Nigerian Investment Promotion Commission Plot 1181, Aguiyi Ironsi Street, Maitama District, Abuja. 09-4134317 www.nipc-

1. PRESENTATION BYEngr. Mustafa Bello, FNSE Executive Secretary NIGERIAN INVESTMENT PROMOTION COMMISSIONAT THE NIGERIA-CHINA BUSINESS INVESTMENT FORUM IN TAIPEI, TAIWAN FRIDAY, SEPTEMBER 10TH, 2004 Nigerian Investment Promotion Commission Plot 1181, Aguiyi Ironsi Street, Maitama District, Abuja. 09-4134317 www.nipc-nigeria.org .

2. INVESTMENT PROSPECTS IN NIGERIA

3. OUTLINE • About NIPC • Steps For Establishing New Companies • Requirements For Business Permit • Operations Of Foreign Companies In Nigeria • Laws Guiding Foreign Investment In Nigeria • Other Major Legislations Guiding Investment • Investment Opportunities • Investment Related Links • Basic Factor Cost • Conclusion

4. NIGERIAN INVESTMENT PROMOTION COMMISSION (NIPC) • The Commission is an Agency of the Federal Government established to amongst others: - Promote investments in and outside Nigeria - Assist incoming and existing investors by providing support services - Advise government on policy matters for general development and industrialization of Nigeria and so on.

5. NIPC STRUCTURE • The Commission is structure into three core Departments: • Investment Promotion to: • Organize Business and Investment Forums within Nigeria and abroad • Identifies and periodically reviews viable investment and projects for promotion • Develop functional image building program for Nigeria and so on • Policy Advocacy and External Relations: - Analyze policies affecting investment approval and the operating environment • Work with relevant agencies to achieve policy change

6. NIPC STRUCTURE • Establish impact of these policies and propose amendments unfriendly investment policies where necessary • Investor Relations: - Co-ordinate registration of foreign investors and provides relevant information. - Facilitate the processing and timely delivery of government permits and sector- specific incentives among others i.e. pioneer status, incentive, expatriate quota etc. - Provide pre and post investment service to investors.

7. Steps For Establishing New Companies • Step 1 • Incorporation of the Business at the Corporate Affairs Commission (CAC) in accordance with the Companies and Allied Matters Act, 1990. • Step 11- Register with Tax Authority (FIRS) • Obtain operating license (where applicable) - DPR – Oil & Gas Sector - NCC – Telecommunications Section - CBN – Financial Sector - FMSMD – Solid minerals Sector, - NAFDAC – Pharmaceuticals, etc • Acquire operating Premises You are in Business in Nigeria !

8. Steps For Establishing New Companies (Contd) • Step 111 • Registration of the company with the Nigerian Investment Promotion Commission for the granting of Business Permit • NIPC also grants approvals for Expatriate Quota positions and other Incentives.

9. Requirements for Business Permit • Purchase NIPC Form for N10,000 ($73). Completed Form submitted with original receipt • Certificate of Incorporation • A minimum share capital of N10 million • Details of share holding in the joint venture • Joint venture/partnership Agreement where Applicable • Memo and Article of Association • CAC’s Form CO2 and C07 duly certified

10. Requirements for Business Permit (Contd) • Evidence of capital importation • Approval from the appropriate professional bodies where applicable

11. Expatriate Quota Following additional requirements have to be met for expatriate quota approvals: • Evidence of operational premises and operational machinery/equipment in the case of industrial establishment • Evidence of Foreign Capital Importation • Management and Technical Services agreement (for service companies) • Tax Clearance Certificate • Minimum authorized share capital of N10 million ($73,000)

12. Expatriate Quota (Contd) • Supply names, addresses, qualifications and positions to be occupied by the expatriates • The company must produce its project implementation programme • Must produce a training programme for Nigerians in addition to management succession Schedule • Provides its feasibility report where Applicable especially for new and pioneer industries.

13. Pioneer Status • The benefit of a Pioneer Status Certificate is that the holder is exempted from payment of tax for a specified number of years (5 years or 7 years for companies located in economically disadvantaged areas) • Requirements: -Certificate of Incorporation -Memorandum and Article of Association -Feasibility study -Tax Clearance Certificate -Joint Venture Agreement

14. Pioneer Status(Contd) - Evidence of development carried out at factory site - NIPC Form 11 (to be purchased from NIPC at N10,000 ($73,000) and should be returned with original purchase receipt) - The company must not be more than one year old from its commencement date of production - Joint venture must attain a minimum expenditure of N5 million ($36,000)

15. Operations of Foreign Companies in Nigeria • Foreign Investor may incorporate a Nigerian branch or subsidiary; • The locally incorporated branch or subsidiary company must apply to NIPC for business permit and other requisite permits and licenses; • Exemptions to the General Rule: -Foreign Companies invited by the Government to execute specified projects; -Foreign Companies invited to execute specific loan projects on behalf of a Donor country etc.

16. Operations of Foreign Companies in Nigeria -Foreign government-owned companies engaged solely in export promotion activities; and -Engineering consultants and technical experts engaged on any individual specialized project with government; • Representative Offices May set up representative offices in Nigeria but cannot engage in business or conclude contracts or open or negotiate any letters of credit. The office must be registered with CAC.

