The Nigerian Ministry of Interior recently released a circular informing the public of a revised Handbook on Expatriate Quota Administration for 2022 which was published on the ECitibiz portal. This guideline introduces certain new additional requirements to the existing framework for foreigners doing business in Nigeria.

What is the role of Ministry of Interior?

The Ministry of Interior is responsible for administering and enforcing the Nigeria Immigration Act, 2015 and the Immigration Regulations 2017 by granting Business Permit ,Approving Expatriate Quota and Monitoring of the utilization of quota positions by companies .

What is the purpose of The Revised Handbook on Expatriate Quota Administration?

Just like the previous handbooks, the Revised Handbook outlines the services that the Ministry of Interior provides, the general rules, specific requirements for Business Permits and Expatriate Quota positions, including offenses and penalties for breaches of the rules.

What is a business permit?

A business Permit is a document issued by MoI and required when a company in Nigeria is owned wholly or jointly by foreigners which allows foreigners to conduct business in Nigeria and it must be
obtained before the business commences in Nigeria.

What is an Expatriate Quota?

Expatriate Quota is a document issued by MoI that allows foreigners to work and live in Nigeria freely. The expatriate quota is applicable to any foreigner who is a director or an owner of a registered business in Nigeria and is willing to obtain residency status in Nigeria. An Expatriate Quota is required for companies who intend to engage expatriate personnel with skills and competences that are not available locally.

What are The New Provisions in the Handbook on Expatriate Quota Administration?

The Revised Handbook provides that a condition for issuing a Business Permit is that the applicant company must have a minimum paid-up capital of N100 Million instead of N10 Million in the previous edition . The value of equipment or machinery will continue to be recognised as part of share capital.

The revised handbook has reduced expatriate quota lifespan such that the grant for expatriate quota personnel is for a period of three (3) years initially and could be renewable biennially for two consecutive times within a lifespan of seven (7) years instead of ten (10) years in the previous handbook, except for approvals for companies in the oil and gas sector .Approval for companies in the oil and gas industry, whose approval will be for an initial period of 2 years and renewable once within a life span of 4 years.

Extension of Project Tagged Expatriate Quota was not provided for in the previous handbook. This is a facility granted to companies to extend the employment duration of its expatriates for one (1) year only for the sole purpose of completing a specific project.

For each Expatriate Quota Position granted and on which an Expatriate is placed, two (2) Nigerian understudies with minimum qualifications of Bachelor Degree/Higher National Diploma or relevant training certificate should be employed to understudy the Expatriate;

The Handbook also makes it mandatory for the National Identification Number (NIN) of the expatriates and their Nigerian understudies to be reflected in the monthly returns filing.

What are the New Provisions on Charge, Fees and Penalties ?

The Revised Handbook provides for an increase in the statutory fees applicable to each service category.The Handbook establishes stiff new penalties as follows:

  • Any company who fails to renew expatriate quota or render the mandatory expatriate monthly returns within the stipulated time is liable to a fine of N3,000,000 (Three Million Naira).
  • Any company that fails to employ Nigerian understudies as required is liable to a fine of N3,000,000.00 (Three Million Naira) for each month that a position is occupied by an expatriate without an understudy. Up to N5Million, including imprisonment and an Order of Court to wind up the defaulting company.

Implication on set up cost for foreign investors in Nigeria

The new requirement that a condition for issuing a Business Permit is that the applicant company must have a minimum paid-up capital of N100 Million will considerably increase the cost of business registration with the Corporate Affairs Commission and stamp duties paid to the Federal Inland Revenue Service. The regulatory cost paid to these authorities are typically a function of how high the share capital is.

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.