The Nigeria Investment Promotion Commission (“NIPC”) in collaboration with Federal Inland Revenue Service (“FIRS”) with inputs from ministries and agencies have released a compendium of existing investment incentives in Nigeria (the Compendium) pursuant to Section 4(i) of the NIPC Act which mandates the NIPC to provide and disseminate up-to-date information on incentives available to investors.
The Compendium covers amongst others the following heads:
1. Investment Policies and Protections: The Compendium in this regard, reiterates:
(x) the commitment of the Federal Government of Nigeria to guarantee 100% ownership of foreign investments as well as protection against nationalisation and expropriation;
(y) the right of a foreign investor of access to courts and fair and adequate compensation if acquisition is in national interest or for public purpose,
(z) unconditional transferability and repatriation by foreigners of investment returns or sale proceeds through an authorised dealer (that is, banks licensed by the Central Bank of Nigeria);
and (xx) liberal provisions for the amicable resolution of investor/government disputes by providing for the application of any Bilateral Treaty with the investor’s country as well as the investor’s right of recourse to international arbitration under the International Centre for Settlement of Investment Disputes Rules.
2. General Tax Based Incentives: Incentives under this head include:
• Incentives available to companies to wit: the pioneer status incentive; tax exemption of interest on loans, deduction for research and development; investment tax relief; amongst others.
• Incentives available to companies and persons including exemption on retirement benefits schemes; exemption on gains accruing on securities, stocks and shares; exemption on gains arising from take-overs, absorption or merger; and exemptions on gains accruing to a unit trust holder on disposal of securities provided that the proceeds are reinvested.