Nigeria Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Nigeria generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Types of Work Visas and Work Permits for Nigeria

In 2020, The Nigerian Immigration Service (NIS) overhauled its visa policy to reflect more of a global approach to attract more people through tourism, those with specialist skills, for investment purposes, and to reflect best practices to enhance ‘doing business’ in the country while protecting its borders. Each of these new classifications has a code, which makes them identifiable and easier to process and came into effect from October 2020 as the Nigerian Visa Policy – NVP 2020.

However, whether all of the 79 new visas and permits are fully operational should be checked with Nigerian consulates/embassies/diplomatic missions abroad. Sometimes it is the infrastructure delays processes and implementation can lag behind the policy making.

Also, companies employing expatriates, apart from the various consents, regulatory permits, and quotas are expected two appoint two colleagues to shadow each foreign worker.

Government departments involved with immigration, work permits and visas

  • National Immigration Service (NIS) which enforces immigration laws, controls the entry and exit in Nigeria, border control, issues migration documentation
  • Federal Ministry of the Interior (FMI) responsible for consular and immigration services and for approving business permits for foreign-owned companies and expatriate quotas

Note: We have included the new legislation and have given links to the Nigerian Immigration Service webpages

Visas:

There are four classification for visa-exempt travellers:

  • Citizens of ECOWAS, Economic Community of West African States (F1A) member states, which is based on ‘free movement of people’. They require valid passports, must not be on a prohibited immigrant list. To stay longer than three months they must be registered and to start a business or for employment, they have to apply for a residence permit from the NIS.
  • Citizens where there has been a mutual ‘visa abolishment’ policy e.g., Chad, Cameroon (F1B) for up to 90 days but not for business or work purposes. These require work visa / permit.
  • International organisation members with official status and documentation e.g., United Nations, ECOWAS, African Union Commission and African Development Bank. (F1C)
  • Official or diplomatic passport holders where there are reciprocated arrangements – around 13 countries. This is for up to 90 days and single entry. (F1D) Not valid for employment.

Countries that have no exemption regarding entry visas may be able to apply online, at an OIS office (Office Integrated Solutions). This is an official visa centre which can process the Nigerian Entry visas. Otherwise, applicants apply at a Nigerian Diplomatic Mission. There is a portal for countries able to use the online OIS Service which also gives documentation.

NVP 2020 denoted 75 visa classifications falling into three categories, which are:

  • Short Visit Visas SVV (24 classifications). These allow travellers to visit the country for no more than 90 days for tourism, seminars, business, transit, journalism, visiting family and friends, sporting events, religious purposes, medical treatment and short-term work (F8A)
  • Temporary Residence Visas TRV (36 classifications) available up to a maximum of two years for employment, students, interns etc.
  • Permanent Residence Visas PRV (15 classifications) for retirees, investors, highly qualified or skilled employees and spouses, to stay in the country long term

A NEW Visa on Arrival (VoA) has been issued by the NIS which is available to qualifying businesspersons of all nationalities PLUS nationals of the African Union (AU) countries. ECOWAS countries’ nationals do not require a visa to enter Nigeria. The prior ‘Letter of Approval’ is no longer required. The VoA is issued at airports upon arrival where biometric data is also collected (however, not at land borders). Payment has to be made online through the NIS website:

Since 2020, an e-Visa for SVV travellers is available online for stays up to three months, over a wide range of visa classifications. Travellers apply for a ‘Travel Authorisation’ online before travelling.

The above-mentioned visas can be handled through Nigerian embassies, consulates, or high commissions abroad, and through Visa Application Centres (OIS) but applicants must provide biometrics (photo and fingerprints) for issuing the relevant visa.

Note: Companies should check availability at the time they require visas and permits for staff.

Applying for the Work Visas and Work Permits in Nigeria

When onboarding staff and being responsible for work documentation, companies must be aware that visa policy since 2020 has been fluid, with legislation introduced through the Nigerian Visa Policy 2020 being implemented in stages. Below, information is taken from immigration sites and consists of requirements and eligibility when applying for work permits and visas.

Many companies at this stage seek advice from experts such as Bradford Jacobs and its Professional Employer Organisation, whose local knowledge is enhanced by its global experience. They can help with many of the challenges that arise as systems fluctuate and strategies change.

Temporary Work Permit (R11)

For expatriates wanting to live and work for a maximum of six months and categorized as a Temporary Residence Visa. This visa is not part of a company’ Expatriate Quota (EQ).

