Frequently Asked Questions
The information below does not and is not intended to constitute legal or any other professional advice. We recommend that you seek professional advice to best suit your circumstances.
What are annual returns and why must my business/company file it annually?
Annual returns filing is a yearly report on the status and activities of your business or company. It is a mandatory process for all registered businesses and entities according to the Companies and Allied Matters Act 2020.
Registering a business name or a company, which is better?
This would ultimately depend on your business objective or goal; a Business Name is flexible with fewer formalities however the proprietor(s) personal assets are not separate from the business and may be affected. A Limited Liability Company although requiring more formalities in registration, is a separate personality and the assets of the shareholders/directors are exempt from liability. Other factors may affect your choice of entity so we recommend you seek legal advice.
Are there taxes and fees associated with selling property in Nigeria?
Yes, upon the sale and purchase of a property, the Vendor is obligated to pay Capital Gains Tax – at the rate of 10% chargeable on the profits/gains made from the sale. There is also Stamp Duty which is levied on the document and is charged at 1.5% of the value of the property.Further to the holding of the tax appeal tribunal in NGX Real Estate Limited v FIRS (2022) and Section 44 of the Finance Act 2020, the contentious issue of the payment of VAT on acquired property was laid to rest as VAT is not due and payable for property acquisition.
What are the steps involved in acquiring a property in Nigeria?
Before acquiring any property, proper due diligence must be conducted to ascertain the history of the land and what you intend to buy. This can be done by confirming the information provided by the Vendor/Owner at the Ministry of Lands where the property is situated. It is important to note that different due diligence investigations are required for properties located at different locations and states, we recommend that you seek an experienced property lawyer to conduct due diligence investigations.
Can I enforce a court judgement from Nigeria a foreign country?
It is possible to enforce a valid judgement of a court sitting in Nigeria in other jurisdictions, either by reciprocal enforcement or as an action in common law.
Can a grant of probate or letters of administration received in one state be executed in another of the Federation?
A grant of probate or letters of administration is recognised across the country and can be executed in another state, provided the testator/deceased has property there. This is done through a process called Resealing of Probate and Letters of Administration
As a landlord, at what point in the tenancy/lease term can I increase rent?
The ability of a landlord to raise rent depends on the terms of the lease agreement. Landlords can include provisions allowing for rent reviews at specific intervals, often tied to economic factors. In such cases, tenants have the right to either accept the new rent or choose not to renew the lease and vacate the property.If the tenant disagrees with the increased rent and refuses to pay or leave the property, the landlord may commence an action to evict them, recover the premises, and charge for mense profit.
What company tax obligations do I need to be aware of?
In Nigeria, there are general and industry-specific taxes levied on companies. They include Companies Income Tax, which is the primary tax payable by all companies; Value Added Tax, though not levied on the company but on goods and services; Withholding Tax chargeable on certain payments; Capital Gains Tax chargeable on the profits made from the disposal of assets; and Tertiary Education Tax levied on the assessable profit of the company amongst others.