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Talking Law with Ivie Omoregie: Here Are Vital Things to Consider If You’re Thinking of Coming Into Nigeria to Set Up a Business

Ivie Omoregie



Recently someone called me with excitement about the new value of the Naira. She had been hearing about Nigeria’s economic challenges, but had never really considered what this meant to her, as she was not directly affected by it (her entire immediate family are spread across America and the UK).

It was when she sent some money to her aunt that she realised that $1000 was now almost N500,000. Oooh boi! To say she was excited was an understatement. She started calculating the things she could now afford to do in Nigeria. At the top of the list was buying property and starting a small business.
She called me to discuss some of her ideas; however, when I cautioned that many popular businesses are actually running at a loss she was confused. I had to break it down for her and explain that many business owners simply do not understand the basic principles of accounting and tend to run their limited liability companies as sole traders (I know some people will be reading this and thinking ‘huh!’)

Small and Micro Businesses
Over the years I have seen many people doing business in Nigeria without the proper training or even a basic understanding of the various types of structures available for their business operations.

The obstacles faced by small and micro businesses are universally established; entrepreneurs in this sector inherently face many challenges that limit their long-term survival and the rate of their development.

There are currently many high-profile initiatives and training programs available to empower and support small and micro businesses. Uunfortunately, many entrepreneurs are not aware or do not have the skills or network to take advantage of these developmental aids. As you can imagine, where the promoter of a business is cash rich but knowledge and experience poor, the likelihood of the business succeeding is slim to none.

In this article I will briefly run through the things that one needs to do when thinking about doing business in Nigeria.

Why Nigeria?
For many Nigerians in diaspora, most of which might have spent most of their adult lives abroad, a question which resonates is “Why Nigeria?”

To this my answer is always: –
1. Nigeria has the largest population in Africa, thus a relatively cheap labour force and a large market for initial sales;
2. We have abundant natural resources (not just oil and gas, coal, copper, livestock, poultry etc);
3. We have vast and fertile land for agricultural projects;
4. There are significant government incentives for small and micro businesses, as well as for foreign investors;
5. We have the largest economy in Africa and have been identified by Goldman Sachs as being amongst the “next eleven” economies.

Things to Consider
The following are things to consider when setting up a business in Nigeria

a. Incorporation
Local incorporation is compulsory in most instances. Investors may consider registration of a business name or forming a private limited company. There are pros and cons to either option. The final choice will be largely dependent on the nature of business you wish to set up. Where you decide to incorporate a private limited company, it would be advisable to outsource the companies secretarial and accounting needs. This tends to be menial, but the correlation to the success of the business unquantifiable.

b. Importation of Capital
This may be done by either importing the raw cash, or done in kind (i.e equipment, plant, machinery). Either way, prior to the importation of the required capital, business promotors should research and obtain a Certificate of Capital Importation (“CCI”). The CCI is required by investors who plan to remit profits for either non-resident shareholders or loan and interest repayments attributable to the investment. It enables the holder, by presenting the CCI, to purchase foreign currency from the official foreign exchange market.

c. Registration with NIPC
Any enterprise in which there is foreign participation (foreign here means a non-Nigerian national) must be registered with the Nigerian Investment Promotion Commission (“NIPC”). NIPC provides services and facilitates the grant of business permits, licenses, authorizations and incentives.

d. Business and immigration permits
These are necessary where there is foreign participation in the undertaking of any business in Nigeria. The relevant companies would also need an expatriate quota for each expatriate it wishes to employ; this could be either a Temporary Work Permit for expatriates engaged in short term assignments or a Combined Expatriates Residents Permit and Aliens Card for expatriates wishing to stay in Nigeria for longer periods of time; and

e. Industry permits and registrations
The type of permits and registrations one would typically apply for is determined by the nature of the proposed business, I would advise that the applicable permits and registrations be thoroughly researched beforehand to avoid unnecessary governmental intervention. Tax registrations are necessary at both federal and state level, and a Tax Clearance Certificate tends to be a prerequisite for most applications for regulatory approvals.

Key Investment Issues
There are some areas where there is a statutory requirement that the business is owned by a certain percentage of Nigerians in order to be eligible for certain government incentives. These include the oil and gas sector, as well as the Nigerian maritime sector. When intending to partner with a foreigner for any project, it is important to research if the proposed venture is caught within these exceptions and discuss ways around it.
Other investment issues which most people do not factor into their business plans, are the mandatory contributions required by eligible organisations.

