality and services. They are also commonly adopted by multinational groups seeking a stable corporate base for their Nigerian or West African operations. Establishing a holding company in Nigeria requires thoughtful structuring, compliance with local regulation and a clear understanding of tax, corporate and immigration implications. Below is a detailed, practical guide for investors considering this route. What a Holding Company Is (and Why Investors Use It) A holding company is a corporate entity created primarily to own shares or assets in other companies. It typically does not engage in substantial day-to-day operations itself. Instead, it controls subsidiaries, manages group strategy, holds intellectual property, and serves as the investment and governance hub of a larger corporate structure. Investors favour holding companies in Nigeria because they separate operational risk from core assets, centralise group decision-making, simplify fundraising at the group level, facilitate succession and ownership transfers and create a clearer governance and compliance framework These advantages make the holding model attractive for both local conglomerates and foreign multinational groups. Incorporating a Holding Company The process begins with the Corporate Affairs Commission (CAC), Nigeria’s company registry. A holding company is most commonly incorporated as a Private Company Limited by Shares (Ltd). Standard incorporation requirements includes proposed company name registered office in Nigeria details of directors and shareholders (foreign directors are permitted) share capital structure and allotment Memorandum & Articles of Association The company’s objects clause should reflect its holding purpose (for example: acquiring, holding and managing shares or interests in other companies, holding intellectual property, and providing group oversight). Minimum Paid-Up Capital Under Nigeria’s current regulatory practice, companies with foreign participation are expected to have a minimum paid-up share capital of ₦100,000,000 (one hundred million naira). This requirement is reflected in the Revised Handbook on Expatriate Quota Administration and has been implemented in practice by regulators and service providers. The ₦100 million threshold applies to companies with foreign participation and is a precondition for certain post-incorporation approvals such as business permits and expatriate quota applications.Regulators and banks typically expect the capital to be paid-up (not merely authorised). In many cases, only the portion owned by the foreign investor needs to be inflowed and evidenced, but practices can vary by bank and regulator so it is prudent to plan for full paid-up capital documentation. The Corporate Affairs Commission and immigration authorities have signalled enforcement through incorporation queries, post-incorporation checks and linkage to expatriate quota and business permits. Because guidance has evolved, many service providers treat this as a live requirement and advise compliance to avoid delays. Companies with foreign participation and paid-up capital below the ₦100 million threshold have been advised to bring their capital in line with the new threshold within regulatory timelines to avoid queries on future filings or regulatory actions. Transferring Subsidiaries and Assets into the Holding Structure After incorporation, a holding company can acquire shares in existing subsidiaries, inject capital into new operating entities, transfer intellectual property rights or take title to group assets. Each share transfer must be properly documented and reflected in subsidiary registers and CAC filings. When foreign capital is imported, a Certificate of Capital Importation (CCI) issued by the receiving bank is critical for future profit and capital repatriation. Proper documentation of capital inflows helps smooth foreign exchange and tax processes. Sector-Specific and Regulatory Approvals If the holding company will own controlling stakes in regulated entities, expect regulatory approval processes. Regulators that commonly require change-of-ownership notices or approvals include: Central Bank of Nigeria (CBN) for banks, payment services, and certain financial institutions Nigerian Upstream Petroleum Regulatory Commission (NUPRC)  for upstream oil interests Nigerian Communications Commission (NCC) for telecoms licence transfers National Insurance Commission (NAICOM) for insurance entities NAFDAC or SON  for pharmaceuticals and manufacturing Securities and Exchange Commission (SEC)  for companies operating in the capital markets Regulatory timelines and documentation requirements differ across sectors; early engagement prevents transactional delays. NIPC Registration and Investment Incentives Foreign-owned holding companies should register with the Nigerian Investment Promotion Commission (NIPC). NIPC registration is important for formal recognition as an enterprise with foreign participation and for accessing potential incentives, clarifying repatriation rules and documenting the foreign investment for treaty protections. Tax Considerations A holding company offers tax planning opportunities but also attracts scrutiny on inter-company transactions. Key tax points: Dividends: Dividends received by a holding company from Nigerian subsidiaries are generally exempt from further Nigerian tax if structured correctly. Transfer pricing: Inter-company services, management fees and loans must meet arm’s length standards under Nigeria’s transfer pricing rules. Proper documentation is essential. Withholding tax, VAT and CGT: These may apply in different circumstances and should be considered in structuring group flows. Filing obligations: Holding companies must file annual tax returns and audited financial statements in Nigeria. Immigration, Staffing and Corporate Governance If the holding company will employ expatriates for group oversight roles such as group CFO, regional CEO or technical directors  ensure you obtain: Business Permit from the Ministry of Interior (where applicable) Expatriate Quota approval for specified roles STR/CERPAC and visa regularisation for incoming expatriates A holding company is an ideal place to centralise group policies on governance, risk management, compliance and HR. Centralised policies help harmonise standards across subsidiaries and make regulatory reporting more straightforward. Why Investors Choose Holding Structures in Nigeria A properly structured holding company supports streamlined fundraising at the group level, asset protection and separation of liabilities, easier portfolio reorganisation or exit planning, consolidated governance and reporting and efficient expansion and brand management across sectors These benefits explain why many of Nigeria’s leading business groups and multinationals operate holding company models. Conclusion Establishing a holding company in Nigeria remains a strategic decision for investors looking for oversight, tax efficiency, and clear structure. With the new minimum paid-up capital requirements for foreign investors, careful planning around capital importation, regulatory approvals, and tax strategies is more crucial than ever. Engaging local advisors early—such as corporate, tax, and immigration experts—will help ensure your holding structure is compliant, operationally sound, and well positioned to support growth across Nigeria and the surrounding region. For further enquiries, please contact Olawunmi Ojo on [email protected], +2348038954988  

