Nigeria is Africa’s biggest economy and a beehive of business activities. 

With an ever-growing consumer appetite, it is no wonder that investors and businesspeople around the globe are looking to do business here. But as promising as the business opportunities might be, setting up a business in Nigeria can feel like a daunting task due to bureaucracy and regulatory requirements.

This guide simplifies the entire process, enabling foreign business owners and investors to navigate the system easily. It details the process from start to finish, ensuring you understand how to register your business in Nigeria legally, overcome any potential challenges, and leverage available resources. The guide is the perfect resource for any foreign entrepreneur or investor looking to operate a business in Nigeria.

 TL;DR: How to register a business in Nigeria 

• Choose a business structure (LLC recommended for foreigners).
• Register with the Corporate Affairs Commission (CAC).
• Get a Tax Identification Number (TIN) and necessary licenses.
• Open a business bank account.
• Explore tax incentives and Special Economic Zones (SEZs).

Need a step-by-step guide? Sign up for the FREE African Expansion Roadmap Email Course.

Step-by-step guide: How to register a business in Nigeria  

Step 1: Choosing the right business structure 

Before immersing yourself in the registration process, the biggest decision you’ll have to make is what the organisational structure should be. This choice determines everything from how much tax one will pay to the amount of individual risk to which they may be exposed.

Take a look at the options that are available in Nigeria:

Sole proprietorship

This is the simplest form of business structure. It is perfect for anyone who is working small or solely running the business. It is easy to set up, but remember that the individual and the business are the same. If the business runs out of money, the individual’s assets are on the line.

Partnership 

This structure could be a good option if you are teaming up with somebody. You divvy up the responsibilities, but you also split the profits and the risks and the liabilities. It is a great choice if you have a co-founder you trust, and you have a clear business agreement.

Limited Liability Company (LLC)  

The LLC is the most foreigner-friendly option.

This is the most popular structure in Nigeria because it is the personal asset of the business. That means if your business has any problems with its finances, your personal wealth will not feel the burn. It also gives your business credibility when you are dealing with banks, foreign investors, or government agencies.

Public Limited Company (PLC) 

If you go for a PLC, it means that you’re planning to go big in the long run, and you will eventually raise capital by floating your company on the stock market.

The advantage of this company structure is that it allows you to issue shares to the public.

This is a good idea for a big business. However, it has a lot of regulatory requirements, but it is a good idea for a business that plans to grow rapidly.

Pro Tip: The business structure you choose will impact several things, from taxation and liability to the amount of reports you will need to file annually.

Not sure which one to choose? The African Expansion Roadmap Email Course covers this in detail, so you can make an informed decision before you register your business.

Step 2: Register with the Corporate Affairs Commission (CAC) 

Now that you’ve figured out a business structure, the next step is to get yourself registered with the Corporate Affairs Commission (CAC). This is the government body that is responsible for business incorporation in Nigeria.

Think of this step as giving your company a legal identity, which allows you to operate without regulators or banks breathing down your neck.

Here’s a step-by-step breakdown of how to register your business:

Name reservation  

This part of the application requires that you pick a unique business name and see if that name is available for use on the CAC portal.

In case you choose a name already in use, you may have to modify the name slightly or select a new one. This process does not take very long, and you will be notified when the name is reserved for your use.

Prepare any incorporation documents  

This stage involves gathering mandatory documents. Typically, you’ll need documents like:

• A Valid passport for foreign founders
• Memorandum and Articles of Association (MEMART) is needed for LLCs and PLCs. It details the purpose, structure, and governance of the company.
• The business address and director details, such as business address details as well as the details of the directors or shareholders, are necessary at this stage.

Finish the online registration  

Once all your documents are in place, upload them to the CAC portal and pay the registration fees.

The process is fully digitised, and you can now do this from the comfort of your home without having to visit an office physically.

