DOING BUSINESS IN NIGERIA’S FREE TRADE ZONES
A free trade zone is an area where trade barriers have been eliminated. In such selected areas goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities.
Free-trade zones are usually located around major seaports or international airports. An example is the Lekki Free Trade Zone which is strategically located around the Proposed Cargo Airport and Lekki Deep Sea Port. Nigerian Government has so far licensed over 32 Free Trade Zones located in different parts of the Country.
In recent years, Export Processing Free Trade Zones have emerged as an effective instrument to boost the export of manufactured products as it allows for interested persons to set up industries and businesses within demarcated zones principally with the objective of exporting the goods and services manufactured or produced within the zones and to provide an internationally competitive duty free environment for export production at low costs.
REASONS TO LOCATE YOUR BUSINESS IN A FTZ
- Complete holiday from all Federal, State and Local Government Taxes, Rates, and Levies
- Duty free importation of capital goods, machinery/components, spare parts, raw materials and consumable items in the zones.
- 100% foreign ownership of investments.
- 100% repatriation of capital, profits and dividends.
- Waiver of all imports and export licenses.
- Waiver on all expatriate quotas.
- One-stop approvals for permits, operating license and incorporation papers.
- Permission to sell 100% of goods into the domestic market (However, when selling into the domestic market, applicable customs duty on imported raw material shall apply).
- For prohibited items in the custom territory, free zone goods are allowed for sale provided such goods meet the requirement of up to 35% domestic value addition.
- Waiver on all expatriate quotas for companies operating in the zones.
- Minimize delays in the movement of goods and services.
- Rent free land during the first 6 months of construction (for government owned zones).
REQUIREMENTS FOR LOCATING YOUR BUSINESS IN A FTZ
- Complete an application form which can be downloaded online or collect from the administration of the free zone or from NEPZA HQ in Abuja, with a non-refundable fee of US$500 or its Naira equivalent.
- Submit completed application form to the Zone Administration or NEPZA Office in Abuja along with required Project Plan/Feasibility Study. Application will be reviewed and either approved or returned with observations within five (5) working days.
- On approval of application, an Operating License (OPL) will be issued by the Free Zone Administration. Being licensed by the Authority constitutes registration and no further registration is required with the Corporate Affairs Commission (CAC). It is at this point that the Free Zone Administration will discuss your site location and assign or reserve a space for you.
- Remit your investment capital through banks located in the zones which will in turn issue a Certificate of Capital Importation.
- Prepare your building or warehouse space. Investors who are constructing their own buildings must submit four (4) copies of full architectural drawings for approval by Zone Management according to established building codes. Built-up spaces should not exceed 70% of the leased land, and construction should start within three (3) months after execution of agreement.
- Move in and operate. Government has designed the process to be as streamlined and user friendly as possible. Some companies may have some additional procedure to follow such as obtaining permission for their foreign nationals and employees which can be done at the immigration desk offices in the free zones.
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