COMPARING REGULATION IN 36 STATES, ABUJA FCT AND 183 ECONOMIES 74681 2010 in Nigeria COMPARING REGULATION IN 36 STATES, ABUJA FCT AND 183 ECONOMIES A COPUBLICATION OF THE WORLD BANK AND THE INTERNATIONAL FINANCE CORPORATION © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail feedback@worldbank.org All rights reserved. A publication of the World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. 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Doing Business in Nigeria 2010 and other subnational and regional Doing Business studies can be downloaded at no charge at http://subnational.doingbusiness.org Additional copies of the Doing Business global reports: Doing Business 2010: Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004: Understanding Regulations, may be purchased at www.doingbusiness. org About the Investment Climate Advisory Services of the World Bank Group The Investment Climate Advisory Services of the World Bank Group helps governments implement reforms to improve their busi- ness environment, and encourage and retain investment, thus fostering competitive markets, growth and job creation. Funding is provided by the World Bank Group (IFC, MIGA, and the World Bank) and over fifteen donor partners working through the multi-donor FIAS platform. Contents Doing Business in Nigeria 2010 is the reforms have worked, where, and why. About Doing Business and second subnational report of the Doing Other areas important to business—such Doing Business in Nigeria 2010 1 Business series in Nigeria. In 2008, quan- as a country’s proximity to large markets, Overview 7 titative indicators on business regula- the quality of infrastructure services Starting a business 13 tions were created for 10 states and (other than services related to trading Dealing with construction permits 18 Abuja, FCT. This year, Doing Business across borders), the security of property in Nigeria 2010 expands the analysis to from theft and looting, the transparency Registering property 23 all 36 Nigerian states and Abuja, FCT, of government procurement, macro- Enforcing contracts 28 and documents progress in the 10 states economic conditions, or the underlying and the capital previously measured. The strength of institutions—are not directly Data notes 33 states are compared against each other, studied by Doing Business. To make the State tables 38 and with 183 economies worldwide. data comparable across jurisdictions, the Doing Business indicators 47 Comparisons with other economies indicators refer to a specific type of are based on the indicators in Doing business—generally a small or medium- List of procedures Business 2010: Reforming through Dif- size limited liability company. Starting a business 51 ficult Times, the seventh in a series of This project is part of the Nigeria Dealing with construction permits 90 annual reports published by the World Subnational Investment Climate Pro- Registering property 137 Bank and the International Finance gram, which supports state governments Acknowledgments 168 Corporation. The indicators in Doing in improving their business environ- Business in Nigeria 2010 are also compa- ments. This program is the Nigerian rable with the data in other subnational government’s response to its National Doing Business reports. All Doing Busi- Economic Empowerment and Develop- ness data and reports are available at ment Strategy (NEEDS) and the Coun- http://subnational.doingbusiness.org try Partnership Strategy between it, and at www.doingbusiness.org. the U.K. Department for International Doing Business investigates the regu- Development (DFID), and the World lations that enhance business activity and Bank Group, which aim to create mo- those that constrain it. Regulations af- mentum for reform through dialogue fecting 4 stages of the life of a business between the private and public sectors are measured at the subnational level in in participant states, drive investments Nigeria: starting a business, dealing with and non-oil growth in these states, and construction permits, registering prop- reduce income poverty through shared erty, and enforcing contracts. These in- sustainable economic growth in Nige- dicators have been selected because they ria’s non-oil sector. This study is part of cover areas of local jurisdiction or prac- a three-instrument benchmarking pro- tice. The data in Doing Business in Nigeria cess for Nigeria that also includes an 2010 are current as of January 2010. Investment Climate Assessment (ICA) The indicators are used to analyze and State Level Policy and Institutional economic outcomes and identify which Mapping (SLPIM). 1 About Doing The global financial crisis has re- newed interest in good rules and regu- WHAT DOING BUSINESS IN NIGERIA 2010 COVERS Business and lation. In times of recession, effective business regulation and institutions can Doing Business in Nigeria 2010 provides Doing Business support economic adjustment. Easy a quantitative measure of the federal entry and exit of firms, and flexibility and state regulations for starting a busi- in Nigeria 2010 in redeploying resources, make it easier ness, dealing with construction permits, to stop doing things for which demand registering property, and enforcing con- has weakened and to start doing new tracts—as they apply to domestic small things. Clarification of property rights and medium-size enterprises. and strengthening of market infrastruc- A fundamental premise of Doing ture (such as credit information and Business is that economic activity re- collateral systems) can contribute to con- quires good rules. These include rules fidence as investors and entrepreneurs that establish and clarify property rights look to rebuild. and reduce the costs of resolving disputes, Until very recently, however, there rules that increase the predictability of In 1664 William Petty, an adviser to were no globally available indicator sets economic interactions and rules that England’s Charles II, compiled the first for monitoring such microeconomic fac- provide contractual partners with core known national accounts. He made 4 tors and analyzing their relevance. The protections against abuse. The objective entries. On the expense side, “food, hous- first efforts, in the 1980s, drew on per- is: regulations designed to be efficient, to ing, clothes and all other necessaries” ceptions data from expert or business be accessible to all who need to use them were estimated at £40 million. National surveys. Such surveys are useful gauges and to be simple in their implementa- income was split among 3 sources: £8 of economic and policy conditions. But tion. Accordingly, some Doing Business million from land, £7 million from other their reliance on perceptions and their indicators give a higher score for more personal estates and £25 million from incomplete coverage of poor countries regulation, such as stricter disclosure re- labor income. constrain their usefulness for analysis. quirements in related-party transactions. In later centuries estimates of coun- The Doing Business project, launched Some give a higher score for a simplified try income, expenditure and material 8 years ago, goes one step further. It looks way of implementing existing regulation, inputs and outputs became more abun- at domestic small and medium-size com- such as completing business start-up dant. But it was not until the 1940s that panies and measures the regulations ap- formalities in a one-stop shop. a systematic framework was developed plying to them through their life cycle. Doing Business in Nigeria 2010 for measuring national income and ex- Doing Business and the standard cost encompasses 2 types of data. The first penditure, under the direction of British model initially developed and applied in come from readings of laws and regula- economist John Maynard Keynes. As the the Netherlands are, for the present, the tions. The second are time and motion methodology became an international only standard tools used across a broad indicators that measure the efficiency standard, comparisons of countries’ fi- range of jurisdictions to measure the in achieving a regulatory goal (such as nancial positions became possible. Today impact of government rule-making on granting the legal identity of a business). the macroeconomic indicators in na- business activity. Within the time and motion indicators, tional accounts are standard in every The first Doing Business report, pub- cost estimates are recorded from official country. lished in 2003, covered 5 indicator sets in fee schedules where applicable. Here, Governments committed to the eco- 133 economies. This year’s report covers Doing Business builds on Hernando de nomic health of their country and op- 10 indicator sets in 183 economies. The Soto’s pioneering work in applying the portunities for its citizens now focus on project has benefited from feedback from time and motion approach first used more than macroeconomic conditions. governments, academics, practitioners by Frederick Taylor to revolutionize the They also pay attention to the laws, regu- and reviewers. The initial goal remains: production of the Model T Ford. De Soto lations and institutional arrangements to provide an objective basis for under- used the approach in the 1980s to show that shape daily economic activity. standing and improving the regulatory the obstacles to setting up a garment fac- environment for business. tory on the outskirts of Lima, Peru. 2 DOING BUSINESS IN NIGERIA 2010 WHAT DOING BUSINESS IN phases of a company’s life cycle, through social security, for example. NIGERIA 2010 DOES NOT COVER 4 specific sets of indicators. The indica- Where regulation is particularly tor sets also do not cover all aspects of onerous, levels of informality are higher. It is important to know the scope and regulation in the particular area. For Informality comes at a cost: firms in limitations of Doing Business in Nigeria example, the indicators on starting a the informal sector typically grow more 2010 in order to interpret the results of business do not cover all aspects of com- slowly, have poorer access to credit and this report. mercial legislation. employ fewer workers—and their work- ers remain outside the protections of LIMITED IN SCOPE BASED ON STANDARDIZED CASE labor law. Doing Business in Nigeria 2010 SCENARIOS Doing Business in Nigeria 2010 focuses measures one set of factors that help on four topics, with the specific aim of The indicators analyzed in Doing Business explain the occurrence of informality measuring the regulation and red tape in Nigeria 2010 are based on standardized and give policy makers insights into po- relevant to the life cycle of a domestic case scenarios with specific assumptions, tential areas of reform. Gaining a fuller small to medium-size firm. Accordingly: such as that the business is located in cer- understanding of the broader business r Doing Business in Nigeria 2010 does tain cities in one of the 36 Nigerian states environment, and a broader perspective not measure all ten indicators covered or in Abuja, FCT. Economic indicators on policy challenges, requires combining in the global Doing Business report. commonly make limiting assumptions of insights from Doing Business in Nigeria The report covers only those 4 areas of this kind. Inflation statistics, for example, 2010 with data from other sources, such business regulation that are the prov- are often based on prices of consumer as the World Bank Enterprise Surveys. enance of state or federal governments goods in a few urban areas. Such assump- and where local differences exist. tions allow global coverage and enhance WHY THIS FOCUS r Doing Business in Nigeria 2010 does comparability, but they inevitably come at not measure all aspects of the busi- the expense of generality. Doing Business in Nigeria 2010 func- ness environment that matter to firms In areas where regulation is com- tions as a kind of cholesterol test for or investors—or all factors that affect plex and highly differentiated, the stan- the regulatory environment for domestic competitiveness. It does not, for ex- dardized case used to construct each businesses. A cholesterol test does not ample, measure security, macroeco- Doing Business in Nigeria 2010 indicator tell us everything about the state of our nomic stability, corruption, the labor needs to be carefully defined. Where health. But it does measure something skills of the population, the under- relevant, the standardized case assumes important for our health. And it puts us lying strength of institutions or the a limited liability company. This choice on watch to change behaviors in ways quality of infrastructure. Nor does it is in part empirical: private, limited li- that will improve not only our cholesterol focus on regulations specific to for- ability companies are the most prevalent rating but also our overall health. eign investment. business form in most economies around One way to test whether Doing Busi- r Doing Business in Nigeria 2010 does the world. The choice also reflects one ness serves as a proxy for the broader not assess the strength of the financial focus of Doing Business: expanding op- business environment and for competi- system or market regulations, both portunities for entrepreneurship. Inves- tiveness is to look at correlations be- important factors in understanding tors are encouraged to venture into busi- tween the Doing Business rankings and some of the underlying causes of the ness when potential losses are limited to other major economic benchmarks. The global financial crisis. their capital participation. indicator set closest to Doing Business r Doing Business in Nigeria 2010 does in what it measures is the Organization not cover all regulations, or all regu- FOCUSED ON THE FORMAL SECTOR for Economic Co-operation and Devel- latory goals, in any jurisdiction. As In defining the indicators, Doing Business opment’s indicators of product market economies and technology advance, in Nigeria 2010 assumes that entrepre- regulation; the correlation here is 0.75. more areas of economic activity are neurs are knowledgeable about all regu- The World Economic Forum’s Global being regulated. lations in place and comply with them. Competitiveness Index and IMD’s World In practice, entrepreneurs may spend Competitiveness Yearbook are broader in For example, the European Union’s considerable time finding out where to scope, but these too are strongly corre- body of laws (acquis) has now grown go and what documents to submit. Or lated with Doing Business (0.79 and 0.72, to no fewer than 14,500 rule sets. Doing they may avoid legally required proce- respectively). These correlations suggest Business in Nigeria 2010 measures just 4 dures altogether—by not registering for that where peace and macroeconomic ABOUT DOING BUSINESS AND DOING BUSINESS IN NIGERIA 3 stability are present, domestic business makers face particular challenges. Both results. Some states may rank unexpect- regulation makes an important differ- developed and developing economies are edly high on some indicators. And some ence in economic competitiveness. seeing the impact of the financial crisis states that have had rapid growth or A bigger question is whether the flowing through to the real economy, attracted a great deal of investment may issues on which Doing Business focuses with rising unemployment and income rank lower than others that appear to be matter for development and poverty re- loss. The foremost challenge for many less dynamic. duction. The World Bank study Voices governments is to create new jobs and But for reform-minded govern- of the Poor asked 60,000 poor people economic opportunities. But many have ments, how much their indicators im- around the world how they thought they limited fiscal space for publicly funded prove matters more than their abso- might escape poverty. The answers were activities such as infrastructure invest- lute ranking. As states develop, they unequivocal: women and men alike pin ment or for the provision of publicly strengthen and add to regulations to their hopes above all on income from funded safety nets and social services. protect investor and property rights. their own business or wages earned in Reforms aimed at creating a better in- Meanwhile, they find more efficient ways employment. Enabling growth—and en- vestment climate, including reforms of to implement existing regulations and suring that poor people can participate business regulation, can be beneficial for cut outdated ones. One finding of Doing in its benefits—requires an environment several reasons. Flexible regulation and Business: dynamic and growing econo- where new entrants with drive and good effective institutions, including efficient mies around the world continually re- ideas, regardless of their gender or ethnic processes for starting a business and effi- form and update their regulations and origin, can get started in business and cient insolvency or bankruptcy systems, their way of implementing them, while where good firms can invest and grow, can facilitate reallocation of labor and many poor economies still work with generating more jobs. capital. And regulatory institutions and regulatory systems dating to the late Small and medium-size enterprises processes that are streamlined and acces- 1800s. are key drivers of competition, growth sible can help ensure that, as businesses and job creation, particularly in develop- rebuild, barriers between the informal DOING BUSINESS— ing countries. But in these economies up and formal sectors are lowered, creating A USER’S GUIDE to 80% of economic activity takes place more opportunities for the poor. in the informal sector. Firms may be pre- Quantitative data and benchmarking can vented from entering the formal sector DOING BUSINESS IN NIGERIA be useful in stimulating debate about by excessive bureaucracy and regulation. 2010 AS A BENCHMARKING policy, both by exposing potential chal- Where regulation is burdensome EXERCISE lenges and by identifying where pol- and competition limited, success tends icy makers might look for lessons and to depend more on whom you know Doing Business in Nigeria 2010, in captur- good practices. These data also provide than on what you can do. But where ing some key dimensions of regulatory a basis for analyzing how different policy regulation is transparent, efficient and regimes, can be useful for benchmark- approaches—and different policy re- implemented in a simple way, it becomes ing. Any benchmarking—for individu- forms—contribute to desired outcomes easier for any aspiring entrepreneurs, als, firms or economies—is necessarily such as competitiveness, growth and regardless of their connections, to oper- partial: it is valid and useful if it helps greater employment and incomes. ate within the rule of law and to benefit sharpen judgment, less so if it substitutes Seven years of Doing Business data from the opportunities and protections for judgment. have enabled a growing body of research that the law provides. Doing Business in Nigeria 2010 pro- on how performance on Doing Busi- In this sense Doing Business values vides 2 approaches on the data it collects: ness indicators—and reforms relevant good rules as a key to social inclusion. It it presents “absolute” indicators for each to those indicators—relate to desired also provides a basis for studying effects state for each of the 4 regulatory topics social and economic outcomes. Some of regulations and their application. For it addresses, and it provides rankings of 405 articles have been published in example, Doing Business 2004 found that states by indicator. Judgment is required peer-reviewed academic journals, and faster contract enforcement was associ- in interpreting these measures for any about 1,143 working papers are avail- ated with perceptions of greater judicial state and in determining a sensible and able through Google Scholar. Among the fairness—suggesting that justice delayed politically feasible path for reform. findings: is justice denied. Reviewing the Doing Business rank- r -PXFSCBSSJFSTUPTUBSUVQBSFBTTPDJ- In the current global crisis policy- ings in isolation may show unexpected ated with a smaller informal sector. 4 DOING BUSINESS IN NIGERIA 2010 r -PXFSDPTUTPGFOUSZFODPVSBHFFOUSF- METHODOLOGY AND DATA DEVELOPMENT OF THE METHODOLOGY preneurship, enhance firm productiv- ity and reduce corruption. Doing Business in Nigeria 2010 covers all The methodology for calculating each r 4JNQMFSTUBSUVQUSBOTMBUFTJOUPHSFBUFS 36 Nigerian states and Abuja, FCT. The indicator is transparent, objective and employment opportunities. data are based on federal and state laws easily replicable. Leading academics col- and regulations as well as administrative laborate in the development of the indi- HOW DO GOVERNMENTS USE DOING requirements. (For a detailed explana- cators, ensuring academic rigor. Seven BUSINESS? tion of the Doing Business in Nigeria 2010 of the background papers underlying A common first reaction is to doubt methodology, see the Data notes). the indicators have been published in the quality and relevance of the Doing leading economic journals. One is at an Business data. Yet the debate typically INFORMATION SOURCES FOR THE DATA advanced stage of publication. proceeds to a deeper discussion explor- Most of the indicators are based on laws Doing Business uses a simple averag- ing the relevance of the data to the and regulations. In addition, most of the ing approach for weighting subindica- economy and areas where reform might cost indicators are backed by official fee tors and calculating rankings. Other ap- make sense. schedules. Doing Business respondents proaches were explored, including using Most reformers start out by seeking both fill out written surveys and provide principal components and unobserved examples, and Doing Business helps in references to the relevant laws, regu- components. The principal components this. For example, Saudi Arabia used the lations and fee schedules, aiding data and unobserved components approaches company law of France as a model for re- checking and quality assurance. turn out to yield results nearly identical vising its own. Many countries in Africa For some indicators part of the cost to those of simple averaging. The tests look to Mauritius—the region’s stron- component (where fee schedules are lack- show that each set of indicators provides gest performer on Doing Business indica- ing) and the time component are based new information. The simple averag- tors— as a source of good practices for on actual practice rather than the law on ing approach is therefore robust to such reform. In the words of Luis Guillermo the books. This introduces a degree of tests. Plata, the Minister of Commerce, Indus- subjectivity. The Doing Business approach try and Tourism of Colombia, has therefore been to work with legal IMPROVEMENTS TO THE practitioners or professionals who regu- METHODOLOGY AND DATA It’s not like baking a cake where you follow REVISIONS larly undertake the transactions involved. the recipe. No. We are all different. But we Following the standard methodological The methodology has undergone contin- can take certain things, certain key les- approach for time and motion studies, ual improvement over the years. Changes sons, and apply those lessons and see how they work in our environment. Doing Business breaks down each process have been made mainly in response to or transaction, such as starting and legally country suggestions. In accordance with Over the past 7 years there has been operating a business, into separate steps the Doing Business methodology, these much activity by governments in re- to ensure a better estimate of time. The changes have been incorporated into the forming the regulatory environment for time estimate for each step is given by Doing Business in Nigeria 2010. domestic businesses. Most reforms relat- practitioners with significant and routine For starting a business, for example, ing to Doing Business topics were nested experience in the transaction. the minimum capital requirement can be in broader programs of reform aimed at The Doing Business approach to an obstacle for potential entrepreneurs. enhancing economic competitiveness. In data collection contrasts with that of Initially, Doing Business measured the structuring their reform programs, gov- enterprise or firm surveys, which capture required minimum capital regardless of ernments use multiple data sources and often one-time perceptions and experi- whether it had to be paid up front or indicators. And reformers respond to ences of businesses. A corporate lawyer not. In many economies only part of the many stakeholders and interest groups, registering 100–150 businesses a year minimum capital has to be paid up front. all of whom bring important issues and will be more familiar with the process To reflect the actual potential barrier to concerns into the reform debate. than an entrepreneur, who will register entry, the paid-in minimum capital has World Bank support to these reform a business only once or maybe twice. A been used since 2004. processes is designed to encourage criti- bankruptcy judge deciding dozens of All changes in methodology are ex- cal use of the data, sharpening judgment cases a year will have more insight into plained in the Data notes section of this and avoiding a narrow focus on improv- bankruptcy than a company that may report as well as on the Doing Business ing Doing Business rankings. undergo the process. website. In addition, data time series ABOUT DOING BUSINESS AND DOING BUSINESS IN NIGERIA 5 for each indicator and state are available on the website. The website also makes available all original data sets used for background papers. Information on data corrections is provided in the Data notes and on the website. A transparent complaint pro- cedure allows anyone to challenge the data. If errors are confirmed after a veri- fication process, they are expeditiously corrected. 