Nigeria remains a major destination for foreign investment in Africa, but repatriating profits, dividends and capital requires strict compliance with banking and regulatory procedures.
This article provides foreign investors and international businesses with a roadmap for legally and efficiently transferring profits, dividends, and capital from Nigerian operations to overseas accounts.
Eligibility Requirements And Compliance
1. Company Registration Requirements
Valid registration with the Corporate Affairs Commission (CAC) in active status is essential for all repatriation activities. Companies with foreign shareholding exceeding certain thresholds must obtain Foreign Investment Certificates from the Nigerian Investment Promotion Commission (NIPC). As well as current tax compliance with the Federal Inland Revenue Service (FIRS), evidenced by valid tax clearance certificates.
Up-to-date audited financial statements, prepared in accordance with Nigerian accounting standards and certified by registered auditors, must clearly show the source of funds being repatriated and demonstrate compliance with company law requirements for profit distributions.
2. Investment Documentation
Investors cannot legally repatriate capital imported into Nigeria without an e-Certificate of Capital Importation (e-CCI), making the e-CCI crucial for the repatriation process. The requesting company must present a copy of the e-CCI to the Nigerian bank to process a remittance.
Additionally, Form NXP, the CBN’s official repatriation application form, must be accurately completed for each transaction. Board resolutions authorising specific dividend declarations and repatriation transactions provide the necessary corporate authorisation for fund transfers. Shareholder agreements may contain specific provisions regarding profit distributions and repatriation procedures, which must be considered during the process.
3. Regulatory Compliance Checklist
Maintaining relationships with CBN-authorised dealer banks is vital, as only these institutions can process foreign exchange transactions and repatriations. Current tax clearance certificates from FIRS demonstrate compliance with all tax obligations, including company income tax, value-added tax (VAT), and withholding taxes.
Furthermore, up-to-date statutory returns with relevant agencies, including annual returns to CAC and tax filings to FIRS. Additional compliance verification may be required for industry-specific permits in regulated sectors such as banking, oil and gas, telecommunications, and others before repatriation approvals.
Step-by-Step Process For Fund Repatriation In Nigeria
Step 1: Verify Eligibility And Compliance Status
Start by conducting a thorough review of your documents. Gather all required certificates, clearances, and corporate documents. Engage your CBN-authorised dealer bank early to understand their specific requirements and current processing procedures. Ensure that all tax obligations are current, including company income tax, VAT, withholding taxes, and any industry-specific levies.
Confirm that your investment trail documentation is complete and accessible, particularly the original Certificate of Capital Importation and any subsequent amendments or endorsements. Review your company’s audited financial statements to ensure they clearly show distributable profits and comply with current accounting standards.
Step 2: Obtain Necessary Approvals And Clearances
Acquire current tax clearance certificates from the Federal Inland Revenue Service, ensuring that all outstanding obligations are settled before applying. Have certified auditors review and certify your financial statements if they require updates or amendments for repatriation purposes.
Pass formal board resolutions that specifically authorise the intended repatriation, including exact amounts, beneficiaries, and intended use of funds. For transactions above certain thresholds or those involving strategic sectors, obtain preliminary guidance from the CBN to understand any additional requirements or approvals needed.
Step 3: Complete Form NXP And Supporting Documents
Complete the CBN’s Form NXP, providing accurate and detailed information about the proposed repatriation, including the source of funds, intended beneficiaries, and compliance with regulatory requirements. Attach all necessary supporting documentation, including copies of the Certificate of Capital Importation, tax clearance certificates, audited financial statements, and board resolutions.
Submit the completed application package through your authorised dealer bank, ensuring that all documents are properly certified and meet CBN requirements. The bank will verify the completeness of the documentation and may request additional information or clarifications before forwarding it to the CBN.
Step 4: CBN Processing And Approval
The Central Bank will review applications for compliance with foreign exchange regulations, investment policies, and monetary policy objectives. At this stage, ensure that you respond promptly to any CBN queries or requests for additional information to avoid processing delays.
On January 8, 2025, the CBN issued a circular announcing the immediate suspension of approvals for extending the timeline for repatriating export proceeds, emphasising the importance of meeting original deadlines and compliance requirements.
Upon approval, the CBN will issue an authorisation through your authorised dealer bank, typically with specific validity periods and conditions that must be met during the transaction execution.
Step 5: Execute The Repatriation Transaction
Your authorised dealer bank will purchase the required foreign exchange at the prevailing market rates, subject to CBN guidelines and any applicable margins or charges. International wire transfers will be executed to designated foreign accounts, with correspondent banking relationships facilitating the overseas transfer.
Obtain comprehensive transaction confirmations and receipts for regulatory compliance and record-keeping purposes.
Step 6: Post-Transaction Compliance
Maintain detailed records of all repatriation transactions for potential regulatory review, including all approvals, supporting documents, and transaction confirmations. Some transactions may require quarterly returns or ongoing reporting to the CBN, especially large or recurring repatriations.
Stay updated on regulatory changes that may affect future repatriations, as CBN policies can evolve based on economic conditions and policy objectives. Maintain good standing with your authorised dealer bank through regular communication and compliance with banking requirements.
Action Steps
Successfully repatriating profits from Nigeria requires careful planning, meticulous documentation, and strict adherence to evolving regulatory requirements. The process is systematic but demands attention to detail and proactive relationships with banks, regulators, and professional advisors.
Begin your repatriation planning by contacting us today to get a comprehensive compliance review and professional assistance where needed.
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