Nigeria Country Profile
GENERAL INFORMATION ON NIGERIA
Official Name: Federal Republic of Nigeria
Area: around 925,000 sq. km
Population: around 169 million (world bank data 2013)
Gross Domestic Product (GDP) per capita: 2,700 USD (World Economic Outlook Database, 2013)
Capital: Abuja (pop. 1.857 million)
Other important cities: Lagos, Kano, Ibadan, Kaduna
State: Federation of 36 states, independent from the United Kingdom since 1st October 1960
Government: Presidential Constitutional Republic, the Head of State is also Head of Government
Religions: 50% Muslim, 40% Christian, 10% traditional local ones
Languages: English (official) and local ones
SECTORS AND DISTRIBUTION OF GDP IN NIGERIA
- 30.9% Agriculture
- 43% Industry
- 26.1% Services
According to United Nations’ estimates, Nigeria will develop a high population growth in the next 40 years, with a population that will be higher than 367 million inhabitants by then.
According to the latest projection over the next 10 years as carried out by the Global Construction Perspectives & Oxford Economics, the growth rate of the Nigerian construction industry, due to the rapid urbanization, will be the highest on the continent, equal to 6.4 billion USD by 2015.
Therefore, investment opportunities in housing sector will increase, even though they already have an excellent starting point in the current housing deficit, which lies between 12 and 16 million units, equal to approximately 200 billion USD.
Lagos is one of the 6 largest cities in the world (it currently has 20 million inhabitants and it is expected to grow up to 25 million by 2020). In the Nigerian construction industry there are mainly foreign companies, which control almost 95% of the market, including a large number of Italian ones, such as Cappa d’Alberto, Gitto, Impregilio, Salini, Borni, AG Ferrero, INTELS.
FOREIGN DIRECT INVESTMENT IN NIGERIA
Forms of Direct Investment: Sole proprietorship, Partnership, Public and Private Limited Liability Companies
Obligation Local Partner: foreign investors can operate in Nigeria even without a local partner, except for engineering consultancy companies and for Oil & Gas sector where there are strong incentives with a local partner to 51% of capital.
Minimum Social Capital: the minimum capital requirement to set up a company open to foreign capital participation is 10000000.00 NGN (approximately 65000.00 USD).
TAX ISSUES IN NIGERIA
Companies Tax treatment: the tax rate on corporate income is equal to 30%.
Repatriation of profits: The Monitoring & Miscellaneous Provision Act n. 17 of 1995 establishes that foreign investors are free to repatriate after taxes profits deriving from economic activities in Nigeria and through approved professionals. Dividends are taxed by a withholding tax of 10% except for dividends paid by a Nigerian company to another company that are exempt from it.
LEGAL SYSTEM FEATURES AND LEGAL ISSUES IN NIGERIA
The Legal System is a mix of legislations: Common Law, Islamic law (12 northern states apply the Islamic criminal code based on the Koran’s teachings, the so-called “Sharia”) and Customary law.
The federal court system bodies are: the Supreme Court (composed of judges appointed by the Head of State on the recommendation of the National Judicial Council) and the Federal Court of Appeal.
Arbitration: the country has ratified the New York Convention of the 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.
Convention to avoid double taxation on income deriving from aviation and shipping, with exchange of notes, signed in Lagos on 02.22.1977 and in force since 11 .09.1978.
Agreement on the promotion and mutual protection of investments signed in Rome on 27.09.2000 and in force since 22.08.2005
SACE Insurability conditions without conditions on sovereign risk, bank risk, private risk and the portability of SACE insurance policy for Export or Foreign Direct Investment in the country.