7 Overview across states. Doing Business in Nigeria there are exceptions. For example, Akwa 2008 was the first report to go beyond Ibom ranks better than its regional neigh- Lagos, to capture these differences in bors due to its above average performance 10 other Nigerian states and the capi- on starting a business and registering tal on 4 Doing Business topics: starting property. In Uyo, Akwa Ibom’s capital, the a business, dealing with construction cost of legal representation to handle com- Nigeria is Africa’s giant. It is the conti- permits, registering property, and en- pany incorporation and property transfer nent’s most populous country, second- forcing contracts. This report updates is also cheaper than in other states from largest economy, and an emerging leader the information presented in 2008 and the South South region. of African diplomacy. By virtue of its tracks the progress in implementation Large southern business centers— size alone, a prosperous Nigeria would of reforms. It also expands the analysis such as Lagos, Port Harcourt, and Iba- generate social and economic gains for to all 36 Nigerian states and the capital dan—deal with a higher volume of busi- the whole region. But the challenges city, to provide a comprehensive map of ness services, which can lead to delays facing the country are formidable and the ease of doing business in the country. and more expensive professional services. success is not guaranteed. Despite its oil The results are presented here (table On the other hand, these cities should wealth and sustained economic growth 1.1). Overall, it is easiest to do business also benefit from economies of scale and during the last decade, more than half in Jigawa, Gombe, and Borno and most have more resources at their disposal to of its population still lives in poverty.1 difficult in Imo and Ogun. invest in administrative modernization Given the low employment capacity in Two observations stand out. First, than their smaller neighbors. Behind the the oil sector, economic diversification this year’s top performers are states with aggregate ranking, there is a rich varia- is important for sustainable growth, job competitive regulatory frameworks that tion on a topic-by-topic basis. No single creation, and poverty reduction. Nigeria’s were not measured in Doing Business state does well on all four topics, even private sector is a tribute to the resilience in Nigeria 2008. Others, like Kano and when compared with peers (figure 1.1). of a vibrant enterprise culture struggling Bauchi, maintain their position in the top For example, Ekiti performs well on the to take root. For years Nigerian firms 10. Second, in aggregate, northern states ease of dealing with construction per- have faced a tough business environ- generally perform better.2 Nevertheless, mits, but lags behind on the three other ment and yet resourceful entrepreneurs TABLE 1.1 continue to find ways of coping. Efficient, Where is it easier to do business in Nigeria—and where not? accessible, and simple regulations and 1 Jigawa (easiest) 11 Taraba 21 Edo 31 Ebonyi clear property rights could unleash the 2 Gombe 12 Sokoto* 22 Kaduna* 32 Abia* natural entrepreneurship of small and 3 Borno 13 Benue 23 Osun 33 Cross River* medium-size firms even further. 4 Kebbi 14 Kwara 24 Ondo 34 Ekiti Doing Business studies business reg- 5 Kogi 15 Plateau 25 Lagos* 35 Anambra* ulations from the perspective of a small 6 Yobe 16 Niger 26 Oyo 36 Imo to medium-size domestic firm. Lagos 7 Katsina 17 Abuja, FCT* 27 Rivers 37 Ogun* represents the country in the annual 8 Kano* 18 Nasarawa 28 Bayelsa Doing Business report, which compares 9 Zamfara 19 Adamawa 29 Delta regulatory practices in 183 economies. Yet, within Nigeria, entrepreneurs face 10 Bauchi* 20 Akwa Ibom 30 Enugu* *State included in Doing Business in Nigeria 2008 report. different local regulations and practices Source: Doing Business database. 8 DOING BUSINESS IN NIGERIA 2010 FIGURE 1.1 Comparing the Doing Business rankings of states with similar population and economic activity States with low economic activity States with medium economic activity States with high economic activity Starting Starting Starting a busines a busines a busines TOP RANK TOP RANK TOP RANK Akwa Ibom Lagos Plateau Kebbi Dealing with Dealing with Dealing with construction construction construction permits Abia permits permits Enugu Ekiti Bauchi Kaduna TOP TOP TOP TOP TOP Rivers TOP RANK RANK RANK RANK RANK RANK Enforcing Enforcing Enforcing contracts contracts Cross River contracts Kano TOP RANK TOP RANK TOP RANK Registering Registering Registering property property property Source: Doing Business database. WHAT GETS MEASURED GETS topics when compared with states with DONE and employers are no longer required to a similar population size and economic register with the Nigeria Social Insurance activity,3 such as Akwa Ibom, Enugu, or Despite the hardship imposed by the Trust Fund.5 In addition, Nigeria intro- Kebbi. And while Enugu does not do well 2009 economic crisis on businesses glob- duced electronic procedures at the com- on contract enforcement, the other three ally, this was a record year for regula- pany registry, such as online verification states can learn from Enugu how to make tory reforms. Doing Business recorded of the company name, speeding start-up property registration easier. 287 reforms in 131 of the 183 econo- time by 9 days.6 Stamp duty fees were re- While Bauchi is the best overall mies measured between June 2008 and duced from 1.5% to 0.75% of the nominal performer among medium-size states, it May 2009—20% more than the previ- share capital. A new building code was should look to Plateau for good practices ous year. In Sub-Saharan Africa, 29 of introduced in August 2006, which made when starting a business. Cross River 46 economies reformed in 2008/2009, significant improvements to building ranks lowest among its peers on starting implementing 67 reforms. As in previ- safety.7 Nigeria embarked on major trade a business and enforcing a contract, but ous years, nearly half the reforms in the facilitation reforms, including: introduc- Plateau and Abia can learn from Cross region focused on making it easier to ing computerization to speed up the in- River how to make dealing with construc- start a business and trade across borders. spection of goods, implementing a post tion permits more efficient. Among large And for the first time, a Sub-Saharan Af- clearance audit system to eliminate delays states, Kano’s overall performance is bet- rican economy, Rwanda, led the world in and congestion in ports, concessioning ter than Lagos, Rivers, and Kaduna. More- Doing Business reforms (figure 1.2). container terminals to private operators, over, Kano outperforms smaller states on Nigeria’s 2020 strategy targets eco- and establishing Inland Container Ter- dealing with construction permits and nomic growth, through structural and minals. Nigeria reformed getting credit registering property. But when it comes to institutional reforms, as a critical devel- by adopting regulations which paved the enforcing a contract or starting a business, opment initiative. The strategy includes way for the creation of a private credit bu- Kano could learn from Kaduna or Lagos. an ambitious goal of taking the country reau.8 Despite these efforts, Nigeria’s over- The conclusion is that all states can learn into the ranks of the world’s 20 largest all ranking on the ease of doing business from the local regulations and practices economies by the year 2020.4 did not improve, because other countries of their peers. Also, national level agen- Between 2005 and 2009, Nigeria in- have been reforming more vigorously. In cies can compare the performances of troduced 9 major regulatory reforms to the most recent report, Doing Business their local branches in different states, make it easier for firms to start-up and 2010: Reforming through Difficult Times, implementing the experiences of the most operate, as measured by Doing Business Nigeria, represented by Lagos, ranks 125 efficient ones in less successful locations. (table 1.2). With the passing of the Pen- of 183 economies globally on the overall sion Reform Act No.2 of 2004, companies ease of doing business. OVER VIE W 9 FIGURE 1.2 2008 to 18 days now. Abuja’s Develop- Consistent reformers continued reform efforts in 2008/09 Improvement in the ranking on the ease of doing business, DB2009–DB2010 ment Control Department imposes no 1 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 183 time limits, but organizes weekly ap- proval committee meetings to review Georgia Colombia applications. If approval is granted, the 16 TO 11 49 TO 37 2 REFORMS 8 REFORMS permit is issued in one month, faster Mauritius Rwanda than in 2008, when it took 60 days. Some 24 TO 17 143 TO 67 6 REFORMS 7 REFORMS states have taken steps to make informa- Macedonia, FYR Egypt, Arab Rep. tion more easily available to the public. 69 TO 32 116 TO 106 7 REFORMS 4 REFORMS Abeokuta’s Bureau of Urban and Physical Planning organizes a weekly television AVERAGE RANKING 30 71 83 95 118 139 program, Town Planning Half an Hour, ON THE EASE OF OECD EASTERN EAST 92 LATIN SOUTH SUB- DOING BUSINESS, HIGH EUROPE ASIA & MIDDLE AMERICA & EAST & CARIBBEAN ASIA SAHARAN on the Ogun state Gateway television DB2010 INCOME & CENTRAL PACIFIC AFRICA ASIA NORTH AFRICA channel every Thursday to address urban Source: Doing Business database. development issues and complaints. In Lagos, several reforms are currently NIGERIAN STATES ARE obtaining a building permit has halved being implemented. In October 2009, the REFORMING the time to 14 days. Delegating the gov- governor of Lagos issued an executive ernor’s power to grant consent on prop- order that delegates the power to grant The federal government is not alone erty transfers to both the Commissioner construction permits to lower levels of in introducing regulatory reforms in and the Permanent Secretary for Lands the administration, depending on the Nigeria. States have been actively imple- has resulted in substantial reductions in complexity of the project. The executive menting reforms over the past two years. time. The process can now be completed order also specifies that building regula- Since the publication of Doing Business in 2 weeks, faster than in most states. tions contained in the Lagos Building in Nigeria 2008, eight of the ten states Efforts have been made to broaden ac- Permit Approval Handbook should be and the capital measured for the second cess to justice and speed up proceedings made available to the public for free. time reformed in at least one of the by setting up new Magistrates Courts. Lagos’ District Office now requires its four Doing Business indicators (table The new courts and an increase in the field officers to carry a camera when 1.3). In total, 14 positive reforms9 were number of magistrates have resulted in a conducting their first site inspection. The recorded, of which 11 focused on con- decrease in the time needed to enforce a pictures—proving that the plot is in fact struction permits and property registra- contract by three months, from 810 days empty—are attached to the application, tion. Most reforms adopted by the states recorded in the last report. with no need to conduct any further pre- were administrative and often not costly In dealing with construction per- construction inspections. to implement. One state stands out: mits, five of the eleven states surveyed Six states reformed property registra- Kano introduced reforms in three areas in the last report reformed. Enugu has tion. One of the reasons why transferring becoming the top reformer since the enforced statutory time limits, result- a property title in Nigeria is cumbersome publication of Doing Business in Nigeria ing in a reduction in the time to obtain is because entrepreneurs have to pay mul- 2008. Enforcing statutory time limits for a construction permit from 67 days in tiple fees at commercial banks and wait TABLE 1.2 Reforms in Nigeria* 2005–2009 Doing Dealing with Trading Business Starting a construction Employing Registering Getting Protecting Paying across Enforcing Closing a report business permits workers property credit investors taxes borders contracts business DB 2006   DB 2007    DB 2008   DB 2009  DB 2010  * Represented by Lagos Source: Doing Business database. 10 DOING BUSINESS IN NIGERIA 2010 TABLE 1.3 The average cost of starting a business is Eight of the eleven states measured since 2008 implemented reforms in at least one area below the Sub-Saharan Africa average of Dealing with Registering Enforcing State construction permits property contracts 99.7% and, unlike most countries on the continent, Nigeria abolished the min- Kano*    Anambra imum capital requirement. In Abuja,   Ogun   FCT, the top-ranked city for starting a Enugu   business, it takes 5 procedures, 22 days, Abuja, FCT    and 58.5% of income per capita to start a Kaduna business. By contrast, in Enugu, it costs  Sokoto  almost twice as much. In Bayelsa, the Abia  most difficult state in which to start a *Top reformer. A top reformer is a state that implemented reforms since Doing Business in Nigeria 2008 that made it easier to do business in business, it takes almost a month longer two or more of the Doing Business indicators, and also achieved the largest increase in the aggregate ranking from the previous report. to complete the same incorporation pro-  indicates a negative reform Note: This table records reforms that occurred between June 2008 and January 2010. cess as it does in Abuja, FCT. Source: Doing Business database. In comparison with countries from the Economic Community of West Afri- for the respective agency to receive pay- doubled the number of account officers can States (ECOWAS), Nigeria requires ment confirmation. Ogun state addressed from 2 to 4 in an effort to speed up the rec- almost the same number of procedures this problem by introducing a system that onciliation of payments for property fees. than the ECOWAS average but five more allows fee payments using an ATM card Ongoing reforms in Lagos also include than Burkina Faso and Senegal. The av- at a “point of payment” terminal located the delegation of governor consent for erage time needed to start a business is within the Ministry of Lands. The total property transfers to 4 more commission- below the ECOWAS average (39 days), but time needed to register property in Ogun ers, with a mandatory consent deadline behind twelve ECOWAS countries and just has decreased by almost two weeks, com- of 48 hours. ahead of Côte d’Ivoire, Guinea, Togo, and pared with 114 days two years ago. Abia In the area of contract enforcement, Guinea-Bissau. When it comes to cost, introduced e-payment in 2009 and now there is a dynamic trend of moderniz- Nigeria’s national average is cheaper than all fees are paid at a commercial bank and ing and updating civil procedure rules in the ECOWAS average (113.7%), but more transferred electronically to the account many states. The momentum was initiated expensive than in Ghana and Liberia. of each agency, which keeps corruption at by Lagos, where new High Court Civil bay. In Sokoto, the Nigerian Bar Associa- Procedure Rules were adopted in 2004. In DEALING WITH CONSTRUCTION tion and other stakeholders put pressure 2006, Abuja, FCT, was among the first to PERMITS to speed up the process of granting con- follow suit. As a result, the time to enforce A construction company based in Lagos sent on property transfers. The governor a contract in the capital was reduced from spends 350 days on 18 procedures to agreed and has since ensured that consent 432 to 381 days. Since then, many other obtain all building approvals and util- is granted within 60 days, rather than 75 states have remodeled their rules on those ity connections, at a cost of 580%10 of days, as previously. Another reform is of Lagos and Abuja, FCT. Some states, like income per capita. As reported in Doing the introduction of the Geographic Infor- Kaduna and Nasarawa, have been faster to Business in Nigeria 2008, building a ware- mation System (GIS). Following Abuja’s act than others. Most recently, in Decem- house is faster and cheaper in the North example, and more recently Lagos, Kano ber 2009, Ondo adopted new High Court than in the South. It takes on average 74 and Kwara will implement GIS, which rules. Others are setting up committees to days and 514% of income per capita to captures and stores land information in introduce the new rules. deal with construction permits in the 19 a digital format. This reform speeds the northern states and the capital surveyed, process of searching the property title COMPARING BUSINESS against 114 days and 573% of income per for encumbrances. It also increases title REGULATIONS ACROSS NIGERIA capita in the 17 southern states. There security, eliminating the need for submit- are also large variations in the number ting additional documents to prove the STARTING A BUSINESS of procedures required across Nigerian title origin. Anambra lowered the search Across all 36 states and Abuja, FCT, start- states. To obtain all construction-related fee for property titles fivefold from NGN ing a limited liability company requires permits and utility connections, a con- 5,000 (US$ 37) to NGN 1,000 (US$ 7). on average 9 procedures and 36 days, struction company must complete only In 2009, the Lands Registry in Lagos has and costs 77.7% of income per capita. 10 procedures in Jigawa, compared with OVER VIE W 11 TABLE 1.4 Best practices in Nigeria compared internationally Nigeria in DB 2010 Nigeria best practice (represented by Lagos) Global rank (183 economies) Global rank How Nigerian (183 Best-performing states would Indicator Performance economies) state within Nigeria Performance compare globally Days to deal with construction permits 350 days 167 Jigawa 47 days 6 Number of procedures to deal with 18 procedures 101 Jigawa 10 procedures 9 construction permits Days to enforce a contract 457 days 64 Jigawa 261 days 10 Number of procedures to start a business 8 procedures 94 Abuja, FCT 5 procedures 25 Days to register property 82 days 140 Borno 14 days 26 580.3% of income 94.6% of income per Cost to deal with construction permits 143 Kano 67 per capita1 capita 32% of the claim 26% of the claim Cost to enforce a contract 120 Katsina 86 value value Days to start a business 31 days 117 Abuja, FCT 22 days 92 20.9% of the 5.2% of the property Cost to register property 178 Yobe 104 property value value Number of procedures to register property 13 procedures 177 Borno, Gombe, Kwara 8 procedures 136 77.0% of income 58.5% of income per Cost to start a business 153 Abuja, FCT 148 per capita2 capita 1. At the time of publication of Doing Business 2010: Reforming through Difficult Times the cost was 573.4% of income per capita. 2. At the time of publication of Doing Business 2010: Reforming through Difficult Times the cost was 76.7% of income per capita. Source: Doing Business database. 