Introduction Nigeria remains one of Africa’s most attractive business destinations, with many foreign companies choosing to gradually enter the market by establishing either a branch office or a representative office before making a long-term commitment. Both structures allow an international business to maintain a presence in the country without immediately setting up a full Nigerian subsidiary, though they serve different purposes. Understanding how each functions and how to set them up properly is crucial for navigating Nigeria’s regulatory environment and ensuring compliance. A branch office is essentially an extension of the foreign parent company. It conducts the same business activities as the parent organization and is authorized to generate income in Nigeria, enter into contracts, and engage in commercial operations. In contrast, a representative office is much more limited. It cannot conduct business, earn revenue, or execute contracts in Nigeria. Its functions are restricted to promotional activities, market research, customer liaison, and acting as a communication channel. Many foreign companies use a representative office as a preliminary step to understand the Nigerian market before establishing a trading entity. Setting up either structure begins with understanding Nigeria’s regulatory requirements for foreign company registration. Under Nigerian law, foreign entities carrying on business in the country must register with the Corporate Affairs Commission (CAC). However, the CAC recognises that some companies wish to operate in a limited capacity for liaison or research purposes. As a result, it permits the registration of branch offices and representative offices, provided the parent company remains the legal entity responsible for activities carried out in Nigeria. The application process typically starts with preparing the necessary corporate documents. These include the parent company’s certificate of incorporation, constitutional documents, details of directors, a registered address and a board resolution authorising the establishment of the Nigerian office. The CAC also requires the appointment of a local representative who will act as the authorised contact person within Nigeria. At this stage, it is important to be clear about the intended scope of activities, because choosing between a branch office and a representative office has both legal and tax implications. A company intending to conduct actual business operations in Nigeria, whether trading, supplying goods, or providing services, must register a branch office and comply with the regulatory requirements applicable to foreign companies. A representative office, by design, is not allowed to engage in profit-making activities. Using the wrong structure can easily create compliance and tax challenges. Once CAC registration is complete, the company must fulfill additional obligations applicable to any legal presence in Nigeria. This includes obtaining a Tax Identification Number from the Federal Inland Revenue Service (FIRS). Even though a representative office does not earn income, it still requires a tax registration for administrative purposes. A branch office, on the other hand, is subject to Nigerian tax laws, including corporate income tax, withholding tax, and value-added tax, depending on its operations. Companies should also review whether sector-specific approvals are required. Industries such as banking, insurance, petroleum, pharmaceuticals, shipping, manufacturing, and telecommunications are heavily regulated. Entities operating in these sectors may require approvals from regulators such as the Central Bank of Nigeria (CBN), the Nigerian Communications Commission (NCC), NUPRC, NAFDAC, or the Standards Organisation of Nigeria (SON). Ensuring these licences are in place is a key part of establishing a compliant foreign presence. Practical considerations also matter when setting up a branch office or representative office in Nigeria. Securing a physical office, opening a Nigerian bank account and engaging local or expatriate staff are all part of the process. Foreign employees will require appropriate immigration permits, and companies intending to employ expatriates must apply for Expatriate Quota approval from the Ministry of Interior. This is a critical step that new entrants often overlook. Foreign companies should also be mindful of how liability flows from operations in Nigeria. A branch office is treated as an extension of the foreign company and may expose the parent organisation to legal or financial obligations arising from activities in the country. A representative office provides more insulation from liability but offers fewer commercial opportunities. Many investors begin with a representative office and later transition to a Nigerian subsidiary once they gain clarity and traction in the market.   Conclusion Setting up a branch office or representative office in Nigeria is relatively straightforward once the regulatory requirements and operational realities are well understood. The real success lies in choosing the structure that aligns with the company’s objectives while meeting all legal, tax, and sector-specific obligations. With Nigeria’s expanding consumer base, strategic location, and strong economic potential, establishing the right kind of presence can create a valuable pathway into one of Africa’s most dynamic markets. For further enquiries, kindly reach out to Olawunmi Ojo via [email protected], +2348038954988  

