The Nigerian state has transformed remarkably since independence from British rule in 1960. Nigeria has 36 states and I federal capital territory. The English common law, Islamic law and customary laws make up the legal system. With a bi-cameral national assembly, Nigeria has the senate and the House of Representatives making up the legislature. The Supreme Court is the highest court in Nigeria exercising mainly appellant powers.

A country with a population of 135 million people, a total area of 923,768 sq km, a land area of 910,768 sq km, a coastline of 853km, huge human resources and enormous natural resources like petroleum, tin, columbite, iron ore, coal, limestone, lead, zinc. Natural gas, hydropower, arable land, provides a destination for profitable investment.

The return to democratic rule in 1999 expanded the horizon of business and encouraged the inflow of foreign direct investment in Nigeria.

The communication sector has boomed with the investment of some foreign telecommunication companies in the sector. Tourism, construction, exports and imports have experienced great leap. Transport and agricultural has its own share of improvement but could still be referred to as a gold mine for investors in the sector.

BUSINESS IN NIGERIA
A foreigner or a foreign company can freely invest and participate in the operation of any enterprise in Nigeria. Such enterprise must not be an enterprise in the “Negative List”. Enterprises in the negative list include production of arms, ammunition and service uniforms, production and dealing in drugs etc.

The foreigner who may operate alone or in joint venture with Nigerians by means of a company must take necessary steps to obtain incorporation as a separate entity in Nigeria and thereafter register with the Nigeria Investment Promotion Commission. The Nigerian Investment Promotion Commission (NIPC) will act as liaison between the Foreign Enterprise and Relevant Government Department especially with regard to issuance of permits.

However, a foreign company may apply to the federal executive council for exemption from the requirement to register locally if it belongs to one of the following categories, that is:-

1. Foreign Companies invited to Nigeria by or with the approval of the Federal Government to execute any specified loan project.
2. Foreign Companies, which are in Nigeria for the execution of specific individual loan project on behalf of a donor country or international organization.
3. Foreign Government owned companies engaged on any individual specialist project under contract with any of the government in the federal or any of their agencies or with any other or person, where such contract has been approved by the Federal Government.

Moreso, any foreigner not wishing to establish a business may buy shares in a Nigeria company in any convertible currency. Investment will be effected with foreign currency imported freely into Nigeria through an authorized dealer and converted into the Naira at the official foreign exchange market. The authorized dealer will issue a certificate of capital importation. Imported capital is guaranteed unconditional transferability and repatriation of funds with regards to both earnings and capital.

TYPES OF COMPANY
Different types of companies are registrable under the Nigerian law: they include:

1. Companies limited by shares i.e. having the liability of its members limited by the memorandum of association to the amount unpaid on shares respectively held by them.
2. Companies limited by guarantee i.e. having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.
3. “Unlimited” i.e. not having any limit on the liability of its members.

A company, whether limited by shares or by guarantee or unlimited may be private or public subject to such factors like – kind and size of business, membership of company, restriction on issue and transfer of shares, formalities etc.

A company mostly sole proprietorship may be registered under part B of the Companies and Allied Matter Act.

STATUTORY FRAMEWORK
The Nigeria economy is based on free enterprise. Accordingly, commercial freedom is guaranteed by statutes. Relevant statutes promulgated in Nigeria to regulate and encourage investment include:

1.          Companies and Allied Matters Act
2.          Nigerian Investment Promotion Commission Act
3.          Foreign Exchange (Monitoring and Miscellaneous Provisions) Act
4.          Investment and Securities Act
5.          Immigration Act
6.          National Office of Industrial Property Act
7.          Industrial Inspectorate Act
8.          Companies Income Tax Act

For a foreign company to operate in Nigeria, it must comply with the following permits and approvals.

1.          Business permit
2.          Expatriate quota: There are two types of expatriate quota
(a)          Permanent Until Reviewed (PUR) usually for the post of chairman of the Company’s Board of Director or Managing Director.
(b)          Temporary: For Directors and other employees of the company.
3.          Residence permit
4.          Registration of securities
5.          Transfer of technology (where necessary)

INCENTIVES AND RELIEFS
To encourage both local and foreign investment in industrial and agricultural production for export, a wide range of incentives and reliefs has been designed by the Nigerian Government. They include

1.          PIONEER STATUS: Tax exemption is granted for a period of three years in the first instance but may be extended to a further period of two years. To qualify (a) the applicant must be a public company     (b) the investment must be in respect of industry or products designated as pioneer e.g. agro allied, export goods and solid minerals   (c) the company must comply with the estimated cost of qualifying capital expenditure.

2.       TAX RELIEFS: various tax reliefs are granted to different types of businesses. Co-operative societies, religious/charitable organizations, sporting activities are granted tax reliefs.

Relief in respect of common wealth income tax, relief from double taxation, relief in respect of interest on

1. Foreign loans
2. Bank loans for agriculture
3. Bank loan to a company engaged in agricultural business, fabrication of local plant or machinery or as working capital for any cottage industry established under the family economic advancement programme establishment.
4. Deposit accounts or domiciliary accounts of a foreign non-resident company are exempted from tax.
5. Bank loans for manufacture of goods for export.

Tax relief of 7 years is granted for investment in economically disadvantaged areas.

Companies going into mining of solid minerals are exempted from  tax for the first three years of its operations which may be extended for one further period of two years. Duty drawback/suspension scheme: This scheme provides for the refund of import duties on:

1. Raw materials including packaging materials used in manufacturing goods that are exported.
2. Paper used for the manufacture of goods supplied for educational purpose to educational establishments recognized by the federal adviser on education.
3. Goods exported in the same state as that in which they were imported.
4. Export incentives under the export (incentive and miscellaneous provisions) act
5. Incentives to a company engaged in the utilization of associated gas under the petroleum profit, tax act.
6. Investment in the export processing zone
7. Local raw materials utilization
8. Research and development
9. Companies engaged in R&D activities for commercialization are allowed 20% investment tax credit or their qualifying expenditure.
10. Expenses incurred on research and development including the amount paid to the natural science and technology fund are allowed as deductible expenses.
11. Rural Invest Allowance: This provides graduated allowance for capital expenditure on such facilities as electricity, water; tarred road and telephone located at least 20 kilometers away from such facilities provided by government.

THE NIGERIAN LAWYERS
The advent of democratic rule in 1999 brought with it an unprecedented in flow of investment into the country thereby opening up new areas of law practice and challenging Nigerian lawyers to the task of providing excellent services to their numerous foreign clients. Nigerian lawyers are diligently containing the challenges. They have provided entry platform for foreigners seeking to enter the Nigerian promising business environment. Areas of practice include company formation, intellectual property, providing properties for foreign and local client, maritime, aviation, telecommunication, international commercial law etc.