The recent drop in global crude oil price and the persistent efforts of the Federal Government of Nigeria to diversify her economy and move away from overreliance on the oil and gas sector have made Nigeria a fertile ground for investments. In spite of the attempts of both Government and indigenous companies, the telecommunication, energy, tourism and hospitality, agriculture, security, manufacturing, real estate, transport, banking, mining sectors are still nascent and promises foreign investors rich returns on investment. With a huge population, large land mass and encouraging government policies, the Nigerian market is indeed an untapped gold mine.
It is for this purpose that the Federal Government enacted the Nigerian Investment Promotion Commission Act ("NIPC Act") which created Nigerian Investment Promotion Commission ("NIPC") to advice the Federal Government on policy matters designed to promote the industrialization of Nigeria; enhance the investment climate in Nigeria for investors; identify specific projects and invite interested investors for participation in those projects; maintain a liaison between investors and ministries, government departments and agencies, institutional lenders and authorities concerned with investments as well as assist incoming and existing investors by providing support services.
NIPC provides services for grant of business entry permits, licenses, authorization and incentives in a one-stop shop environment. NIPC's One Stop Investment Centre offer general information and data on the Nigerian economy to facilitate informed investment decisions, facilitate post entry approvals, licenses and sector-specific permits with government agencies and general advisory services on profitable investment opportunities in Nigeria including matching investors requirements with opportunities available in the 36 States of the Federation and the Federal Capital Territory.
Under NIPC's Pioneer Status Incentives Regulation, 2014, a corporate body registered in Nigeria with a capital expenditure of not less than N10, 000, 000 (Ten Thousand Naira) can apply for a Pioneer Status Incentive ("the incentive"). A beneficiary of the incentive enjoys a tax holiday for up to 7 years in some instance. For the purpose of promoting identified strategic or major investment, NIPC, may, in consultation with appropriate government agencies, negotiate specific incentive packages for the promotion of investment as it may specify.
This is to encourage investors to make reasonable profit within their formative years and put back the profit into their business. Where an investor granted the incentive is unable to enjoy the incentive due to the fact that it is constrained or compelled to suspend its operations as a result of host community hostilities, natural disasters, strikes, insurgency or any other circumstance, the investor shall within 3 months of the continuous occurrence notify NIPC. Upon confirmation of the investor's claim, NIPC would in conjunction with the Federal Inland Revenue suspend the tenure of the incentive.
A foreign investor registered with NIPC is guaranteed unconditional transfer of dividends or profits attributed to the investment, payments in respect of loan servicing where a foreign loan was obtained and remittance of proceeds and other obligations in the event of a sale or liquidation of the investors' business or any interest attributable to the investment. Any dispute between an investor and the Government in respect of investments in Nigeria is settled by negotiation between the parties and as a last resort submitted to arbitration at the option of the aggrieved party.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.