Overview If you’re thinking about launching a microfinance bank, lending company, or payment platform in Nigeria, this guide is written from the ground up based on real-world experience. I’ll walk you through every stage—from registering your company, to understanding the paperwork and capital requirements, to dealing with the Central Bank of Nigeria (CBN) and staying compliant for the long haul. The aim is to demystify the process with practical advice, insights, and a checklist you can genuinely use if you’re serious about building a compliant financial business in Nigeria. In short, you’ll need to: Register your business with the Corporate Affairs Commission (CAC); Prepare strong governance documents and a business plan; Apply to the CBN for the right licence (microfinance, finance company, or payment services); Put your compliance systems (like AML/KYC and IT controls) in place; and Secure the CBN’s Approval-in-Principle, meet any further requirements, then get your final licence.   Which licence do you need? Microfinance Bank (MFB): This is your route if your goal is to accept deposits and provide microloans to the public. There are three major categories namely;unit, state, and national. Each with its own capital requirements. You’ll be dealing directly with the CBN for licensing and ongoing oversight. Finance / Lending Company: If you mainly want to lend money (to individuals or businesses) but don’t plan to accept deposits, you’ll be looking at a finance company licence. These companies have their own set of rules under the CBN. Payment Solution Provider (PSP or PSSP): If your focus is on processing payments, running wallets, handling remittances, or building APIs for banks and businesses, you’ll need a CBN payment licence. There are several categories , each with different activities allowed and capital requirements. Be sure to check which fits your business model. Step-by-step Guide Choose your company structure and register with CAC Start by registering a limited liability company. This is the most common choice for founders. If you have foreign partners, be prepared for additional paperwork and potentially higher minimum capital. You’ll need to choose a business name, prepare your Memorandum and Articles of Association, and obtain your CAC certificate and Tax ID (TIN).   Draft a detailed business plan & governance documents Your business plan isn’t just a formality. Regulators want to see that you’ve thought things through and have a real strategy. Make sure you include: Market analysis and product suite (savings, micro-loans, wallet, merchant acquiring). Financial projections (3–5 years), capital injection schedule, and stress tests. Risk management & AML/CFT framework, IT systems, disaster recovery, and outsourced vendor management. Corporate governance: board structure, CVs of directors/promoters, fit-and-proper declarations. Meet minimum capital & financial requirements Capital thresholds have changed historically and vary by licence: For microfinance banks (MFB), the capital you’ll need depends on your chosen tier: ₦20 million for unit, ₦100 million for state, and ₦2 billion for national licenses are common figures. Finance companies have lower capital requirements than banks, but you’ll still need to follow the CBN’s prudential guidelines. Payment service providers (like PSPs and PSSPs) have different capital requirements depending on exactly what you want to do. These have changed recently, so double-check the latest CBN guidelines to make sure you’ve budgeted enough. Required Documents The list of required documents will depend on your license, but here’s what you’ll almost certainly need: CAC certificate of incorporation, Memorandum & Articles, Form of Allotment. Detailed business plan & financial projections. Board and management CVs, passports/IDs, police good conduct where applicable, and fit-and-proper forms. Evidence of paid-up capital / bank statements showing capital injection. AML/CFT policy, KYC procedure, IT security policy, data protection compliance (NDPR), internal controls/policies. For PSP/PSSP: software architecture, API specifications, PCI/DSS compliance plan (if card acceptance), risk management. Apply to CBN: AIP, then final licence Most financial licences follow a two-stage process: First comes the Approval-in-Principle (AIP): The CBN will review your documents and, if you meet their requirements, will issue a provisional approval. Be ready to pay a non-refundable application fee and submit your financial documents (audited or projections, depending on your stage). Once you’ve met all pre-licence conditions (like showing your capital is in the bank and your IT systems are set up),the CBN will then issue your final licence subject to meeting other requirements and you’re ready to operate. Processing times vary depending on the completeness of the application and regulator workload.   Implement compliance & operational readiness Before you go live, make sure you’ve done the following: Deploy KYC/AML onboarding. Register with Nigeria’s Financial Intelligence Unit (NFIU) where required. Put in place transaction monitoring, suspicious activity reporting (SAR) frameworks. Establish vendor contracts, PCI/DSS compliance (if you handle cards), and robust cybersecurity controls. Run pilot / sandbox if deploying novel fintech services , engage the CBN on sandbox options if available. Post-licence obligations After you get your licence, don’t relax, there’s ongoing work to stay compliant: Submit periodic prudential reports and audited accounts to CBN. Maintain minimum capital & liquidity ratios prescribed. Keep up AML training and independent audits. Notify CBN of significant corporate changes (shareholders, directors).   Compliance & risk highlights (must-do list) Anti-money laundering (AML/CFT): You must have systems for customer due diligence, transaction monitoring, reporting suspicious activities, and appointing a compliance officer Data protection: Nigeria’s NDPR applies to you if you’re collecting or processing personal data. Cybersecurity and third-party risk: Have clear contracts (SLAs) with your tech providers, run penetration tests regularly, and be sure you have an incident response plan in place. Consumer protection: Be upfront about your fees and lending terms, and stick to any interest rate caps that apply. Outsourcing and agents: If you use agents or third parties (like in agent banking), get CBN approval and monitor their activities closely.   Practical tips for founders & foreign investors Work with a good lawyer and compliance pro from the start. CBN is strict about who runs and owns these companies, and about your governance setup. Be conservative in projections and explicit on capital sources. Regulators want verified evidence of funds. Consider partnerships: partnering with an existing PSP or MFB can reduce time-to-market for some services (but check regulatory limits). Plan for NDPR & PCI/DSS if holding customer data/cards. Check recent CBN circulars just before application. Capital and procedural rules have been updated several times; always rely on the latest CBN guidance.   FAQs Q: How long does it take to get a microfinance bank licence in Nigeria? A: With complete documentation, expect 3–12 months, but bank-level or national authorisations can take longer. Always factor time for capital verification and regulatory back-and-forth. Q: Can a foreigner own 100% of a Nigerian microfinance or fintech company? A: Foreign participation is permitted but comes with specific CAC and sectoral requirements; some licences may require local presence or minimum local shareholding depending on the activity, confirm with CAC and CBN. Q: What’s the difference between a PSP and a Payment Service Bank (PSB)? A: PSPs/PSSPs generally provide payment processing services (merchant acquiring, payment gateways, wallets) and are licensed accordingly. A Payment Service Bank or Payment Solution Bank often has a broader remit (deposit taking within preset limits) and different capital rules. Check the CBN payment guidelines for exact scopes.   For further enquiries, kindly contact Olawunmi Ojo on [email protected]  

