The Nigeria Investors' Roadmap
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The Nigeria Investors' Roadmap ... and Enabling Environment Strategy Final Report Prepared for: The Government of the Federal Republic of Nigeria (Office of the Presidency; Ministry of Finance; and Nigerian Investment Promotion Commission) -w Prepared by: Pricewaterhouse Coopers L.L.P. (Prime Contractors) The Services Group (TSG), Inc. (Technical Contractors) The Foreign Investment Advisory Service (FIAS) Funded under: Support for Economic Growth and Institutional Reform General Business, Trade and Investment (SEGIR GBTI) IIII Contract No. PCE-I-00-98-00017 -00 Iii Task Order No. 825 December 2002 1liliiii United States Agency for International Development (USAlD)I~ ... The Nigeria Investors' Roadmap and Enabling Environment Strategy Final Report Prepared for: The Government of the Federal Republic of Nigeria (Office of the Presidency; Ministry of Finance; and Nigerian Investment Promotion Commission) Prepared by: Jean-Paul Gauthier, Esq., Manager/Team Leader, TSG Dr. Donaldo Hart, Senior Associate Consultant. TSG Gokhan Akinci, Investment Officer, FIAS Trina Rand, Staff Consultant, TSG Assisted by: Candice Wu and Julie Pham, Research Associates, TSG Aniekan E. Ukpanah, Partner, Udo-Udoma & Belo-Osagie Anire Kanyi, Solicitor, Udo-Udoma & Belo-Osagie Tubosun Falase, Solicitor, F.O. Akirenle & Co. Funded under: Support for Economic Growth and Institutional Refonn General Business, Trade and Investment (SEGIR GBTI) Contract No. PCE-I-00-98-00017-00 Task Order No. 825 December 2002 ,...... United States Agency for International Development (USAID) ,~~ .... Table of Contents Executive Summary Introduction ... Chapter 1 Business Registration p. 1 1.1 Federal Company Registration 1.1.1 Procedure 1.1.2 Analysis 1.1.3 Recommendations 1.2 Foreign Investment Regulations & Business Penn it Issuance 1.2.1 Procedure 1.2.2 Analysis 1.2.3 Recommendations .... 1.3 "Pioneer Status" Investment Incentives Acquisition 1.3.1 Procedure 1.3.2 Analysis 1.3.3 Recommendations 1.4 State-Level Business Registration 1.4.1 Procedure .. 1.4.2 Analysis 1.4.3 Recommendations Chapter 2 Locating p.56 2.1 Site Acquisition 2.1.1 Kaduna State 2.1.2 Plateau State 2.1.3 Lagos State • 2.1.4 Ahuja Federal Capital Territory 2.2 Environmental Impact Mitigation .. 2.2.1 FEPA 2.2.2 Kaduna State 2.3 Site Development 2.3.1 Kaduna State 2.3.2 Lagos State 2.3.3 Abia State ... 2.3.4 Plateau State 2.3.5 Abuja Federal Capital Territory til 2.4 Utilities connections ... .... Chapter 3 Employing p.128 3.1 Investor & Expatriate Entry 3.1.1 Procedure 3.1.2 Analysis 3.1.3 Recommendations 3.2 Labor Regulations 3.2.1 Registration of Labor and Compliance With the NSITF 3.2.2 Registration of Labor and Compliance With the Industrial Training Fund 3.2.3 Analysis .... 3.2.4 Recommendations 3.3 Employee Income Tax Regulations 3.3.1 Procedure 3.3.2 Analysis 3.3.3 Recommendations ... 3.4 Labor norms, Enforcement and Dispute Resolution 3.4.1 Dispute Resolution Procedure 3.4.2 Analysis i;;I 3.4.3 Recommendations Chapter 4 Import & Export p.150 4.1 Importing and Exporting Procedures 4.1.1 Non-Fee Zone Importation Procedure .... According to Federal Officials 4.1.2. Non-Free Zone Importation Procedure According to Port Officials .... 4.1.3 Non-Free Zone Exporting Procedure According to Port Officials 4.1.4 Analysis 4.1.5 Recommendations 4.1.6 Free Zone Importation and Exportation Procedures 4.2 Export Incentives Procedures 4.2.1 Manufacture-in-Bond Scheme (MIBS) 4.2.2 Duty Drawback Scheme (DDS) ""' 4.2.3 Analysis 4.2.4 Recommendations wi 4.3 Analysis .. 4.4 Recommendations ChapterS Resolution of Commercial Disputes p.186 5.1 Procedure iii II J - 5.2 Analysis 5.3 Recommendations .... Chapter 6 Taxation p.l95 6.1 Federal Taxation 6.1.1 Overview 6.1.2 Analysis 6.1.3 Recommendation 6.2 State-Level Taxation 6.2.1 Overview 6.2.2 State Monthly Income Tax Payment Procedure 6.2.3 Annual Income Tax Filing Procedure 6.2.4 Analysis ... 6.2.5 Recommendations 6.3 Local Govemment Taxation 6.3.1 Overview 6.3.2 Analysis 6.3.3 Recommendations Annexes International Best Practices 1 International BenChmarks in Business & Tax Registration p.211 2 International Benchmarks in Locating Procedures p.224 3 International Labor Practices p.227 4 International Customs Practices p.235 5 International ADR Practices p.245 6 International Tax Practices p.250 ... Bibliography w ... ------------------------------------------------------------~lll .. ACRONYMS and ABBREVIATIONS ... ADR Altemative Dispute Resolution ANCE [French] Agence Nationale pour la Creation d'Entreprises ANPE [French] Agence Nationale pour la Promotion de I'Emploi API [funisian] Agence pour la Promotion Industrielle Art. Article ASCON Administrative Staff College of Nigeria ASYCUDA Automated System for