23 procedures in Ebonyi. This difference the 36 states and the capital in detail, state, it takes more than twice the time is explained in part by the fact that in wide differences emerge. State govern- (835 days) and money (52.8%) to get the Jigawa there are only two inspections ment requirements and practices and the same result. On a global scale, Nigerian during construction, while in Ebonyi, differing performances of local branches courts prove efficient when filing a claim. a site analysis report is required before of federal agencies drive these variations. It takes an average of 23 days, but in construction starts, followed by 12 in- For example, registering property is easi- Akwa Ibom, Delta, Ekiti, and Ondo, the spections during the construction. est in Gombe, where it takes 8 procedures, process can be as fast as 7 days. The trial 16 days, and 6.6% of the property value and judgment stage is where most delays REGISTERING PROPERTY to transfer a title. By contrast, in Rivers occur. This usually takes at least one year, On average, an entrepreneur would have state, it takes 13 procedures, 201 days, and with the longest delays in Niger state— to go through 12 procedures, wait 82 days, 23.2% of the property value to complete more than three years. and pay 16% of the property value to have the same process. it registered in the Lands Registry. The LEARNING FROM EACH OTHER: average time and cost needed to transfer ENFORCING CONTRACTS ADOPTING GOOD LOCAL a property title make Nigeria one of the It takes on average 511 days and costs PRACTICES most difficult places to register property 36.3% of the claim value to resolve a worldwide. Nigeria only has two fewer commercial dispute through the courts. Benchmarking exercises like Doing Busi- requirements than Brazil—the country This is faster and cheaper than the Sub- ness inspire governments to reform. They with the highest number of procedures Saharan Africa regional average of 644 uncover potential challenges and iden- to register a property globally—and one days and 49.3% of the claim value. How- tify where policy makers can look for less than Uganda—that with the highest ever, Nigeria lags behind Ghana, where it good practices. Comparisons between number of procedures in Sub-Saharan takes 487 days and costs 23% of the claim cities within the same country are even Africa. At 16% of property value on aver- value. There are wide differences across stronger drivers of reform, because local age, the cost is almost 70% higher than the Nigeria. In Yobe, it takes 1 year and costs governments have a hard time explain- Sub-Saharan average. Yet, when analyzing 26.1% of the claim value. In Cross River ing why doing business in their city or 12 DOING BUSINESS IN NIGERIA 2010 state may be harder than in neighboring days, is similar to Finland. Finally, resolv- locations. The good news is that sharing ing a commercial dispute in 261 days, like a national legal framework facilitates the in Jigawa, would put Nigeria among the 1. United Nations. 2009. Human Develop- ment Report. New York. implementation of existing good prac- 10 fastest countries in the world, similar 2. Nigeria is divided into six geopolitical tices within a country. National govern- to Rwanda and faster than the United regions: North West, North East, North ments can also use Doing Business data Kingdom. Central, South West, South East, and to monitor how local branches of their Payoffs from reform can be large. South South. agencies implement national regulations. Reforms expand the reach of regulation 3. The classification is based on city popula- tion and on state Gross Domestic Prod- In a world where locations compete by bringing businesses and employees uct (GDP). Population statistics are based against each other to attract investment, into the formal sector. Take Mexico, for on the 2006 Census published in the subnational Doing Business data allow example, where reforms cut the time Official Gazette of Lagos on January 19, 2007. GDP statistics were obtained from local governments to review the condi- to start a business from 58 to 13 days. the Canback Global Income Distribution tions facing entrepreneurs in their cities A recent study reports the payoffs: the Database, Canback Dangel. http://www. from a comparative perspective. Subna- number of registered Mexican busi- cgidd.com. Accessed on August 20, 2008. tional data are now available for almost nesses rose by nearly 6%, employment 4. Nigeria’s Vision 2020: www.nv2020.org. 300 cities in 41 countries. increased by 2.6%, and prices fell by 1% 5. World Bank. 2005. Doing Business 2006: Creating Jobs. Washington, DC. World The example of Colombia is telling. because of the competition from new Bank Group. Doing Business in Colombia 2008 identi- entrants.13 Such results would be im- 6. World Bank. 2007. Doing Business 2008. fied good practices in 13 cities, pointed portant for Nigeria, where only 10% of Washington, DC. World Bank Group. out bottlenecks, and provided recommen- the 6-million new entrants to the labor 7. Ibid. dations for reform. Two years later, a new market find jobs.14 The high percentage 8. World Bank. 2009. Doing Business 2010: report tracked progress over time. The re- of youth in Nigeria (more than 50% of all Reforming through Difficult Times. Wash- sults were impressive. All 13 cities showed Nigerians are under 24) is an indicator ington, DC. World Bank Group. improvements in at least one of the areas that the country will struggle to create 9. There were also 4 negative reforms in Enugu, Abuja, FCT, Abia, and Bauchi –all measured, thanks to local-level reforms.11 the jobs needed to absorb new entrants of them due to fee increases for property Similarly, Doing Business in India 2009 into the formal labor market.15 Reforms transfers. showed that 9 out of 10 Indian states that strengthen property rights would 10. At the time of publication of Doing Busi- benchmarked for the second time had also benefit the Nigerian economy, where ness 2010: Reforming through Difficult Times the cost was 573.4% of income per introduced reforms. As a result of these secure property titles exist for just 3% capita. reforms, the average time to start-up a of the country’s land area,16 preventing 11. World Bank. 2010. Doing Business in company dropped from 45 to 35 days and businesses and the poor from using it as Colombia 2010. Washington, DC. World the time to obtain a building permit was collateral to raise funds. Bank Group. reduced by 25 days, on average.12 The implementation of and support 12. World Bank. 2009. Doing Business in India 2009. Washington, DC. World Bank States in Nigeria can learn from each for reforms at all levels of government Group. other and adopt regulations and practices must continue. Consistent reformers 13. Bruhn, Miriam. 2008. “License to Sell: that are working elsewhere in the country. globally follow a long-term agenda and The Effect of Business Registration If a hypothetical state called “Nigeriana” continually push forward. The top-ranked Reform on Entrepreneurial Activity in Mexico.” Policy Research Working Paper adopted all the best practices identified economy on the ease of doing business, 4538. Washington, DC. World Bank. The in this report, it would rank 72nd out of Singapore, introduces reforms every results were obtained after controlling for 183 countries globally—53 places ahead year. Reforms are comprehensive, thus GDP per capita, number of economic es- tablishments per capita, fixed assets per of Nigeria’s position in Doing Business increasing the chances of success and capita, and investments per capita in the 2010 (table 1.4). Reducing start-up re- impact. Moreover, consistent reformers benchmarked municipalities. quirements to the 5 procedures and 22 are inclusive, involving all relevant actors 14. Kwakwa, Victoria, Adeola Adenikinju, days needed in Abuja, FCT, would make and institutionalizing the reform effort. Peter Mousley, and Mavis Owusu- Nigeria as speedy as Japan. Fast approval They also stay focused by setting specific Gyamfi. 2008. Binding Constraints to Growth in Nigeria. New York: Palgrave of construction permits, like in Jigawa, goals and regularly monitoring progress. Macmillan. would mean that dealing with construc- The federal and state governments in 15. Economist Intelligence Unit, Nigeria tion permits is three times faster than Nigeria can follow similar strategies to Country Profile 2009. the OECD average (157 days). The time improve their regulatory environment 16. Nigeria: Factbook. CIA. needed to register property in Borno, 14 and enhance the chances for success. 13 Starting a TABLE 2.1 Where is it easy to start a business—and where not? business 1 2 Abuja, FCT (easiest) Kogi 14 15 Kaduna Zamfara 27 28 Anambra Ebonyi 3 Kebbi 16 Edo 29 Rivers 4 Gombe 17 Jigawa 30 Osun 4 Plateau 18 Abia 31 Delta 6 Taraba 19 Kwara 32 Ekiti 7 Akwa Ibom 20 Adamawa 33 Imo 8 Lagos 21 Bauchi 33 Ondo 9 Niger 21 Enugu 35 Cross River 10 Benue 23 Sokoto 36 Ogun 11 Borno 24 Oyo 37 Bayelsa (most difficult) 12 Nasarawa 25 Katsina 13 Yobe 26 Kano Tuoyo has returned to Nigeria after earn- Note: The ease of starting a business is a simple average of the state rankings on the number of procedures, and the associated time and cost required to start a business. See the Data notes for details. ing an MBA from Harvard and is anxious Source: Doing Business database. to set up his own business. His mother has a weaving business that produces Across all 36 states, starting a lim- a business globally have no more than six rugs, baskets, and various other crafts. ited liability company requires on aver- procedures each and a cost of less than Tuoyo’s mother could not afford the high age 9 procedures and 36 days and costs 5% of income per capita (figure 2.2). cost and hassle of business incorporation 77.7% of income per capita. The cost of There are marked differences across in Delta state and has operated for over starting a business in Nigeria is less than Nigeria in the time, cost, and number of twelve years from the family compound. the regional average of 99.7% and, unlike procedures required to start a business. Because her business is informal, she can- many countries in Sub-Saharan Africa, These variations stem from different not advertise and must rely on verbal Nigeria has abolished the minimum cap- performance levels of state branches of referrals from customers. She markets her ital requirement. But starting a business national agencies, such as the Corporate crafts at local fairs and festivals, where her is still a burdensome process, and in the Affairs Commission (CAC) and stamp- stand is always the busiest. Tuoyo plans area of business registration the country duty offices, as well as variations in state to expand his mother’s thriving business lags behind economies such as Mauritius departmental taxes and local licensing and to set up manufacturing outlets in and South Africa. In Mauritius, the top- fees for business premises in each state. the neighboring states to tap into new ranked economy in Sub-Saharan Africa In Abuja, FCT, the top-ranked city for markets. For this to happen the business on business start-up, it takes only six starting a business in the country, it takes must be properly set up in each state. In days and costs 4.1% of income per capita. only five procedures, 22 days, and 58.5% Delta state, where Tuoyo’s mother lives, it In South Africa it is 13 times cheaper and of income per capita to open a business. takes as long as 51 days to complete the two weeks faster to register a company By contrast, in Bayelsa, it takes almost an registration procedures and costs 84.4% than in Nigeria. The more efficient proce- extra month to complete the same incor- of income per capita. dures for business start-up in Mauritius poration process due to the high number In order to increase private-sector and South Africa can be accounted for of procedures required—two more than activity, the incorporation requirements to some extent by automation and the must be easy, fast, and inexpensive. Re- use of information and communication What is measured? search shows that the number of new technologies (ICT), but some other Sub- Doing Business records all procedures that are firms increases and employment grows Saharan Africa countries are champions officially required to start-up and formally when business entry becomes easier. In in business start-up without ICT involve- operate a commercial or industrial small or medium-size limited liability company. These Colombia, after the introduction of one- ment. This is the case of Rwanda, which include obtaining the necessary licenses and stop shops in six cities, new firm registra- has a completely manual and paper- permits and completing all required notifica- tion increased by 5.2%.1 These findings based system, but provides for business tions, verifications, and registrations for the company and its employees with the relevant are confirmed by additional studies in start-up in only two steps and three authorities. See the detailed description of other countries (figure 2.1).2 days. The top ten performers on starting the standard case in the Data notes. 14 DOING BUSINESS IN NIGERIA 2010 FIGURE 2.1 81 official treasury receipts have been pre- More business entry after reform Increase in annual business entry after reform (%) 72 sented. In some states, such as Katsina, cash payments above a certain threshold 52 cannot be accepted at the stamp-duty office.3 As a result, before stamping the incorporation documents, the entrepre- 24 26 neur must first pay the stamp duty at a 22 23 After reform designated bank, adding one more step to the process. The time needed to start a business Finland Guatemala Jordan Madagascar Mauritius Egypt Saudi ranges from 22 days in Abuja, FCT to Arabia 51 days in Delta. Across all states, the Source: Doing Business database. lengthiest procedure is registration with the national average (table 2.1). tax, value-added tax, and Pay-As-You- CAC. In 2008, CAC introduced elec- The number of procedures to start a Earn (PAYE) in one integrated tax office. tronic procedures for company name business varies from five in Abuja, FCT to Moreover, new businesses in Abuja, FCT verification and registration. But the on- 11 in Bayelsa. Five procedures are federal do not have to obtain a business premises line system that would allow registration and uniform across the country. These permit from the municipality. Whereas documents and payment to be processed include the name-availability search, the in the northern parts of the country reg- electronically has not yet been fully im- stamping of incorporation documents, istering a business premise involves one plemented. Documents must still be filed incorporation with CAC, and tax regis- visit to the Ministry of Commerce to sub- physically, and although entrepreneurs tration with the Federal Board of Inland mit the necessary forms and payment, can apply for business registration in Revenue Service (FIRS). The deposition in the South, several steps are necessary. their state of residence, all applications of the CAC Declaration of Compliance For example, in Bayelsa, an entrepreneur are processed at CAC headquarters in form is also a federal requirement. This must visit three different offices to regis- Abuja, FCT, where business registration deposition can be made through a notary ter his business premises (figure 2.3). In certificates are issued for the whole coun- public or a commissioner of oaths in addition to applying for the permit at the try. There is a vast time lag between sub- either a federal or state High Court. All Ministry of Commerce and making the mission of documents to the local CAC other procedures are state requirements. payment at a designated bank, the entre- office and approval from Abuja, FCT. On- Since Abuja, FCT is not a state, there preneur must present a proof of deposit line name checking is now available, but is no separate requirement to register at FIRS, where an official treasury receipt is not working optimally because pro- with state tax authorities. Companies is issued. The Ministry of Commerce posed company names must be verified there are required to register for income issues a business premises permit once through a central database maintained at FIGURE 2.2 CAC headquarters in Abuja, FCT. Due to Best, average and worst practices in starting a business in Nigeria, compared globally unreliable Internet services, the time for 499.5 such verification varies across states. The Range ZIMBABWE in Nigeria name search could take two to three days KENYA ZIMBABWE BAYELSA 11 in most states, and as much as ten days in ZIMBABWE Nigeria OYO 110.2 Rivers. Stamping the incorporation doc- average 9 SSA AVERAGE GHANA SSA AVERAGE uments with FIRS is lengthy, especially 77.7 in states without a stamp-duty office. It DELTA 51 SSA AVERAGE takes four days to stamp the registra- ABUJA 5 MAURITIUS ( ABUJA 58.5 36 KENYA GHANA tion documents in Bauchi and Kaduna, KENYA where FIRS maintains a stamp-duty of- ABUJA 22 GHANA RWANDA ( fice, and ten days in Bayelsa, where there NEW ZEALAND MAURITIUS ( RWANDA ( 0 0 RWANDA ( 0 MAURITIUS ( is no local office. Since Doing Business in NEW ZEALAND NEW ZEALAND Procedures Time Cost Nigeria 2008 was published, additional (days) (% of income per capita) stamp-duty offices have been opened in ( Mauritius is the 2010 top performer in Sub-Saharan Africa (SSA) on the ease of starting a business. some states, bringing the total number Rwanda is the 2010 global top reformer overall. of state stamp-duty offices to 16. For Source: Doing Business database. STARTING A BUSINESS 15 FIGURE 2.3 yers in places like Delta and Bayelsa still Starting a business—faster in Abuja, FCT than in Bayelsa charge the old rate in practice. The busi- Time (days) Bayelsa 11 procedures, 47 days ness premises registration fee set forth in 45 the legislation7 is either a fixed rate speci- Procedure 5 Register the company with fied in an appendix to the Registration the Corporate Affairs Commission of Business Premises Edict or a variable 30 rate based on the business activity, size of Procedure 2 Prepare the requisite incorporation premises, urban or rural location, num- documents and pay the stamp duty Abuja, FCT ber of employees, and type and size of 15 6 procedures, 22 days signage displayed. The Ministry of Com- merce in Taraba and Yobe charges NGN 2,000 (US$ 15) and NGN 5,000 (US$ 0 37.50), respectively, for business premises 1 2 3 4 5 6 7 8 9 10 11 Procedures registration for a medium-size company, Source: Doing Business database. while in Kwara and Delta states, the fees are as high as NGN 40,000 (US$ 300) and the remaining 21 states, entrepreneurs assessed on the nominal share capital. NGN 20,000 (US$ 150). must travel to the nearest state that has a In 2008, the joint Tax Board revised the Since the publication of Doing Busi- stamp duty office. Stamp Duty Act and reduced stamp duty ness in Nigeria 2008, business registration There are significant variations in rates by half from 1.5% to 0.75% of share across Nigeria has improved, with the es- the cost of starting a business across the capital. The stamp duty commission- tablishment of regional branches of CAC 36 states and Abuja, FCT (figure 2.4). ers now receive NGN1.506 for every 200 in all 36 states and the Federal Capital The lowest cost is seen in Abuja, FCT shares. However, this reduction has not Territory. The introduction of standard and Taraba, at 60% of income per capita been properly communicated to the pub- forms for the memorandum and articles or less, while Oyo stands out as the most lic in all states, and incorporation law- of association (MEMART) has simplified costly at 110%. The largest cost com- ponent is the professional fees charged FIGURE 2.4 Time and cost to open a business in selected Nigerian states by intermediaries. The Companies and Time Cost Allied Matters Act 1990 makes it manda- (days) (% of income per capita) tory for an entrepreneur to engage the Abuja, FCT 22 58.5 services of professional intermediaries Taraba 33 60.0 accredited by CAC.4 These professionals Edo 45 60.5 Kebbi 30 61.7 typically handle all the steps involved in Yobe 38 61.9 the registration process with CAC, but 31 63.7 Plateau not the post-incorporation tax and busi- Benue 36 65.0 ness premises registrations. Best-practice Akwa Ibom 34 65.1 economies, such as New Zealand, Canada Gombe 24 66.2 and Singapore do not make such services Kaduna 31 69.5 Borno 34 71.4 mandatory. In Nigeria, lawyers are often Adamawa 44 74.7 used as incorporation agents without Lagos* 31 77.0* having their activity and registration fees Kano 38 77.8 regulated.5 Lawyers fees for incorporation Delta 51 84.4 services are notably lower in states where Bayelsa 47 84.7 Imo 39 85.9 the process of company registration is Nasarawa 29 87.6 fastest and stamp-duty offices are avail- Ogun 40 90.9 able. Professional fees are compounded Ondo 37 90.9 by additional costs for transportation and Ekiti 40 103.7 accommodation for lawyers who have Cross River 47 103.7 Oyo 31 110.2 to travel out of state. Another expensive component is the stamp duty, which is * At the time of publication of Doing Business 2010: Reforming through Difficult Times the cost was 76.7% of income per capita. Source: Doing Business database. 16 DOING BUSINESS IN NIGERIA 2010 the registration process by shortening the duced at the state level have not been MONITOR AND EVALUATE THE PERFORMANCE OF CAC REGIONAL charter documents and preventing errors. staffed with representatives from the rel- OFFICES The Integrated Tax Office for corporate evant agencies and have therefore failed income tax and VAT is functioning well to have a real impact. To be effective, of- At present, the state CAC offices function in all parts of the country. Consultations ficials at one-stop shops should be given as clearing houses. Incorporation papers are ongoing between FIRS and states and decision-making power to act on behalf are filed through them, but the actual local government councils to implement of their respective agencies. Without it, processing of applications is handled in the full provisions of Section 8(q) of the delays will continue, as the documents Abuja, FCT. The time needed to trans- Federal Inland Revenue Service (Estab- travel to agency headquarters and back. mit incorporation documents from each lishment) Act, 2007 for issuance of a It is also important that these one-stop state office to headquarters and to sort unique taxpayer identification number shops be available not only for foreign through piles of incorporation certifi- (TIN), which seeks to standardize the TIN businesses but for local entrepreneurs as cates received from headquarters signifi- across Nigeria. Whereas in most states well. Many African countries have had cantly delays the business registration a separate TIN is issued by both FIRS success consolidating company start-up process. Entrepreneurs demand quick and the State Board of Internal Revenue at a single access point. In Rwanda, all turnarounds across the country and one (SBIR), a few states, such as Niger, are in relevant officials, forms, and payments way to achieve this is to grant state CAC the process of linking their SBIR database were recently consolidated under one offices the autonomy to handle applica- to FIRS in order to issue a single TIN to roof. Togo is another good example, tions and issue certificates. Providing new businesses. The One Stop Investment where the establishment of an opera- the zonal CAC branches with the same Centre (OSIC), created by the Nigerian tional one-stop shop eliminated six pro- discretion, mandate, and functionality as Investment Promotion Commission and cedures for starting a business.9 headquarters will cut down registration located in Abuja, FCT, is now fully op- time and eliminate delays. erational. Similar one-stop shops have WHAT TO REFORM? recently been launched in several states, MAKE THE REQUIREMENT TO USE such as Ogun, Delta, and Cross River, to EXPEDITE REFORMS TO UNIFY THE PROFESSIONAL INTERMEDIARIES FOR REGISTRATION PROCESS AT A SINGLE INCORPORATION OPTIONAL facilitate company start-up. So far, these ACCESS POINT state investment centers, unlike the federal The requirement to use accredited inter- OSIC, have been unsuccessful in bringing The requirement to visit several offices mediaries to handle business registration all federal agencies relevant to starting a when setting up a new business is a is outdated. It adds to the complexity business together in one location. major obstacle that continues to nega- and cost of business registration. Profes- To keep up with the fast pace of tively affect business registration. Uni- sional intermediary services are now business start-up reforms across the re- fying the registration processes would optional under Samoa’s new Companies gion, Nigeria must continue reforming. reduce the time by anywhere from five Act and the Nigerian government can As a member of the Corporate Registers days to two weeks, depending on the implement a similar reform by amend- Forum,8 Nigeria can learn from the expe- state. The procedure for stamping the in- ing its Companies and Allied Matters rience of other federal countries, such as corporation documents with FIRS poses Act. A convenient, fast, and simple al- Canada and Australia, and adopt some of a great burden to business registration ternative would be to fully automate their good practices. Although all states and can easily be resolved. If this pro- the business registration process, so that would benefit from federal reforms, each cedure is primarily aimed at generating entrepreneurs can handle the process on state should also improve state-level revenue for the government, a simpler their own. Best-practice economies in procedures associated with starting a alternative is to have CAC collect stamp- business start-up, such as Canada and business. The reform recommendations duty fees, along with other registration the United Kingdom, currently imple- from Doing Business in Nigeria 2008 still fees, and later transfer them to FIRS. ment online incorporation system. New require attention, as there have been no This is in line with the recommendations business owners no longer have to work significant reforms since. Several federal of Doing Business in Nigeria 2008. Jordan through the red tape of various agencies reforms are still in the pipeline. The and Egypt have transferred tax registra- and they can save money by avoiding ac- digital filing and electronic system for tion to the registrar, thus streamlining countants’ or lawyers’ fees. company registration proposed by CAC and speeding up the process, which now in June 2005 has yet to be implemented. takes only one or two days.10 The one-stop investment centers intro- STARTING A BUSINESS 17 IMPROVE OR REMOVE BUSINESS PREMISES REGISTRATION Nigerian entrepreneurs must pay state 1. Cardenas, Mauricio, and Sandra Rozo. 2007. “La informalidad empresarial y governments a fee for a permit to oper- sus consecuencias: Son los CAE una ate business premises within the state. solucion?” Documento de Trabajo 38. Registration is expensive and creates a Bogotá, Colombia: Fedesarrollo. burdensome administrative bottleneck. 