Nigeria has become one of Africa’s most active markets for fintech and digital assets, shaped by a youthful population, deep mobile penetration, and a strong appetite for innovative financial solutions. While the market is dynamic, entering the Nigerian fintech or crypto space requires a grounded understanding of the regulatory landscape. Foreign companies often discover that licensing, particularly for crypto-related operations, is not a fast or mechanical process. It demands patience, strategy and an evident appreciation of how Nigeria’s regulators approach emerging financial technologies. Unlike some jurisdictions that operate a single, consolidated “fintech licence,” Nigeria regulates fintechs based on the nature of services they intend to offer. Payment companies fall under the Central Bank of Nigeria (CBN), while the Securities and Exchange Commission (SEC) regulates digital asset and virtual asset businesses. This means that foreign companies may need to engage with different regulators depending on whether they offer payments, digital wallets, mobile money, crypto exchange services, token issuance or brokerage activities. For crypto-focused firms in particular, the SEC’s “Rules on Digital Assets and Virtual Asset Service Providers” form the core regulatory framework. Under these rules, a company intending to operate as a Virtual Asset Service Provider (VASP) must register with the SEC. However, this process is evolving. To date, the SEC has issued only a limited number of VASP registrations, and most applicants remain in preliminary stages of engagement, incubation or assessment. Rather than opening the floodgates to mass licensing, the SEC has taken a cautious, measured approach, preferring to vet applicants more deeply and coordinate closely with other financial regulators before issuing additional approvals. For foreign companies, this means that compliance preparedness and understanding of local regulations are more important than ever. The licensing journey typically begins with establishing a legal presence in Nigeria. Most companies incorporate a Nigerian subsidiary through the Corporate Affairs Commission (CAC), as this simplifies regulatory engagement, banking arrangements, and local compliance. Some seek approval to operate as a foreign entity, but for fintechs and VASPs, a local company structure is generally the smoother path. Once the corporate structure is in place, the real work begins. A fintech looking to operate as a payment processor, mobile money operator, switching company, or payment solution provider must engage the CBN under clearly defined licensing categories, each with its own capital requirements, technology standards, and governance expectations. These requirements often include maintaining a minimum paid-up capital, implementing strong cybersecurity controls, submitting operational manuals, and demonstrating the ability to carry out AML/CFT monitoring. For crypto and digital asset companies, interaction with the SEC is more detailed. The regulator requires robust documentation: governance structures, thorough risk management frameworks, cybersecurity protocols, internal policies, AML/KYC procedures, descriptions of digital asset offerings, technology architecture and disclosures on cross-border arrangements. The SEC also conducts a “fit and proper” assessment of key personnel, which is consistent with global standards for virtual asset regulation. Foreign companies should be aware that Nigerian regulators are not only focused on compliance paperwork. They assess whether applicants understand the risks associated with digital assets, whether their systems can withstand cyber threats, and whether they can demonstrate a clear commitment to consumer protection. Nigeria has seen an uptick in digital fraud and platform vulnerabilities, and regulators are increasingly sensitive to operational resilience and customer safeguarding. Tax compliance is another critical element of market entry. Depending on the structure, companies may be subject to corporate income tax, VAT, withholding tax, stamp duties, and sector-specific levies. Engaging a local tax adviser early helps avoid structural mistakes that could affect repatriation of profits or overall operational efficiency. It is also important to recognise that the regulatory landscape has shifted in recent years. The CBN’s earlier restrictions on crypto-related transactions were softened in 2023, allowing banks to open accounts for regulated VASPs. Meanwhile, the SEC continues refining its digital asset rules and supervising the regulatory incubation of potential VASP applicants. For now, only a handful of companies have secured SEC registration, and most of the market is watching closely for the next phase of approvals. Given these dynamics, many foreign companies adopt a phased market entry strategy. Some partner with existing licensed Nigerian fintech operators to begin operations more quickly. Others engage consulting and legal teams early to lay the groundwork for licensing, knowing that regulators expect thorough internal systems before approval. A well-prepared application stands a far stronger chance in Nigeria’s selective licensing climate. Conclusion Nigeria remains one of the most promising fintech markets on the continent. For foreign companies, obtaining a crypto or fintech license is possible, but it requires time, clarity of purpose, and strong regulatory alignment. With the right strategy and compliance foundation, foreign entrants can establish a sustainable presence in a market that continues to evolve and attract global attention. For further enquiries, contact Olawunmi Ojo via [email protected]. +2348038954988