Customs Data BIR Board of Inland Revenue .... BPE Bureau of Public Enterprises CofO Certificate of Occupancy CAC Corporate Affairs Commission ... CAMA Companies and Allied Matters Act CEO [Singapore] Customs and Excise Department CEPZ Calabar Export Processing Zone CFE [French] Centre de Formalites des Entreprises CFTZ Calabar Free Trade Zone CPC Customs Central Processing Center CRI Clean Report of Inspection ... DC District of Columbia, USA DDS Duty Drawback Scheme Dr. Doctor ... EOPS [Canadian] Exporter of Processing Services Program ECC Environmental Clearance Certificate EIA Environmental Impact Assessment iB EIS Environmental Impact Statement EP Expatriate Quota Position EPRSB Energy Power Sector Reform Bill .... Etc . Et cetera FAA [US] Federal Aviation Authority FAAN Federal Aviation and Airports Authority of Nigeria .. FCDA Federal Capital Development Authority FCT Federal Capital Territory FEPA Federal Environmental Protection Agency FDI Foreign Direct Investment FIAS Foreign Investment Advisory Service (World Bank) FIRS Federal Inland Revenue Service FMoE Federal Ministry of the Environment FOB Free On Board FOS Federal Office of Statistics GOP Gross Domestic Product GNP Gross National Product GEM Govemment Economic Management Working Group GFRN Govemment of the Federal Republic of Nigeria w HS Harmonized System (for goods classification) lAP Industrial Arbitration Panel lAS International Accounting Standards IASC lAS Committee ICA Input Coefficient Administration (Customs) ICC Intemational Chamber of Commerce .. ICSID Intemational Center for the Settlement of Investment Disputes (World Bank) IDA Irish Development Agency lEE Initial Environmental Examination IFC International Finance Corporation (World Bank) IIA [Korean] Input Coefficient Administration 110 Industrial Inspection Department (Federal Ministry of Industries) ILO International Labor Organization IPR Intellectual Property Rights ISO Intemational Standards Organization IFC Intemational Finance Corporation Inc. Incorporated IPP Independent Power Project ITF Industrial Training Fund IVP Investment Promotion JMDB Jos Metropolitan Development Board KASUPDA Kaduna State Urban Planning and Development Authority KEPA Kaduna Environmental Protection Agency KLG Kaduna Local Govemment KV Kilovolt LLP Limited Liability Partnership LUAC Land Use Allocation Committee M Meter .... MCI [State-level] Ministry of Commerce and Industry MIBS Manufacture-in-Bond Scheme MIGA Multilateral Investment Guarantee Agency MIS Management Information Systems .... MoC Ministry of Commerce MoF Ministry of Finance Mol Ministry of Industries MoIA .. Ministry of Internal Affairs Mr. Mister MW Megawatt NACCIMA Nigerian Association of Chambers of Commerce, Industry, Mining and Agriculture N Naira NAFDAC National Food and Drug Administration and Control •• NCC Nigerian Communications Commission NCS Nigerian Customs Services NOLA Nigerian Drugs Law Enforcement Agency NEDB [Singapore] National Economic Development Board NEPA Nigerian Electrical Power Agency NEPZA Nigerian Export Processing Zones Authority NERC National Electricity Regulatory Commission NESG Nigerian Economic Summit Group NIDA [Thailand] national Industrial Development Agency NIPC Nigerian Investment Promotion Commission NIS National Institute of Management NITEL Nigeria Telecommunications Pic. ... .. NJC National Judicial Council NPA Nigerian Ports Authority NPC National Planning Commission (Office of the Presidency) NSTIF Nigerian Social Insurance Trust Fund .. NTDC Nigerian Tourism Development Corporation OBRA Ontario Business Registration Access Program OECD Organization for Economic Cooperation and Development PAYE Pay As You Eam - PC Personal Computer Pic Private Limited Corporation Ii. POA Power of Attomey PSI Pre-shipment Inspection PTO Private Telecommunications Operator .- PUR Permanent Until Review PwC PricewaterhouseCoopers, LLP R&D Research & Development RofO Right of Occupancy ... SBA [US] Small Business Administration SEC [US] Securities Exchange Commission SME Small to Medium Sized Enterprise ... SOAG [USAID] Strategic Objectives Agreement SON Standards Organization of Nigeria SGD Single Goods Declaration w TIN [US] Tax Identification Number TSG The Services Group, Inc. UK United Kingdom ... UN United Nations US United States USA United States of America USAID United States Agency for Intemational Development ... UV Ultra Violet VAT Value Added Tax WCO World Customs Organization ... WIPO World Intellectual Property Organization WTO World Trade Organization /v Executive Summary Introduction H.E. Olusegun Obasanjo, President of the Federal Republic of Nigeria (GFRN), has publicly stated his Government's objective of drawing Foreign Direct Investment ... (FDI) in order to alleviate poverty levels in the country, currently estimated at 85% . The