ARTICLE
22 March 2023

A Review Of The Regulatory Regime For Expatriate Employment In Nigeria

KN
KPMG Nigeria

Contributor

KPMG Nigeria is a member firm of KPMG International. We provide Audit, Advisory and Tax & Regulatory services, across various industries, to national and multinational companies. Our purpose is to inspire confidence and empower change. We have a relentless focus on delivering quality and excellent service to clients. We, therefore, provide insights and innovative ideas to clients to help them achieve their corporate objectives.
The Nigerian missions abroad focus on the review of visa application documents and issuance of appropriate visas to individuals who intend to visit or live and work in Nigeria.
Nigeria Immigration
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Introduction

The administration of the protocols for employment of expatriates in Nigeria remains an area of focus for the responsible Nigerian government agencies, namely, the Federal Ministry of Interior (FMI), the Nigeria Immigration Service (NIS), and the Nigerian missions abroad. While the FMI is focused on the issuance of the relevant approvals to facilitate long term employment, the NIS is saddled with the responsibility of issuance of work permits for both short and long-term assignments and maintaining the integrity of Nigeria's borders. The Nigerian missions abroad focus on the review of visa application documents and issuance of appropriate visas to individuals who intend to visit or live and work in Nigeria.

The three agencies are expected to work together to ensure that employers in Nigeria with expatriate manpower needs comply with the rules and regulations relating to expatriate employment in the country.

This article will examine the roles played by the various agencies, evaluate the current approaches to the regulation of expatriate employment and residency, and recommend the changes that the agencies can make to streamline their processes for the purpose of ease of doing business and Nigeria's competitiveness for foreign talent and investment.

The FMI as a key regulator of expatriate employment & residency matters

The FMI is responsible for the administration and technical enforcement of the Nigeria Immigration Act, 2015 and the Immigration Regulations, 2017 relating to the establishment of business in Nigeria by foreigners and employment of expatriates. The Ministry issues Business Permits and various Expatriate Quota (EQ) related approvals, to organisations that intend to employ foreign individuals.

For clarity, a Business Permit (BP) is the first level of approval required by companies with any percentage of foreign ownership and would require expatriate manpower. However, a wholly Nigerian-owned organization does not need to obtain a Business Permit to employ expatriates.

Another requirement for employment and residency of foreigners in Nigeria is approved EQ positions to qualified companies. The EQ approval is the licence for deployment of expatriate manpower to Nigeria. Once an EQ application meets the requirements of the FMI, the application is approved online and payment of the prescribed statutory fees is made via the FMI's dedicated portal prior to issuance of the EQ approval letter. Thereafter, the applicant organization will, based on the EQ approval, apply for subject to regularization (STR) visas to be issued by Nigerian missions abroad to the expatriates for the purpose of travelling to Nigeria to start their employment.

It is important to note that there is a critical requirement to have at least two Nigerian understudies for each EQ position being occupied by an expatriate. One of the Nigerian understudies is expected to take over the role occupied by the expatriate after a period of time, usually not more than 10 years.

Establishment of an Enforcement, Investigation and Inspection Unit

In the last quarter of 2022, the FMI announced the establishment of the Enforcement, Investigation and Inspection (EII) Unit to serve as the enforcement arm of the Citizenship and Business Department of the Ministry. The EII Unit, headed by a Deputy Director in the Ministry, is tasked with monitoring the utilization of EQ facility and evaluating compliance levels of companies in line with the prescribed laws and guidelines.

To facilitate the activities of the EII Unit, the Ministry charges Company Inspection fees which range from N50,000 – N200,000 payable every two years, subject to the location of the companies. A typical inspection visit entails verification of EQ records, utilization of EQ slots, evaluation of the level of compliance with the understudy programme and review of the development of a training plan for the Nigerian employees. It has been observed that some of these visits have been impromptu as organisations receive notifications very close to the dates of the inspection exercises, although the FMI has been open to rescheduling when requested.

There have been varying reactions to the establishment of the EII Unit as it is seen to be a duplication of the role of the Investigation and Compliance Department of the Nigeria Immigration Service which has over the years been responsible for carrying out similar tasks.