Before investing in any Nigerian company, whether through a share acquisition, a joint venture, or a full takeover, it is essential to conduct thorough due diligence. Nigeria is a vibrant and fast-growing market, but the business landscape is diverse, and the quality of record-keeping, regulatory compliance, and internal governance can vary significantly from one company to another. Proper due diligence helps investors verify facts, understand risks, and avoid surprises that could undermine deal value. Most investors begin with a clear objective: to confirm who owns the company, how it is structured, whether it is in good standing with regulators, and whether its financial and commercial claims hold up under scrutiny. With foreign investors, there is an added need to understand how Nigerian corporate practices work in reality, beyond what is stated on paper. Legal Due Diligence A good starting point is confirming the company’s legal identity. This usually involves a search at the Corporate Affairs Commission (CAC) to retrieve its incorporation records, shareholding structure, details of its directors, and any existing encumbrances. This verification step is crucial, especially when the investment involves buying shares or partnering with the owners. It also immediately reveals whether the company has been complying with its statutory obligations, such as filing annual returns. The next stage of due diligence involves reviewing the company’s governance documents. These include its Memorandum and Articles of Association, any shareholders’ agreements, board resolutions, and past meeting minutes. These documents often reveal how decisions are made, who truly controls the business, and whether there are restrictions on share transfers, voting rights, or profit distribution. Many investment disputes in Nigeria stem from governance issues that were overlooked at this stage. Contracts form another vital part of the process. Investors need to understand the commercial commitments the company has made with suppliers and customers, loan facilities, leases, employment contracts, distribution arrangements, and any long-term obligations. A careful contract review helps uncover liabilities that may not immediately appear on financial statements, such as unresolved payment obligations, exclusivity arrangements, or indemnities that could affect future revenue. It is also essential to understand the company’s litigation and dispute history. A court search can reveal existing lawsuits, enforcement actions, arbitration proceedings, or regulatory investigations. Even if the company is not directly involved, you may discover relationships or contractual arrangements that expose it to future claims. Financial Due Diligence Financial due diligence usually runs in parallel with the legal review. This involves examining audited financial statements, cash flow records, loan obligations, the company’s working capital position, and its overall economic health. Because asset ownership can be a sensitive issue in Nigeria, investors often take additional steps to verify land, equipment, and other key asset titles. Inconsistent valuations, undisclosed liabilities, and irregular accounting practices are common red flags. Tax compliance is another critical area to examine. Nigeria has a multi-layered tax system, and businesses are expected to meet obligations at both the federal and state levels. Reviewing tax filings, outstanding assessments, tax clearance certificates, and correspondence with tax authorities can reveal whether the company has unpaid liabilities or ongoing disputes with the Federal Inland Revenue Service (FIRS) or state revenue agencies. Regulatory Compliance Due Diligence Sector-specific due diligence is equally important. Nigeria’s regulatory environment is active, and many industries require approval from regulators such as the Central Bank of Nigeria (CBN), the Nigerian Communications Commission (NCC), NUPRC, NAFDAC, SON and others. Ensuring that all licences are valid and verifying compliance with industry regulations can significantly reduce investment risk. Operational Due Diligence Operational due diligence provides a practical picture of the company’s day-to-day realities. This may involve speaking with management, reviewing internal processes, assessing human resources policies, and confirming the status of any expatriate staff. Site visits are particularly valuable. They offer insight into how the business actually functions, how employees interact, and whether operations align with what is presented in documents. Depending on the nature of the company, technology, and data protection compliance may also need to be assessed. With Nigeria’s National Data Protection Act now in force, investors should verify how customer data is stored and processed, what cybersecurity measures are in place, and whether the company is exposed to potential breaches or liabilities. In certain industries, especially manufacturing, energy, natural resources, and agriculture, environmental and ESG issues also play a role. Reviewing environmental permits, safety practices and sustainability commitments helps investors understand long-term compliance risk and whether the company meets the expectations of global investors or lenders.   Conclusion Ultimately, due diligence on a Nigerian company is not just a box-ticking exercise. It is a practical way to understand the business you are about to invest in, identify potential risks early and negotiate the terms of your investment with complete clarity. Many deals have collapsed or been renegotiated because issues uncovered during due diligence have fundamentally changed the transaction's value or viability. Nigeria offers strong growth opportunities, but success depends on entering the market with the correct information and local insight. A well-executed due diligence exercise gives investors confidence, protects capital and improves the chances of a smooth and profitable transaction.   For further enquiries, reach out to Olawunmi Ojo on [email protected], +2348038954988  

Introduction Nigeria remains one of Africa’s top destinations for foreign investment, and setting up a foreign-owned company is often the initial step for international firms aiming to enter the market. While the incorporation process isn’t overly complicated, it requires a clear understanding of local regulatory expectations, documentation requirements, and the additional compliance obligations that specifically apply to companies with foreign ownership. Registering a foreign-owned company in Nigeria differs from registering a local business. There are extra steps, minimum capital requirements, regulatory approvals, and post-incorporation procedures that must be completed to ensure the company is fully compliant and legally able to operate. Below is a clear, practical guide for foreign investors on setting up in Nigeria. Choosing the Appropriate Structure Most foreign investors incorporate a Private Company Limited by Shares (Ltd), as it is the most flexible and widely accepted structure for commercial operations. Nigerian law allows up to 100% foreign ownership, except in a few regulated industries where local participation is mandatory. The Companies and Allied Matters Act (CAMA) does not restrict foreign shareholding, but several post-incorporation approvals govern how foreign-owned companies operate.  