Business development and international trade
Nigeria is not only the largest African country in terms of inhabitants – 185 million and growing fast – but also in terms of GDP. The size of the Nigerian economy was 569 billion US dollars in 2014, making Nigeria the 22nd economy worldwide. Economic growth in Nigeria was 6.2 percent in 2014 (source: World Bank).
That makes Nigeria a large, growing and dynamic economy in transition and thus full of business opportunities for both Nigerian and non-Nigerian entrepreneurs.
Nigeria is making a new start. The 2015 elections brought a first time peaceful change of governement. The new president Muhammadu Buhari has put diversifying the Nigerian economy and fighting corruption high on his agenda.
The Nigerian Tax System has undergone significant changes in recent times. The Tax Laws are being reviewed with the aim of repelling obsolete provisions and simplifying the main ones. Under current Nigerian law, taxation is enforced by the 3 tiers of Government, i.e. Federal, State, and Local Government with each having its sphere clearly spelt out in the Taxes and Levies Decree, 1998.
Nigeria has a number of tax treaties referred to as “Double Taxation” Agreements with a number of countries. This is to ensure that the tax payable in Nigeria on the profits of a Nigerian company being remitted into the country are reduced by the amount of “foreign Tax” paid abroad and vice versa. In the last few years, Nigeria has entered into double taxation agreements with a number of countries.
These agreements are entered into with a view to affording relief from double taxation in relation to taxes imposed on profit taxable in Nigeria and any taxes of similar character imposed by the laws of the country concerned. Where an overseas company receives profits from Nigeria that have already been taxed in Nigeria. Some of these countries include the UK, France, The Netherlands, Belgium, Canada, Czech, Slovakia and Romania.
Nigeria’s investment laws and policies are geared towards liberalisation, deregulation and competition. Accordingly, all sectors of the economy are open to both foreign and domestic investment. As a result of this favourable climate and the country’s economic and political stability, Nigeria has become increasingly attractive to foreign investors. However, with increased investment comes increased potential for disputes.
Nigeria has entered into bilateral investment treaties (BITs) with a number of countries. Investment treaties are in force with France, Netherlands, Germany, Switzerland, Romania, Spain and the UK. Nigeria has signed the 1965 Convention on the Settlement of Investment Disputes.
All our team
Detlev K. Schrade
Gavin McFarlan Watt