Summary
The Nigerian Investment Promotion Commission (“NIPC” or the “Commission”), through a circular dated September 2, 2024, announced revised fees to process applications within its purview.
Background
The NIPC was established to promote and co-ordinate all investments in Nigeria by Nigerians and Foreigners. The Commission sets out to attain its objectives by implementing its functions and exercising its powers to provide and disseminate relevant information on investment opportunities to investors, negotiate special incentive packages to promote strategic and major investments, and maintain an inventory of enterprises in Nigeria with foreign participation.
Generally, foreign investment may take either of the two most common forms, namely Foreign Direct Investments (‘FDI') or Foreign Portfolio Investments (‘FPI'). FDI typically involves the investment into the productive assets for instance by promoting and floating companies that operate fully in the beneficiary country, whereas FPI entails the investment in financial assets such as stocks, shares or bonds by foreign investors situate in a different country. FPI would typically involve the importation of capital using a convertible foreign currency.
Foreign investors interested in FDI are mandated to register such companies with the NIPC prior to commencing business operations. Excluding the special incentive packages, foreign investors are further assured certain incentives, including return of dividends or profits (net of taxes) attributable to the investment; payments in respect of loan servicing where a foreign loan has been obtained; remittance of proceeds (net of all taxes), and other obligations in the event of a sale or liquidation of the enterprise or any interest attributable to the investment, guarantee against expropriation; and in the event of compulsory acquisition of the enterprise for national interest, the payment of adequate and fair compensation among others.
Consequent to its responsibility to register foreign investors and maintain records thereof, the Commission recently reviewed its application fees as contained in its service fee schedule (‘SFS')
Need-to-know Information.
The updated SFS was published September 2, 2024, and is effective from October 1, 2024. The revised fees are as follows:
- The new NIPC application fee is One Hundred and Fifty thousand Naira Only (N150,000.00)
- All affected foreign entities are now required to renew their NIPC permit annually effective from January 1, 2025. The new annual renewal application fee is fixed at Fifty Thousand Naira Only (N50,000.00).
- Introduction of a new fee known as the Replacement fee. The replacement fee is fixed at One Hundred Thousand Naira Only (N100,000.00).
- Applicants interested and required to apply for Pioneer Status Incentive (PSI) will now pay an application fee of Five Hundred Thousand Naira Only (N500,000.00);
- First time Applicants will now pay PSI due diligence fee of One Million Naira Only (N1,000,000.00), service charge of Three Million Naira Only (N3,000,000.00) and an annual service charge of one point five (1.5%) of actual pioneer profits as opposed to the previous fees.
- PSI extension application now attracts an application fee of Two Hundred and Fifty Thousand Naira (N250,000) and an annual service charge of one point five (1.5%) of actual pioneer profits.
- Default in complying with the PSI by relevant applicants will attract a penalty of Two Hundred Thousand Naira (N200,000) for first time applicants and One Hundred Thousand Naira (N100,000) for extension applicants
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