Transcript Nigeira China Business and Investment Forum in Taipei

PRESENTATION
BY
Engr. Mustafa Bello, FNSE
Executive Secretary
NIGERIAN INVESTMENT PROMOTION COMMISSION
AT 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 .
INVESTMENT
PROSPECTS
IN
NIGERIA
OUTLINE
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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
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.
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NIPC STRUCTURE
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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
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Policy Advocacy and External Relations:
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Analyze policies affecting investment approval and the
operating environment
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Work with relevant agencies to achieve policy change
NIPC STRUCTURE
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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.
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 !
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Steps For Establishing New
Companies (Contd)
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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.
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
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Requirements for Business
Permit (Contd)
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Evidence of capital importation
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Approval from the appropriate professional bodies
where applicable
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)
Expatriate Quota (Contd)
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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.
Pioneer Status
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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)
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Requirements:
-Certificate of Incorporation
-Memorandum and Article of Association
-Feasibility study
-Tax Clearance Certificate
-Joint Venture Agreement
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)
Operations of Foreign
Companies in Nigeria
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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.
Operations of Foreign
Companies in Nigeria
-Foreign government-owned companies engaged
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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.
Laws Guiding Foreign Investment
in Nigeria
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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
Laws Guiding Foreign Investment in
Nigeria (Contd)
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-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;
Laws Guiding Foreign Investment in
Nigeria (Contd)
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-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.
Investment Protection Assurance
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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.
Investment Protection Assurance
(Contd)
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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;
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
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Investment Opportunities
Nigeria is rich in natural resources (e.g. agric,
fishing, forest & mineral resources, oil &
natural gas, etc)
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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
Investment Opportunities
(Cont’d)
Manufacturing / Agro processing
Palm Oil Processing
 Wood Products –
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furniture
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Fishing –
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Cassava Processing –
Rubber Products –
tyres, condoms
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Fruit Juice –
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Paints &
Pharmaceuticals –
current
ban on importation of juice
Kaolin
culture
deep sea/aqua
industrial starch, chips &
Flour
Poultry Feeds
Production
 Fruit & Vegetable
Processing – canning &
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bottling
Priority Areas of Investment
 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
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Agriculture
Tourism
 Manufacturing
 Oil and Gas
 Export Free Zone
 Communication
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Privatization
Generous Package of
Investment Incentives
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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)
INVESTMENT RELATED LINKS
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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
INVESTMENT RELATED LINKS
(Contd)
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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
Basic Factor Cost
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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
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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.
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:[email protected]