Introduction
With the growth of e-commerce business comes the use of courier and logistics companies which facilitate the delivery of goods between sellers and buyers. A courier and logistics company offers delivery services to the public members and the categories of goods and population served by this middleman business is very huge globally.
In Nigeria, courier and logistics business is regulated by law which prescribes licensing requirements for entrepreneurs seeking to venture into delivery services. The first step in setting up a logistics business is to register the business with the Corporate Affairs Commission (CAC) as a limited liability company. The minimum share capital for private limited liability companies in Nigeria is N100,000 and N2,000,000 for public companies. So, a courier and logistics company can be registered with as low as N100,000 share capital.
However, where a foreigner is involved in the company (as as shareholder or director), then the company must be incorporated with a minimum share capital of N10,000,000 (Ten Million Naira). Meanwhile, logistic companies that seek to engage in freight forwarding require a minimum issued share capital of N5,000,000 (Five Million Naira) while companies that carry on shipping activities as part of their businesses must have a minimum issued share capital of N25,000,000 (Twenty-Five Million Naira).
1. What are the requirements for incorporating a logistics company in Nigeria?
Below are the requirements for registering a company in Nigeria.
- Two proposed names for the company: these names will be submitted to the CAC for name search, screening and approval. Upon approval, the promoters may thereafter proceed to register the company with the approved name;
- Proposed Registered Address, Email Address and Phone Number of the Company;
- Details of the Shareholders, Director(s) and Company Secretaryto include their Names, Contact/Home Address, Email address, Phone number, Date of birth, Occupation, a copy of Government-issued means of identification (e.g. NIN, Voters card, Data page of International Passport), and Electronic signatures respectively. Please note that a National Identification Number Card is a prerequisite for company registration in Nigeria.
- Objects of the Company: The proposed company must be registered as a logistics company.
You can learn more about the requirements for registering a company in Nigeria here
2. What is the Regulatory Framework for a logistics company in Nigeria?
The Courier and Logistics Services (Operations) Regulations 2020, a subsidiary of the Nigerian Postal service Act (“NIPOST Act”), governs all forms of courier and logistics business in Nigeria. The objective of the regulations is to provide a regulatory framework for effective and efficient licensing processes and the regulation of the Courier and Logistics industry in Nigeria.
3. What post-incorporation registrations and approvals do a logistics company require to operate in Nigeria?
- Tax Registration
In practice, upon incorporation with CAC, a Tax Identification Number (TIN) is assigned to a company. Nonetheless, a company is required to register with Federal Inland Revenue Service (FIRS) for tax purposes.
The requirements for the registration are as follows:
- Application letter using company’s letterhead,
- Incorporation documents,
- Particulars of the company directors, and
- Utility Bill of the registered address of the company.
- Nigerian Postal Service (NIPOST) Courier Licence
Logistics companies are required to obtain a Licence for their operations from the Courier and Logistics Regulatory Department (“CLRD”) of the Nigerian Postal Service. The CRLD is a specialised arm of the Nigerian Postal Service that is saddled with the responsibility of the development of the courier and logistics industry. Please note that, a one-time processing fee of ₦20,000 is required to commence the application for Licence.
The categories of licences are as follows:
(a)International Licence: This Licence allows logistics operations across international borders;
(b) National Licence: This Licence permits logistics operations nationwide (interstate);
(c) Regional Licence: This Licence is required for logistics companies that operate within a geo-political zone. e.g South-West, North East, South-South, South East, North West or North-Central etc. This licence allows for logistic operations with a maximum of one hundred and eighty (180) motorbikes and permits the use of vehicles for delivery.
(d) State/Small & Medium Enterprise (SME) licence: This licence is required for intrastate logistics operations. It allows for operating with a minimum of two (2) motorcycles and a maximum of five (5) motorcycles. This licence does not permit the use of vehicles for delivery.
(e) Solo-Rider Permit: This licence is for single riders operating only one motorcycle. This permit is mandatory to operate as an independent courier operator or as a partner with licensed operators.
What are the Applicable Costs for NIPOST Licence?