2. World Bank. 2008. Doing Business in Egypt 2008. Washington, DC. World States should consider the purpose be- Bank Group. hind this mandatory post-registration 3. The threshold for cash payment is up to procedure. If it is intended to generate NGN 5,000 (US$ 37.50). revenue, states might consider consoli- 4. Companies and Allied Matters Act, Cap. dating registration with other existing 59, Laws of the Federal Republic of Nige- ria, 1999. revenue streams. Where permit fees are 5. Doing Business in Nigeria 2008 did not affordable and the procedure is fast and take into account these professional simple, new businesses are more likely to charges in the cost calculations for the 11 comply with registration requirements. states measured. In Northern states, such as Kebbi and 6. Equivalent to US$ 0.011. Zamfara, the business premises permit 7. Registration of Business Premises Edict No. 20 of 1973. can be obtained in one day, at a sin- 8. The Corporate Registers Forum is an in- gle-access point within the Ministry of ternational not for profit organization for Commerce, against a small flat fee. By administrators of corporate and securi- contrast, over two-thirds of the states ties registers. http://www.corporateregis- require multiple steps for registration tersforum.org. and have no fee schedule. States might 9. World Bank. 2009. Doing Business 2010: Reforming through Difficult Times. Wash- reform further and eliminate this permit ington, DC. World Bank Group. all together if it serves no particular 10. World Bank. 2009. Doing Business in regulatory function. India 2009. Washington, DC. World Bank Group. 18 Dealing with TABLE 3.1 Where is it easy to deal with construction permits—and where not? construction 1 2 Jigawa (easiest) Sokoto 14 15 Borno Katsina 27 28 Nasarawa Ebonyi permits 3 4 Kano Adamawa 15 17 Rivers Cross River 29 30 Akwa Ibom Abia 5 Kwara 18 Zamfara 31 Anambra 6 Kogi 19 Ondo 32 Imo 7 Bauchi 20 Delta 33 Kaduna 8 Kebbi 21 Taraba 34 Enugu 9 Osun 22 Yobe 35 Abuja, FCT 10 Niger 23 Oyo 35 Lagos 11 Benue 24 Plateau 37 Ogun (most difficult) 12 Ekiti 25 Bayelsa 13 Gombe 26 Edo Note: The ease of dealing with construction permits is a simple average of the state rankings on the number of procedures, and the associ- ated time and cost required to build a warehouse. See the Data notes for details. Riding a wave of oil-driven prosperity, Source: Doing Business database. Nigeria has experienced rapid urbaniza- tion in the last thirty years. The country’s oper. “It is such a hassle to obtain all state level through the amendment of the urbanites now account for 48.2% of the certificates, receive all inspections, pay a local Urban and Regional Planning Laws. population, compared to 23.4% in 1975.1 fee for this and a bribe for that, that only Some states, such as Lagos; Abuja, FCT; Cities have struggled to absorb this large big construction companies bother to Abia; and Ebonyi have already enforced rural exodus and the resultant hous- comply with the letter of the law.” Deal- several provisions of the code, such as ing shortages, traffic congestion, and en- ing with construction permits is indeed requiring new inspections and certifi- vironmental degradation. In addition, cumbersome and costly in Nigeria. A cates of completion. Others have not. many of the buildings erected to accom- construction company based in Lagos These discrepancies, combined with the modate newcomers have used substan- spends 350 days on 18 procedures to persistence of old local building bylaws dard construction materials and fallen obtain all building approvals and utility and differences in local practices, create short of construction regulations.2 As a connections, at a cost of 580% of income wide local variations in the requirements result, building-related incidents have per capita.5 Lagos ranks 162nd of 183 to be met when dealing with construc- multiplied. According to the Nigerian economies, behind Rwanda (90th) and tion permits. Institute of Building, 84 structures have Kenya (34th). In Hong Kong, China, collapsed in the last 20 years in Nigeria, the best performer for this indicator, a What is measured? claiming more than 400 lives.3 construction company spends only 67 Doing Business looks at construction permits A good building code is an essential days and 18.7% of income per capita on as an example of the licensing regulations tool to ensure sustainable urban devel- 7 procedures (figure 3.1). that businesses face. This indicator measures the procedures, time, and cost needed to get opment. But striking the right balance To streamline the process and im- the required permits to build a commercial between too little or too much regulation prove compliance, the Nigerian govern- warehouse, hook it up to basic utilities, and is challenging. A well-balanced build- ment drafted a new National Building formally register it. The recorded procedures include submitting project documents (build- ing code must formulate and enforce Code in 2006, which sets out minimum ing plans, site maps, etc.); obtaining clear- strict construction standards to protect construction standards. The code estab- ances and permits; passing inspections; and public safety, while remaining efficient lishes a strict schedule of inspections to obtaining connections from electricity, water, and affordable. Sixty to eighty percent be conducted at specific stages during sewerage, and telephone providers. The time and cost needed to complete each procedure of construction projects in developing construction (setting out, foundation, under normal circumstances are calculated. economies are undertaken without a floor level, and so on), and requires every All official fees are included. The case study permit because the approval process is project to obtain a certificate of comple- assumes that the warehouse will be used for storage of nonhazardous goods and is too complex or oversight too lax.4 tion after construction. located in the peri-urban area of the bench- “When you want to build, you sim- Although ratified by the Federal marked location. See the detailed description ply go ahead and do it,” confesses Ola- Executive Council, the Building Code has of the standard case in the Data notes. sunkamni, a Nigerian real estate devel- yet to be adopted and implemented at the DEALING WITH CONSTRUC TION PERMITS 19 FIGURE 3.1 spections during construction in Ebonyi Best, average and worst practices in dealing with construction permits in Nigeria, compared globally and 7 in Lagos, but none in Adamawa INDIA and Gombe. Moreover, only 16 states LAGOS 350 CHINA require a certificate of completion. Al- CHINA SSA AVERAGE Range though the new Building Code lays out in Nigeria SSA AVERAGE ENUGU a precise set of inspections and requires EBONYI 23 1,509.1 RWANDA a certificate of completion, enforcement depends on staff capacity. Where there SOUTH AFRICA Nigeria SOUTH AFRICA are no qualified inspectors, the author- average 15 RWANDA KENYA ity relies on the supervising architect to UNITED KINGDOM 92 UNITED KINGDOM CHINA KENYA 541.1 ensure that the construction respects the JIGAWA 10 HONG KONG, JIGAWA 47 KANO KENYA plan’s specifications, and only conducts a CHINA 94.6 few ad hoc visits to ensure that a building 0 0 0 SOUTH AFRICA Procedures Time Cost permit has been obtained. (days) (% of income per capita) Local variations in the time needed Note: SSA denotes the Sub-Saharan Africa region. Source: Doing Business database. to deal with construction permits are substantial. Completing all procedures can be as fast as 47 days in Jigawa and 52 As reported in Doing Business in (table 3.1). Jigawa, the best-performing days in Kwara or as long as 148 days in Nigeria 2008, building a warehouse is state for this indicator, would rank 30th Rivers or 350 days in Lagos. These differ- faster and cheaper in the north than in out of 183 economies, ahead of Saudi ences are driven by two main bottlenecks: the south. It takes on average 74 days and Arabia (33rd) and Switzerland (36th). obtaining a building permit and getting a 514% of income per capita to deal with There are large variations in the permanent electricity connection. construction permits in the 19 northern number of requirements across states. Across Nigeria, obtaining a building states and the capital surveyed, against To obtain all construction-related per- permit represents, on average, 27.4% of 114 days and 573% of income per capita mits and utility connections, a construc- the total time spent on the construction- in the 17 southern states. Local varia- tion company must complete only 10 permit process (figure 3.2). Behind this tions, however, go beyond the north/ procedures in Jigawa compared to 23 number lie different local realities. The south divide, and can be observed at the procedures in Ebonyi. All states require a time it takes for the authority in charge state level. It is easier for construction building permit, but the procedures that to issue the permit varies from 4 days in companies to obtain all construction- precede and follow obtaining this docu- Yobe and 5 days in Adamawa to 90 days related permits and utility connections ment differ. in Cross River. in Jigawa, Sokoto, Kano, and Adamawa In 32 of the states surveyed, con- The efficiency of the issuing author- than in Abuja, FCT; Lagos and Ogun struction companies must obtain one or ity depends on two factors: the workload more certificates before applying for a of the office and the enforcement, or not, FIGURE 3.2 building permit. These certificates might of a statutory time limit. Administrations Obtaining a building permit and electricity include an environmental impact assess- are more efficient when they are suffi- connection is time consuming ment, a land use clearance, which verifies ciently staffed to handle all applications Share of total time to deal with construction permits , Nigeria average (%) that the project is consistent with the and entrusted with a clearly defined task. local master plan, a site analysis report, Otherwise, office clerks find themselves Other* a fire safety report, and other types of overworked, applications pile up, back- 14.3 Building Pre-permit permit authorizations. In the remaining five logs appear, and delays ensue. City size 27.4 states (Jigawa, Kwara, Kano, Benue, and may be a factor. The four most efficient 12.5 Sokoto), no such preliminary approvals permit-issuing authorities are located in are needed for simple structures with cities with populations below the 36-state 11.7 low environmental impact, such as a average.6 But size is only one side of the Water 34.2 connection warehouse storing books. coin. Administrations that focus solely Electricity connection Procedures that follow the building on reviewing applications and issuing permit also differ from state to state. building permits are more efficient than *Includes inspections and certificate of completion procedures. Development authorities conduct 12 in- those burdened with additional activi- Source: Doing Business database. 20 DOING BUSINESS IN NIGERIA 2010 TABLE 3.2 work,” local architects say. As a result, Five of the 11 states measured in 2008 reformed dealing with construction permits Enugu’s Town Planning Authority now Statutory time Improved limit / silent is Approval transparency of issues the building approval in 18 days, consent committee information compared to 67 days in 2008. Abuja’s De- Kano  velopment Control Department imposes Anambra  no limits, but organizes weekly approval Enugu  committee meetings to review applica- Ogun   tions. If approval is granted, the permit is Abuja, FCT issued in one month, faster than in 2008,  when it took 60 days (figure 3.3). Note: This table records reforms that occurred between June 2008 and January 2010. Source: Doing Business database. The single biggest bottleneck is the electricity connection, which represents ties. A good example is Ondo, where the Doing Business in Nigeria 2008 have since 34.2% of the total time (figure 3.2). Get- Ministry of Physical Planning and Urban developed and enforced statutory time ting a warehouse wired to the power grid Development recently created two new limits, resulting in substantial reductions can take as little as 14 days in Bayelsa departments and narrowed the tasks of in time (table 3.2). In Ogun, the Urban and Yobe, and as long as 9 months in the existing ones. The Development Per- and Physical Planning Board has intro- Lagos. Why such differences? The Power mit Department now focuses on issuing duced a two-week statutory time limit Holding Company of Nigeria (PHCN), permits, while the other departments7 and asked its officers to produce weekly the country’s main power provider, has take care of the physical planning, master activity reports in order to assess their recently introduced a new three-phase planning, monitoring, enforcement, and performance. Combined with a fast track prepaid meter to replace the current so on. As a result, a construction com- for simple applications, such as for resi- credit meter. In order to avoid abuses pany in Ondo can obtain a construction dences and small buildings, this reform and non-payment, the prepaid meter permit in only 14 days. has halved the time needed to obtain a requires the purchase of a card of fixed States that have an enforced statu- building permit in Ogun, from 28 days in value prior to consumption. Once empty, tory time limit for processing applica- 2008 to 14 days in 2010. Kano and Ana- the card must be refilled. The supply of tions tend to issue permits in less time mbra have implemented similar reforms prepaid meters has been unable to keep than those that do not. When local of- and seen their construction permit time up with demand in several states, how- ficials in charge of issuing permits are shrink from 30 to 14 days and 30 to 21 ever, leading to substantial delays. There- not encouraged to complete their work days, respectively. Enugu has had a statu- fore, getting connected to electricity is within a certain time frame, they may tory time limit in its Urban Planning Law faster in states where PHCN does not yet be tempted to procrastinate or create since 1992. Yet it never enforced it until require the use of prepaid meters (Yobe, artificial delays. recently, under compulsion by a new Zamfara, Kogi, and Abia) and where the Five of the eleven states surveyed in government determined to “make things supply of prepaid meters is sufficient (Taraba). For states where there are not FIGURE 3.3 Five of the eleven states measured in 2008 cut the time for building permit or enough meters, the wait can stretch from building plan approval two months to one year.8 Time (days) The cost of dealing with construc- 2008 67 Before reform tion permits also shows local variations, 60 from 95% of income per capita in Kano Means of time to 1,509% in Enugu. Why? First, the cost reduction: Statutory Approval Statutory of a building permit ranges from NGN time limit committee time limit 4,500 (US$ 34) in Adamawa to NGN 30 30 30 28 975,450 (US$ 7,324) in Abuja, FCT. Big- 2010 ger, more developed cities, such as Lagos After reform 18 21 14 14 and Abuja, where development projects are rife and the price of land higher, can charge larger fees. Smaller cities, on Enugu Abuja, FCT Kano Anambra Ogun the other hand, have more incentives to Note: Reforms occurred between June 2008 and January 2010. encourage real-estate development. The Source: Doing Business database. DEALING WITH CONSTRUC TION PERMITS 21 FIGURE 3.4 local tribes lived. Since then, in 10 states WHAT TO REFORM? High water connection costs (Abia, Akwa Ibon, Anambra, Bayelsa, Share of total cost to deal with construction permits, Nigeria average (%) Delta, Edo, Enugu, FCT, Imo, and Ogun), Doing Business in Nigeria 2008 recom- 9 of them located in the south, construc- mended introducing a fast track and Other* tion companies building an edifice must time limits for processing permit ap- Permit Compensation 10.3 to the natives pay compensation10 to the natives and plications, lowering the permit fee, and 5.3 hire some of them as masons or security making information more readily avail- 20.0 Pre-permit 8.4 guards on the site. able. These recommendations are still Some states are in the process of valid for many states. Some additional implementing additional reforms. Lagos recommendations also apply. 56.0 District Office now requires its field of- ficers to carry a camera when conducting INTRODUCE TIME LIMITS AND FAST Water their first site inspection. The photos— TRACK PROCEDURES TO IMPROVE THE connection EFFICIENCY OF PERMIT AUTHORITIES proving that the plot is in fact empty— * Includes electricity and phone costs. are then attached to the application, with In construction, speed matters to entre- Source: Doing Business database. no need to conduct further pre-construc- preneurs as well as to the government. In capital of the brand new state of Jigawa, tion inspections. In addition, in October Nigeria, building companies in several Dutse, is a small semirural city with few 2009, the governor of Lagos issued an states wait up to three months to obtain buildings. Jigawa’s Ministry of Land, at executive order, where he delegates the a building permit. To improve the effi- four stories, is the highest edifice in the power to issue the construction permit ciency of the permit-issuing authorities, city. To encourage real-estate develop- to lower levels of the administration, de- Nigerian states could emulate the good ment, the Dutse Capital Development pending on the complexity of the project. practices set by some of their peers, such Authority keeps its requirements simple While buildings of 7 floors and higher as the statutory time limits enforced by and its permit fees relatively low, at NGN must obtain approval from the governor Ogun, Kano, Enugu, and Anambra, the 50,000 (US$ 375). himself, buildings of less than two stories administrative restructuring undertaken Obtaining a water connection is the need only obtain the approval of the local by Ondo, and the improvements in trans- most expensive component in the overall district office. parency of information made by Ogun, cost (figure 3.4). In the presence of a The executive order also ensures the state that has reformed the most in reliable public delivery system, such as that information is more available to construction permits. in Cross River; Abuja, FCT; Sokoto; and the public. Entrepreneurs can now ob- Kano, connecting a warehouse to water tain the Lagos Building Permit Approval SIMPLIFY PRE-PERMIT PROCEDURES costs between NGN 2,000 (US$ 15) and Handbook, which contains all building Before applying for a building permit, NGN 70,000 (US$ 526). When the public regulations, at no charge. The handbook construction companies may undergo water system is not dependable, however, used to cost NGN 50,000 (US$ 375) and up to five procedures—obtaining an construction companies have no choice require entrepreneurs to submit prop- environmental impact assessment, site but to drill a borehole, which is more erty title documents. Ogun state has analysis report, land use clearance, fire expensive. The cost of boreholes varies taken a similar step toward transparency. safety report, and preliminary approval. widely depending on how far and deep Abeokuta’s Bureau of Urban and Physi- Adding procedures adds to the complex- the aquifer source is and how rocky the cal Planning holds a “town planning ity and cost of the building-approval soil is, among other factors. In the capital half an hour” every Thursday on Ogun process. In 2006, Hong Kong, China, of Delta state, Warri, located 6 meters state capital television to address devel- faced the same problem. To streamline above sea level and endowed with soft opment-related issues and complaints. the permit process, Chinese authorities soil, drilling a borehole costs only NGN Abeokuta also organizes zonal meetings set up a cross-sector consultation team 200,000 (US$ 1,500). In Enugu, where soil with community-development associa- to identify redundant procedures. As a is filled with coal, companies must drill tions to inform landowners and develop- result, Hong Kong eliminated eight steps their boreholes nine miles from the city, ers of the procedures to follow to obtain and cut the time needed for construction at a cost of NGN 2,000,000 (US$ 15,000), a construction permit. Leaflets that de- permits by five weeks.11 and bring water to their site by truck.9 scribe the procedures to undertake, the Nigerian states could follow suit. With the Land Use Act of 1978, the documents to submit, and the applicable Pre-permit procedures are important to government appropriated land on which fee schedules are also available. ensure that construction respects safety 22 DOING BUSINESS IN NIGERIA 2010 and planning standards. Rather than IMPLEMENT THE NATIONAL BUILDING CODE AT THE STATE LEVEL forcing entrepreneurs to approach mul- 1 Economist Intelligence Unit. Country tiple authorities, Nigerian states could While Nigerian state laws often require profile, Nigeria 2009. The Economist. streamline a number of these procedures several inspections during the construc- London. within the building-permit review pro- tion process, Denmark requires only 2 According to the Minister of the Federal cess. Public officials could conduct the one. This is not to say that buildings in Capital Territory Administration (FCTA), 346 structures violated the building code site analysis and environmental assess- Denmark are less safe. In Nigeria, many in Abuja in 2008, in This Day newspaper, ment themselves while processing the of the inspections required are not con- “FCTA Sanctions Owners of 346 Illegal application for the building permit or ducted, in practice, or are conducted at Structure”, September 15, 2008. coordinate with fire authorities to con- random and motivated by rent-seeking 3 Agence France Presse. 