Investing in a Nigerian Business: A Practical Guide for Foreign Investors

Nigeria has more than 200 million people, deep consumer and industrial demand, and a growing list of owners open to outside capital. It also has a reputation for deals that stall on paperwork. Most of that paperwork is predictable. This guide covers what a foreign investor or acquirer needs to get right in a mid-market Nigerian transaction.

Why investors are looking again

A single exchange rate. In June 2023 the Central Bank of Nigeria (CBN) merged its foreign exchange windows into one market, and in late 2024 it introduced an electronic matching system for trades. The naira closed at about NGN 1,333 to the dollar on 19 October 2026, against under NGN 500 before unification. The IMF reported in June 2026 that the gap between the official and parallel rates has averaged about 9% since then, far narrower than before.

Lower, but still high, interest rates. The CBN cut its policy rate to 23% in September 2026, from 26.5%.

A new tax code. The Nigeria Tax Act 2025 took effect on 1 January 2026 and replaced most of the old corporate tax rules.

Local buyers for large assets. International oil companies have sold onshore businesses to Nigerian groups. Shell completed the sale of its onshore subsidiary to the Renaissance consortium in March 2025.

Get the money in the right way

Foreign capital should arrive through an authorised dealer bank, which issues a Certificate of Capital Importation within 24 hours of the inflow, under section 15 of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act 1995. The certificate, now electronic, is what guarantees that dividends, loan service and sale proceeds can later be converted and sent abroad. The CBN requires evidence of the electronic certificate before any divestment or repatriation, and its 2026 foreign exchange manual expects capital to be registered within 24 to 48 hours of arriving.

In practice: agree with the seller which bank receives the funds, make sure the certificate is issued in the name of the investing entity, and keep it with the share documents. Capital that arrives without one is hard to take out later.

Approvals that can apply

Competition. Under the Federal Competition and Consumer Protection Act 2018, a deal must be notified to the FCCPC when the parties' combined Nigerian turnover is at least NGN 1bn, or the target's is at least NGN 500m. Those thresholds date from 2019 and have not been raised, so most mid-market deals are caught. Review of a large merger can take 60 business days, extendable by another 60. Closing without approval risks a fine of up to 10% of turnover, and in April 2026 the FCCPC warned that failure to notify would attract stiff penalties.

Sector regulators. Banks need the CBN's prior consent to a change of control, and a transfer made without it is void. In payments, CBN approval is needed for any holding of 5% or more in a payments holding company. In telecoms, an acquisition of more than 10% of a licensee needs the Nigerian Communications Commission's prior consent. For listed companies, crossing 30% triggers a mandatory takeover offer under the Investments and Securities Act 2025.

Company formalities. A foreign company cannot do business in Nigeria without incorporating a Nigerian company, which must also register with the Nigerian Investment Promotion Commission. If you plan to bring in expatriate staff, the business permit and expatriate quota require paid-up capital of NGN 100m. Anyone holding 5% or more of the shares or votes must be disclosed to the company and filed with the Corporate Affairs Commission.

Build these approvals into the timetable and into the share purchase agreement as conditions to closing. Regulatory review is often the longest item on a Nigerian deal.

Tax since 1 January 2026

• Corporate income tax is 30%. Small companies, with turnover up to NGN 100m and fixed assets up to NGN 250m, pay none.
• A development levy of 4% applies to the assessable profits of companies other than small and non-resident ones.
• A minimum effective tax rate of 15% applies to companies with turnover of NGN 50bn or more and to members of multinational groups with consolidated turnover of EUR 750m or more.
• Capital gains tax for companies rose from 10% to 30%.
• Indirect transfers are taxed. Selling a foreign holding company does not necessarily avoid Nigerian tax: where shares draw more than half their value from Nigerian assets, a non-resident's disposal can be taxed in Nigeria.
• Dividends carry 10% withholding tax, which a tax treaty may reduce.

Take local tax advice before you fix the structure: where the holding company sits decides how much of each dividend and of the exit proceeds reaches you.

Pricing a Nigerian deal

Currency and interest rates shape the price more than in most markets. Three practical consequences:

• Value in dollars, check in naira. Build the model in naira, convert at a realistic view of the future exchange rate, and test what happens if the naira weakens further.
• Decide who carries the currency risk. Deferred payments, earn-outs and price adjustments can be set in dollars or in naira. Agree on each one deliberately rather than leaving it to the drafting.
• Watch working capital. With a 23% policy rate, funding receivables and stock is expensive. A business that looks profitable can still consume cash.

Due diligence that matters in Nigeria

• Tax history, including withholding tax and VAT, and any open audits.
• Licences and permits, and whether they survive a change of ownership.
• Related-party arrangements with the founders' other companies: leases, supply contracts, shared staff.
• Receivables, especially from government and large corporate customers, and how fast they actually pay.
• Ownership records: share registers, significant-control filings and any undocumented promises of equity.
• Capital importation records for existing foreign shareholders, since they affect what can be repatriated.

Structure and governance

Most foreign investors hold a Nigerian company through a holding company abroad, chosen for treaty access, legal certainty and their own reporting. The shareholders' agreement should cover board seats, reserved matters, information rights, dividend policy, exit routes and dispute resolution. International arbitration is common, and Nigeria is a party to the New York Convention on the recognition and enforcement of arbitral awards.

How we help

We have worked on Nigerian transactions, including modelling, valuation and preliminary structuring of a fund designed to bring institutional capital into a broadband consolidation. We work with Gulf, US and European investors and with Nigerian owners: building the model and the valuation, structuring the deal between foreign and local partners, and preparing what investors need to decide. See how we work with international clients.

General information only. Not legal, tax or investment advice.