Incentives for Special Investment 

Where exemption from local incorporation is desired, a foreign company may apply in accordance with Section 56 of the Companies Act, to the National Council of Ministers for exemption from incorporating a local subsidiary if such foreign company belongs to one of the following categories:

1.Foreign companies invited to Nigeria by or with the approval of the Federal Government of Nigeria to execute any specific individual project;

2.Foreign companies which are in Nigeria for the execution of a specific individual loan project on behalf of a donor country or international organisation;

3.Foreign government-owned companies engaged solely in export promotion activities; and

4.Engineering consultants and technical experts engaged in any individual specialist project under contract with any of the governments in the Federation or any of their agencies or with any other body or person, where such contract has been approved by the Federal Government.

5.The application for exemption from disclosing certain details about the applicant is to be made to the Secretary of the Government of the Federation (SGF). If successful, the request of the applicant is granted upon such terms and conditions as the National Council of Ministers may deem fit.

Representative Offices

Foreign companies may set up representative offices in Nigeria. They only serve as promotional and liaison office. As a rule, a representative officer has to be registered with the Corporate Affairs Commission.

Principal Laws Regulating Foreign Investments in Nigeria

The principal laws regulating foreign investments in Nigeria are: The Nigerian Investment Promotion Commission Decree No. 16 of 1995 and the Foreign Exchange (Monitoring Miscellaneous Provisions) Decree No. 17 of 1995.

Deregulation of Equity Structure in Nigeria Enterprises

The Nigerian Enterprises Promotion (Repeal) Decree No.7 of 1995 has abolished any restrictions, in respect of the limits of foreign share holding, in Nigeria registered/domiciled enterprises. The only enterprises, which are still exempted from free and unrestrained foreign participation, are those involved in:

Production of arms and ammunition;

Production of and dealing in narcotic drugs and psychotropic substances;

Provisions Relating to Investments

Notable amongst the provision relating to investments are the following:

A non-Nigerian may invest and participate in the operation of any enterprise in Nigeria;

An enterprise in which foreign participation is permitted, shall after its incorporation or registration, be registered with the NIPC.

A foreign enterprise may buy the shares of any Nigerian enterprise in any convertible foreign currency.

A foreign investor in an approved enterprise is guaranteed unconditional transferability of funds through an authorised dealer, in freely convertible currency of:

Dividends or profit (net of taxes) attributable to the investment;

Payments in respect of loan servicing where a foreign loan has been obtained; and

The remittance of proceeds (net of all taxes) and other obligations in the event of sale of liquidation of the enterprise or any interest attributable to the investment.

Priority Areas of Investment

The NIPC issues guidelines and procedures, which specify priority areas for investments and prescribed incentives and benefits, which are in conformity with Government policy. < Page 3>