2006. Nigeria Ap- proves Building Code. As many cases go un- duct joint safety inspections. intentions. Implementing the new Build- reported, the real figure is probably higher. Moreover, environmental assess- ing Code, would replace random visits 4 Moullier, Thomas. 2009. “Reforming ment should focus on high-risk con- with a set schedule of inspections occur- Building Permits; Why Is It Important and structions, such as dams and heavy in- ring at critical stages of the construction What Can IFC Really Do?” International Finance Corporation. Washington, DC. dustries. Dutse, Kano, Ebonyi, Gusau, process. Though adopted at the federal World Bank Group. Sokoto, Delta, Anambra, and Kwara al- level, the new code must still be imple- 5 At the time of publication of Doing Busi- ready exempt simple constructions from mented at the local level through the ness 2010 the cost was 573.4% of income this requirement. amendment of state urban and regional per capita. planning laws. Local development au- 6. The population average across the 36 cit- LOWER FEE FOR BUILDING PERMITS thorities should also increase staff capac- ies surveyed, excluding Lagos, is 580,214 inhabitants. Population statistics are based Several states have some of the world’s ity to ensure that these inspections are on the 2006 Census published in the Offi- highest fees for construction permits. conducted by qualified professionals. cial Gazette of Lagos on January 19, 2007. Such high fees encourage entrepreneurs 7. Ondo’s Ministry of Physical Planning to build illegally or—when the fees are FACILITATE CONNECTION TO and Urban Development counts with UTILITIES seven departments: development permit, based on building size, which is often monitoring and enforcement, physical the case in Nigeria—submit fake plans In the majority of states, electricity con- planning, urban renewal, master and to lower the cost. In order to fight infor- nection is the most time-consuming, and local planning, planning research and statistics, and administration. mal construction and ensure compliance water connection the most expensive 8. While waiting for a meter, it is common with safety standards, some state govern- procedure. The Power Holding Company practice to sign a provisional contract ments resort to more random inspec- of Nigeria (PHCN) should ensure that based on an estimated consumption rate tions, which are burdensome for the prepaid meter supplies meet demand, to connect the warehouse to electricity. entrepreneur and costly to administer. to limit delays, or allow companies to 9. To control for the variation of estimates due to factors like geographical location, An alternative would be to make the fees function with a credit meter while supply technology used to drill, and so on, the more affordable. issues are addressed. In addition, state data apply an average of NGN 500,000 Such a reform should take into con- authorities should improve their water (US$ 3,754) across 30 cities. Only cities identified as outliers, such as Warri (lo- sideration the sources of revenue on which delivery systems to increase the reach cated 6 meters above sea level), Zamfara state governments rely. If high permit fees and reliability of their networks. (rocky terrain), Maiduguri (water located compensate for a lack of fiscal resources in deep in the soil), Enugu (coal soil), Lagos other areas (property taxes, for example, and Port Harcourt (water easily avail- able), and Osun (irrigated by the Osun administered at the state level), lowering River) show variations compared with the fees might require a broader overhaul the average. of the local tax structure. 10. The amount of the fee varies widely de- pending on the company’s negotiation skills, the value of the site, the political context, the connections between the de- veloper and the natives, and the number of native tribes in the area. As such, to control for the large variance in the esti- mates, an average of NGN 200,000 (US$ 1,502) has been applied to all 10 cities. 11. World Bank. 2009. Doing Business 2010: Reforming through Difficult Times. Wash- ington, DC. World Bank Group. 23 Registering TABLE 4.1 Where is it easy to register property—and where not? property 1 2 Gombe (easiest) Borno 14 15 Enugu Kwara 25 27 Imo Lagos 3 Zamfara 16 Kebbi 28 Delta 4 Kano 17 Akwa Ibom 29 Ekiti 5 Jigawa 18 Nasarawa 30 Abia 5 Taraba 19 Niger 30 Anambra 5 Yobe 20 Cross River 32 Edo 8 Katsina 21 Ebonyi 33 Oyo 9 Abuja, FCT 21 Sokoto 34 Ondo 10 Kogi 23 Bayelsa 35 Ogun 11 Benue 23 Kaduna 36 Osun 12 Bauchi 25 Adamawa 37 Rivers (most difficult) 13 Plateau Note: The ease of registering property is a simple average of state rankings on the number of procedures, associated time and cost (mea- sured as a percentage of the property value) required to register a property. See Data notes for details. Izigbe from Benin, in Edo state, has been Source: Doing Business database. manufacturing reproductions of the fa- mous ivory pendant mask for eight years. construction materials.1 Indeed, banks practices. Some Nigerian states perform Her business grew rapidly as tourists in countries lacking adequate creditor in- much better than others. And things are were interested in reproductions of this formation prefer land titles as collateral, improving: 6 of the 14 reforms imple- traditional mask, which can be found in since land is difficult to move or hide.2 mented by states measured in 2008 are in museums in both Edo and the United Property registration also benefits gov- the area of property registration. Nigeria’s Kingdom. She now has dozens of em- ernments, as more properties registered top performing states provide good ex- ployees. Izigbe needed more space to translate into greater tax revenues. amples from which others could learn.4 accommodate her growing business, so In the past 5 years, Doing Business If all states were to adopt the existing she decided to invest in a warehouse on has recorded 125 reforms in property best practices from across the country the outskirts of the city. Her plans came registration in 93 economies, one third and register property in 8 procedures as to a halt, though, when she realized that of them in Sub-Saharan Africa. However, in Kwara and 14 days like in Borno for a she would have to pay 27.6% of its value registering property in Nigeria continues cost of 5.2% of the value of the property to register the property title under her to be a slow, expensive, and burdensome as in Yobe, then Nigeria would climb 89 name. So Izigbe did what many entre- process. On average, in the 36 Nigerian positions, from 178 to 89, outperforming preneurs in Nigeria do: she settled for a states and Abuja, FCT, an entrepreneur France and Italy. power of attorney showing that the cur- would have to go through 12 procedures, Despite the fact that registering rent owner transferred the right to use wait 82 days, and pay 16% of the value property falls within the same legal the property to her. This option, however, of the property to have it registered in framework across Nigeria, practice var- does not provide full legal security. It also the Lands Registry. On a global scale, ies greatly among states. Registering does not allow her to use the property as that makes registering property in Ni- collateral for a loan to expand her busi- geria more expensive than in 170 of 183 What is measured? ness further. economies measured by Doing Business Doing Business records the sequence of procedures, time, and costs necessary for a Entrepreneurs like Izigbe are aware and lengthier than in 139 countries. This business to purchase property from another that an efficient property registration puts Nigeria in the last place on the business and to transfer the property title to system has real benefits. In fact, property global registering property ranking.3 The the buyer’s name so that the purchasing busi- registration should be a priority in every best performer, Saudi Arabia, registers ness can use it as collateral in taking out loans or sell it to another business. Every procedure society. When there is a formal deed, en- property in two days, free of charge. required by law or necessary in practice is trepreneurs can use their immovable as- However, Nigeria does not need to look included, whether it is the responsibility of sets to obtain credit and grow their busi- that far for lessons on how to improve the seller or the buyer or must be completed by a third party on their behalf. It is assumed nesses. A recent study in Peru suggests registering property. that the property is registered and free of title that property titles are associated with a In fact, Nigeria does not even have dispute. See the detailed description of the 10% increase in loan approval rates for to look beyond its borders for good standard case in the Data Notes. 24 DOING BUSINESS IN NIGERIA 2010 TABLE 4.2 Sub-Saharan regional average. Six of the 11 states measured in 2008 reformed property registration The average time to transfer a prop- Reduction Elimination Promotion of Speeding up/delegation erty title among the 36 Nigerian states of fees of fees electronic services of governor's consent and the capital is 82 days—only slightly Abia   shorter that the longest time needed to Abuja, FCT  register property in a Kenyan city (Ga- Anambra   rissa, 87 days).5 But the time needed Bauchi  varies greatly from state to state. In Borno it takes two weeks to transfer a property Enugu   title, while in Anambra it takes seven Kano  months. The time is largely dependent on Ogun  a single requirement: the state governor’s Sokoto  consent. In accordance with the 1978 Note: This table records reforms that occurred between June 2008 and January 2010. Land Use Act, all land within the territory  indicates a negative reform. Source: Doing Business database. of a state is vested with the governor, mak- ing his consent mandatory for the legal property is easiest in Gombe and most number of procedures varies from 8 in validity of any transfer of landed property. burdensome in Rivers state, where it Borno, Gombe, and Kwara to 17 in Oyo. On average, waiting for the governor’s takes 13 procedures, 201 days, and 23.2% The variations are due to the fact that consent accounts for 70% of the total time of the property value to transfer a title some states have managed to merge needed to register property. Depending (table 4.1). procedures or establish payment points on whether or not this power has been Registering property across Nige- conveniently located within the respec- delegated by the governor to a Ministry rian states follows several basic stages— tive institutions, while others have not. of Lands official, however, the delay varies searching the property title for encum- Kogi and Gombe, for example, have from two days in Borno to six months in brances, signing the deed of assignment, merged three procedures—assessing Kebbi (figure 4.1). obtaining the governor’s consent, as- the deed at the Federal Inland Revenue Registering property is further com- sessing and paying fees, and register- Service (FIRS), paying the stamp duty, plicated by the inefficiency of some of ing the title under the buyer’s name. and stamping the deed—into one by al- the government agencies responsible for In addition to these, states have added lowing applicants to pay the stamp duty registering property. Reportedly, an ap- their own requirements. As a result, the at FIRS directly, rather than at a com- plicant has to make many follow-up calls mercial bank. In Lagos, five different and personal visits in order to move the FIGURE 4.1 fees can be paid at the same time: the file from one desk to another. Otherwise, Obtain governor’s consent—the biggest bottleneck in property registration consent fee, registration fee, stamp duty, as an entrepreneur from Yobe says, the for most Nigerian states neighborhood improvement charge, and file would just “sit there.” Moreover, ap- Days to register property 195 capital gains tax. On the other hand, in plicants are often obliged to perform Lagos, Taraba, and Nasarawa, the ap- themselves what should be internal plicant is required to submit a certified procedures. Incomplete applications are true copy of the title document, even if sometimes accepted just to secure the the seller has the original title. This adds payment of application fees. Lagos was at least one procedure. In Oyo, the state confronted with this issue and decided with the highest number of procedures, to introduce a checklist for all applica- Total 82 180 the applicant has to visit the Ministry tion requirements at the initial intake of of Lands six times to submit or pick up the file. The Lands Bureau also requested Other procedures a variety of documents; go to the bank that applicants’ contact information be six times to pay various fees; receive an collected for faster follow-up. Simple Days to obtain governor’s 58 evaluation inspection from the Ministry measures can make the difference. Add- consent 14 of Lands; and obtain a valuation report ing to the hassle is the necessity to pay 2 from an independent valuer. This back- multiple fees at various points at com- Nigeria Kebbi Borno and-forth adds up to a total of 17 pro- mercial banks, then wait each time for average cedures, 10 procedures more than the the respective agency to receive payment Source: Doing Business database. REGISTERING PROPERT Y 25 confirmation before the process is al- government officials claim will make up ring property. The governor agreed to lowed to proceed. Ogun state addressed for revenue lost due to underreporting expedite the process and has since en- this problem by introducing a system of property values. Another federal tax sured that consent is granted within 60 that allows applicants to pay fees using that is applied inconsistently is the stamp days, rather than 75 days, as previously. an ATM card at a “point of payment” duty, which, according to the federal By 2008, Kano had already delegated the terminal located within the Ministry of Stamp Duty Act 1939, should be 2% of power to grant consent, which decreased Lands. This reform decreased the total the property value for property transfers the time to 20 days. In June 2009, the time needed to register property in Ogun between businesses.6 In practice, many power to grant consent was further del- by 13 days compared to two years ago. states charge 3% or even 4%. egated to both the Commissioner and the The average cost of registering Of the 11 states benchmarked in Permanent Secretary for Lands. Gover- property is 16% of property value. The Doing Business in Nigeria 2008, 6 have in- nor’s consent on assignment can now be cost ranges from 5.2% in Yobe, which troduced positive reforms in the past two obtained in 14 days, decreasing the over- is comparable to Germany, to 33.6% in years (table 4.2). Abia state introduced all time to register property to 31 days. Ondo, which is more expensive than the e-payment in 2009 and now all fees are Another reform is the introduction Syrian Arab Republic, the worst global paid at a commercial bank, which keeps of the Geographic Information System performer (figure 4.2). The cost is a sum corruption at bay; Anambra decreased (GIS). Following Abuja’s example, Lagos, of several fees: the consent fee, registra- the search fee for property titles from Kano, Kaduna, and Kwara are implement- tion fee, stamp duty, and legal fees. These NGN 5,000 (US$ 37.5) to NGN 1,000 ing a GIS, which captures and stores land fees are required in all states, but their (US$ 7.5). In Sokoto, the Nigerian Bar information in digital format. Titles se- amounts differ greatly from state to state. Association and other stakeholders put curity is now strengthened since a com- For example, the registration fee is a flat pressure on the governor to speed up the puterized registry makes it easier to spot fee of NGN 2,500 (US$19) in Akwa Ibom, process of granting consent on transfer- overlapping titles. while in Borno and Sokoto it is set at 5% FIGURE 4.2 of the property value. The consent fee in The cost of transferring a property title in Ondo, Yobe and in selected African countries Ekiti is 15% of the value of the property, Cost (% of property value) while some states, like Kano and Ka- Total 36.6 duna, have eliminated the consent fee altogether. Legal fees vary from 1% of the property value in Gombe to 10% in most other states. At 10%, the cost of hiring a Capital gains tax lawyer accounts for half of the total costs. 10.0 While hiring a lawyer is not mandated by law, it is a common practice, which 22.7 increases the costs substantially. The capital gains tax also contrib- utes to the variations in the total cost. Consent fee 10.0 According to the federal Capital Gains Tax Act 1990, the capital gains tax is 10% of the gain (profit), defined as the difference between the selling price and the purchasing price paid by the seller, minus the cost of improvements to the Legal fees 8.7 10.0 property. However, the manner in which 6.2 the capital gains tax is calculated in 5.2 0.2 different states does not always comply with the letter of the law. Most states do Stamp duty 3.0 3.0 1.1 not charge capital gains tax at all, while 0.5 Other others, like Cross River and Abuja, FCT, Ondo Yobe Chad South Equatorial Ghana Rwanda levy it as a percentage of the property Nigeria Africa Guinea value rather than the gain, a measure Source: Doing Business database. 26 DOING BUSINESS IN NIGERIA 2010 Unfortunately, not all reforms have standardized schedule of property val- their property altogether. Flat fees can been positive. Four states increased the ues, where areas of the city would be translate into more revenue for the gov- fees associated with registering property. assigned rates per square meter and fees ernment. In 2007, the Arab Republic of In Bauchi, the search fee was increased would be calculated by the desk officer, Egypt introduced a low fixed stamp duty two-and-a-half times and in Abuja, as is successfully done in Lagos. And fee, replacing the 3% registration fee. This FCT, the consent fee was increased from publishing a property valuation schedule led to a boom of property registrations NGN 10,000 (US$ 75) to NGN 55,000 would enable entrepreneurs to anticipate that increased government revenues by (US$ 413) in 2009. In Enugu, almost all how much transfer tax they have to pay. 39% six months after the reform.8 property registration fees were increased In addition to the above, Nigeria can since 2008, some as much as 30 times. In benefit from introducing several other CONSOLIDATE PROCEDURES December 2009, the Executive Council of reforms. Some states have merged procedures by Abia state passed a resolution and imple- integrating government services or es- mented a 25% increase of administrative ELIMINATE THE REQUIREMENT OF tablishing commercial banking payment fees across the board. GOVERNOR’S CONSENT, OR AT LEAST points within the agencies themselves. MAKE IT EASIER TO OBTAIN States also introduced structural With the creation of the Commissioner land reforms. In June 2009, the Min- The requirement to obtain governor con- of Stamp Duties at the Lands Bureau in istry of Lands in Kaduna pledged to sent to property transfer remains the Lagos, five fee payments were merged deliver same-day consent to mortgages, largest bottleneck. Governor’s consent into one. Gombe has merged three proce- one-week consent to assign Statutory is not particular to Nigeria; other Af- dures—assessing the deed at the Federal Right of Occupancy (including perform- rican countries, such as Lesotho, Ma- Inland Revenue Service (FIRS), paying ing valuation inspections and submitting lawi, Gambia, Senegal, and Zambia have the stamp duty, and stamping the deed— valuation reports within two days), and similar consent requirements. This is not into one by allowing applicants to pay one-month consent to assign Custom- always a relic of colonial days: Nigeria the stamp duty at FIRS rather than at a ary Right of Occupancy and Deemed introduced the Land Use Act in 1978. It commercial bank. Moreover, these three Grant of Statutory Right of Occupancy. was adopted to reduce conflicts deriv- procedures could be merged with another Ongoing reforms in Lagos include the ing from overlapping ownership claims, three procedures performed at the Minis- delegation of governor consent for prop- but it added a six-month delay and a try of Lands: assessing the property value, erty transfers to 4 more commissioners, 10% fee. Eliminating governor’s consent paying consent and registration fees at a with a mandatory consent deadline of would significantly speed up the total bank, and submitting payment receipts 48 hours. In 2009, the Lands Registry time needed to register property across to the Ministry of Lands. By establishing in Lagos has doubled the number of ac- the country. Even delegating the power a FIRS counter at the Ministry of Lands, count officers from 2 to 4 in an effort to to grant consent will significantly de- these six procedures can be merged into speed up the reconciliation of payments crease the waiting time, as evidenced three or even one, if a payment point is for property fees. in states that have implemented this established within the Ministry as well. (Abuja, FCT; Bauchi; Borno; Cross River; WHAT TO REFORM? Gombe; Kaduna; Kano; Lagos; Ogun; SET UP ELECTRONIC PAYMENT POINTS and Taraba).7 The time needed to ob- WITHIN GOVERNMENT AGENCIES Doing Business in Nigeria 2008 recom- tain consent in Enugu, for example, was Revenue collection is carried out either mended the elimination or simplification reduced from 60 days to 30 days when through cash payments to the relevant of obtaining governor consent, lowering the power was delegated to the Commis- agencies (which can be susceptible to property transfer fees or introducing flat sioner for Lands. corruption) or payments made via com- rates, and replacing physical inspections mercial banks (which is time-consum- with a standardized schedule of prop- INTRODUCE FLAT FEES ing, as it often takes several days for erty values. While states such as Kano, The introduction of flat rates instead of payments to go through). A convenient, Kaduna, and Lagos have implemented fees expressed as a percentage of prop- fast, and secure alternative would be some of these recommendations, for the erty value has proven beneficial for both to establish electronic payment points majority of states they remain valid. entrepreneurs and the government in within the revenue-generating agencies, Rather than spending resources and many countries, as it reduces the in- where applicants could pay using ATM staff time on performing on-site inspec- centive for property owners to either or prepaid cards and the money would tions, Land Registries can introduce a undervalue their plots or not register be directly deposited to the agency’s ac- REGISTERING PROPERT Y 27 count. Ogun is currently implementing a PUBLICIZE AND COMMUNICATE THE BENEFITS OF REFORMS similar system, called the Point of Pay- ment (POP) terminal, which has already Information on legal requirements 1. De Soto, Hernando. 