  • Employee requires a passport with minimum six months validity plus empty pages for visa
  • Two recent, coloured photographs along passport guidelines
  • Proof of enough funds to cover stay in the country e.g., bank statements
  • Proof of accommodation for length of stay
  • Application form downloaded from online NIS website from employer/company accepting ‘immigration responsibility’
  • Approval from the Comptroller General of Immigration (CGI)
  • Receipt for fees paid for visa
  • ‘Offer of Appointment’ letter and a letter from employee accepting the offer
  • Copies of required educational or academic qualification or technical certificates/diplomas
  • Latest CV

This visa only permits temporary employment, is not renewable and applied for from diplomatic missions abroad.

Temporary Residence Visas (TRVs)

These were Subject to Regularisation Visas (STR) prior to the Nigerian Policy Visa 2020 which divided the visas into 36 classifications. The employment visas are:

  • Expatriate Employment Visa (R2A) which comes under the Expatriate Quota regulations
  • Free Zone Expatriate Employment Visa (R3A)

They can be applied for through the Nigerian Diplomatic embassies and consulates abroad and Visa Application Centres, such as the Online Integrated Solutions (OIS).

Process for applying for the main Expatriate Employment Visa

  • Sponsoring employer or company applies to the CGI at the National Immigration Service (NIS) for permission to employ a foreign worker, providing documents including the embassy or consulate in employee’s home country where the Employment R2A Visa (STR) will be sent. Note: Some nations may have to apply for visa through Visa Application Centres
  • Employers must also confirm in the application letter, that they have a vacancy for the position as part of the Expatriate Quota (EQ)
  • The embassy issues the employment visa after checking documentation and receiving approval for the visa from the NIS, gives the employee a ‘Brown Pack’ containing notarised and checked documents
  • The Employment Visa has 90 days validity, during which the employee has to enter Nigeria and the employer applies to the CGI to regularise their stay, taking the Brown Pack with them
  • The NIS takes payment for the Combined Expatriate Residence Permit and Alien Card (CERPAC) and ‘a temporary receipt’ is given around 14 days later and is valid for three months
  • The CERPAC is issued within three months and is for long term residence and permission to work in Nigeria. This is for a one-to-two-year period as long as the EQ remains valid

Note: Companies not renewing their EQ can be fined NGN 3 million (€5,985, US$6,590) per month

Overview of Taxes in Nigeria

Personal Income Tax: Individuals earning less than the monthly national minimum wage of NGN 30,000 (€60, US$65) are not liable for tax or PAYE deductions. Income up to NGN 300,000 (€602, US$653) is taxed at 7%. There are five further bands up to 24% on excess above NGN 3,200,000 (€6,430, US$6,964)

Value Added Tax (VAT): 5% standard rate, plus zero and exempt categories

Corporate Income Tax (CIT): 30% where company gross turnover exceeds NGN 100 million (€200,960, US$217,640); 20% where turnover exceeds NGN 25 million (€50,253, US$54,410). CIT does not apply where turnover is less than NGN 25 million

Petroleum Profit Tax (PPT): In lieu of CIT. Varies between 30%, 50%, 65.75% and 80% depending on type of operation and whether there is a production sharing contract with the Nigerian National Petroleum Corporation (NNPC)

Hydrocarbon Tax (HCT): 15% or 30% depending on whether production is onshore or offshore. Companies can also be liable for CIT at 30% if they hold a prospecting licence and a mining lease for petroleum

Capital Gains Tax (CGT): Generally at 10% on individuals and companies

Withholding Tax (WHT): There is no distinction between resident and non-resident companies or individuals. Rates vary between 5-10% on such as dividends, interest, rates, directors’ fees and royalties

Excise and Luxury Taxes: Applied at various rates. For example between 5%-20% on alcohol and tobacco products; 10% on private jets; 35% on luxury yachts

Education Tax: 5% levied on companies towards tertiary education, which can be deductible depending on tax status

Employment Income Tax in Nigeria

Figures are in Nigerian naira (NGN) with euro and US dollar equivalents.