Certificate of Incorporation issuance  

The CAC will review your application. If everything is in order, then they’ll issue a final Certificate of Incorporation, which confirms that your business is now officially recognised in Nigeria.

This certificate is important because you will need it at the bank when you are opening an account, when applying for licences, and for your tax matters.

Step 3: Obtaining a Tax Identification Number (TIN) and necessary licences 

When your business is officially registered, it’s time to get tax-compliant because, let’s be honest, no one wants trouble with the tax authorities.

In Nigeria, every registered business must have a Tax Identification Number (TIN), which is issued by the Federal Inland Revenue Service (FIRS).

Getting your TIN 

Applying for the TIN is easy and can be done online through the FIRS portal. Here’s what you need:

• Certificate of Incorporation from the Corporate Affairs Commission CAC
• A completed TIN application form
• Proof of business address
• Details of company directors or proprietors

You will get the TIN when you have been approved. A TIN is necessary for opening a business bank account, paying taxes, and using other financial services.

Here’s a tip: Some banks request a TIN for you when you register a commercial account. Ensure to ask about this possibility.

Do you need additional licences or permits? 

Short answer, yes, but it depends on the sector.

There are sector-specific regulations in Nigeria. You may need some extra approvals depending on the type of business you are running before you can operate legally. Here are some common examples:

Fintech and financial services  

If you are starting a fintech startup, you will need approval from the Central Bank of Nigeria (CBN) to ensure compliance with financial regulations for payment solutions, lending platforms, and digital banking services.

Oil and gas businesses  

If your business is part of the energy sector, then you will need the appropriate permits from the Department of Petroleum Resources (DPR) to operate legally.

Manufacturing and consumer goods 

Do you plan to manufacture or import? Then take into account that you must comply with the requirements for safety and quality that are set by the Standards Organization of Nigeria (SON).

Pharmaceutical and health industry  

Enterprises within the pharmaceutical and health sectors, such as those supplying medical supplies, medications, or services related to health. These types of businesses need to be approved by the National Agency for Food and Drug Administration and Control (NAFDAC).

E-commerce and retail  

No strict licensing is required for businesses in this niche, but consumer protection compliance from agencies like the FCCPC might be needed.

Dealing with multiple regulatory bodies can be overwhelming, especially if you’re expanding into Nigeria from abroad.

If you are not sure which permits you need, this free five-day email guide breaks it down into simple, actionable steps, so you can confidently navigate Nigeria’s business regulations.

Step 4: Setting up a business bank account 

So your business is officially registered, and you have your TIN in hand.

Now, it’s time to set up a corporate bank account because no one wants to mix personal and business finances (it gets messy).

In Nigeria, a business bank account is a legal requirement for companies operating in the country. It allows you to receive payments, pay employees, handle international transactions, and maintain financial transparency.

What can you do to ensure this step is smooth sailing for you?

Choose the right bank 

Not all banks are created equal. So it is important that you pick one that aligns with your business needs. Here is what to consider when choosing a bank:

• If your business involves international transactions, ensure that you have a bank that allows for foreign currency accounts and can transact across the forex.
• Consider online banking and mobile access; you’ll want a bank that boasts of robust online banking services for remote management.
• The account should be relatively easy to open and run. Some banks have a faster and less bureaucratic process than others. Research and compare.
• Look for customer service that is responsive. You want a bank that is going to be there for you when you need them in an emergency.

In no particular order, the top Nigerian banks for corporate accounts are:

• Zenith Bank
• GTBank
• Access Bank
• UBA
• First Bank

The documents you’ll need to open a corporate account 

Settling on a bank means getting your paperwork in order. Every bank differs in what they need, but the general commonalities are:

• A certificate of incorporation, which establishes that your company is duly incorporated according to the Companies and Allied Matters Act (CAMA), is required.
• Tax Identification Number, or TIN, is mandatory for those who need to comply with the tax regulations, and the Federal Inland Revenue Service issues it.
• Board Resolution (For LLCs and PLCs): If your company has several directors, you’ll need the resolution of the board of directors on the opening of the account. The resolution of the board shall also contain the list of people authorised to operate the account.
• Valid ID – This includes a passport or national ID offered from the government for the business owners and directors.
• Proof of Address document, which can be a utility bill or tenancy agreement that confirms your business location.