2003. The Mystery of Capital: Why Capitalism Triumphs in decreased the time needed to process should be easily available to the public. the West and Fails Everywhere Else. New payments from 14 days to 1 day. This would eliminate many of the frus- York, NY: Perseus Group Books. trations of entrepreneurs, who often have 2. World Bank. 2009. Doing Business 2010: ELIMINATE THE INVOLVEMENT OF A to figure out the system through trial Reforming through Difficult Times. Wash- LAWYER FOR STANDARD PROPERTY ington, DC. World Bank Group. REGISTRATIONS and error. Government communication 3. Last place among the 178 countries campaigns are an essential part of any where registering property is measured. It is customary to retain a lawyer to reg- reform process. They raise awareness For five economies there is no practice ister property. Lawyers not only draft the about government efforts, inform the for registering property. Deed of Assignment, they also make sure public about the benefits, and reduce 4. Peer-learning mechanisms, such as the National Development Forum (NDTF) the property is unencumbered, follow up legal uncertainty. Such information could —set up under a land administration with government agencies, and ensure be provided via posters, brochures, web reform program supported by a number that the title is registered with the Land sites, and billboards. In Nigeria, some of of development partners—have been established to promote exchange of best Registry under the new owner’s name. the recent reforms described above have practices in this area. The legal fees are approximately 10% not been properly communicated and 5. World Bank. 2009. Doing Business in of the property value. The government therefore their impact has not reached Kenya 2010. Washington, DC. World could make procedures simpler and the end users. Most reformers are bad Bank Group. more transparent, so that entrepreneurs marketers. For example, El Salvador first 6. Doing Business in Nigeria 2008 reported could go through the process on their established a one-stop shop in 1999, but that the stamp duty tax was 3% across the country. own. They could also introduce a stan- local entrepreneurs thought it was only 7. World Bank. 2004. Doing Business 2005. dardized deed of assignment that would for foreigners. A lesson was learned. The Washington, DC. World Bank Group. be validated by a notary. These measures second time around, the president him- 8. World Bank. 2007. Doing Business in would decrease the cost of registering self inaugurated the improved one-stop Egypt 2008. Washington, DC. World property by 10% across the board. shop and widespread media coverage Bank Group. ensured that everyone knew about the 9. World Bank. 2009. Doing Business 2010: DIGITIZE THE LAND REGISTRY Reforming through Difficult Times. Wash- new system. ington, DC. World Bank Group. In many states, property title searches and deed registration are still done manually. Making the registry electronic would shorten processing times, increase title security, and allow for more ef- ficient use of staff time. Inspiration can be found at home. Abuja, FCT; Lagos; Kano; Kaduna; and Kwara are using GIS to capture and store land information in a digital format. Elsewhere, Belarus has increased the number of transferred titles three-fold since it began comput- erizing its system in 2005. Bosnia and Herzegovina has seen a 33% growth in transferred titles since all municipal land offices started computerizing a few years ago. Moreover, a computerized registry makes it easier to spot overlapping titles, thus improving title security. 28 Enforcing TABLE 5.1 Where is it easy to enforce a contract — and where not? contracts 1 2 Katsina (easiest) Yobe 14 15 Bayelsa Lagos 25 27 Kwara Delta 3 Kebbi 16 Sokoto 28 Akwa Ibom 4 Jigawa 17 Abuja, FCT 29 Benue 5 Borno 18 Ogun 30 Abia 6 Edo 18 Taraba 31 Anambra 7 Kaduna 20 Oyo 32 Adamawa 8 Nasarawa 20 Plateau 32 Ebonyi 9 Ondo 22 Rivers 34 Imo 10 Bauchi 23 Kano 35 Ekiti 11 Osun 23 Niger 36 Enugu 12 Gombe 25 Kogi 37 Cross River (most difficult) 13 Zamfara Note: The ease of enforcing contracts is a simple average of the state rankings on the procedures, time and cost to resolve a commercial dispute through the courts. See the Data notes for details. The state courts of Nigeria had a rocky Source: Doing Business database. year in 2009. Judiciary workers went on strike twice, demanding higher salaries FCT, it takes on average 511 days and courts and regulated by state-specific and better working conditions. Both costs 36.3% of the claim value to en- civil procedure rules. Furthermore, court strikes immobilized the courts. Oluke force a contract. This is better than the administration also falls within the pre- runs a small business printing tradi- Sub-Saharan Africa regional average of rogative of the state’s judiciary. As a tional wax textiles. He is unaware of the 644 days and 49.3%. However, Nigeria result, there are wide differences in the wider issues within the judiciary, but lags behind Tanzania, the top-ranked ease of enforcing a commercial contract suffers the consequences. For over a economy on enforcing contracts in Sub- across Nigeria (table 5.1). In Katsina, the year he has been suing one of his biggest Saharan Africa, where Doing Business top-ranked state, it takes 285 days and clients to recover the unpaid balance 2010: Reforming through Difficult Times costs 26% of claim value. In Cross River, under a sales agreement. He is confident records 462 days and a cost of 14.3% to it would take more than twice the time that the law is on his side and the judge enforce a contract, or Ghana where it (835 days) and money (52.8%) to get the will rule in his favor. But his lawyer has takes 487 days and costs 23%. same result. In addition to different rules, just told him that the case has been post- Commercial justice matters to busi- the caseload may vary substantially from poned for the fourth time. He does not nesses. Efficient courts provide a mecha- location to location due to population have the cash or the courage to accept a nism by which contractual obligations size and economic activity. In Lagos, the large order from a new client. What if he can be enforced and thus encourage eco- most populous state in Nigeria and by never gets paid? Entrepreneurs through- nomic activity. A study of judicial systems itself more populous than 32 of 47 Afri- out Nigeria face similar issues. in transition economies summarizes the can countries, the courts face a heavier Across Nigeria’s 36 states and Abuja, courts’ contribution to economic growth: caseload than in the smaller states. “they define the rules by which markets Like 128 of the 183 economies What is measured? function, and they provide a means to benchmarked by Doing Business,3 Nige- resolve disputes, protect economic and ria has a two-tiered, first instance civil The Doing Business enforcing contracts indicator measures the efficiency of the com- social rights, and hold governments ac- court system.4 Jurisdiction is determined mercial justice system. It records the time, countable for their actions.”1 on the basis of the claim amount, with cost and procedural complexity involved to The Nigerian constitution grants the the Magistrates’ Court (the lower court) enforce a contract through the courts up to receipt of the amount due. The standard- chief judge of each state the power to dealing with smaller claims and the High ized case study involves a claim for payment make rules for regulating its courts.2 Court dealing with higher claims. Each for goods sold and, in order to capture the This, in effect, bestows on the state’s state sets its own competence threshold. picture of contract enforcement as opposed to simple payment orders, assumes the judiciary control of proceedings as well These vary widely from NGN 10,000 in involvement of an expert witness at trial. as the responsibility for engineering re- Ekiti (about US$ 75) to NGN 1 million See the detailed description of the standard forms. Therefore, a typical commercial in Lagos (about US$ 7,500). Moreover, case in the Data Notes. contract is enforced through the state in some states like Ogun, thresholds are ENFORCING CONTRAC TS 29 not strictly adhered to. In order to benefit the number of adjournments. Even the High Courts have different resources, from more experienced judges, litigants more dynamic state judiciaries find it including infrastructure (building, com- commonly choose to file in the High hard to curb this practice. In most state puters, and other equipment) and staff- Court even small claims falling within the courts, it is common for three to four ing. Also, while uniform civil procedure competence of the Magistrates’ Courts. adjournments to be granted. In Enugu, rules have existed since 1987, they serve This results in an inconsistent judicial as many as eight adjournments are typi- only as “model” rules from which states map, with civil and commercial litiga- cally granted, while in Cross River they are free to depart. In fact, both Lagos tion being obsolete in certain Magistrates’ may reach ten. and Abuja, FCT, have enacted separate Courts. Some states, like Oyo and Ekiti, Administrative efficiency and bud- rules. With features such as “frontload- ranked 20th and 35th, respectively, are get also explain variations in the time ing”, these may prove more efficient. considering raising the thresholds of the needed to enforce a contract across states. Enforcement is governed by the Magistrates’ Court. Best-practice econo- State courts are administered by the state Sheriffs and Civil Process Act. This fed- mies, like that of the United Kingdom, judiciary on a budget allocated by the eral law is binding on the states, which continuously ensure that competence state. Therefore, both Magistrates’ and can only regulate certain administra- thresholds are up to date; in 2009 the FIGURE 5.1 High Court’s minimum threshold was Time needed to enforce a contract across Nigerian states raised from £15,000 (about US$ 25,000) Time (days) to £25,000 (US$ 41,000). 0 365 730 1,095 The constitution guarantees every Jigawa Nasarawa person that a court or tribunal will judge Katsina Filing and Trial and all civil obligations, including contractual Edo service judgment Enforcement ones, within a reasonable time frame.5 Taraba And yet, while commercial proceedings Kebbi can be swift in some states, in others Yobe Borno they may take years (figure 5.1). The time Rivers needed to enforce a contract varies from Abuja, FCT 261 days in Jigawa to 1130 days in Niger. Ondo The enforcing contracts indicator Bayelsa tracks the time needed to resolve a com- Zamfara Akwa Ibom mercial dispute through the three stages Kaduna of litigation: filing and service, trial and Osun judgment, and enforcement. On a global Oyo scale, Nigerian courts prove efficient Bauchi when filing a claim. It takes an average of Ogun Lagos 23 days nationwide, but in Akwa Ibom, Abia Delta, Ekiti, and Ondo the process can be Gombe as fast as seven days. Similarly to other Delta high-performing locations such as Hong Plateau Kong, China, where filing and service Imo take five days, the procedure is consid- Kogi Ebonyi ered a purely administrative process. The Anambra court registrar’s office only ensures that Benue the plaint fulfills certain formal require- Sokoto ments, charges a fee, and assigns a date Kano for the defendant to be summoned. Adamawa Kwara The trial and judgment stage is Ekiti where most delays occur (figure 5.2). Cross River This stage usually takes at least one year, Enugu with the longest delays in Niger state— Niger more than three years. A major cause is Source: Doing Business database. 30 DOING BUSINESS IN NIGERIA 2010 FIGURE 5.2 In contrast, Kenya regulates most TABLE 5.2 Time at trial accounts for the bulk of delays Which states have reformed recently? of the costs associated with litigation, Share of total time to enforce a contract, New civil Nigeria average (%) including attorney fees.8 An Advocates procedure Remuneration Order fixes a minimum State rules More courts Filing and service fee based on the amount of the claim. Abuja, FCT  (23 days) 5 Regulation does not translate into overall Kaduna  Enforcement lower costs, however. It costs 47.2% of the Kano  13 of judgment value of the claim to enforce a contract in Note: This table records reforms that occurred between June (68 days) Nairobi compared with 32% in Lagos. 2008 and January 2010. 82 Source: Doing Business database. Since the publication of Doing Busi- ness in Nigeria 2008, three states have Trial and taken measures resulting in swifter con- 2009, Ondo adopted new High Court judgement (421 days) tract enforcement: Abuja, FCT; Kaduna; rules. Others are setting up committees Source: Doing Business database. and Kano (table 5.2). to decide on the new rules. Among the The enactment of new civil proce- states benchmarked by Doing Business tive matters, such as bailiff fees. As a dure rules in Abuja, FCT and Kaduna in Nigeria 2008, Abuja, FCT reduced the result, enforcing a judgment proves to form part of an ongoing trend, observed time needed to enforce a contract by al- be relatively swift, with less variation in many states, of modernizing civil proce- most 2 months and Kaduna more than 3 across states. It takes on average 68 days dure rules. The momentum was initiated months, thanks to the impact of the new to apply for a writ of execution and hold by Lagos, where new High Court Civil rules (figure 5.4). In the Sub-Saharan a public sale—more than twice as fast Procedure Rules were adopted in 2004.9 Africa region, new High Court rules in than the global average of six months.6 In This proved groundbreaking because of Botswana that emphasize pre-trial con- some states such as Akwa Ibom, Jigawa, three innovative features: frontloading of ferences and case management resulted and Kebbi the process can be finalized evidence, time limits, and pre-trial con- in a decrease of 300 days in the time within a month. ferences. “Frontloading” emphasizes the needed to enforce a contract, as noted in Most litigation costs are not regu- role of litigants by compelling plaintiffs Doing Business 2010: Reforming through lated by law. Enforcing a contract costs to annex to the initial statement of claim Difficult Times. 26% of the value of the claim in Katsina, all documents and witness statements in In Kano, another reforming state, ef- whereas the national average is as high support of the claim. In this way, frivo- forts have been made to broaden access to as 36.3%. Differences are mainly due to lous claims are discouraged, surprises justice and speed up proceedings by set- variations in legal fees and expert-wit- requiring adjournments are limited, and ting up new Magistrates’ Courts. The new ness fees.7 Some fees associated with fil- protracted discovery is avoided. Pre-trial courts and accompanying increase in the ing suit and bailiff fees are regulated ac- conferences and time limits strengthen number of magistrates have resulted in a cording to the state-level Civil Procedure the role of judges as active case manag- decrease of 90 days in the time needed to Rules or fee schedules. For example, the ers. Time limits impose deadlines on enforce a contract, compared to that re- Osun State High Court fee schedule pro- parties to fulfill procedural requirements. corded in Doing Business in Nigeria 2008. vides for a filing fee of NGN 100 (about Finally, pre-trial conferences aim to en- FIGURE 5.3 US$ 0.75) and the Jigawa State High courage settlement and identify issues. Attorney fees— the biggest driver of cost Court for NGN 120 (about US$ 0.9). As a result of this reform, Doing Business Share of total cost to enforce a contract, These fees can be more than 10 times 2007 recorded a decrease in the time Nigeria average (%) higher in other courts. The High Court of needed to enforce a contract in Lagos Enforcement Ondo would charge NGN 1,500 (US$ 11). from 730 days to 457 days. of judgment 20 Nigeria is no exception to a global find- In 2006, Abuja, FCT, was among ing on the costs involved in commercial the first to follow suit and adopt new litigation: litigants spend most on attor- rules based on the Lagos example. Since 21 59 ney’s fees (figure 5.3). Fifty-nine percent then, many other states have remod- of costs paid or advanced by the plaintiff eled their rules on those of Lagos and Court costs and expert fees go to paying the attorney. Worldwide, on Abuja, FCT. Some states, like Kaduna average, legal fees account for 65% of the and Nasarawa, have been faster to act Attorney fees costs of litigation. than others. Most recently, in December Source: Doing Business database. ENFORCING CONTRAC TS 31 FIGURE 5.4 have been successful in reducing the time New civil procedure rules result in faster contract enforcement Time to enforce a contract (days) needed to enforce a contract by 10%.13 All 36 states and Abuja, FCT, have Before reform 987 a system for collecting vital statistics from the courts, such as the number of cases filed, pending, and disposed 730 After reform 687 of. However, across states the uses and methods of data collection vary. In most 534 457 states, regular reports on the number of 431 432 381 new cases and cases disposed of, known as “returns,” are submitted by the magis- trates or judges to the Chief Magistrate or Chief Judge for internal purposes. In Abuja, FCT, computerized registers allow Botswana Lagos Kaduna Abuja, FCT for easy generation of returns. Vast steps Source: Doing Business database. remain, however, including consolidat- ing the statistics in order to use them as WHAT TO REFORM? may speed up commercial contract en- performance indicators. forcement—as they grow accustomed Making statistics available to the INTRODUCE SPECIALIZED to the specific issues and terminology litigants, lawyers, and other stakehold- COMMERCIAL COURTS of commercial cases, case management, ers also strengthens accountability of Specialized courts are an exception. and decision making become swifter. the courts toward its users. The state Magistrates’ Courts commonly hear both Rwanda proved successful in its 2008 judiciary could start by publishing the criminal and civil cases. Of the state implementation of specialized commer- statistics they already collect in a sys- High Courts, only the Lagos High Court cial courts. These benefit from a sepa- tematic way. For instance, Rivers state has created specialized divisions.10 Since rate infrastructure and resources, and has a functional Web site,14 which is up- 2001, there are separate divisions for judges assigned solely to this jurisdic- dated regularly. By posting the Legal Year commercial cases as well as for land, tion. The result: a 16% reduction in the Ceremonial Address of the Chief Judge, family, and revenue matters. time needed to enforce a contract.11 Rivers state makes its statistics public. Doing Business in Nigeria 2008 rec- Doing so does not diminish judiciary in- ommended that other states follow the PROVIDE ANNUAL REPORTS AND dependence, but sends the message that STATISTICS Lagos example by introducing special- the courts are indeed user oriented. ized commercial divisions or courts, with Why monitor the courts? Research finds judges assigned solely to hearing com- that “monitoring and evaluation systems FACILITATE COMMERCIAL JUSTICE mercial matters. This remains a valid are not only powerful tools to ensure FOR SMALL AND MEDIUM ENTERPRISES recommendation for states with an im- accountability but also to introduce portant commercial caseload. Each state changes.”12 Monitoring guides the allo- Doing Business looks at small and me- judiciary should therefore analyze its cation of resources, such as the number dium-size businesses. These businesses caseload to determine whether the cost of of judges. Ethiopian courts now possess go to court to secure payment of rela- setting up a specialized court is justified. a state-of-the-art computerized case- tively small sums.15 The time and costs Specialized commercial courts allow management system that allows them involved in resolving such a simple com- for resources, both in terms of personnel not only to measure delays in proceed- mercial dispute remain disproportion- and infrastructure, to be allocated in a ings but also to compare performances ately high. The costs, in particular, can targeted way and for specific backlog between judges, chambers, and courts. reach more than 50% of the claim value reduction programs. Setting up special- Reports are available in real time and in some states. ized courts may also result in improved oversight by the court administration Many economies are now setting efficiency in general courts, as they find ensures continuous performance evalu- up small claims tracks or courts. These themselves relieved of a substantial case- ations. These reports, together with a courts deal with claims falling below a load. Finally, allowing judges to focus backlog reduction program providing ad- certain monetary threshold and, contrary their expertise on commercial matters ditional court sessions during vacation, to a traditional lower jurisdiction such as 32 DOING BUSINESS IN NIGERIA 2010 Nigeria’s Magistrates’ Court, litigation 7. The Doing Business standardized case study assumes that parties will rely on an proceeds on the basis of substantially expert to give testimony on the quality of simplified procedural rules. Litigation is goods delivered. also made simpler by the use of standard 8. World Bank. 2009. Doing Business in forms for filing claims. In the Republic of Kenya 2010. Washington, DC. World Korea, more than 70% of civil cases are Bank Group. solved through small claims proceed- 9. Hertveldt, Sabine. 