A Free Trade Zone is a category of the special economic zone in Nigeria. It is areas where goods may be landed, manufactured, handled, stored, or perhaps reconfigured and re-exported under specific customs regulation. The goods processed export from free trade zones are not subject to customs duty. Free trade zones are often set up around major seaports, international airports, and national frontiers - areas with many geographic advantages for trade.

The government agency overseeing the activities in the free trade zones in Nigeria is the Nigeria Export Processing Zones Authority (NEPZA) established under the Nigeria Export Processing Zone Act Cap N107 Laws of the Federation of Nigeria 2004 (the Act).


Some of the functioning Free Trade Zones in Nigeria include the followings:

  • Ogun Guangdong Free Trade Zone
  • Lagos Free Trade Zone
  • Lekki Free Zone
  • Newrest Airline Services & Logistic EPZ
  • Dangote Industries Free Zone
  • Ladol Free Zone
  • Nigeria Aviation Handling Company (NAHCO)
  • Nigeria International Commerce City (Eko Atlantic)
  • Snake Island Integrated Free Zone
  • Tomaro Industrial Park
  • Quits Aviation Services FZ
  • Pan African Catering Services FZ
  • Alaro City Lekki Free Zone
  • Centenary Economic City
  • Abuja Tech. Village Free Zone
  • Newrest Airline Service & Logistic FTZ


There are actually three significant grants or licenses that may be granted in respect of Free Trade Zones in Nigeria.

  • Free Zone Developers License
  • Free Zone Enterprise License
  • Export Processing Factory/Export Processing Farm License

Free Zone Developers License

This type of license is granted to either a public or private entity for the establishment, management and operation of a Free Zone in Nigeria under the supervision, monitoring and regulation by the NEPZA

Free Zone Enterprise License

This particular type of license is actually granted by the Authority or the Zone Management for an enterprise to carry out an approved activity within a Free Zone. Such activities may include Manufacturing, Trading Servicer Provision.

Export Processing Factory/Export Processing Farm License

This license is actually granted by the Authority to an export-oriented manufacturing enterprise of a farm located in the customs territory that has the capacity to export more than 75 % of its production.


In considering eligibility for a Free Trade Zone License, the Authority/Zone Management shall put the following factors into consideration:

  • The business activities that the applicant proposes to carry out shall be in consonance with the free zone permitted activities;
  • The proposed business activities to be carried out will bring value to and be consistent with, the development program for the Free Zone;
  • The applicant shall comply with the applicable Rules and the Act and Regulations, which could be put in place by the Authority or Zone management from time to time;
  • The technical, managerial and financial capabilities of the applicant; and the applicant's experience and track record;
  • The amount of foreign direct investment proposed by the applicant.

A License shall only be granted to an Applicant who must have satisfied the Authority or the Zone Management in line with the requirements.


In line with the Free Zones Registration Procedures and Regulations, upon a License being approved to an entity by the Authority or Zone Management, they shall cause all relevant information in respect of the enterprise to be entered in the FZ Register and for a Certificate of Registration, duly executed by or perhaps on behalf of the Authority/Zone Management to be issued.


Each Free Zone Enterprise shall always have an address, either in the Free Zone, in the State, or perhaps in another State, to which all communications and notices may be forwarded to. Details of that address, which shall be its registered address, and of any change of address shall be notified within fourteen days to the FZ Registry, and details thereof promptly entered in the FZE Register.


The objects of each Free Zone Enterprise in Nigeria shall be to have on all that business activities within the area of the Free Zone, as the Authority may approve under the terms of the license issued in respect of the Free Zone Enterprise and anywhere else in accordance with all the applicable laws and regulations, and all business and other matters ancillary, related or conducive thereto. Such matters are going to include power for each Free Zone Enterprise to borrow, grant security, guarantee some obligation of any person or perhaps indemnify any person, to enter into all kinds of financial transactions and banking, to issue, make endorse or draw negotiable instruments (which include cheques, bills of exchange, promissory notes or perhaps bills of lading) in relation to its power and business for each Free Zone Enterprise to make, alter or perhaps dispose of any investments (whether or perhaps not within Nigeria) in relation to its company.

The Regulations also provide that a Free Trade Zone License shall be seen as personal to the Licensee who must not transfer, assign, or perhaps purport to transfer or perhaps assign the license in whole or in part without the prior written consent of the Authority or Zone Management.


A Free Trade Zone License usually lasts for one year, and it may be renewed upon expiration.

Requirements for Renewal

  • Payment of the License renewal Fee;
  • Production of any other documents returns
  • Payment of all outstanding amounts (if any) due to the Authority.


Accordance with the Licensing of Free Zones and Business Enterprises Regulations, a License granted by the Authority or Zone Management shall only be valid within the Free Zone. A Licensee wishing to have on business outside the Free Zone must comply with the applicable and regular laws in force for the time being outside the Free Zone.


If a business commences in any of the free trade zones, they are exempted from the regular laws and rules of the government, which are actually applicable all over the country of Nigeria, particularly in the area of taxes and customs duties. In return, the government anticipates that such businesses are going to help the economic growth of the nation. There are many benefits available for an enterprise when it is set up in a Free Trade Zone in Nigeria. Some of these advantages include the followings:

Any legislative provision related to taxes, levies, duties, and some foreign exchange regulations which are actually applicable in the country shall not apply to the companies set up in a Free Trade Zone. Section 8 of the Act provides that "approved enterprises operating within a Zone shall be exempted from all Federal, Government and State taxes, rates and levies"

Additionally, Section 18(1) (a) of the NEPZA provides that "legislative provisions pertaining to taxes, levies, foreign exchange regulations and duties shall not apply within the Zones."

Additionally, a business set up in the Export Processing Zone is actually allowed to send back all the foreign capital investment with capital appreciation of the investment. If any profits and dividends are earned by foreign investors, they are able to be remitted back to the home country.

Companies established in the free zones are able to employ competent personnel and foreign managers. The regulations of the NEPZ provide that all of the businesses which are actually licensed companies established in EPZ will be exempted from the expatriate quota requirement. This implies that companies operating within the zone will not require to obtain expatriate quotas before they are able to bring the expatriates to work in the free trade zones, unlike companies incorporated under the Companies and Allied Matters Act.


The procedure for the registration of the free trade zone enterprise is completely different from the registration of ordinary business in Nigeria. To set up a company in the free trade zone, the investor must take certain steps that are standard for all of the free zones of the nation. These steps are as follows:

  • Obtain and complete the application form.
  • Submit the completed application form in the Zone Administration office or perhaps NEPZA Office with the required Project Plan/Feasibility Study.
  • The application will be reviewed, and after review, it might be accepted by the administration or be rejected.
  • When the application is actually approved, an Operating License (OPL) will be issued by the Administration of the Free Zone.

It is noteworthy to state that you will find prohibitions on the type of trade done within the EPZ. Companies that are actually licensed to trade within the EPZ are actually prohibited from carrying out retail trade. Section 14 of the NEPZA provides that

"No retail trade shall be conducted within a Zone without the prior approval of the Authority and which might be subject to such terms and conditions as may be imposed, from time to time, by the Authority"

Section 16 of the Act further prohibits the sale of ammunition and dangerous explosives. Section sixteen states as follows. The Act further provides for a mechanism for resolving disputes between Licensees or Licensee and any government authority or Licensee's employers.

In closing, Free Zones in Nigeria provide rewarding and important areas that not only attract foreign investors but also provide employment opportunities to the local citizens. Lastly, once an enterprise has been registered within a trade zone, such business is actually exempted from incorporation with the Corporate Affairs Commission.

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.