Electronic Submission of Expatriate Monthly Returns

In the past, the FMI had requested for submission of hard copies of the Expatriate Monthly Returns. The returns contain a report of the number of expatriate employees in an organization, utilization of approved EQ slots and the understudies assigned to each expatriate occupying an EQ position. However, in practice, many organisations only submitted the returns to the relevant offices of the NIS.

In January 2022, the FMI announced the introduction of online submission platform and reinforced the need for submission of the monthly quota utilization returns. To guard against fictitious uploads, the FMI has made it mandatory for employers to provide the residence permit numbers of the expatriate personnel and the National Identification Numbers (NIN) of the Nigerians understudying them before the returns can be submitted online. However, it should be noted that the FMI is yet to commence the enforcement of these guidelines.

The Nigerian Missions as agents for issuance of entry visas for employment purposes

The Nigerian Missions abroad are responsible for issuing the Subject to Regularization (STR) visas required by expatriates to take up long-term employment in Nigeria. Where no Nigerian Mission exists, concurrent accreditation is granted to other Nigerian Missions within that region. For example, the Nigerian Mission in Bucharest, Romania has concurrent accreditation to issue Nigerian entry visas to nationals of Slovenia, Croatia and Bosnia & Herzegovina where no Nigerian Mission currently exists.

The role of the Nigerian Missions in visa issuance is to verify the documentation that has been provided, evaluate the qualification of the applicants and, if satisfied, issue the required entry visa to the applicant. In exceptional instances, there are gaps between the requirements of the Nigerian Missions and the NIS. Where this happens, expatriates who have been issued the relevant work visas by the Nigerian Missions abroad may face challenges with obtaining residence permits in Nigeria. This is more prevalent where the NIS deems the academic documentation of an expatriate as insufficient to regularize his stay in Nigeria and obtain his residence permit (green card).

The role of the NIS in the process of issuance of residence permits

The NIS is the government agency responsible for issuing residence permits to foreigners living and working in Nigeria. The residence permit serves the dual purpose of facilitating work and residency.

Upon the arrival of an expatriate on an STR visa, the employer is required to apply to the NIS for a residence permit for the expatriate and accept full immigration responsibility on his behalf. It is important to note that regularisation applications for top management/board positions are approved by the Comptroller General of the NIS (CGIS), while other applications may be approved by the Deputy Comptroller General (DCG) in charge of Visa and Residency.

The Nigerian residence permit application process is generally categorized into three (3) stages:

  • The first stage is the submission of an expatriate's passport, STR documents and an application for regularisation of stay, and is completed with the issuance of an endorsed Temporary Residence Permit (CERPAC form). The endorsed CERPAC form facilitates the exit and re-entry of the holder into Nigeria for a period of 3 months, while the regularisation process is ongoing.
  • The second stage is the monitoring and follow-up to resolve any queries on the application. At the end of this stage, a permanent Residence Permit (Green Card), typically valid for one (1) year from the date of arrival, is approved for production and issuance to the affected expatriate.
  • The final stage is the "Green Card Endorsement" stage. This involves certification of the correctness of the information on the resident permit and granting of approval for its endorsement on the expatriate's international passport. It is after this that the green card is released to the company for the expatriate.

A Nigerian residence permit can be renewed subject to the validity of the EQ approval. The renewal may be initiated and completed at the NIS State Commands where the expatriate is resident or at the NIS Headquarters, Abuja.

Mandatory submission of statutory Expatriate Monthly Returns (EMR)

As the agency responsible for driving compliance, the NIS mandates organisations who have employed expatriates to submit their EMR to the NIS Headquarters, Abuja and the NIS Commands in the States where they have business presence and resident expatriates.

The returns contain, among other things, the biodata of all expatriate employees, dependants, where applicable, the details of EQ positions granted, and the details of Nigerian understudies. The returns serve as a source of data to the NIS in verifying expatriate residence permit records. Where discrepancies are discovered, the NIS may conduct an audit or investigation to ascertain the problem and address them in line with the laws and regulations.

Non-submission of the EMR is an offence for which Section 105 (4)(b) of the Immigration Act, 2015 prescribes a fine of Three Million Naira per month upon conviction.