2007. “Repairing a Car with the Engine Running.” In World ings.16 It costs only 10.3% of claim value Bank, Celebrating Reform 2007. Wash- and takes 230 days to resolve a commer- ington, DC. World Bank Group and U.S. cial dispute in Korea.17 Agency for International Development. Another mechanism to increase ac- 10. Doing Business in Nigeria 2008 reported that Abuja, FCT, had specialized com- cess to justice is to promote Alterna- mercial courts. However, this report tive Dispute Resolution (ADR) mecha- could not confirm that specialized divi- nisms—in particular, mediation. This sions, with judges solely assigned to hear commercial cases, are operating in is the solution implemented by Abuja, Abuja, FCT. FCT; Lagos; Kano; and a number of 11. World Bank. 2008. Doing Business 2009. other Nigerian states, which have es- Washington, DC. World Bank Group. tablished “multidoor courthouses.” They 12. “Monitoring and Evaluation of Court are considered successful in bringing System: A Comparative Study,” CEPEJ Studies 6, p. 12 (http://www.coe.int/t/ parties to the table and resolving cases dghl/cooperation/cepej/series/Etudes6- amicably. Other states could follow suit Suivi_en.pdf). and consider implementing similar ADR 13. World Bank. 2009. Doing Business 2010: frameworks and institutions. Reforming through Difficult Times. Wash- ington, DC. World Bank Group. 14. See http://www.rsjudiciary.com. 15. The Enforcing Contracts case study there- fore uses a relatively small claim value 1. Anderson James H., David S. Bernstein, equivalent to NGN 309,166 (about US$ and Cheryl W. Gray. 2005. Judicial Sys- 2,322). tems in Transition Economies: Assessing the Past, Looking to the Future. Washing- 16. Supreme Court of Korea, “Proceedings,” ton, DC. World Bank. Available at http:// http://eng.scourt.go.kr/. siteresources.worldbank.org/INTECA/ 17. World Bank. 2009. Doing Business 2010: Resources/complete.pdf. Reforming through Difficult Times. Wash- 2. Section 274, Constitution of the Federal ington, DC. World Bank Group. Republic of Nigeria, 1999. 3. World Bank. 2009. Doing Business 2010: Reforming through Difficult Times. Wash- ington, DC. World Bank Group. 4. Please note that this report considers only the formal court system. Customary courts (administered by traditional chiefs) and sharia courts are prevalent in Nigeria but fall outside the formal judiciary. 5. Section 36(1), Constitution of the Federal Republic of Nigeria, 1999. 6. Doing Business database. 33 Data notes ECONOMY CHARACTERISTICS GROSS NATIONAL INCOME (GNI) PER CAPITA Doing Business in Nigeria 2010 reports 2008 income per capita and population as published in the World Bank’s World Development Indicators 2009. Income is calculated using the Atlas method (current US$). For cost indicators expressed as a percentage of income per capita, 2008 GNI in local currency units is used as the denominator. Nigeria’s GNI per capita in 2008 = US$ 1,161 EXCHANGE RATE The exchange rate used in this report is 1 US$ = 133.19 NGN (Nigerian Naira) REGION AND INCOME GROUP Doing Business uses the World Bank regional and income group classifications, available at http://www. worldbank.org/data/countryclass. The indicators presented and analyzed in ten correspondence and visits by the team. estimates, the time indicators reported in Doing Business in Nigeria 2010 measure busi- The team invited state government officials Doing Business represent the median values ness regulation and the protection of prop- to review the preliminary results and offered of several responses given under the assump- erty rights—and their effect on businesses, them a right of reply period. The data from tions of the standardized case. especially small and medium-size domestic surveys are subjected to numerous tests for Finally, the methodology assumes that firms. The indicators document the degree of robustness, which lead to revisions or expan- a business has full information on what is regulation, such as the number of procedures sions of the information collected. required and does not waste time when com- to start a business, to construct a warehouse or The Doing Business methodology offers pleting procedures. In practice, completing to register and transfer commercial property. several advantages. It is transparent, using a procedure may take longer if the busi- Second, they gauge regulatory outcomes, such factual information about what laws and regu- ness lacks information or is unable to follow as the time and cost to enforce a contract. For lations say and allowing multiple interactions up promptly. Alternatively, the business may details on how the rankings on these indica- with local respondents to clarify potential choose to disregard some burdensome pro- tors are constructed, see aggregate ranking at misinterpretations of questions. Having rep- cedures. For both reasons the time delays the end of this section. resentative samples of respondents is not an reported in Doing Business in Nigeria 2010 In this project, Doing Business indicators issue, as the texts of the relevant laws and reg- would differ from the recollection of entrepre- have been created for all 36 Nigerian states ulations are collected and answers checked for neurs reported in the World Bank Enterprise and Abuja, FCT—the complete list is available accuracy. The methodology is inexpensive and Surveys or other perception surveys. on page 48. The data for all sets of indicators easily replicable, so data can be collected in a in Doing Business in Nigeria 2010 are current large sample of economies. Because standard STARTING A BUSINESS as of January 2010. assumptions are used in the data collection, comparisons and benchmarks are valid across Doing Business in Nigeria 2010 records all METHODOLOGY economies. Finally, the data not only highlight procedures that are officially required for an the extent of specific regulatory obstacles to entrepreneur to start up and formally oper- The Doing Business in Nigeria 2010 data are doing business but also identify their source ate an industrial or commercial business. collected in a standardized way, following the and point to what might be reformed. These include obtaining all necessary licenses methodology developed by the Doing Busi- and permits and completing any required ness team. To start, the Doing Business team, LIMITS TO WHAT IS MEASURED notifications, verifications or inscriptions for with academic advisers, designs a survey. The Doing Business methodology applied to the company and employees with relevant The survey uses a simple business case to Doing Business in Nigeria 2010 has 4 limita- authorities. ensure comparability across economies and tions that should be considered when inter- After a study of laws, regulations and over time—with assumptions about the legal preting the data. First, the data often focus on publicly available information on business form of the business, its size, its location and a specific business form—generally a limited entry, a detailed list of procedures is de- the nature of its operations. Then, the survey liability company (or its legal equivalent) of veloped, along with the time and cost of is customized to the particular case of Nigeria. a specified size—and may not be representa- complying with each procedure under nor- Surveys are administered through more than tive of the regulation on other businesses, mal circumstances and the paid-in minimum 480 local experts, including lawyers, archi- for example, sole proprietorships. Second, capital requirements. Subsequently, local in- tects, government officials and other profes- transactions described in a standardized case corporation lawyers, notaries and government sionals routinely administering or advising on scenario refer to a specific set of issues and officials complete and verify the data. legal and regulatory requirements. These ex- may not represent the full set of issues a busi- Information is also collected on the se- perts have several rounds of interaction with ness encounters. Third, the measures of time quence in which procedures are to be com- the Doing Business in Nigeria team, through involve an element of judgment by the expert pleted and whether procedures may be carried face-to-face interviews, conference calls, writ- respondents. When sources indicate different out simultaneously. It is assumed that any 34 DOING BUSINESS IN NIGERIA 2010 required information is readily available and out middlemen, facilitators, accountants or is aware of all entry regulations and their that all agencies involved in the start-up pro- lawyers, unless the use of such a third party sequence from the beginning but has had no cess function without corruption. If answers is mandated by law. If the services of profes- prior contact with any of the officials. by local experts differ, inquiries continue until sionals are required, procedures conducted by the data are reconciled. such professionals on behalf of the company COST To make the data comparable across are counted separately. Each electronic pro- Cost is recorded as a percentage of the econo- economies, several assumptions about the cedure is counted separately. If 2 procedures my’s income per capita. It includes all official business and the procedures are used. can be completed through the same website fees and fees for legal or professional services but require separate filings, they are counted if such services are required by law. Fees for ASSUMPTIONS ABOUT THE BUSINESS as 2 procedures. purchasing and legalizing company books are The business: Both pre- and post-incorporation pro- included if these transactions are required r *TBMJNJUFEMJBCJMJUZDPNQBOZ*GUIFSFJT cedures that are officially required for an by law. more than one type of limited liability entrepreneur to formally operate a business The company law, the commercial code company in the economy, the limited are recorded. and specific regulations and fee schedules are liability form most popular among Procedures required for official corre- used as sources for calculating costs. In the domestic firms is chosen. Information spondence or transactions with public agen- absence of fee schedules, a government of- on the most popular form is obtained cies are also included. For example, if a com- ficer’s estimate is taken as an official source. In from incorporation lawyers, notaries or pany seal or stamp is required on official the absence of a government officer’s estimate, the statistical office. documents, such as tax declarations, obtain- estimates of incorporation lawyers are used. r 0QFSBUFTJOUIFTUBUFTMBSHFTUCVTJOFTT ing the seal or stamp is counted. Similarly, if If several incorporation lawyers provide dif- city. a company must open a bank account before ferent estimates, the median reported value is r *TEPNFTUJDBMMZPXOFEBOEIBT registering for sales tax or value added tax, applied. In all cases the cost excludes bribes. owners, none of whom is a legal entity. this transaction is included as a procedure. r )BTTUBSUVQDBQJUBMPGUJNFTJODPNF PAID-IN MINIMUM CAPITAL Shortcuts are counted only if they fulfill 4 per capita at the end of 2008, paid in cash. criteria: they are legal, they are available to the The paid-in minimum capital requirement re- general public, they are used by the major- flects the amount that the entrepreneur needs r 1FSGPSNTHFOFSBMJOEVTUSJBMPSDPNNFS- cial activities, such as the production ity of companies, and avoiding them causes to deposit in a bank or with a notary before or sale to the public of products or substantial delays. registration and up to 3 months following in- services. The business does not perform Only procedures required of all busi- corporation and is recorded as a percentage of foreign trade activities and does not nesses are covered. Industry-specific proce- the economy’s income per capita. The amount handle products subject to a special tax dures are excluded. For example, procedures is typically specified in the commercial code regime, for example, liquor or tobacco. to comply with environmental regulations or the company law. Many economies have It is not using heavily polluting produc- are included only when they apply to all a minimum capital requirement but allow tion processes. businesses conducting general commercial or businesses to pay only a part of it before r -FBTFTUIFDPNNFSDJBMQMBOUBOEPēDFT industrial activities. registration, with the rest to be paid after the and is not a proprietor of real estate. Procedures that the company undergoes first year of operation. In Italy in June 2009, r %PFTOPURVBMJGZGPSJOWFTUNFOUJODFO- to connect to electricity, water, gas and waste the minimum capital requirement for limited tives or any special benefits. disposal services are not included. liability companies was €10,000, of which at r )BTBUMFBTUBOEVQUPFNQMPZFFT least €2,500 was payable before registration. 1 month after the commencement of TIME The paid-in minimum capital recorded for operations, all of them nationals. Time is recorded in calendar days. The mea- Italy is therefore €2,500, or 9.7% of income r )BTBUVSOPWFSPGBUMFBTUUJNFT sure captures the median duration that in- per capita. In Mexico the minimum capital income per capita. corporation lawyers and notaries indicate is requirement was 50,000 pesos, of which one- r )BTBDPNQBOZEFFEQBHFTMPOH necessary to complete a procedure with mini- fifth needed to be paid before registration. The PROCEDURES mum follow-up with government agencies paid-in minimum capital recorded for Mexico and no extra payments. It is assumed that the is therefore 10,000 pesos, or 8.9% of income A procedure is defined as any interaction of minimum time required for each procedure per capita. the company founders with external parties is 1 day. Although procedures may take place (for example, government agencies, lawyers, simultaneously, they cannot start on the same The data details on starting a business can auditors or notaries). Interactions between day (that is, simultaneous procedures start on be found for each economy at http://www. company founders or company officers and consecutive days). A procedure is considered doingbusiness.org by selecting the economy in employees are not counted as procedures. completed once the company has received the the drop-down list. This methodology was de- Procedures that must be completed in the final document, such as the company registra- veloped in Djankov, La Porta, López-Silanes same building but in different offices are tion certificate or tax number. It is assumed and Shleifer. 2002. “The Regulation of Entry”. counted as separate procedures. If founders that the entrepreneur does not waste time Quarterly Journal of Economics 117(1): 1-37; have to visit the same office several times and commits to completing each remaining and is adopted here with minor changes. for different sequential procedures, each is procedure without delay. The time that the en- counted separately. The founders are assumed trepreneur spends on gathering information is to complete all procedures themselves, with- ignored. It is assumed that the entrepreneur DATA NOTES 35 DEALING WITH CONSTRUCTION ASSUMPTIONS ABOUT THE WARE- tion reasons; a fire extinguishing system PERMITS HOUSE (dry system) will be used instead. If a The warehouse: wet fire protection system is required Doing Business in Nigeria 2010 records all by law, it is assumed that the water r 8JMMCFVTFEGPSHFOFSBMTUPSBHF demand specified below also covers the procedures required for a business in the activities, such as storage of books or water needed for fire protection. construction industry to build a standardized stationery. The warehouse will not be used for any goods requiring special r )BTBOBWFSBHFXBUFSVTFPGMJUFST warehouse. These procedures include submit- conditions, such as food, chemicals or (175 gallons) a day and an average ting all relevant project specific documents wastewater flow of 568 liters (150 gal- (for example, building plans and site maps) to pharmaceuticals. lons) a day. the authorities; obtaining all necessary clear- r )BTTUPSJFT CPUIBCPWFHSPVOE XJUI a total surface of approximately 1,300.6 r )BTBQFBLXBUFSVTFPG MJUFST  ances, licenses, permits and certificates; com- gallons) a day and a peak wastewater square meters (14,000 square feet). pleting all required notifications; and receiv- flow of 1,136 liters (300 gallons) a day. Each floor is 3 meters (9 feet, 10 inches) ing all necessary inspections. Doing Business high. r 8JMMIBWFBDPOTUBOUMFWFMPGXBUFSEF- in Nigeria 2010 also records procedures for mand and wastewater flow throughout r )BTSPBEBDDFTTBOEJTMPDBUFEJOUIF obtaining connections for electricity, water, peri-urban area of the state’s selected the year. sewerage and a fixed land line. Procedures city (that is, on the fringes of the locali- necessary to register the property so that it ties but still within their official limits). The telephone connection: can be used as collateral or transferred to r *TOPUMPDBUFEJOBTQFDJBMFDPOPNJDPS r *TNFUFST GFFU JODIFT GSPN another entity are also counted. The survey industrial zone. The zoning require- the main telephone network. divides the process of building a warehouse ments for warehouses are met by build- r *TBêYFEMBOEMJOF into distinct procedures and calculates the ing in an area where similar warehouses time and cost of completing each procedure in can be found. PROCEDURES practice under normal circumstances. r *TMPDBUFEPOBMBOEQMPUPGTRVBSF A procedure is any interaction of the com- Information is collected from experts in meters (10,000 square feet) that is 100% pany’s employees or managers with external construction licensing, including architects, owned by BuildCo and is accurately parties, including government agencies, no- construction lawyers, construction firms, registered in the cadastre and land taries, the land registry, the cadastre, utility utility service providers and public officials registry. companies, public and private inspectors and who deal with building regulations, includ- r *TBOFXDPOTUSVDUJPO UIFSFXBTOP technical experts apart from in-house archi- ing approvals and inspections. To make the previous construction on the land). tects and engineers. data comparable across economies, several as- r )BTDPNQMFUFBSDIJUFDUVSBMBOE Interactions between company employ- sumptions about the business, the warehouse technical plans prepared by a licensed ees, such as development of the warehouse architect. project and the utility connections are used. plans and inspections conducted by employ- r 8JMMJODMVEFBMMUFDIOJDBMFRVJQNFOU ees, are not counted as procedures. Proce- ASSUMPTIONS ABOUT THE CON- required to make the warehouse fully dures that the company undergoes to connect STRUCTION COMPANY operational. to electricity, water, sewerage and telephone The business (BuildCo): ASSUMPTIONS ABOUT THE UTILITY services are included. All procedures that are r *TBMJNJUFEMJBCJMJUZDPNQBOZ CONNECTIONS legally or in practice required for building a r 0QFSBUFTJOUIFTUBUFTMBSHFTUCVTJOFTT The electricity connection: warehouse are counted, even if they may be city. r *TNFUFST GFFU JODIFT GSPN avoided in exceptional cases. r *TEPNFTUJDBMMZBOEQSJWBUFMZPXOFE the main electricity network. TIME r )BTPXOFST OPOFPGXIPNJTBMFHBM r *TBNFEJVNUFOTJPO QIBTF XJSF entity. Y, 140-kVA connection. Three-phase Time is recorded in calendar days. The mea- r *TGVMMZMJDFOTFEBOEJOTVSFEUPDBSSZ service is available in the construction sure captures the median duration that local out construction projects, such as area. experts indicate is necessary to complete a building warehouses. r 8JMMCFEFMJWFSFECZBOPWFSIFBE procedure in practice. It is assumed that the r )BTCVJMEFSTBOEPUIFSFNQMPZFFT  service, unless overhead service is not minimum time required for each procedure all of them nationals with the technical available in the peri-urban area. is 1 day. Although procedures may take place expertise and professional experi- r $POTJTUTPGBTJNQMFIPPLVQVOMFTT simultaneously, they cannot start on the same ence necessary to obtain construction installation of a private substation day (that is, simultaneous procedures start permits and approvals. (transformer) or extension of network on consecutive days). If a procedure can be r )BTBUMFBTUFNQMPZFFXIPJTBMJ- is required. accelerated legally for an additional cost, the censed architect and registered with the r 3FRVJSFTUIFJOTUBMMBUJPOPGPOMZPOF fastest legal procedure available and used by local association of architects. electricity meter. the majority of construction companies is r )BTQBJEBMMUBYFTBOEUBLFOPVUBMMOFD- BuildCo is assumed to have a licensed chosen. It is assumed that BuildCo does not essary insurance applicable to its general electrician on its team to complete the internal waste time and commits to completing each business activity (for example, accidental wiring for the warehouse. remaining procedure without delay. The time insurance for construction workers and The water and sewerage connection: that BuildCo spends on gathering informa- third-person liability insurance). r *TNFUFST GFFU JODIFT GSPN tion is ignored. It is assumed that BuildCo is r 0XOTUIFMBOEPOXIJDIUIFXBSFIPVTF the existing water source and sewer tap. aware of all building requirements and their is built. r %PFTOPUSFRVJSFXBUFSGPSêSFQSPUFD- sequence from the beginning. 