17. Laws Guiding Foreign Investment in Nigeria • Principal Laws on Foreign Investments: -NIPC Decree No.16 of 1995 -Foreign Exchange (Monitoring & Miscellaneous Provisions) Decree No.17 of 1995. -Deregulation of Equity Structure in Nigeria Enterprises i.e Nigerian Enterprises promotion (Repeal) Decree No.7 of 1995. • Provisions Relating to Investments: -A Foreigner may invest and participate in the operation of any enterprise in Nigeria

18. Laws Guiding Foreign Investment in Nigeria (Contd) -An enterprise in which foreign participation is permitted, shall after its incorporation or registration must be registered with NIPC; -A foreign enterprise may buy the shares of any Nigerian enterprise in any convertible currency; • A foreign Investor in approved enterprise is guaranteed free transfer of funds of: -dividends or profit (net of taxes) attributable to investment;

19. Laws Guiding Foreign Investment in Nigeria (Contd) -servicing or payment of foreign loans where applicable; -remittance of proceeds (net of taxes) and other obligations in the event of sale or liquidation. • Enterprises restrained from foreign participations are those involved in: -production of arms and ammunition; -production and dealing in Narcotic Drugs and Psycothropic Substances.

20. Investment Protection Assurance • The NIPC Decree provides that: -No enterprise shall be nationalized or expropriated by any Government of the Federation; and -No person who owns, wholly or in part, shall be compelled by law to surrender his investment/capital to any other persons. • In addition countries are also welcome to execute and enter into bilateral Investment Promotion and Protection Agreements (IPPA) with Nigerian government.

21. Investment Protection Assurance (Contd) • Exceptions- National Interest or Public Purposes, which makes provision for: -payment of fair and adequate compensation; and -a right of access to court for the determination of investors interest and compensation must be paid promptly in convertible currency where applicable;

22. Other Major Legislations guiding investment • Immigration Act of 1963 • The Companies and Allied Matters Act of 1990 (as amended) • The National Office of Technology Acquisition and Promotion Act of 1979 • The Investment and Security Act of 1999

23. Investment Opportunities Nigeria is rich in natural resources (e.g. agric, fishing, forest & mineral resources, oil & natural gas, etc) • Services industry/Construction • Waste Management (collection of refuse, estab. of dumping sites & incinerators, conversion of waste to gasohol etc.) • Health Care Facilities & Equipment (manufacture of syringes and basic medical equipment) • Real Estate Development

24. Investment Opportunities (Cont’d) Manufacturing / Agro processing • Palm Oil Processing • Wood Products –furniture • Rubber Products – tyres, condoms • Fruit Juice – current ban on importation of juice • Paints & Pharmaceuticals – Kaolin • Fishing – deep sea/aqua culture • Cassava Processing – industrial starch, chips & Flour • Poultry Feeds Production • Fruit & Vegetable Processing – canning & bottling

25. Solid Minerals Identified deposits with Investment opportunities are: -Talc -Gypsum -Iron Ore -Lead Zinc -Bentonite and Baryte -Gold -Bitumen -Coal -Rock Salt -Gem Stone -Kaolin Agriculture Tourism Manufacturing Oil and Gas Export Free Zone Communication Privatization Priority Areas of Investment

26. Generous Package of Investment Incentives • Pioneer Status – Tax Holiday on corporate tax for 7 yrs • Enriched Capital Allowances - ranges from 50 – 90% • Corporate Tax – 30% • Withholding Tax on dividends, interest, and rent is 10%: for Royalties 15% and on management and technical agreement 10% • Export Incentives • Export Expansion Grant Fund (suspended for now) • Export Processing Zone (EPZ)

27. INVESTMENT RELATED LINKS • Visit Nigerian Investment Promotion Commission website to access: http:www.nipc-nigeria.org • Investment Opportunities in Nigerian States • Business Registration Agency (CAC) http:www.cac.gov.ng • Privatization Agency (BPE): http;www.bpeng.org • Central Bank of Nigeria (CBN): http:www.cenbank.org • Securities & Exchange Commission (SEC) http:www.secngr.org

28. INVESTMENT RELATED LINKS (Contd) • Other Investment Related are: • Nigerian Export Processing Zone Authority (NEPZA). website – http:www.nepza.com • Nigerian Communications Commission (NCC) website – http:www.ncc.gov.ng • Nigerian Export Promotion Council (NEPC) www.saffronweb.com/nepc • Nigerian Tourism Development Corporation (NTDC): http:www.nigeriatourism.net

29. Land –N7,000 - N15,000($50-$100) /sqm Labour – N90,000($643)per annum (minimum basic wage) Power Residential – N4 ($0.03)per unit Commercial – N6($0.043) per unit Water - Transport Air (Local) – N9,000($64.3) Road Intercity – N300($2.14) per 60km Intracity - N400($2.86) per hr Telecommunications Fixed – N4 ($0.03)per min Mobile (GSM) 70k per sec N21 ($0.15) per min Internet Connectivity Accommodation Residential Rent - (N10,000 – N15,000) ($73-$109)/sqm/yr Office Rent – (N10,000 – N15,000) ($73-$109)/sqm/yr Hotel N15,000 – N25,000($109-$182) per night Basic Factor Cost

30. Conclusion With the bias for private sector development, the Commission is more than ever equipped to ‘facilitate’ rapid growth of investment in the country by both foreign and local investors. Nigeria offers one of the most rewarding investment destination, not just in Africa but, in the World.

31. Thank you for your attention ! Nigerian Investment Promotion Commission (NIPC) Plot 1181, Aguiyi Ironsi Street, Maitama District, P.M.B.381, Maitama, Abuja. http:www.nipc-nigeria.org Email:infodesk@nipc-nigeria.org