Incentive and Investor Protection

Whether you are entering new markets or expanding existing operations, Nigeria has frameworks offering strategic, sectoral, and fiscal edge for long-term success.

Special Economic Zones (SEZs)

Investing in the country's SEZs positions businesses to enhance operational efficiency and reduce the cost of doing business by:

• Tax holidays and exemptions
• Efficiency in business registration and licensing.
• Duty-free importation of raw materials, capital goods, and other components.
• 100% capital and profit repatriation
• Guaranteed full foreign ownership

Key SEZs like the Lekki Free Zone, Calabar Free Trade Zone, Kano Free Trade Zone, and others also offer proximity to ports and major markets.

Sectoral Incentives

Sector-specific incentives prioritize value-adding areas that fuel Nigeria's economic growth. Sector-specific incentives are administered by the relevant ministries or regulatory agencies, such as the Federal Ministry of Agriculture and Rural Development, among others, ensuring that support measures are tailored to the unique needs of each industry. Some examples of incentives in major sectors include:

• Zero import duty on machinery, government scheme-backed financial support, and tax relief in research and development in the agricultural sector.
• Public-private partnerships, land allocation assistance, and preferential tax treatment in the renewable energy and infrastructure sector.
• Tax holidays under Pioneer Status Incentive (PSI) and duty-free importation of equipment and machinery for qualifying sectors.

Fiscal Incentives

Incentives vary based on investment scale, regulatory compliance, and the specific sector involved. The NIPC and corresponding regulatory bodies oversee the application process. Fiscal advantages of investing in Nigeria include:

• Capital expenditures on equipment may qualify for investment allowances and offer early-stage capital recovery.
• Export-oriented businesses benefit from VAT waivers on locally-sourced inputs and duty drawback schemes.
• Sectors like agriculture and infrastructure development enjoy tax exemptions or reductions in corporate tax rates.

Additional Incentives

• Provisions for streamlined business registration, investor aftercare services, and other aspects through the One-Stop Investment Centre (OSIC).
• Establishing double taxation treaties with multiple countries to promote cross- border investment and prevent fiscal barriers.
• Export Expansion Grant (EEG) to support non-oil exporters with negotiable tax credits and cash grants.

Investor Protection

Nigeria upholds a transparent and equitable legal framework designed to safeguard the interests of all investors.

Several legal instruments and policies offer investment protection, including:

• Section 25 of the NIPC Act expressly safeguards against nationalization or expropriation. No enterprise shall be subject to nationalization or expropriation by any government of the Federation, except in instances of national interest or public purpose, and in accordance with a law that ensures fair and adequate compensation.
• Investors are entitled to transfer profits and repatriate capital in convertible currency, ensuring full access to their investment returns.

Dispute Resolution Mechanisms

Domestic and international dispute resolution options available to investors include:

• International Centre for Settlement of Investment Disputes (ICSID), to which Nigeria is a signatory, offers foreign investors the opportunity to settle disputes with the state in a neutral international forum.
• The Arbitration and Conciliation Act (Cap A18, LFN 2004) provides alternative dispute resolution mechanisms in alignment with global standards.
• The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) guarantees the enforceability of foreign arbitral awards in Nigeria.
• Experienced practitioners in commercial courts and arbitration centers ensure  accessible and effective local dispute resolution.

Bilateral Investment Treaties (BITs)

A signatory to over 30 BITs with multiple countries, these treaties cover foreign investors with additional legal support mechanisms and guarantees, including:

• Protection from expropriation
• Free transfer of funds
• Non-discriminatory treatment
• Access to international arbitration

Intellectual Property Rights (IPR) Protection

Nigeria has IPR laws conforming with global standards and strengthened through specialized agencies such as the Nigerian Copyright Commission (NCC) and customs enforcement at entry points. Some of these include:

• Patents and Industrial Designs under the Patents and Designs Act
• Membership in the World Intellectual Property Organization (WIPO)
• Signatory to Trade-Related Aspects of Intellectual Property Rights (TRIPS)
• Trademarks, protected under the Trademarks Act
• Copyrights regulated by the Nigerian Copyright Commission

Investment Insurance and Risk Mitigation

Investment insurance and risk mitigation tools such as:

• Nigeria’s Export-Import Bank (NEXIM) offers local coverage solutions for cross- border investment risks.
• Export Credit Agencies (ECAs) and private insurers support investors from partner nations.
• The Multilateral Investment Guarantee Agency (MIGA) of the World Bank provides insurance against political risks.

Transparency and Government Initiatives

The Nigerian government has made regulatory reforms in the investment environment to prioritize transparency, reduce bureaucratic bottlenecks, and encourage investments. Deliberate steps to build investor confidence include:

• Establishment of the Presidential Enabling Business Environment Council (PEBEC) to remove bureaucratic barriers.
• Digitizing government services to foster transparency and allow hassle-free access to services.
• Judicial reforms to safeguard investor rights.
• A signatory of the global Open Government Partnership (OGP) to strengthen citizen engagement and public-sector transparency.
• Strengthening anti-corruption institutions like the Economic and Financial Crimes Commission (EFCC) to ensure accountability in both the public and private sectors.

Through pro-business initiatives and forward-looking reforms, the Nigerian government is committed to creating conditions that support sustainable, long-term investments.