Personal income tax for employed individuals

Income | Tax on Excess
First NGN 300,000 (€603, US$652) | 7%
Next NGN 300,000 | 11%
Next NGN 500,000 (€1,000, US$1,086) | 15%
Next NGN 500,000 | 19%
Next NGN 1,600,000 (€3,202, US$3,475) | 21%
Above NGN 3,200,000 (€6,430, US$6,964) | 24%

Individual Tax Rules in Nigeria

  • The tax year is generally the calendar year from January 1 until December 31
  • Returns must be filed within 90 days after the end of the tax year
  • Taxpayers earning less than the minimum monthly wage of NGN 30,000 (€60, US$65) do not have to file a return
  • Companies must also file returns of all remuneration paid to individuals by January 31 after the tax year
  • Individuals’ PAYE taxes must be remitted to the relevant State Internal Revenue Service (SIRS) by the 10th of the month following payment. Thus excludes military, police or foreign service personnel, whose tax is deducted by the Federal Inland Revenue Service (FIRS)
  • Individuals resident in Nigeria are taxed on worldwide income. Non-residents are liable for tax on income sourced in Nigeria, unless they work for a company based in another country or the income is taxed in the country of the other company under provisions of a double taxation treaty
  • Individuals are considered residents if they are physically in Nigeria for 183 days in any 12-month period, including leave or temporary absences
  • Taxable remuneration includes salary and benefits in kind, such as allowances for housing, transport, meals, clothing and company cars

Permitted deductions include National Health Insurance Authority and pension scheme contributions and life insurance premiums

Setting up a subsidiary is a regular route for international companies making their way into a new territory as they lengthen their global reach and explore new economic horizons. Setting up a subsidiary in Nigeria is a requirement for companies who intend hiring staff and operating payroll, and the usual choice is to establish a private limited liability company.

The World Bank recognises Nigeria as an emerging and developing market, with a strong foundation built on oil and gas revenues that have pushed the nation into the No. 1 spot among African economies. The government is determination to diversify away from dependence on these natural resources, alongside a rapidly-growing digital and e-commerce technological ecosystem.

The incorporation process for the subsidiary must comply with the Companies and Allied Matters Act, which was revised in 2020. Although the process can be handled partly online, there are many necessary steps to complete incorporation. In addition, there will be issues involving hiring and onboarding employees, running payroll and complying with tax laws and employment legislation. Coping with this long list is time consuming and risks diverting your focus away from building your business in Nigeria.

Or … you could take a faster route into the Nigerian economy, with no need to open a subsidiary. Bradford Jacobs has the expertise to remove these potential obstacles. Our Professional Employer Organisation (PEO) specialists and Employer of Record (EOR) consultants will point you in the right direction – from recruiting the staff to managing every legal aspect of compliance. Instead of waiting weeks or months, you can be up-and-running in days … and your staff are always under your day-to-day control.

How to set up a Nigeria Subsidiary

As applies to a foreign parent company opening a private limited liability company to comply with the Companies and Allied Matters Act.

  • Verify and reserve the unique company name with the Corporate Affairs Commission (CAC); the name must include the suffix ‘Limited’ or ‘Ltd’
  • Provide the CAC with the signature of the registered lawyer to represent the company, verified by a Commissioner for Oaths, and provide proof of registered office address
  • Provide the CAC with notarized Memorandum and Articles of Association
  • Register with the Federal Inland Revenue Service (FIRS); receive company’s Tax Identification Number from the CAC; apply for a Tax Clearance Certificate (TCC) from the relevant State Internal Revenue Service (SIRS); companies operating outside the Federal Capital Territory must register with the relevant state tax authority
  • All foreign companies must register with the Nigeria Investment Promotion Commission (NIPC) database
  • Obtain the company’s National Identity Number (NIN) from the National Identity Management Commission (NIMC)
  • Minimum share capital for a private limited company cannot be less than NGN 100,000 (€200, US$218
  • Register with the National Health Insurance Authority (NHIA)
  • Obtain Certificate of Incorporation from the CAC

https://pre.cac.gov.ng/home

https://apps.firs.gov.ng/tinverification/

https://swip.nipc.gov.ng/auth.php?a=r

What are the Benefits of setting up a Subsidiary in Nigeria?

The subsidiary operates in Nigeria as a separate and independent legal entity from the parent company, which is generally protected from responsibility for any debts or liabilities, including legal issues. Shareholders and members are generally liable only to the extent of their contribution to the subsidiary’s capital.

Through its subsidiary the parent company has the chance to test the market by exploring potential opportunities outside its usual orbit and entering into agreements with other registered companies in Nigeria. Also, the permanency of a subsidiary has greater credibility with clients and suppliers, compared with branches.

However, taking the step of setting up a subsidiary is still a long way from finding the most efficient and financially sensible route to setting up operations in Nigeria.