Share Capital Requirements Under Nigeria’s current regulatory practice, companies with foreign participation are required to have a minimum paid-up share capital of N100,000,000 (one hundred million naira). This requirement is outlined in the Revised Handbook on Expatriate Quota Administration and has been put into practice by regulators and service providers. The Incorporation Process (CAC) The company is registered with the Corporate Affairs Commission (CAC). Required documents include: proposed company name registered Nigerian address Shareholder and director details (local or foreign) notarised or apostilled foreign documents identification documents for all officers share structure and percentage allocation Memorandum & Articles of Association After review and approval, the CAC issues a Certificate of Incorporation and a Status Report that includes ownership, directors, and share capital details. NIPC Registration Although not compulsory, registering with the Nigerian Investment Promotion Commission (NIPC) is recommended for all foreign-owned companies. It offers: (a). Official recognition as a business with foreign participation (b) Access to investment incentives © Easier profit and capital repatriation (d) Protection provided by Nigeria’s investment treaties Business Permit & Expatriate Quota Every foreign-owned company in Nigeria that intends to employ expatriates must obtain: Business Permit Issued by the Federal Ministry of Interior. It authorises a foreign company to operate in Nigeria and; Expatriate Quota This grants approval to employ expatriate staff in specific roles. Each quota position is linked to a job title (e.g., Managing Director, Technical Specialist, CFO, etc.). Foreign companies cannot legally hire expatriates without quota approval. The expatriate quota is also necessary for the issuance of: STR Visa (Subject to Regularisation) CERPAC (residence permit) The size of the company’s share capital is an essential factor in quota approvals, another reason why having a realistic minimum share capital is important. Corporate Bank Account & the Certificate of Capital Importation (CCI) Once the company is incorporated, it must open a corporate bank account in Nigeria to receive foreign investment capital. When funds are transferred from the parent company or foreign investor, the bank issues a Certificate of Capital Importation (CCI). This document is essential because it legally allows the investor to repatriate profits, dividends, capital, and access foreign exchange through official channels. Tax Registration and Compliance The company must register with the Federal Inland Revenue Service (FIRS) to obtain a Tax Identification Number (TIN). Depending on operations, additional tax requirements include VAT registration, PAYE (for employees), WHT (withholding tax), and stamp duties. A foreign-owned company that begins operations without a TIN will face compliance challenges. Sector-Specific Licensing Requirements Many industries in Nigeria require additional regulatory approvals. Examples include: Banking & Fintech – CBN Insurance – NAICOM Telecommunications – NCC Oil & Gas – NUPRC Pharmaceuticals – NAFDAC Manufacturing – SON Investment and Securities – SEC Foreign investors must ensure that incorporation is aligned with industry regulations from the outset. Immigration, Hiring and Operational Considerations Foreign companies planning to send expatriates must ensure adherence to STR visas, stay regularization, CERPAC Green Card, and monthly immigration reporting. Additionally, they must maintain proper employment contracts, HR policies, and workplace compliance standards. Key Compliance Obligations After Incorporation Foreign-owned companies must: file annual returns with CAC file annual tax returns with FIRS maintain proper accounting and audited financial statements renew business permits and quota approvals as required renew sector licenses where and when applicable Depending on the sector, sector-specific returns are also to be made Non-compliance can result in penalties, loss of permits, or immigration issues. Conclusion Registering a foreign owned company in Nigeria involves more than filing incorporation documents. It requires navigating immigration rules, securing the right permits, meeting sector-specific obligations and maintaining strong regulatory compliance from day one. With proper planning and local guidance, foreign investors can establish a structure that is legally compliant, operationally efficient, and well-positioned for long-term success in Africa’s largest economy. For further enquiries, please contact [email protected], +2348038954988

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

Written by Olawunmi Ojo Introduction Nigeria, often referred to as Africa’s largest economy and most populous nation, presents immense opportunities for tech startups looking to expand into West Africa. With a fast-growing digital population, youthful demographics, and a burgeoning startup ecosystem, the country continues to attract foreign investors and technology entrepreneurs. However, succeeding in this promising yet complex market requires a well-informed understanding of the legal and regulatory landscape. Why Nigeria? Before diving into the legalities, it’s essential to understand why global investors are paying close attention to Nigeria: Large Market Size: Over 200 million people, with a growing middle class and increasing urbanization. Vibrant Startup Ecosystem: Nigeria’s startup scene, especially in fintech, healthtech, edtech, and logistics, continues to attract multi-million-dollar funding rounds. Policy Reforms: Pro-investment reforms, such as the Companies and Allied Matters Act (CAMA 2020), Finance Act amendments, and startup legislation, have improved the regulatory environment. Strategic Location: As a West African hub, Nigeria offers a launchpad for regional expansion. This guide provides a clear, practical roadmap for foreign tech startups seeking to establish a compliant and successful presence in Nigeria. It outlines key legal considerations, regulatory obligations, and strategic actions necessary to navigate the Nigerian tech ecosystem. Understanding Nigeria’s Corporate Legal Framework Before launching operations, it is essential for startups to understand the corporate laws governing business entities in Nigeria. The Companies and Allied Matters Act, 2020 (CAMA 2020) is the primary legislation that regulates business formation and corporate governance in the country. Startups looking to set up in Nigeria typically register as: Private Companies Limited by Shares (Ltd) – the most common and preferred structure for tech startups due to its flexibility. Public Companies (PLC) – ideal for scaling enterprises with intentions of raising capital from the public or listing on a stock exchange. Incorporated Trustees or NGOs – suitable for non-profit ventures, research-focused initiatives, or social impact-driven enterprises. The Corporate Affairs Commission (CAC) is the