The costs for NIPOST Licence and renewal fees are stated in the table below:
| Category | Licence Fee (N) | Renewal Fee (N) | Scope of Licence |
| International Courier Licence | 20,000,000 | 1,875,000 | For operators who perform Courier and Logistics services across international borders |
| National Courier Licence | 3,000,000 | 625,000 | For operators who perform Courier and Logistics services nationwide |
| Regional Courier Licence | 2,000,000 | 437,500 | For operators who perform Courier and Logistics services within a geo-political zone in Nigeria e.g., south-west geo-political zone |
| State/Special SME Courier Licence | 250,000 | 100,000 | For operators who perform Courier and Logistics services that operate within a particular state with more than one motorbikes/motorcycles |
| Solo-Rider Permit | This Category have access to a flexible payment plan to pay for their Annual permits. | For operators who perform Courier and Logistics services that operate with only one motorbike |
What are the Documentary Requirements for NIPOST Licence?
Below is a list of documentary requirements for obtaining a courier Licence in Nigeria.
- Application Letter: The letter is addressed to Postmaster General of the Federation, NIPOST. Application Letter must be written or printed on Applicant’s company letterhead paper. Attached to this letter is the evidence of payment of the processing fee and the other following documents:
- Filled Registration Form
- CAC Incorporation documents
- Business Plan, Company Profile and Operations Manual
- Goods in Transit Insurance Policy: Registration with an insurance company is vital in the event of loss or damage to any good in transit.
- Evidence of Tax Clearance
- Evidence of Share Capital
- Evidence of Facilities, and Office Location Detail
- List of Assets & Drivers
- Evidence of License Registration Fee Payments
- Address verification
Please note that the entire process registration apart from inspection can be done online, on the NIPOST/CLRD portal.
Lagos State Structure for Signage and Advertisement Agency (LASAA)
At the state level, if the Company intends to operate within Lagos State, and use its own branded vehicles or motorcycles, then it must apply and obtain the permit of the Lagos State Structure for Signage and Advertisement Agency (LASAA). LASAA requires all persons who intend to use branded vehicles or motorcycles to apply and obtain a permit for that purpose.
The two recognised types of branding are:
- Partial branding – This is the display of the name of a business, address of the business, phone numbers, and contact details of the business without showing the image/picture of the products associated with the company.
- Full branding – This involves partial branding in addition to the display of any image that represents the product or service marketed by an organisation.
Also, companies that intend to use branded vehicles in Lagos State must have a Mobile Advert Permit which allows signage and branding on vehicles for advertisement in the State. An application for a Mobile Advert Permit is to be submitted at any of LASAA’s offices with the following accompanying documents:
- Duly completed mobile advert form;
- Photomontage or photograph of the vehicle showing its registration number;
- A copy of the vehicle’s licence; and
- Evidence of payment of permit fees.
What are the Costs for Getting LASAA Permits?
The applicable fees for obtaining a mobile advert permit are as follows:
| VEHICLE CATEGORY | FULL /WRAP AROUND | PARTIAL |
| TRUCK/TRAILER | N49,900 | N9,900 |
| COASTER/CIVILIAN | N49,900 | N9,900 |
| BUS/PICK-UP | N39,900 | N7,900 |
| SUV | N39,900 | N7,900 |
| CAR | N19,900 | N3,900 |
| MOTORCYCLE | N19,000 | N1,900 |
| TRICYCLE | N19,000 | N1,900 |
| BICYCLE | N19,000 | N1,900 |
| PUSHCART | N19,000 | N1,900 |
(iv.) Lagos State Motor Vehicle Administration Agency (“MVAA”)
In addition, a delivery service company operating with motorcycles must ensure the following:
(a) That the motorcycles are registered with the State/Local Government in which they are operating; and
(b) For operations in Lagos, ensure that the riders have a rider’s card issued by the Lagos State Motor Vehicle Administration Agency (“MVAA”).
Please note that the cost for obtaining rider’s card is about N15,000. Rider is expected to submit two passport photograph and a fully filled form containing the rider’s Bio-Data.
4. What is the timeline for processing incorporation and post – incorporation registrations for a logistics company in Nigeria?
Incorporation of a company takes an average of 3 days. The estimated timeline for post incorporation registration is about 6-8 weeks.
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About KORIAT & CO.
We are a commercial law firm in Nigeria with network of lawyers and consultants in Ghana, Kenya and Rwanda. The above article is not legal advice and does not automatically make our readers our clients unless they specifically instruct us to act or represent them in any way.
We assist local and foreign clients to process company registration and business licences in Nigeria, Ghana, Kenya and Rwanda.
Please contact Koriat & Co. through admin@koriatlaw.com or 09067842241 if you require additional information about or assistance in making the application for a courier and logistics company’s licence.