Consider this … Bradford Jacobs will find the perfect fit and brightest talent for your company in Nigeria through our in-country Professional Employer Organisation (PEO) specialists. Employees can be working at their desk in days … not weeks, or even longer. All concerns regarding employment laws and compliance will be removed by our Employer of Record (EOR) teams. We handle the hassle … while you have day-to-day operational control over your workforce.

Subsidiary Regulations in Nigeria

As applying to a private limited company which incorporates in accordance with the Companies and Allied Matters Act.

Registration and Documentation:

  • Verify and register with the Corporate Affairs Commission (CAC) a unique company name, which must have the suffix ‘Limited’ or ‘Ltd’
  • Notarised signature of a registered legal practitioner to represent the company, verified by a Commissioner of Oaths
  • Provide notarised Memorandum and Articles of Association for the CAC
  • Register notarized signature of attorney to represent the company
  • Register details of office
  • Register with the NIPC’s database for all foreign companies operating in Nigeria
  • Register with the National Health Insurance Authority (NHIA)
  • Obtain Certificate of Incorporation from the CAC

Accounts and Taxation:

  • Must have issued share capital not less than NGN 100,000 (€200, US$217)
  • Register with the Federal Inland Revenue Service (FIRS) for taxation purposes and receive Tax Identification Number for the company from the CAC, which is validated with the FIRS
  • Companies operating outside the Federal Capital Territory must register with the relevant state tax authority
  • Accounts must be filed with the FIRS within six months of the end of the financial year
  • Accounts must be up to date and available for scrutiny by directors to ensure accuracy

Management:

  • A maximum of 50 members, who must not sell their shares without first offering them to fellow members
  • Where foreign investment is involved there must be a minimum of two directors and two shareholders
  • Apply for a Tax Clearance Certificate (TCC) from the relevant State’s Internal Revenue Service (SIRS) to show no taxes are owed
  • The subsidiary will be liable for corporate income tax, withholding tax and capital gains tax
  • First Annual General Meeting must be held within 18 months of incorporation and subsequently held annually with no more than 15 months between AGMs
  • First directors’ meeting must be held within six months of incorporation

International companies entering the business and commercial market in the Federal Republic of Nigeria will be taking their place in Africa’s most powerful economy and a nation with the continent’s largest population. Nigeria is located on Africa’s west coast, alongside the Atlantic on the Gulf of Guinea and has borders with Niger, Chad, Cameroon and Benin.

English is the official language of Nigeria, formerly a British colony from the mid-19th century until 1960. Nigeria’s hugely diverse culture sees more than two hundred languages and dialects spoken by its population of around 219 million. These include Yoruba, Igbo, and Ibibio among scores of others.

Nigeria, which is larger than the US state of Texas, has an equally varied climate. A tropical monsoon climate clings to the southern coast alongside the Gulf; there is a central tropical savannah region and a hot and semi-arid area in the north. In the south, the rainy season can last for eight months from March. Nigeria’s topography can generally be characterised as plains in the north and south, with plateaus, hills and valleys through the central region.

Apart from the many indigenous groups with their distinct roots and heritage, Nigeria also shows Arabic and Western cultural influences. Lagos is Nigeria’s prime business, commercial and industrial centre, although it was replaced as the capital by Abuja in 1991.

https://www.britannica.com/place/Nigeria

Starting your business in Nigeria

Foreign companies intending to start business operations in Nigeria by setting up a subsidiary have initial decisions to make, including which business structure best suits their plans. In Nigeria, a foreign company must have a subsidiary to be able to recruit and pay staff and the usual choice is to open a private limited liability company. This business structure is a separate legal entity from the parent company, which is generally protected from liability along with the subsidiary’s members and shareholders.

The Nigeria Investment Promotion Commission (NIPC) includes the One-Stop Investment Centre (OSIC) which links 27 government agencies including the Central Bank of Nigeria (CBN), the Corporate Affairs Commission (CAC), and the Immigration Service. OSIC’s services include support for incorporation. Fees can also be paid remotely via OSIC’s Single Window Investors’ Portal (SWIP).

Companies that decide to go it alone must follow a strict registration process to comply with the requirements of the Companies and Allied Matters Act, revised in 2020.