regulatory body responsible for company registration and compliance. Key requirements include: At least one shareholder and one director (they may be the same person) A registered business address in Nigeria Minimum share capital of ₦100,000 for local entities and N100,000,000 for wholly foreign owned entities (although many tech startups register with higher capital for credibility and investment purposes) Appointment of a company secretary (mandatory for public companies) Business Permits and Sector-Specific Licences Depending on your startup’s area of focus whether fintech, healthtech, agritech, or e-commerce you may be required to obtain sector-specific licenses. For example: Fintech startups offering payment solutions must obtain approval from the Central Bank of Nigeria (CBN), including Payment Service Provider (PSP) or Switching licenses. Healthtech startups must comply with regulations from the National Health Insurance Authority (NHIA) and the Medical and Dental Council of Nigeria (MDCN). E-commerce startups may need to adhere to consumer protection regulations issued by the Federal Competition and Consumer Protection Commission (FCCPC). In addition to sector-based permits, foreign-owned entities must also obtain: Business Permit – authorizing the employment of foreign nationals Intellectual Property Protection Safeguarding your brand, technology, and innovations is critical. Nigeria operates a "first-to-file" system, making it essential to register your IP rights as early as possible. Key registrations include: Trademarks – under the Trademarks Act Patents and Industrial Designs – via the Patents and Designs Act Copyrights – governed by the Nigerian Copyright Act (recently amended in 2023) These rights are administered by the Trademarks, Patents and Designs Registry (Federal Ministry of Industry, Trade and Investment) and the Nigerian Copyright Commission Data Privacy and Cybersecurity With the rise of digital services, data privacy is a crucial compliance area. Startups handling user data must comply with the Nigeria Data Protection Regulation (NDPR) issued by the National Information Technology Development Agency (NITDA). Startups are required to: Conduct regular data audits Obtain user consent before collecting data Appoint a Data Protection Officer (DPO) if handling large-scale data File compliance reports with NITDA Non-compliance could lead to penalties of up to 2% of annual gross revenue, especially for companies with a large user base. Taxation and Incentives Startups operating in Nigeria must register with the Federal Inland Revenue Service (FIRS) for tax purposes. The key taxes applicable include: Company Income Tax (CIT): 30% for large companies; 20% for medium companies (annual turnover between ₦25 million and ₦100 million); startups with a turnover below ₦25 million are exempt. Value Added Tax (VAT): 7.5% Withholding Tax (WHT): typically 5% to 10% depending on the transaction Personal Income Tax (PIT): for employees, based on a progressive scale up to 24% Under Nigeria’s new Finance Act (2024), additional digital tax provisions have been introduced, including the taxation of non-resident digital service providers. Startups offering digital services from offshore locations should assess their tax exposure and compliance obligations carefully. Nigeria also offers incentives for pioneer tech companies under the Pioneer Status Incentive Scheme, which may include up to 3- to 5-year tax holidays. Foreign Exchange and Capital Repatriation The Central Bank of Nigeria (CBN) regulates the inflow and outflow of foreign exchange. Startups bringing in foreign capital must do so through an authorized dealer (usually a Nigerian bank), which issues a Certificate of Capital Importation (CCI) within 24–48 hours. The CCI is critical—it guarantees the investor’s ability to repatriate dividends, loan repayments, and capital without restrictions. Employment Laws and Compliance: Hiring in Nigeria requires adherence to local labour laws governed by the Labour Act and the National Industrial Court Act. Key compliance steps include: Drafting legally compliant employment contracts Enrolling staff with the National Pension Commission (PENCOM) Making monthly contributions to the Nigeria Social Insurance Trust Fund (NSITF) and Industrial Training Fund (ITF) Foreign-owned startups must also comply with immigration rules when hiring expatriates, including securing a valid Expatriate Quota and Combined Expatriate Residence Permit and Aliens Card (CERPAC) Strategic Tips for Market Entry Partner with local firms: Joint ventures or strategic alliances help mitigate regulatory friction and provide access to local networks. Use professional service providers: Engage lawyers, accountants, and compliance officers familiar with the Nigerian tech space. Stay agile: The Nigerian regulatory environment is dynamic. Having a responsive compliance strategy is essential. Leverage innovation hubs: Establishing in Lagos or Abuja allows access to accelerators, investor networks, and grants. Conclusion Nigeria offers unmatched opportunities for tech startups with scalable solutions. However, success in this market demands strong legal and regulatory planning. From company formation to tax, IP protection, and data compliance, having the right legal framework is the bedrock of a thriving operation. Whether you're a startup founder exploring new markets or an investor supporting portfolio companies, working with local legal experts ensures you're not only compliant but also strategically positioned for growth. FAQs: Legal Entry into Nigeria for Tech Startups What is the best legal structure for a foreign tech startup in Nigeria? A Private Company Limited by Shares is generally preferred due to its simplicity and flexibility. Can I fully own a Nigerian company as a foreigner? Yes. Foreigners can own 100% of a Nigerian company, provided the business complies with immigration, tax, and investment regulations. How long does it take to register a company in Nigeria? Typically 5–10 business days, depending on how complete and accurate your documentation is. Do I need any special licenses to run a tech company? This depends on the sector. Fintech, healthtech, and edtech ventures may require regulatory approvals from CBN, NHIA, or NUC respectively. 5. How can I repatriate profits from Nigeria? You must bring in capital through a licensed bank to obtain a Certificate of Capital Importation (CCI). This enables lawful repatriation of profits and dividends. Are there any tax incentives for startups? Yes. The Pioneer Status Incentive and SME tax exemptions provide significant relief for qualifying startups. What are the major risks for foreign startups? Key risks include policy changes, currency volatility, and lack of regulatory clarity in emerging tech sectors. Engaging local advisors mitigates these challenges. Ready to Launch or Scale Your Startup in Nigeria? At The Trusted Advisors, we’ve guided numerous tech startups and international investors through Nigeria’s legal and regulatory landscape ensuring compliance, minimizing risk, and accelerating go-to-market strategies. Whether you're incorporating your first entity, navigating equity structuring, or securing regulatory approvals, our team is ready to support your success. Reach out to us today for a consultation on your startup or market-entry strategy, for tailored guidance on market entry and compliance, get in touch with our legal team at The Trusted Advisors. Email: [email protected] | Phone: +2348038954988