Activating your account 

After you turn in your documents, the bank will process them and open your account. Depending on the bank’s system, this process generally takes a few days or a week.

The next step is funding your account. Most banks require an opening deposit to activate an account. The amount varies, so check with the specific bank.

Make sure you activate Internet banking and mobile banking apps so you can transact seamlessly.

Some Nigerian banks offer Non-Resident Business Accounts to help foreign entrepreneurs or businesses carry out banking transactions without being physically present. This is a good option if you have yet to arrive in Nigeria.

Step 5: Government incentives and support programs  

When expanding a business to reach new countries, the process can be expensive.

However, Nigeria has some support incentives in place to make it easier for foreign investors. Foreign investors have an opportunity to utilise some of the incentives offered by the government. These programmes are designed to reduce the taxes that are paid by foreign investors and enhance the efficiency of the organisation’s operations.

Pioneer Status Incentive (PSI) (Which offers up to five years of tax holidays)

You may qualify for Pioneer Incentive Status (PSI) if you have a business in the priority sector, such as technology, manufacturing, agriculture, health care, or renewable energy.

What does this mean for you?

• Exemption from paying taxes for up to five years significantly reduces the operational costs.
• Increased profitability, which means you have the opportunity to plow back into the company to enhance its growth.
• Competitive advantage, as it makes your products and services much more affordable.

To apply, you will need to be registered with the NIPC and submit an application to prove your eligibility.

Special Economic Zones (SEZs): Tax benefits and import benefits 

Nigeria has its Special Economic Zones (SEZs) and Free Trade Zones (FTZs), with a number of unique benefits:

• Import and export duty exemptions that lead to lower costs on equipment and raw materials are among the policy measures taken by many countries today to attract investors.
• Streamlined customs and regulatory procedures, which means less bureaucracy and shorter clearance times.
• Corporate tax cash flow, which will leverage tax relief and improve your cash flow.

Some popular SEZs include:

Lekki Free Trade Zone: a hub for tech, e-commerce, and logistics.

Kano Free Trade Zone: best-suited for manufacturing and industrial concerns.

Onne Oil & Gas Free Zone: geared for energy companies as well as businesses in the oil and gas industry.

Registering your business under a well-recognised Special Economic Zone (SEZ) has been a strategic move if you want to benefit from these zones.

Common challenges with registering your business in Nigeria 

Venturing into Nigeria is quite a task fraught with difficulties. Even when you plan it well, you can encounter some of these difficulties:

Bureaucratic hurdles 

Foreign investors contend with the slow pace of paperwork and regulatory processes. What can you do? Engage experienced lawyers to quicken business registration.

Currency and financial regulations 

The financial system in Nigeria is strict about how exchange policies affect the capital brought in and repatriated. The solution for this is to use cross-border fintech solutions that comply with the regulations for smooth transactions.

Cultural and market differences 

Mastering local business culture and consumer behavior is crucial for registering and expanding your business in Nigeria. The way out? Collaborate with professionals in Nigeria or use business links such as local chambers of commerce.

See the tips experts recommend for registering and scaling your business in Nigeria successfully.

Final insights 

Nigeria provides a great opportunity for foreign businesses who want to expand their business in Africa. Although establishing a business in Nigeria involves a lot of regulations and red tapes, having the right information can ease the process.

With the help of this step-by-step tutorial, you’ll have the know-how to register and run your business in Nigeria.

Want a more tailored approach? Get free expert guidance on how to expand into Nigeria and the rest of Africa’s thriving markets.