Incorporation procedures for a private limited liability company include:

  • Verify and register with the CAC a unique company name, which must have the suffix ‘Limited’ or ‘Ltd’
  • Notarised signature of a registered legal practitioner to represent the company, verified by a Commissioner of Oaths
  • Provide notarised Memorandum and Articles of Association for the CAC
  • Where foreign investment is involved there must be a minimum of two directors and two shareholders
  • The subsidiary must have a registered office
  • Register with the Federal Inland Revenue Service (FIRS) for taxation purposes and receive Tax Identification Number (TIN) for the company from the CAC, which is validated with the FIRS
  • Apply for a Tax Clearance Certificate (TCC) from the relevant State’s Internal Revenue Service (SIRS) to show no taxes are owed
  • Obtain the company’s National Identity Number (NIN) from the National Identity Management Commission (NIMC)
  • Companies operating outside the Federal Capital Territory must register with the relevant state tax authority
  • Register with the NIPC’s database for all foreign companies operating in Nigeria
  • Companies intending to import capital equipment must first obtain a Certificate of Capital Importation; other licences maybe required depending on type of operation
  • Register with the National Health Insurance Authority (NHIA)
  • Companies intending to trade internationally must obtain an import-export licence from the Nigerian Customs Service (NCS)
  • Minimum share capital for a private limited company cannot be less than NGN 100,000 (€200, US$218

Note: All entities must complete registration with the CAC before beginning operations. The Certificate of Incorporation may have to be collected from the CAC even if the process was completed online. The certificate includes the registered name and address of the company, names and addresses of all shareholders and directors and, if applicable, company secretary and the TIN.

https://pre.cac.gov.ng/home
https://apps.firs.gov.ng/tinverification/
https://swip.nipc.gov.ng/auth.php?a=r

Expanding your business into Nigeria

The Federal Republic of Nigeria is the largest economy in Africa and at 219 million has the largest population. Consumerism is growing along with the percentage of the increasingly urbanised middle class, and the World Bank classifies Nigeria as an emerging middle income, mixed economy.

Oil and natural gas extraction contribute the bulk of government revenue and foreign exchange. In 2022 Nigeria was the seventh largest crude oil producer among fellow members of the Organisation of Petroleum Exporting Countries (OPEC) and holds one of the world’s largest reserves of natural gas.

Away from traditional strengths however, other sectors of the economy are becoming a major attraction for foreign companies expending their business into Nigeria. Start-ups are a significant influence in the economy, with over 500 in operation by 2022 in sectors such as e-commerce and retail market tech systems; Fintech, banking and insurance; e-health and Ed-tech; transportation and logistics.

Nigeria’s West African location with major ports on the Atlantic coastline opens up trade routes, and the country has around 15 bilateral trade agreements in operation. These include South Africa, Germany and France. Nigeria also has a Trade and Investment Framework Agreement with the US.

Advantages and Challenges when entering the Nigeria Market

Some Advantages:

  • Low-cost labour pool approaching 80 million
  • Major global producer of crude oil and natural gas
  • Rapidly-developing entrepreneurial ecosystem, in Africa’s top four nations
  • Potentially strong agricultural sector

Some Challenges:

  • Internal security threatened by terrorist actions, high crime rate including kidnappings and ethnic tensions between north and south
  • Bureaucratic customs regulations on moving goods through ports and airports
  • Perceived lack of transparency in corporate procedures
  • Government funnelling investment towards domestic production to cut down on imports
  • Significant areas of the country ‘off grid’ for electricity supplies

Under the Labour Act’s Section 7, every employee should receive a written version of their employment terms within three months of starting work. However, the Act does allow that contracts can be written, oral or implied, but it is strongly advised that written contracts are used. There is no statutory language requirement for contracts in Nigeria, where the official language is English. Other legislation regulating employment contracts includes the Trade Unions Act, the Trade Disputes Act and the National Industrial Court Act.

Different types of Employment Contracts in Nigeria

Open-ended, permanent employment contracts: The usual type of contract, specifying no end date, which gives the individual permanent employment. The contract includes the terms and procedure for termination. Mandatory termination requirements apply only to ‘workers’ as defined by the Labour Act, usually manual and clerical workers, and they must be given notice of intended termination and the reasons. Strict rules apply to the dismissal of employees in the gas and oil industries.

Fixed-term employment contracts:  These must be in writing, usually specifying the end date. Where employment exceeds the end date, with the employer’s approval, the contract is either deemed to have been renewed or replaced by permanent regular employment. Fixed-term employees have the same rights as permanent employees.

Part-time employment agreements:  Part-time workers are considered employees under the Employees’ Compensation Act, are paid on a pro rata according to the hours they work but have no statutory rights to entitlements and benefits.

Probation periods:  Typically last three or six months, at the end of which if the arrangement is not terminated then employment is deemed to become permanent.