Request for revalidation of EQ Positions on Permanent-until-Reviewed Status

The Permanent-until-Reviewed (PUR) status is granted by the FMI to organisations with existing EQ positions which are deemed to be critical to business operations. This status is an upgrade mostly approved for top management roles. PUR approvals help to facilitate stability in business operations as they do not require biennial renewals.

Over the years, there have been discussions on the validity of PUR approvals. In 2019, the FMI called for revalidation of all the PUR approvals issued before the year 2000. This implies that PUR approvals issued from 2000 till date are considered valid by the FMI. However, there have been instances where officials of the NIS have stated that PUR approvals are only valid for ten (10) years and queried residence permit applications with PUR approvals issued after the year 2000.

There is an urgent need for the FMI and the NIS to align on the validity of PUR approvals to avoid any ambiguity and inconsistency. Users need clarity in this area especially as revalidating a PUR EQ position costs over Five Million Naira. This would address the unexpected pushbacks that stakeholders sometimes encounter whenever they apply to the FMI to revalidate PUR approvals issued from year 2000.

Migrant e-Registration

In July 2019, the NIS flagged-off the Migrant e-Registration exercise at the NIS Headquarters in Abuja, with the commissioning of the Migrant e-Registration Centre.

According to the then Comptroller General of the NIS (CGIS), Mr. Muhammed Babandede, the exercise was in line with the reform of the NIS aimed at addressing the security challenges facing the country. It was also aimed at creating a conducive environment for migrants and facilitating the integration of migration management in Nigeria. Individuals that are eligible for this exercise are non-citizens of Nigeria who have attained the age of eighteen (18) years and resident in Nigeria, or visitors who intend to stay in Nigeria for a period exceeding 90 days.

The NIS had classified migrants into 5 categories for the purpose of e-registration: Employed Migrants, Students, Self-employed, Spouse of a Nigerian, and Dependants. The requirements for each migrant's registration depend on if they are ECOWAS nationals, nationals of other African countries or expatriate employees. However, for all migrants, a copy each of the passport data page and residence permit are required for the process.

The registration process entails the presentation of the required documents at the closest Migrant Registration Centre, booking an appointment and the physical presence of the migrant for biometric capturing on the appointed day. Upon verification of the submitted information/documents and data capturing, the migrant will be issued an acknowledgement slip showing enrolment details and confirming the end of the exercise.

Non-registration by an eligible individual is deemed as a breach of Section 57(5) of the Immigration Act, 2015 and offenders are liable to imprisonment for a term of three years, or a fine of Five Hundred Thousand Naira, or both.

Recommendations

Nigeria stands to benefit from expatriate employment in Nigeria to fill skill gaps and facilitate knowledge transfer for indigenous human capital development. To ensure Nigeria realizes these benefits and creates an enabling environment for foreign direct investment inflows into the country, regulatory agencies concerned with expatriate employment in Nigeria should align their processes with global best practices.

Specifically, it is recommended that:

  • Nigerian Missions abroad should align their requirements on all expatriate visa related matters with those of the NIS.
  • The Consular Section of the Nigerian Missions abroad, which is responsible for issuing work visas, should be manned by experienced immigration officers to ensure proper review and approval of STR applications and supporting documentation.
  • Both the FMI and the NIS should align on the validity of PUR approvals and officially issue a directive to this effect to avoid the current inconsistent practices in the administration of the facility.
  • The FMI should clarify the role of its EII Unit vis-a-vis its Investigations & Compliance Directorate. This is necessary to avoid duplication of efforts and unduly burdening organisations with multiple inspections.
  • The FMI and the NIS should continue to work on improving the timelines for issuance of EQ approvals and residence permits, respectively, to ensure expatriate personnel can be mobilized and deployed without any undue delay.
  • Finally, the government should continue to engage regularly with stakeholders involved in managing immigration compliance function in Nigeria with a view to continuously improving its processes.

Conclusion

Lack of a proper coordination between the statutory agencies responsible for monitoring and regulating expatriate employment in Nigeria could negatively impact Nigeria's competitiveness for foreign talent and investment inflows into the country.

The Federal Government should put measures in place to ensure the efficiency and effectiveness of its agencies for the sake of ease of doing business in Nigeria.

The opinion expressed in this article is solely personal and does not represent the views of any organization or association to which the authors belong.

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