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About

The Nigerian Investment Promotion Commission (NIPC) is the agency of the Federal Government Nigeria mandated to promote, coordinate and monitor all investments in Nigeria. The basic functions and powers of the NIPC are as prescribed by Act 16 of 1995.

Vision:

“To be pre-eminent Investment Promotion Agency in the Emerging Markets”

Mission:

“To proactively position and promote Nigeria as the preferred investment haven in Africa”

Mandate:

The Commission has perpetual succession and a common seal, which is specially established, among other things, to:

• Coordinate, monitor, encourage and provide necessary assistance and guidance for the establishment and operation of enterprises in Nigeria;
• Initiate and support measures which shall enhance the investment climate in Nigeria for both Nigerian and non-Nigerian investors;
• Promote investments in and outside Nigeria through effective promotional means;
• Collect, collate, analyse and disseminate information about investment opportunities and sources of investment capital and advise on request, the availability, chance or suitability of partners in joint-venture projects;
• Register and keep records of all enterprises to which the NIPC Act legislation applies;
• Identify specific projects and invite interested investors for participation in those projects;
• Initiate, organize and participate in promotional activities such as exhibitions, conferences and seminars for the stimulation of investments;
• Maintain liaison between investors and Ministries, government departments and agencies, institutional lenders and other authorities concerned with investments;
• Provide and disseminate up-to-date information on incentives available to investors;
• Assist incoming and existing investors by providing support services;
• Evaluate the impact of the Commission on investment in Nigeria and recommend appropriate remedies and additional incentives;
• Advise the Federal Government on policy matters, including fiscal measures designed to promote the industrialization of Nigeria or the general development of the economy; and Perform such other functions as are supplementary or incidental to the attainment of the objectives of NIPC Act.

Reasons to invest in Nigeria:

• Abundant Resources: Nigeria has enormous resources, most of which are yet to be fully exploited. They include mineral, agricultural and human resources.
• Large Market: Nigeria offers the market in sub-Saharan Africa, with a population of about 180 million people. The Nigerian market potential also stretches into the growing West African sub-region.
• Political Stability: Nigeria offers stable political environment.
• Free Market Economy: The Government has created a favorable climate for business and industrial ventures. Administrative and bureaucratic procedures have been greatly streamlined. The Government has put in place policies and programmes that guarantee a free market economy.
• Robust Private Sector: The country has a dynamic private sector, which has assured greater responsibilities under the new economic environment.
• Free Flow of Investment: Exchange control regulations have been liberalized to ensure free flow of international finance. There is now unrestricted movement of investment capital.
• Attractive Incentives: A comprehensive package of incentives has been put in place to attract investment.
• Fast Growing Financial Sector: There is well-developed banking and financial sector. The investor has easy access to working capital and other credit facilities.
• Skilled and Low Cost Labour: There is an abundance of skilled labour at an economic cost, resulting in production costs, which are among the lowest in Africa.
• Infrastructure: Rapid development of physical and industrial infrastructure, in terms of transportation, communications, electricity and water supply

The Nigerian Government has put in place a number of investment incentives for the stimulation of private sector investment from within and outside the country. While some of these incentives cover all sectors, other are limited to some specific sectors. The nature and application of these incentives have been considerably simplified.

The incentives include:

COMPANIES INCOME TAX

The Companies Income Tax Act has been amended in order to encourage potential and existing investors and entrepreneurs. The current rate in all sectors, except for petroleum, is 30 percent.

 

PIONEER STATUS INCENTIVE

The grant of Pioneer Status to an industry is aimed at enabling the industry concerned to make a reasonable level of profit within its formative years. The profit so made is expected to be ploughed back into the business.

Pioneer status is a tax holiday granted to qualified or (eligible) industries anywhere in the Federation for a period of 3 years (with additional 1 and 1 more years or 2 years straight)

 

CAPITAL IMPORTATION

Capital importation and remittances -To fund their investments in Nigeria, foreigners are free, subject to money laundering restrictions, to bring in any recognised foreign currency into Nigeria. Such funds will have to be brought in through an authorised dealer (usually a bank authorised by the CBN). The bank through which the funds were imported will need to issue a certificate of capital importation (“CCI”) to the investor to evidence the inflow of such funds into Nigeria. Where capital is not imported in form of funds but is imported in form of equipment, machinery or raw materials, a CCI will also be required.

In the absence of a CCI, foreign exchange cannot be purchased from the official foreign exchange market for an easy repatriation of the proceeds of the foreigner’s investment from Nigeria. If, for example, no CCI was issued to a foreign lender as evidence of funds disbursed to a Nigerian business, the foreign lender may be unable to receive any principal or interest payments in its offshore accounts because the borrower will be unable to access the official foreign exchange market for the purpose of purchasing foreign currency to remit such principal and interest payment. However, it could if it has access to independent sources of foreign currency (as would a borrower that generates foreign currency through exports) lawfully make such interest and principal payments from its own resources.

Where a foreign national is investing in an enterprise in Nigeria, the bank through which the investment is received, shall issue a Certificate of Capital Importation (CCI) within 24 hours of receipt of capital subject to the prescribed documentation requirements. Capital importation means the inflow of foreign currency in cash or goods (raw materials, machinery and equipment). Issuance of CCI is based on presentation of the following documents:

• Authenticated SWIFT/Telex message advising payment;
• Board Resolution of the Nigerian beneficiary authorizing the investment;
• Purpose of capital importation e.g. working capital requirement, purchase of fixed assets etc.;
• Evidence of incorporation where applicable.
• Original Clean Report of Inspection;
• Original Invoice duly attested/sealed by the relevant Inspection Agents
• Original Bill of Lading;
• Original Exchange Control Documents.
• Documents (e) to (h) above will apply only where capital is imported in form of equipment/machinery or raw materials. Non-resident investors are also required to register their investments with the NIPC for records and statistical purposes. Issuance of CCI is very important in processing repayment of external loans including suppliers’ credits. Very typical are projects financed by multilateral bodies and Export Credit Agencies (ECAs). The CCI will be required in accessing funds from the Foreign Exchange Market and effecting payment.

The main benefits in issuance of CCI are:

• Foreign investors are guaranteed unconditional transfer of their dividends, profits and capital relating to their investment in any convertible currency through the banking system in Nigeria.
• Funds may be sourced officially from the Nigerian Foreign Exchange Market i.e. CBN and Inter-bank subject to the prescribed documentation requirements.
• Foreign loan repayment including suppliers’ credit may be repaid through the Nigerian banking system on the basis of the CCI and other required documents such as (i) duly completed Form ‘A’, (ii) copy of Loan agreement showing schedule of repayment, (iii) schedule of drawdown of the loan, and (v) Demand Note. For the purpose of remittance of dividends and profits the following documents are required:
• Duly completed and approved Form ‘A’.
• Audited accounts for the year dividends were declared.
• Board/AGM Resolution authorizing payment of dividend/profits to both local and foreign shareholders.
• Evidence of tax payment on the amount to be repatriated issued by the Federal Inland Revenue Services.
• CCI or approved Status Certificate (in the case of old companies).
• Copy of dividend warrant to be repatriated. Where the foreign investor intends to withdraw its capital, the following documents would be required:
• Duly completed and approved Form ‘A’.
• Copy of sale agreement
• Original certificate of capital gains tax paid.
• CCI or approved Status Certificate (in the case of old companies).
• Evidence to show that the beneficiary has sold or transferred assets.
• Evidence of valuation by an independent third party

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