The Nigerian startup ecosystem is brimming with opportunity. With over 200 million people, increasing mobile penetration, and a growing appetite for digital solutions, it’s no wonder international investors and founders are turning their attention to Africa’s most populous nation. Yet, despite the enthusiasm, many startups especially foreign-backed ones  often run into avoidable legal hurdles that stall or sink their market entry plans. Understanding the legal landscape from the outset is critical to protecting your capital, your innovation, and your team. In this article, we highlight the legal requirements for foreign investors in Nigeria, Nigeria market entry guide,   Nigeria Startup expansion legal guide and most common legal mistakes startups make when entering Nigeria  and how to avoid them. Failing to Choose the Right Legal Structure One of the first decisions startups must make is the legal form of their Nigerian entity. Many default to a simple private limited company (Ltd), which may be sufficient for early-stage operations. However, foreign participation  even at minority levels  introduces regulatory obligations under the Companies and Allied Matters Act (CAMA) and guidelines from the Nigerian Investment Promotion Commission (NIPC). Common Mistake: Registering as a local company without complying with foreign ownership requirements, or failing to obtain a business permit from the Ministry of Interior. Solution: If foreign investors or founders hold shares, register the company with the Corporate Affairs Commission (CAC) as a company with foreign participation, and ensure post-incorporation filings (NIPC registration, Business Permit, Tax ID) are properly handled. Neglecting Regulatory Licensing Nigeria’s regulatory environment can be complex, particularly for fintechs, healthtechs, and edtechs. Depending on the sector, licenses may be required from bodies like: Central Bank of Nigeria (CBN) National Information Technology Development Agency (NITDA) Nigerian Communications Commission (NCC) Nigerian Data Protection Commission (NDPC) Common Mistake: Launching products or services without the appropriate licenses, assuming it can be sorted later. Solution: Conduct a regulatory mapping exercise before launch. For fintechs, this may include applying for a Payment Solution Service Provider license or participating in CBN’s Regulatory Sandbox. Tech-enabled health or education startups may need to engage the relevant ministry Improper Equity Structuring and Cap Table Management Founders often give away equity too quickly, too informally, or without proper documentation. This creates confusion during future fundraising rounds or exits. Common Mistake: Issuing shares to early employees or advisors without a formal agreement or vesting schedule. Solution: Structure equity clearly from the outset. Use instruments like shareholders’ agreements, option plans, and founder vesting arrangements. Ensure your cap table reflects every issuance and is legally enforceable in Nigeria. Ignoring Local Employment and Labour Laws Hiring your first employees in Nigeria? It’s not just about offering a salary. Employment contracts must comply with Nigerian labour laws, and startups must register for mandatory statutory contributions, including: Pension contributions Industrial Training Fund (ITF) Employee Compensation Scheme (NSITF) National Housing Fund (NHF) Common Mistake: Using offer letters without proper legal contracts, or engaging talent as “independent contractors” to avoid compliance. Solution: Issue compliant contracts, register with the necessary agencies, and build a talent strategy that aligns with Nigerian law while remaining startup-friendly. Overlooking Intellectual Property (IP) Protection Your brand, tech, and content are core assets. Yet many startups fail to register trademarks, protect proprietary code, or define IP ownership particularly when using freelancers or development agencies. Common Mistake: Launching without trademark protection or failing to assign IP created by developers to the company. Solution: Register your trademarks with the Trademarks Registry. Include IP clauses in all employment, consultant, and partnership agreements. If IP is developed offshore, ensure ownership is transferred to the Nigerian entity or holding structure. Non-Compliance with Tax and Regulatory Filings Even pre-revenue companies must comply with periodic filings from tax returns to annual returns with the CAC and reports to the NIPC (for foreign entities). Common Mistake: Delaying tax registrations, or missing filings and accruing penalties. Solution: Obtain a Tax Identification Number (TIN) early, register for VAT (if applicable), and engage a local accountant or law firm to manage filings and compliance calendars. Frequently Asked Questions (FAQs) Q1: Can I operate in Nigeria without incorporating a company? No. You must incorporate a company to do business in Nigeria, particularly if you plan to open a bank account, hire staff, or sign contracts. Q2: How long does incorporation take for a startup with foreign shareholders? On average, 10–15 working days. However, post-incorporation registrations (NIPC, Business Permit, etc.) may add another 2–4 weeks. Q3: Are there tax incentives for tech startups? Yes. Nigeria offers pioneer status incentives through the NIPC, which can grant tax holidays of up to 5 years for qualifying sectors. Q4: Can I fully own a Nigerian company as a foreigner?Yes. Nigeria allows 100% foreign ownership in most sectors, except for a few restricted areas like military or narcotics. Final Thoughts: Get It Right from Day One Entering the Nigerian market offers unmatched upside, but legal missteps can undermine your growth or scare off investors. As a founder, your energy should be focused on product and traction — not regulatory firefighting. At The Trusted Advisors, we help startups, investors, and scale-ups navigate Nigeria’s legal and regulatory terrain. From company setup to licensing, employment, and compliance, we offer tailored legal solutions that grow with your venture. Need help setting up or reviewing your Nigerian operations? Let’s talk contact or email us at [email protected], +2348038954988 for a free consultation.