Collective Bargaining Agreements (CBAs):  Legislation allows Nigerians to join trade unions, which in turn enter CBAs to negotiate working conditions and entitlements for their members at company and sector level. In Nigeria, CBAs have developed through practice rather than in accord with mandatory rules.

Laws that regulate the Labour Relationship

The Labour Act and the Nigerian Constitution are the main factors governing employment legislation in Nigeria, complemented by a significant number of other acts and statutes both at federal and state level. These include:

  • Employees’ Compensation Act
  • Factories Act
  • Finance Act
  • National Health Insurance Authority Act
  • National Housing Fund Act
  • Oil and Gas Industry Content Development Act
  • Pension Reform Act
  • Personal Income Tax Act
  • Trade Disputes Act
  • Trade Unions Act
  • Data Protection Regulation

General requirements for Contracts

Although the Labour Act accepts that contracts can be written, oral or implied, Article 7 of the Act specifies that all employees should be given a written record of the contractual agreement within three months of starting work. Fixed-term contracts must be in writing. There are no mandatory language requirements for a written contract, which are generally in English, Nigeria’s official language.

An important clause in the contract must cover agreed procedures for termination in compliance with Section 11 of the Labour Act. Also, the contract must give full details of both employer and employee; employment start date and nature of the role; end date for a fixed-term contract; wages and payment; entitlements and benefits.

The Nigerian Labour Act is the overriding legislation covering the employment relationship between employers and employees. However, statutory minimums for entitlements and benefits apply to those defined as ‘Workers’, generally labourers and clerical workers. ‘Non-workers’ include administrative, technical, executives, managerial staff and professionals, whose terms of employment are covered by their individual contracts, but these should not reduce the terms of the Labour Act. Collective Bargaining Agreements (CBAs) also affect minimum benefits.

What are the Compensation Laws?

National Minimum Wage (NMW): Nigeria’s national minimum wage for 2023 is NGN 30,000 (€60, US$66) per month. The minimum is set by the government and legislation provides for a National Wages Board and Area Minimum Wages Committees. Compliance is enforced by the Labour Inspectorate

Working Hours and Breaks: Working hours are normally eight per day and 40 a week up to a maximum of 48, but these vary and be set by mutual agreement, CBAs or an industrial wages board where no CBA exists. Working for more than six hours entitles employees to one or two breaks totalling not more than an hour, and there must be a minimum of 24 hours consecutive hours rest in seven days. Where it is necessary to work on a rest day or public holiday, workers receive a day off in lieu or monetary compensation under terms of the Labour Act

Sick Leave and Benefits: Workers receive up to 12 days paid sick leave in a calendar year, when certified by a doctor, with benefit paid by the employer. In the case of non-payment by the employer, the employee is covered by the Insurance Trust Fund Management Board. Also, if illness or injury is work related, compensation is covered by the Employees’ Compensation Act

Paid Vacations: Under the Labour Act, workers who have been employed for 12 months are entitled to a minimum six days paid leave after working for 12 months. Under-16s and apprentices receive 12 days as a minimum. In practice, paid vacation usually varies between two and six weeks in a calendar year

Public Holidays: These are paid rest days and there is usually a minimum of 11 in a calendar year. The public holiday Muslim festivals of Eid al-Fitr and Eid al-Adha vary each year. Other public holidays are:

Overtime: Working more than the agreed hours is considered overtime. The Labour Act makes no statutory provisions on overtime pay, which is set by contractual agreement, CBAs or industrial wages boards

Probation Periods: These are generally for three or six months and can transfer into full employment if not terminated with reason by the employer

Notice Periods: No provisions under the labour Act, but typically a reciprocal 30 days for non-senior staff and a minimum 30 days for senior staff

Termination, Severance and Redundancies: Procedure for termination should be covered in the contract and these must then be followed, as detailed in Section 11 of the Labour Act. The statutory requirement to give notice and reasons for termination applies only to those classified as manual or clerical ‘workers’ under the Labour Act. Staff in the oil and gas industry cannot be terminated without permission from the Department of Petroleum Resources. Severance pay is mandatory for workers but the Labour Act does not specify amounts; for non-workers, severance is agreed contractually. Redundancies for economic reasons must comply with the Labour Act’s provisions and apply only to ‘workers’. Trade unions must be informed; those laid off must receive severance; the principle of ‘last in, first out’ should apply

Maternity / Paternity Leave: This amounts to six weeks leave both before and after the birth, with benefit at least 50% of normal salary if the employee has worked for at least six months with the employer. The Labour Act makes no provision for paternity leave, but in 2021 the Federal Executive Council approved 14 days’ paternity leave for fathers, the terms and benefits of which must be detailed in their contract

