Investment in Nigeria 8th edition, May 2021 Kpmg.com/ng Lagos, Nigeria KPMG Tower Bishop Aboyade Cole Street Victoria Island, Lagos Tel: +234-1-4632090-3; +234-1-2718955 Contact Address +234-1-2718599; Fax: +234-1-4621218 Abuja, Nigeria 84, Kwame Nkrumah Crescent Asokoro, Abuja Tel: +234 704 527 6101 For further information, please contact: Kunle Elebute Tola Adeyemi National Senior Partner Partner and Head, Audit Tel: +234-1-280-9267 Tel: +234-1-2805317 Mob: +234-803-402-0970 Mob: +234-803-2001746 Email: [email protected] Email: [email protected] Victor Onyenkpa Wole Obayomi COO/Risk Management Partner Partner and Head, Tel: +234-1-271-8935 Tax, Regulatory & People Services Mob: +234-803-406-5246 Tel: +234-1-271-8932 Email: [email protected] Mob: +234-803-402-0946 Email: [email protected] Joseph Tegbe Partner and Head, Advisory Services Tel: +234-1-280-5335 Mob: 234-803-402-0989 Email: [email protected] KPMG accepts no liability or responsibility for reliance by any party on the contents of this publication. KPMG Professional Services and KPMG Advisory Services, partnerships registered in Nigeria and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. ©2021 All rights reserved. Investment in Nigeria Guide - 8th Edition 2 Preface ............................................................................................................................... 3 Chapter One ...................................................................................................................... 7 1. The Country and its institutions ................................................................................ 8 Contents 1.1 Area and Population .............................................................................................. 8 1.2 International Affiliations ........................................................................................ 8 1.3 The Government ................................................................................................. 10 1.4 Federal Ministries, Departments and Agencies .................................................. 11 1.5 Other Regulatory Agencies ................................................................................ 20 1.6 Economic Overview ........................................................................................... 21 Chapter Two .................................................................................................................... 22 2. Business Organisation and Regulation ................................................................... 23 2.1 Sole Proprietorship ............................................................................................. 24 2.2 Partnerships ....................................................................................................... 24 2.3 Incorporated Companies .................................................................................... 25 2.4 Incorporation ...................................................................................................... 25 2.5 Members, Shareholders and Types of Shares ..................................................... 27 2.6 Shareholders’ Meetings ...................................................................................... 28 2.7 Annual Returns ................................................................................................... 28 2.8 Directors and Officers ........................................................................................ 28 2.9 Dividends ........................................................................................................... 28 2.10 Bonus (Scrip) Issue ............................................................................................. 29 2.11 Statutory Books of Account ................................................................................ 29 2.13 Patents, Designs, Trademarks and Copyrights .................................................... 29 2.14 Coastal and Inland Shipping (Maritime Cabotage) .............................................. 29 Chapter Three ................................................................................................................. 31 3. Labour and Social Security Regulations ................................................................. 31 3.1. Legislation .......................................................................................................... 32 3.2. Labour Unions .................................................................................................... 32 3.3. Employers’ Organisations .................................................................................. 32 3.4. Trade Disputes ................................................................................................... 32 3.5. Termination of Employment/ Suspension of Employees ..................................... 33 3.6. Minimum Wage ................................................................................................... 33 3.7. Industrial Training Fund (ITF) ............................................................................... 33 3.8. Factories Act ....................................................................................................... 34 3.9. Employee’s Compensation Act (ECA) .................................................................. 34 3.10. National Salaries, Incomes and Wages Commission ......................................... 34 3.11. Employment of Expatriates ................................................................................ 35 3.12. Contributory Pension Scheme (CPS) .................................................................. 36 3 Investment in Nigeria Guide - 8th Edition Chapter Four .................................................................................................................... 37 Chapter Nine ................................................................................................................... 76 4. The Nigerian Financial Services Industry ................................................................ 37 9. Importation of Goods ............................................................................................... 76 4.1 Money Market ..................................................................................................... 38 9.1 Import Prohibition List ......................................................................................... 77 4.2 Capital Market ..................................................................................................... 40 9.2 Destination Inspection (DI) ................................................................................. 77 9.3 Payment Procedures .......................................................................................... 77 Chapter Five .................................................................................................................... 42 9.4 Current Guidelines for Imports into Nigeria ....................................................... 77 5. Tax System ................................................................................................................. 42 9.5 Marine Insurance ............................................................................................... 78 5.1 Companies Income Tax (CIT) .............................................................................. 44 9.6 Import Duties ...................................................................................................... 79 5.2 Personal Income Tax (PIT) .................................................................................. 52 9.7 Temporary Importation ....................................................................................... 79 5.3 Petroleum Profits Tax (PPT) ................................................................................. 55 5.4 Value Added Tax (VAT) ......................................................................................... 56 Chapter Ten ...................................................................................................................... 80 5.5 Withholding Tax (WHT) ....................................................................................... 58 10. Exportation of Goods .............................................................................................. 80 5.6 Capital Gains Tax (CGT) ....................................................................................... 59 10.1 Registration of Exporters .................................................................................... 81 5.7 Luxury Tax ........................................................................................................... 59 10.2 Export Procedures and Documentation .............................................................. 81 Chapter Six ...................................................................................................................... 61 Chapter Eleven ................................................................................................................ 82 6. Foreign Exchange Transactions ................................................................................ 61 11. COVID-19 - Economic and Fiscal Measures ........................................................... 82 6.1 Inter-bank Foreign Exchange Market (IFEM) .......................................................