By virtue of section 20 of NIPC Act, enterprises in which foreign participation is permitted, is to apply for business registration with the Nigerian Investment and Promotion Commission.
What are the Documents Required for this Registration?
To apply for NIPC Business Registration Certificate, the following documents are required:
- Duly completed NIPC Form I;
- Memorandum & Articles of Association;
- Certificate of Incorporation;
- CAC Form 1.1 (or CAC Forms CO2 and CO7 for old companies);
- Power of Attorney/ Letter of Authority (where applicable);
- Approved Remita payment receipt of N150,000.00 only (Non- refundable)
- NIPC payment receipt
What is the Procedure for Business Registration With the NIPC?
It should be noted that the NIPC Business Registration takes 24 hours to process once all required documents are submitted. The procedure is as follows:
- Applicant downloads NIPC Form 1 from the website at https://www.nipc.gov.ng;
- Applicant pays a non-refundable processing fee of N150,000.00 only, via Remita online portal at www.remita.net;
- Applicant submits all required documents at the One Stop Investment Centre in NIPC or scanned copies sent to osicinfodesk@nipc.gov.ng;
- NIPC Business Registration Certificate issued to applicant.
What are the Benefits of Registering with the NIPC?
Registration with the Nigerian Investment Promotion Commission (NIPC) guarantees the investment of an enterprise with foreign participation in several important ways as establishes in the NIPC Act:
- Transfer of capital, profits and dividends: A foreign investor in an enterprise, is guaranteed unconditional transferability of funds through an authorised dealer, in freely convertible currency, of the following:
(a) dividends or profits (net of taxes) attributable to the investment;
(b) payments in respect of loan servicing where a foreign loan has been obtained; and
(c) the remittance of proceeds (net of all taxes), and other obligations in the event of a sale or liquidation of the enterprise or any interest attributable to the investment.
- Guarantees against expropriation: No enterprise shall be nationalized or expropriated by any Government of the Federation; and no person who owns, whether wholly or in part, the capital of any enterprise shall be compelled by law to surrender his interest in the capital to any other person. In addition, no enterprise shall be acquired by the Federal Government, unless the acquisition is in the national interest or for a public purpose and under a law which makes provision for (a) payment of fair and adequate compensation; and a right of access to the courts for the determination of the investor’s interest or right and the amount of compensation to which he is entitled.
- Assistance and Guidance: The Commission provides registered enterprise with such assistance and guidance as the enterprise may require and shall act as liaison between the enterprise and the relevant Government Departments, agencies and such other public authorities
- Incentive Packages: In consultation with appropriate Government agencies, the commission negotiates specific incentive packages for the promotion of investment as the Commission may specify. These fiscal incentives are majorly made to provide for deductions and allowances in the determination of taxable income of manufacturing enterprises.
In the Industrial Industry these incentive packages include:
- Infrastructure: 20% of the cost of providing basic infrastructures such as roads, water, electricity, where they do not exist, is tax deductible once and for all.
- Investment in economically disadvantaged areas: 100% tax holiday for seven years and additional 5% depreciation over and over the initial capital depreciation.
- Re-investment allowance: This incentive is given to manufacturing companies that incur capital expenditure for purposes of approved expansion of production capacity; modernisation of production facilities; diversification into related products. It is aimed at encouraging reinvestment of profits.
- Investment tax allowance: Under this scheme, a company would enjoy generous tax allowance in respect of qualifying capital expenditure incurred within five years from the date of the approval of the project. Dividends derived from manufacturing companies in petro-chemical and liquefied natural gas sub-sector are exempt from tax. Companies with turnover of less than N1 million are taxed at a low rate of 20% for the first five years of operation if they are into manufacturing. Dividend from companies in manufacturing sector with turnover of less than N100 million is tax-free for the first five years of their operation.
In the Oil & gas sector:The government in the gas production phase has approved the following fiscal incentives:
- Tax rate under petroleum profit tax (ppt) act to be at the same rate as company tax which is currently at 30%;
- Capital allowance at the rate of 20% per annum in the first 4 years, 19% in the 5th year and the remaining 1% in the books;
- Investment tax credit at the current rate of 5%;
- Royalty at the rate of 7% on shore and 5% offshore.
- Gas utilisation (downstream operations): Incentives for encouragement of exploitation and utilisation of associated gas for commercial purpose include:
- An initial tax-free period of three years renewable for an additional two years
- 15% investment capital allowance which shall not reduce the value of the asset
- All fiscal incentives under the gas utilisation down-stream operations in 1997 are to be extended to industrial projects that use gas in power plants, gas to liquid plants, fertiliser plants and gas distribution/transmission plants
- The initial tax holiday is to extend from three to five years
- Gas is transferred at 0% ppt and 0% royalty
- Investment capital allowance is increased from 5% to 15%
- Interest on loans for gas projects is to be tax deductible provided that prior approval was obtained from the federal ministry of finance before taking the loan
- All dividends distributed during the tax holiday shall not be taxed.
- Oil & gas free zone: A Free Zone is a geographically designated area deemed to be outside the customs territory within which national regulations to production, trade and other economicactivities may not be applicable or partially applicable.
Incentives and fiscal measures approved by the government that favour and encourage large investment in the region include:
- No personal income tax
- 100% repatriation of capital & profit
- No foreign exchange regulation
- No pre-shipment inspection for goods imported into the free zone
- No expatriate quota
- Initial tax holidays period has been extended from 3 to 5 years and renewable for another 2 years
- Investment capital allowance has been increased from 5% to 15%
- All dividends distributed during the tax holiday shall be tax-free, etc.
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About KORIAT & CO.
We are a commercial law firm with head office in Lagos, Nigeria. We assist clients from different nationalities in company registration and processing of business licence in Nigeria, Ghana, Kenya, Rwanda and Uganda. We also provide company secretarial services and general legal support for registered businesses.
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.
Please contact Koriat & Co. through admin@koriatlaw.com or 09067842241 (also WhatsApp) if you require additional information about or assistance in registering or getting a fintech licence in either payment or lending sectors.
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