3.2 The Nigerian Investment Promotion Commission Decree 1995 and the Foreign Exchange Monitoring & Miscellaneous Provisions Decree 1995 guarantee to foreign investors unrestricted remittance of dividends or profits (net of applicable tax – 10%) deriving from the foreign investment in Nigeria. This is conditioned upon proper “Evidence of Capital Importation” usually issued by the banks as agents of the Central bank of Nigeria. The law also allows the repatriation of the capital at the end of the project (in this case on liquidation).
3.3 Management fees (limited to 5% of turnover) can be paid subject to proper registration with the National Office for Technology Acquisition and Promotion (NOTAP). Management and Technical services fees attract 10% withholding tax. So do Royalty payments.
3.4 Consultancy fees can be paid directly abroad. Payments to a foreign consultant can therefore be made but subject to a maximum sum of 20% of the costs of the project. A higher percentage can be negotiated depending on the level of technology involved or demonstrated to be involved. Consultancy fees are however subject to 10% withholding tax.
4 Getting By
4.2 Returns on investment, interest payments, dividends, etc can be repatriated using a combination of the mechanisms allowed under the existing foreign exchange guidelines through banks as agents of the Central Bank of Nigeria.
4.3 However, some of these mechanisms can be filled with inefficiencies, delays and wastage. Here lies the practicality of a PARENT-SUBSIDIARY relationship and the effective use of a Domiciliary Account and the dispensation of the “No Third party transfer” occasional restrictions.
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