13th Month Salary and Bonuses: No statutory requirement, paid at discretion of employer

Pensions: The defined pension scheme is governed by the Pensions Reform Act. Employers contribute the equivalent of 10% of employees’ salaries and the employee contributes 8%. This is mandatory where companies employ more than 15 workers, which means in effect even small and medium enterprises (SMEs) should be paying into the scheme, and risk a 2% penalty on non-remitted funds if they fail to enrol. If an employer elects to pay the employees’ contribution as well, they remit 20% of salaries to the scheme. However, take-up is disappointing. According to the National Pension Commission (PenCom), by June 2022 around 10% of the workforce had pension accounts – around 15-17% of the workforce. Most pension holders are aged between 30 and 49 years, in a population where more than half are aged under 30. Under-30s account for only 9% of those with pensions

Health Insurance:  The National Health Insurance Authority (NHIA) was founded in 2022 under the NHIA Act to improve the quality and access to affordable healthcare for Nigerians. Within the scheme, the healthcare of employees in the Organised Private Sector (OPS) is funded by pooled contributions from employers (10% of salaries) and employees (5%). Employers can choose to pay the entire premium and this 15% amounts to the company’s annual premium, and those with at least five staff can participate. Benefits cover the employee, his/her spouse and four biological children. There is also a programme for the public sector. For more information

International companies moving into a new theatre of economic operations usually need to recruit staff there and inevitably face bureaucracy and restrictions. In Nigeria, companies must comply with the Labour Act for all aspects of employment legislation, including drawing up contracts with new recruits.

The ‘to do’ list for companies expanding into a new territory is a long one – and locating new talent will be at the top of this list. This is the first stage of international expansion and it raises major issues. This certainly applies if trying to recruit staff in Nigeria while still based in your home country. Once recruited and onboarded, employers face strictly-applied employment legislation laid down by the Labour Act that spells out their responsibilities and obligations in addition to the legal rights of their staff.

Additionally, employers have to deal with the issues of Expatriate Quotas applied by the government.

These demands add up to a considerable workload. There is a better option … a straightforward, fast and cost-effective alternative that will have your new staff operational in a matter of days, without having to unravel the red tape.

Bradford Jacobs has the essential expertise you need to provide the smoothest route for your journey into the Nigerian economy. Our Professional Employer Organisation (PEO) networks have global reach to find the right staff. Then, through our Employer of Record (EOR) platforms we will have your new employees at their desks and screens in the shortest time. This guide highlights the essentials of recruitment and onboarding in Nigeria. You can trust Bradford Jacobs to put the brightest talent in position for your company – right now!

Recruiting in Nigeria

Foreign companies entering the Nigerian employment market access a huge labour pool, up to 67 million out of a population of around 219 million. Within this labour pool is a core of highly-skilled, well-motivated and educated, English-speaking and productive potential employees. Under the terms of Nigeria’s Labour Act, these will be typically working in the administrative, professional and technical areas and are categorised as ‘Non-workers’, to differentiate from ‘Workers’ who are generally labourers or clerical staff.

Employers will be recruiting self-starting, self-managing team players, committed to flexibility and learning new skills and usually drawn from the universities, which have strong ties with the private sector.

The biggest recruiters by sector are oil and gas exploration and production; engineers, scientists and technicians for the agriculture industry; personnel for Fintech, banking, insurance and the growing e-commerce businesses; professionals and designers for ICT companies supporting Nigeria’s role among Africa’s leading Start-up nations.

Job opportunities are there, but employers have to find candidates with the necessary skills. This can be a major barrier, particularly when employers are recruiting into the relatively new and rapidly-developing sectors in the digital, technological and e-business areas. Sifting through the applications of under-qualified applicants is a time-waster for companies eager to move forward in their new territory. This is where the global experience and local know-how of Bradford Jacobs is essential. Our Professional Employer Organisation (PEO) platforms will bridge the gap between the skills you need and finding the right fit for your company.

Employees’ pre-hire checks in Nigeria

General:  Medical checks are required for manual and clerical workers and employers must verify all employees comply with immigration regulations. The candidate’s permission is usually needed for such checks as education qualifications, job experience and references, health and credit checks.

Specifics include:

Discrimination:  Employers must be aware that the Nigerian Constitution bars discrimination on grounds of ethnicity, place of origin, gender, political or religious beliefs. Additionally the HIV and AIDS (Anti-Discrimination) Act 2014 prohibits discrimination for HIV-related illnesses, while further legislation prohibits discrimination against persons with disabilities.