These are specifically: –
i. Industrial Training Fund – 1% of payroll for organisations with more than 5 employees and an annual turnover in excess of N50,000,000 (fifty million naira);
ii. Pension fund – applicable where the employer has up to three employees in any sector. The employer is to contribute 7.5 – 10%, and the employee is to contribute 7.5 – 8.5% of the employee’s monthly emolument;
iii. Employee Compensation Fund – the minimum monthly contribution of 1% of the total monthly payroll;
iv. National Health Fund – An employer with a minimum of 10 employees is to contribute at a rate of 10% whilst the employee pays 5%, thus representing 15% of the employees’ basic salary; and
v. National Housing Fund – A Nigerian worker earning an income of N3,000 (three thousand naira) and above per annum in both the public and the private sectors of the economy shall contribute 2.5% of his basic monthly salary to the Fund

Lastly, I cannot over stress insurance. Many people don’t believe in insurance in Nigeria, as they don’t think the insurance companies pay out. This is a popular misconception; insurance companies do.

On a funny note, one time I was discussing with a group of friends, some of which were business owners. They mentioned that one of the main reasons businesses fail in Nigeria is because of people owe the business money.
I disagreed with them and said it was due to mismanagement. When I went on to say that, in balancing the books of any business a debt is an asset to the company, the whole room lit up in debate.
Many simply could not fathom this; generally a debt is not a favourable thing nor would the lay man consider it an asset. It took a while for the room to understand that for a company, a debt is an asset and that it is when this debt remains unpaid that it then becomes a bad debt. Only then is it recorded as a loss in the company’s accounts.
(P.S. Abeg if you are working for a small organisation and they are not paying any of the above mentioned mandatory contributions… report them ☺)

Ivie Omoregie is the Founding Consultant at Skye Advisory. Skye Advisory is a boutique business advisory firm with locations in London, England, as well as Lagos, Nigeria. Skye Advisory offers bespoke Legal, Financial and General Business advisory services to small and micro businesses. Ivie is a duly qualified lawyer with years of cross border experience in the areas of Corporate Advisory, Energy and Projects, Finance and Litigation.  Ivie is also an active member of the Nigerian Bar Association as well as an avid Business Advisor, Political Analyst and Human Rights promoter. View more details about her at Follow her on Twitter @Ivie_Omoregie and Instagram @Ivie.Omoregie "


  1. Omodolapo

    February 9, 2017 at 11:02 pm

    Thank you.

    • Erm ok

      February 11, 2017 at 3:30 am

      Hi Ivie,

      I always look forward to your articles but I’m a bit shocked you wrote this. Are you speaking from experience when you say people don’t know the basic principles of accounting? As if running a business is as simple as that. Just wondering if you took your own advice after having to close your fashion business, move it to your living room and then head back to work. Everyone knows Nigeria is one of the worst countries to do business in. Some of it from Government imposed bureaucracy like the things you have listed here, which are actually expensive to sme’s, however most because the overheads are ridiculous, good staff are hard to find and qualified one’s don’t come cheap, let’s not even get into the basic lack of infrastructure like power and logistics. The reason why businesses fail in Nigeria is because selling is hard and the cost of reaching paying customers is more than what the customer will pay for your goods. I would say most businesses don’t have issues with accounts but its the Naija factor where about 40% of your costs are wastage, diesel, generator repairs, constantly ‘settling’ people to do what they’re supposed to do etc, etc, is the real reason most operate at a loss. BN pls print comment, I know you guys are selective!

    • Buko

      February 13, 2017 at 8:27 pm

      Wow this is funny. Nigeria is soo bad for business yet the chinese, Indians and Lebanese won’t leave. The world knows the chinese follow the money.

      Abeg madam sit down. This comment doesn’t seem well throught out. Just comes across as a personal vendetta. Since you have to come under the guise of anonymity to attack someone I can only presume you are nothing more than a frustrated hater.

      The biggest problem we have in Nigeria is Nigerians like you. The world can see the possibilities but negative unpatriotic Nigerians want to do nothing more than criticise and point fingers.

      Whether you want to accept it or not we are sitting on a gold mine and that is why I commend ivie for writing this article. What do you do aside from troll social media to write negativity? Please don’t come here and list credentials no one can verify.

  2. wendy

    February 10, 2017 at 12:31 pm

    wow, i needed to see this. well researched piece

  3. elizabeth

    February 10, 2017 at 12:31 pm

    @report them, hehehehe love the way you write

  4. UBI

    February 10, 2017 at 6:14 pm

    in this economy where everyone is running, who wants to be doing business in Nigeria sef???

    • Funmi

      February 13, 2017 at 7:20 pm

      Open your inner eyes

    • Yinka

      February 13, 2017 at 9:14 pm

      I know right. Most people are using their personal losses to cloud their judgement.


  5. Funmi

    February 13, 2017 at 7:19 pm

    Thanks for these tips. God bless

  6. Iffy

    February 13, 2017 at 8:36 pm

    Whoop whoop Eva Diva, the sexiest lawyer I know. Keep up the good work darling.

    Guys this babe is a good friend to have, I for one can testify that she loves her legal aid work and helps a lot of her friends with their legal issues.

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