Understanding business permits and expatriate quotas for foreign companies in Nigeria

By Busola Bamidele

In Nigeria, a business permit is necessary primarily when a company is fully foreign-owned or when an international firm enters into a joint venture with a Nigerian business.

If Nigerian citizens have a stake in the company, the need for a business permit may be waived.

Typically, the application for a business permit is submitted alongside the request for an expatriate quota.

While the business permit authorizes a foreign or foreign-controlled entity to operate in Nigeria, the expatriate quota provides approval for individual foreign employees or directors to work within the country, should the company plan to deploy expatriates.

It’s crucial to distinguish the business permit from other specific licenses required for certain industries.

For instance, companies involved in the mineral resources sector must obtain a license from the Ministry of Solid Minerals Development, and those in the petroleum sector need a license from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

These licenses are mandatory for both local and foreign-owned companies aiming to operate in these sectors.

To secure a business permit, companies must adhere to these regulations. Once granted, it allows foreign-owned businesses in Nigeria to begin operations.

The rationale behind these requirements is to prevent foreign entities from displacing local businesses and to protect Nigerian job opportunities from being overtaken by expatriates.