Criminal Checks:  Where required due to the nature of the role, checks are carried out by the relevant records department of the Nigerian police after taking biometrics. After verification on the police database a clearance certificate is issued.

Basic requirements when recruiting in Nigeria

The structure of Nigeria’s employment legislation is based on the Constitution, the Labour Act, federal laws brought in by the National Assembly and state laws introduced by the states’ legislative authority, the House of Assembly. Case law may also apply.

The Labour Act covers employment contracts, the essential first step for employers after they have recruited new staff. The minimum requirements of the Labour Act apply to those defined as ‘Workers’, generally employed as labourers or in clerical work. ‘Non-workers’ cover administrative, technical, executives and professionals, whose terms of employment are covered by their individual contracts, but these should not reduce the terms of the Labour Act.

The Labour Act acknowledges that agreements can be written, oral or implied. However, under Section 7 of the Act every employer must issue a written contract within three months of the employee starting work. Contract terms should include the following:

  • Name and address of the employer and the employee
  • The date of hiring, nature of employment
  • End date if the contract is fixed term
  • Arrangements for termination under Section 11 of the Labour Act
  • Wages and payment schedule
  • Terms of benefits and entitlements

https://iclg.com/practice-areas/employment-and-labour-laws-and-regulations/nigeria

The Basics of Nigerian Culture

Nigeria has an astonishing mix of cultures. It is estimated the population of 219 million comprises as many as 250 ethnic groups, of which Hausa, Igbo and Yoruba are the largest. It is also believed Nigeria, where the official language is English, has around 500 indigenous languages and dialects. Nigeria is a relatively young nation. Its modern borders were not set until 1914 by the British, whose colonisation ended in 1960.

The two major religions are Christianity, predominantly in the south, and Islam in the north. Native religions often revolve around deities and worship of ancestors and are spread throughout the country.

In the African context, Nigerians are very proud of their nation as a regional superpower possessing the continent’s strongest economy. They are equally proud of the family context, which is based on hierarchy and seniority, and extended families are the essential fabric of the social system. Life expectancy is not high by most standards … therefore age and experience are respected and revered.

Typically, Nigerians are outgoing, hospitable and friendly and foreigners who take the trouble to respond will be welcomed and appreciated.

Naturally for a country with such diverse cultural groups, Nigeria displays a rich tapestry of heritage and customs. Distinct ethic groups are often clearly identified by their clothing and dresses. Similarly they have their own distinctive histories and narratives about their race’s origin.

Nigeria also boasts one very modern culture – its thriving movie industry. In terms of quantity, the industry is the fastest-growing in the world producing over 2,500 films a year, more than Hollywood and second only to India’s ‘Bollywood’.

Nigeria Work Culture

Hierarchy: Nigeria’s hierarchical social structure is reflected in the business world. Age brings wisdom, so decision making stays with the most senior.

Introductions/Greetings:  Shake hands with a warm and sincere smile and don’t be brisk with the greeting. Employ the social niceties about health and family for example. Where the other team have female members, wait for them to extend their hand first; Muslims will not generally shake hands with members of the opposite sex. Where applicable, use educational, professional or honorific titles and if the other party is senior, a slight bow of the head is appropriate. Prolonged eye contact may be considered too direct unless there is already a firm relationship.

Language:  English is Nigeria’s official language and the business language, but do not assume it will be spoken away from the major urban and commercial centres.

Gift Giving: Gifts, wrapped, should be given with the right hand but may not always be opened at the time of the meeting.

Business Cards:  These are important, but presented without ceremony, using the right hand or both hands … never with the left hand. Include academic qualifications on the card.

Dress Code: Professionals are normally very smartly dressed, particularly in financial sectors. A more relaxed dress style often applies to new tech companies, but still smart.

Punctuality:  Does not necessarily rate highly; you may be the only one on time, especially if you have been invited to a meeting ‘round about 3pm’. They are probably allowing for traffic congestion.

Negotiations and Meetings:  Be prepared to spend time building relationships. Look for visual clues. Some Nigerians may simply smile when they are disappointed or confused, to hide their true feelings. Others can be extremely direct and say what they mean at the outset. Meetings often begin with a general overview before moving onto specifics, but avoid the ‘hard sell’, while always presenting a united front from your team members. Always supply a suggested agenda in advance.

Agreements:  When negotiations approach the contract stage, be certain that both parties comply with provisions of the Companies and Allied Matters Act.

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