Meaning of ‘NIPC Registration' and ‘EXPATRIATE QUOTA'
NIPC Registration confers permanent
authorisation for the local operation of businesses with foreign
investments either as branch/subsidiary of a foreign company or
Expatriate quota is the official
permit to a company; conveying permission for the company to employ
individual expatriates to specifically approved job designations, and
also specifying the permissible duration of such employment.
The expatriate quota forms the basis
of work permits for expatriate individuals employed (whose
qualifications must fulfil the criteria established for the particular
quota position). Expatriate quota positions are usually granted for 2-3
years subject to renewal, EXCEPT in cases where companies qualify for
and are granted “PUR” Quota (i.e. Permanent Until Reviewed) position.
The Current Regulation on the Appointment of Foreign Directors
The promoters of business ventures
in Nigeria are free to appoint directors of their choice, either
foreign or Nigerian, and the directors may be resident or non-resident.
The application to the NIPC must reflect the names of the proposed
Nigerian and foreign directors (with an indication of resident and
non-resident directors). The Registration Certificate consequently
issued following such application usually reflects the respective names
of the proprietors of the company, as well as the directors
representing each proprietor or co-proprietor.
Payments of foreign directors' fees
are remittable in the same manner as dividends accruing to the foreign
company. However, since such fees are taxed at source (5% as
withholding tax), each foreign director's fees are remittable subject
to satisfactory evidence that the taxable amounts on such fees have
Pioneer Status (Tax Holiday ) Advantages to a Company
The Industrial Development (Income
Tax Relief) Act, Cap. 179 Laws of Nigeria, 1990, declares a number of
industries as pioneer industries. Thus, any company whose products fall
within the categorised industries could be conferred with Pioneer
This designation is not necessarily
a reflection that a company was pioneer per se in the industry, as
several companies within the same pioneer industry classification could
qualify for Pioneer Status. Where the activities of a company include
the production of pioneer and non-pioneer products, the tax relief
available on conferment of Pioneer Status would be restricted to income
derived from pioneer products only. Under the current industrial
policy, conferment of Pioneer Status accords a company relief from
income tax liability for a period of up to 5 years (tax-holiday
The criteria for granting Pioneer Status are related and/or based on the following considerations: -
(i) the amount of qualifying
capital investment in a company (N5 million and above) must be
verifiable by physical inspection and supported by a report of the
Industrial Inspectorate Division of the Federal Ministry of Industry
before a Pioneer Certificate is granted.
(ii) the socio-economic advantages
of a company's activities to the Nigerian economy as set out in its
Feasibility Study is also an important consideration.
Without prejudice to these
conditions, NIPC is empowered to confer Pioneer Status and other
investment incentives, in any other deserving circumstance as the
Council of NIPC may approve in accordance with the provision of the
Nigerian Investment Promotion Commission Act and the Foreign Exchange
(Monitoring and Miscellaneous Provisions) Act in 1995.
However in the case of portfolio
investment in the capital market, the Securities and Exchange
Commission (SEC) regulates the market.