36 DOING BUSINESS IN NIGERIA 2010 COST r "SFEPNFTUJDBMMZBOEQSJWBUFMZ TIME Cost is recorded as a percentage of the econ- owned. Time is recorded in calendar days. The mea- omy’s income per capita. Only official costs r )BWFFNQMPZFFTFBDI BMMPGXIPN sure captures the median duration that prop- are recorded. All the fees associated with are nationals. erty lawyers, notaries or registry officials indi- completing the procedures to legally build r 1FSGPSNHFOFSBMDPNNFSDJBMBDUJWJUJFT cate is necessary to complete a procedure. It is a warehouse are recorded, including those assumed that the minimum time required for ASSUMPTIONS ABOUT THE PROPERTY associated with obtaining land use approv- each procedure is 1 day. Although procedures als and preconstruction design clearances; The property: may take place simultaneously, they cannot receiving inspections before, during and after r )BTBWBMVFPGUJNFTJODPNFQFS start on the same day. It is assumed that the construction; getting utility connections; and capita. The sale price equals the value. buyer does not waste time and commits to registering the warehouse property. Nonre- r *TGVMMZPXOFECZUIFTFMMFS completing each remaining procedure with- curring taxes required for the completion of r )BTOPNPSUHBHFTBUUBDIFEBOEIBT out delay. If a procedure can be accelerated for the warehouse project also are recorded. The been under the same ownership for the an additional cost, the fastest legal procedure building code, information from local experts past 10 years. available and used by the majority of property and specific regulations and fee schedules are r *TSFHJTUFSFEJOUIFMBOESFHJTUSZPSDBEBT- owners is chosen. If procedures can be under- used as sources for costs. If several local part- tre, or both, and is free of title disputes. taken simultaneously, it is assumed that they ners provide different estimates, the median r *TMPDBUFEJOBQFSJVSCBODPNNFSDJBM are. It is assumed that the parties involved are reported value is used. zone, and no rezoning is required. aware of all regulations and their sequence r $POTJTUTPGMBOEBOEBCVJMEJOHѮF from the beginning. Time spent on gathering The data details on dealing with construction land area is 557.4 square meters (6,000 information is not considered. permits can be found for each economy at square feet). A 2-story warehouse of http://www.doingbusiness.org by selecting the 929 square meters (10,000 square feet) COST economy in the dropdown list. is located on the land. The warehouse Cost is recorded as a percentage of the prop- is 10 years old, is in good condition erty value, assumed to be equivalent to 50 and complies with all safety standards, REGISTERING PROPERTY building codes and other legal require- times income per capita. Only official costs ments. The property of land and build- required by law are recorded, including fees, Doing Business in Nigeria 2010 records the ing will be transferred in its entirety. transfer taxes, stamp duties and any other full sequence of procedures necessary for a r 8JMMOPUCFTVCKFDUUPSFOPWBUJPOTPSBE- payment to the property registry, notaries, business (buyer) to purchase a property from ditional building following the purchase. public agencies or lawyers. Other taxes, such another business (seller) and to transfer the r )BTOPUSFFT OBUVSBMXBUFSTPVSDFT  as capital gains tax or value added tax, are property title to the buyer’s name so that the natural reserves or historical monu- excluded from the cost measure. Both costs buyer can use the property for expanding its ments of any kind. borne by the buyer and those borne by the business, use the property as collateral in tak- r 8JMMOPUCFVTFEGPSTQFDJBMQVSQPTFT  seller are included. If cost estimates differ ing new loans or, if necessary, sell the property and no special permits, such as for among sources, the median reported value to another business. The process starts with residential use, industrial plants, waste is used. obtaining the necessary documents, such as storage or certain types of agricultural a copy of the seller’s title if necessary, and activities, are required. The data details on registering property can conducting due diligence if required. The r )BTOPPDDVQBOUT MFHBMPSJMMFHBM BOE be found for each economy at http://www. transaction is considered complete when it is no other party holds a legal interest in it. doingbusiness.org by selecting the economy in opposable to third parties and when the buyer the drop-down list. PROCEDURES can use the property, use it as collateral for a bank loan or resell it. A procedure is defined as any interaction ENFORCING CONTRACTS Every procedure required by law or neces- of the buyer or the seller, their agents (if an sary in practice is included, whether it is the agent is legally or in practice required) or Indicators on enforcing contracts measure the responsibility of the seller or the buyer or must be the property with external parties, includ- efficiency of the judicial system in resolving DPNQMFUFECZBUIJSEQBSUZPOUIFJSCFIBMG-PDBM ing government agencies, inspectors, notaries a commercial dispute. The data are built by property lawyers, notaries and property registries and lawyers. Interactions between company following the step-by-step evolution of a com- provide information on procedures as well as the officers and employees are not considered. All mercial sale dispute before local courts. The time and cost to complete each of them. procedures that are legally or in practice re- data are collected through study of the codes To make the data comparable across quired for registering property are recorded, of civil procedure and other court regulations economies, several assumptions about the even if they may be avoided in exceptional as well as surveys completed by local litigation parties to the transaction, the property and cases. It is assumed that the buyer follows the lawyers as well as by judges. the procedures are used. fastest legal option available and used by the majority of property owners. ASSUMPTIONS ABOUT THE CASE ASSUMPTIONS ABOUT THE PARTIES Although the buyer may use lawyers or r ѮFWBMVFPGUIFDMBJNFRVBMTPG The parties (buyer and seller): other professionals where necessary in the the economy’s income per capita. r "SFMJNJUFEMJBCJMJUZDPNQBOJFT registration process, it is assumed that it does r ѮFEJTQVUFDPODFSOTBMBXGVMUSBOTBD- not employ an outside facilitator in the reg- tion between 2 businesses (Seller and r "SFMPDBUFEJOUIFQFSJVSCBOBSFBPG Buyer), located in the state’s largest the state’s largest business city. istration process unless legally or in practice business city. Seller sells goods worth required to do so. DATA NOTES 37 200% of the Country’s income per The survey allows respondents to record AGGREGATE RANKING capita to Buyer. After Seller delivers the procedures that exist in civil law but not com- goods to Buyer, Buyer refuses to pay mon law jurisdictions, and vice versa. For The aggregate ranking index is calculated as for the goods on the grounds that the example, in civil law countries the judge can the ranking on the simple average of state delivered goods were not of adequate appoint an independent expert, while in com- percentile rankings on each of the 4 topics quality. mon law countries each party submits a list covered in Doing Business in Nigeria 2010. r 4FMMFS UIFQMBJOUJĒ TVFT#VZFS UIF of expert witnesses to the court. To indicate The aggregate ranking measure ranges from defendant) to recover the amount un- der the sales agreement (that is, 200% overall efficiency, 1 procedure is subtracted 1 to 37, with lower values indicating more of the economy’s income per capita). from the total number for economies that efficient regulation and stronger protection of Buyer opposes Seller’s claim, saying that have specialized commercial courts, and 1 property rights. The ranking on each topic is the quality of the goods is not adequate. procedure for economies that allow electronic the simple average of the percentile rankings The claim is disputed on the merits. filing of court cases. Some procedural steps on its component indicators. r "DPVSUJOUIFTUBUFTMBSHFTUCVTJOFTT that take place simultaneously with or are The aggregate ranking index is limited city with jurisdiction over commercial included in other procedural steps are not in scope. It does not account for a state’s cases worth 200% of income per capita counted in the total number of procedures. proximity to large markets, the quality of its decides the dispute. infrastructure services (other than services r 4FMMFSBUUBDIFT#VZFSTNPWBCMFBT- TIME related to construction permits), the security sets (for example, office equipment, Time is recorded in calendar days, counted of property from theft and looting, macroeco- vehicles) prior to obtaining a judgment from the moment the plaintiff files the lawsuit nomic conditions or the strength of underly- because Seller fears that Buyer may in court until payment. This includes both the ing institutions. There remains a large unfin- become insolvent during the law suit. days when actions take place and the waiting ished agenda for research into what regulation r &YQFSUPQJOJPOTBSFHJWFOPOUIFRVBMJUZ periods between. The average duration of dif- constitutes binding constraints, what package of the delivered goods. If it is standard ferent stages of dispute resolution is recorded: of reforms is most effective and how these is- practice in the economy for each party to call its own expert witness, the par- the completion of service of process (time to sues are shaped by the context of an economy. ties each call one expert witness. If it is file the case), the issuance of judgment (time The Doing Business indicators provide a new standard practice for the judge to ap- for the trial and obtaining the judgment) and empirical data set that may improve under- point an independent expert, the judge the moment of payment (time for enforce- standing of these issues. does so. In this case the judge does not ment of judgment). allow opposing expert testimony. r ѮFKVEHNFOUJTJOGBWPSPG4FMMFS COST the judge decides that the goods are of Cost is recorded as a percentage of the claim, adequate quality and that Buyer must assumed to be equivalent to 200% of income pay the agreed price. per capita. No bribes are recorded. Three types r #VZFSEPFTOPUBQQFBMUIFKVEHNFOU of costs are recorded: court costs, enforcement The judgment becomes final. costs and average attorney fees. r 4FMMFSUBLFTBMMSFRVJSFETUFQTGPS Court costs include all costs Seller prompt enforcement of the judgment. (plaintiff) must advance to the court or the The money is successfully collected expert regardless of the final cost to Seller. through a public sale of Buyer’s mov- Expert fees, if required by law or necessary in able assets (for example, office equip- ment, vehicles). practice, are included in court costs. Enforce- ment costs are all costs Seller (plaintiff) must PROCEDURES advance to enforce the judgment through a The list of procedural steps compiled for each public sale of Buyer’s movable assets, regard- state traces the chronology of a commercial less of the final cost to Seller. Average attor- dispute before the relevant court. A procedure neys fees are the fees Seller (plaintiff) must is defined as any interaction between the par- advance to a local attorney to represent Seller ties, or between them and the judge or court in the standardized case. officer. This includes steps to file the case, steps for trial and judgment and steps neces- The data details on enforcing contracts can sary to enforce the judgment. be found for each economy at http://www. doingbusiness.org by selecting the economy in the drop-down list. This methodology was de- veloped in Djankov, La Porta, López-de-Silanes and Shleifer. 2003. “Courts”. Quarterly Journal of Economics 118 (2): 453-517; and is adopted here with minor changes. State tables STATE TABLES 39 Abia, Aba Aggregate ranking 32 Starting a business (rank) 18 Registering property (rank) 30 Procedures (number) 9 Procedures (number) 13 Time (days) 33 Time (days) 106 Cost (% of income per capita) 67.8 Cost (% of the property value) 18.5 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 30 Dealing with construction permits (rank) 30 Procedures (number) 40 Procedures (number) 16 Time (days) 464 Time (days) 79 Cost (% of claim) 47.6 Cost (% of income per capita) 718.1 Adamawa, Yola Aggregate ranking 19 Starting a business (rank) 20 Registering property (rank) 25 Procedures (number) 7 Procedures (number) 13 Time (days) 44 Time (days) 120 Cost (% of income per capita) 74.7 Cost (% of the property value) 12.2 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 32 Dealing with construction permits (rank) 4 Procedures (number) 40 Procedures (number) 11 Time (days) 729 Time (days) 69 Cost (% of claim) 40.5 Cost (% of income per capita) 395.1 Akwa Ibom, Uyo Aggregate ranking 20 Starting a business (rank) 7 Registering property (rank) 17 Procedures (number) 8 Procedures (number) 12 Time (days) 34 Time (days) 55 Cost (% of income per capita) 65.1 Cost (% of the property value) 15.6 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 28 Dealing with construction permits (rank) 29 Procedures (number) 40 Procedures (number) 14 Time (days) 428 Time (days) 111 Cost (% of claim) 46.8 Cost (% of income per capita) 617.1 Anambra, Onitsha Aggregate ranking 35 Starting a business (rank) 27 Registering property (rank) 30 Procedures (number) 9 Procedures (number) 13 Time (days) 39 Time (days) 212 Cost (% of income per capita) 84.4 Cost (% of the property value) 15.4 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 31 Dealing with construction permits (rank) 31 Procedures (number) 40 Procedures (number) 16 Time (days) 600 Time (days) 99 Cost (% of claim) 42.6 Cost (% of income per capita) 574.3 Bauchi, Bauchi Aggregate ranking 10 Starting a business (rank) 21 Registering property (rank) 12 Procedures (number) 10 Procedures (number) 10 Time (days) 36 Time (days) 77 Cost (% of income per capita) 64.9 Cost (% of the property value) 11.1 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 10 Dealing with construction permits (rank) 7 Procedures (number) 40 Procedures (number) 11 Time (days) 455 Time (days) 59 Cost (% of claim) 27.4 Cost (% of income per capita) 564.2 40 DOING BUSINESS IN NIGERIA 2010 Bayelsa, Yenagoa Aggregate ranking 28 Starting a business (rank) 37 Registering property (rank) 23 Procedures (number) 11 Procedures (number) 13 Time (days) 47 Time (days) 84 Cost (% of income per capita) 84.7 Cost (% of the property value) 14.3 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 14 Dealing with construction permits (rank) 25 Procedures (number) 40 Procedures (number) 15 Time (days) 393 Time (days) 81 Cost (% of claim) 36.7 Cost (% of income per capita) 632.9 Benue, Makurdi Aggregate ranking 13 Starting a business (rank) 10 Registering property (rank) 11 Procedures (number) 8 Procedures (number) 9 Time (days) 36 Time (days) 98 Cost (% of income per capita) 65.0 Cost (% of the property value) 8.1 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 29 Dealing with construction permits (rank) 11 Procedures (number) 40 Procedures (number) 14 Time (days) 606 Time (days) 83 Cost (% of claim) 39.7 Cost (% of income per capita) 441.4 Borno, Maiduguri Aggregate ranking 3 Starting a business (rank) 11 Registering property (rank) 2 Procedures (number) 8 Procedures (number) 8 Time (days) 34 Time (days) 14 Cost (% of income per capita) 71.4 Cost (% of the property value) 14.1 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 5 Dealing with construction permits (rank) 14 Procedures (number) 40 Procedures (number) 13 Time (days) 371 Time (days) 65 Cost (% of claim) 26.2 Cost (% of income per capita) 697.6 Cross River, Calabar Aggregate ranking 33 Starting a business (rank) 35 Registering property (rank) 20 Procedures (number) 9 Procedures (number) 13 Time (days) 47 Time (days) 70 Cost (% of income per capita) 103.7 Cost (% of the property value) 15.0 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 37 Dealing with construction permits (rank) 17 Procedures (number) 40 Procedures (number) 14 Time (days) 835 Time (days) 138 Cost (% of claim) 52.8 Cost (% of income per capita) 187.4 Delta, Warri Aggregate ranking 29 Starting a business (rank) 31 Registering property (rank) 28 Procedures (number) 9 Procedures (number) 13 Time (days) 51 Time (days) 76 Cost (% of income per capita) 84.4 Cost (% of the property value) 25.7 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 27 Dealing with construction permits (rank) 20 Procedures (number) 40 Procedures (number) 16 Time (days) 492 Time (days) 97 Cost (% of claim) 37.1 Cost (% of income per capita) 392.4 STATE TABLES 41 Ebonyi, Abakaliki Aggregate ranking 31 Starting a business (rank) 28 Registering property (rank) 21 Procedures (number) 10 Procedures (number) 12 Time (days) 39 Time (days) 91 Cost (% of income per capita) 68.4 Cost (% of the property value) 14.3 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 32 Dealing with construction permits (rank) 28 Procedures (number) 40 Procedures (number) 23 Time (days) 545 Time (days) 97 Cost (% of claim) 46.3 Cost (% of income per capita) 420.5 Edo, Benin City Aggregate ranking 21 Starting a business (rank) 16 Registering property (rank) 32 Procedures (number) 8 Procedures (number) 15 Time (days) 45 Time (days) 69 Cost (% of income per capita) 60.5 Cost (% of the property value) 27.6 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 6 Dealing with construction permits (rank) 26 Procedures (number) 40 Procedures (number) 14 Time (days) 314 Time (days) 89 Cost (% of claim) 28.7 Cost (% of income per capita) 624.4 Ekiti, Ado-Ekiti Aggregate ranking 34 Starting a business (rank) 32 Registering property (rank) 29 Procedures (number) 9 Procedures (number) 15 Time (days) 40 Time (days) 59 Cost (% of income per capita) 103.7 Cost (% of the property value) 28.3 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 35 Dealing with construction permits (rank) 12 Procedures (number) 40 Procedures (number) 14 Time (days) 797 Time (days) 82 Cost (% of claim) 44.6 Cost (% of income per capita) 451.7 Enugu, Enugu Aggregate ranking 30 Starting a business (rank) 21 Registering property (rank) 14 Procedures (number) 9 Procedures (number) 12 Time (days) 31 Time (days) 73 Cost (% of income per capita) 97.5 Cost (% of the property value) 11.2 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 36 Dealing with construction permits (rank) 34 Procedures (number) 40 Procedures (number) 16 Time (days) 970 Time (days) 88 Cost (% of claim) 45.4 Cost (% of income per capita) 1,509.1 FCT, Abuja Aggregate ranking 17 Starting a business (rank) 1 Registering property (rank) 9 Procedures (number) 5 Procedures (number) 10 Time (days) 22 Time (days) 51 Cost (% of income per capita) 58.5 Cost (% of the property value) 13.0 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 17 Dealing with construction permits (rank) 35 Procedures (number) 40 Procedures (number) 17 Time (days) 381 Time (days) 98 Cost (% of claim) 42.9 Cost (% of income per capita) 950.0 42 DOING BUSINESS IN NIGERIA 2010 Gombe, Gombe Aggregate ranking 2 Starting a business (rank) 4 Registering property (rank) 1 Procedures (number) 8 Procedures (number) 8 Time (days) 24 Time (days) 16 Cost (% of income per capita) 66.2 Cost (% of the property value) 6.6 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 12 Dealing with construction permits (rank) 13 Procedures (number) 40 Procedures (number) 11 Time (days) 470 Time (days) 97 Cost (% of claim) 27.9 Cost (% of income per capita) 522.6 Imo, Owerri Aggregate ranking 36 Starting a business (rank) 33 Registering property (rank) 25 Procedures (number) 10 Procedures (number) 9 Time (days) 39 Time (days) 147 Cost (% of income per capita) 85.9 Cost (% of the property value) 21.3 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 34 Dealing with construction permits (rank) 32 Procedures (number) 40 Procedures (number) 18 Time (days) 510 Time (days) 84 Cost (% of claim) 52.9 Cost (% of income per capita) 654.8 Jigawa, Dutse Aggregate ranking 1 Starting a business (rank) 17 Registering property (rank) 5 Procedures (number) 7 Procedures (number) 11 Time (days) 35 Time (days) 28 Cost (% of income per capita) 81.2 Cost (% of the property value) 11.1 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 4 Dealing with construction permits (rank) 1 Procedures (number) 40 Procedures (number) 10 Time (days) 261 Time (days) 47 Cost (% of claim) 28.6 Cost (% of income per capita) 396.7 Kaduna, Kaduna Aggregate ranking 22 Starting a business (rank) 14 Registering property (rank) 23 Procedures (number) 9 Procedures (number) 12 Time (days) 31 Time (days) 130 Cost (% of income per capita) 69.5 Cost (% of the property value) 13.6 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 7 Dealing with construction permits (rank) 33 Procedures (number) 40 Procedures (number) 15 Time (days) 431 Time (days) 125 Cost (% of claim) 26.2 Cost (% of income per capita) 643.8 Kano, Kano Aggregate ranking 8 Starting a business (rank) 26 Registering property (rank) 4 Procedures (number) 9 Procedures (number) 11 Time (days) 38 Time (days) 31 Cost (% of income per capita) 77.8 Cost (% of the property value) 10.8 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 23 Dealing with construction permits (rank) 3 Procedures (number) 40 Procedures (number) 14 Time (days) 720 Time (days) 56 Cost (% of claim) 29.7 Cost (% of income per capita) 94.6 STATE TABLES 43 Katsina, Katsina Aggregate ranking 7 Starting a business (rank) 25 Registering property (rank) 8 Procedures (number) 9 Procedures (number) 11 Time (days) 37 Time (days) 33 Cost (% of income per capita) 77.8 Cost (% of the property value) 11.0 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 1 Dealing with construction permits (rank) 15 Procedures (number) 40 Procedures (number) 16 Time (days) 285 Time (days) 70 Cost (% of claim) 26.0 Cost (% of income per capita) 435.6 Kebbi, Birnin Kebbi Aggregate ranking 4 Starting a business (rank) 3 Registering property (rank) 16 Procedures (number) 8 Procedures (number) 9 Time (days) 30 Time (days) 195 Cost (% of income per capita) 61.7 Cost (% of the property value) 12.0 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 3 Dealing with construction permits (rank) 8 Procedures (number) 40 Procedures (number) 13 Time (days) 356 Time (days) 68 Cost (% of claim) 26.2 Cost (% of income per capita) 445.3 Koji, Lokoja Aggregate ranking 5 Starting a business (rank) 2 Registering property (rank) 10 Procedures (number) 8 Procedures (number) 9 Time (days) 28 Time (days) 33 Cost (% of income per capita) 61.8 Cost (% of the property value) 15.7 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 25 Dealing with construction permits (rank) 6 Procedures (number) 40 Procedures (number) 12 Time (days) 534 Time (days) 78 Cost (% of claim) 36.6 Cost (% of income per capita) 424.2 Kwara, Ilorin Aggregate ranking 14 Starting a business (rank) 19 Registering property (rank) 15 Procedures (number) 8 Procedures (number) 8 Time (days) 34 Time (days) 78 Cost (% of income per capita) 87.5 Cost (% of the property value) 20.9 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 25 Dealing with construction permits (rank) 5 Procedures (number) 40 Procedures (number) 13 Time (days) 774 Time (days) 52 Cost (% of claim) 30.0 Cost (% of income per capita) 473.7 Lagos, Lagos Aggregate ranking 25 Starting a business (rank) 8 Registering property (rank) 27 Procedures (number) 8 Procedures (number) 13 Time (days) 31 Time (days) 82 Cost (% of income per capita) 77 Cost (% of the property value) 20.9 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 15 Dealing with construction permits (rank) 35 Procedures (number) 39 Procedures (number) 18 Time (days) 457 Time (days) 350 Cost (% of claim) 32.0 Cost (% of income per capita) 580.3 44 DOING BUSINESS IN NIGERIA 2010 Nasarawa, Lafia Aggregate ranking 18 Starting a business (rank) 12 Registering property (rank) 18 Procedures (number) 7 Procedures (number) 11 Time (days) 29 Time (days) 102 Cost (% of income per capita) 87.6 Cost (% of the property value) 13.7 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 8 Dealing with construction permits (rank) 27 Procedures (number) 40 Procedures (number) 16 Time (days) 275 Time (days) 86 Cost (% of claim) 36.4 Cost (% of income per capita) 512.2 Niger, Minna Aggregate ranking 16 Starting a business (rank) 9 Registering property (rank) 19 Procedures (number) 7 Procedures (number) 11 Time (days) 32 Time (days) 86 Cost (% of income per capita) 74.7 Cost (% of the property value) 15.4 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 23 Dealing with construction permits (rank) 10 Procedures (number) 40 Procedures (number) 12 Time (days) 1,130 Time (days) 66 Cost (% of claim) 26.5 Cost (% of income per capita) 584.3 Ogun, Abeokuta Aggregate ranking 37 Starting a business (rank) 36 Registering property (rank) 35 Procedures (number) 10 Procedures (number) 15 Time (days) 40 Time (days) 101 Cost (% of income per capita) 90.9 Cost (% of the property value) 16.2 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 18 Dealing with construction permits (rank) 37 Procedures (number) 40 Procedures (number) 18 Time (days) 455 Time (days) 102 Cost (% of claim) 37.1 Cost (% of income per capita) 713.9 Ondo, Akure Aggregate ranking 24 Starting a business (rank) 33 Registering property (rank) 34 Procedures (number) 10 Procedures (number) 16 Time (days) 37 Time (days) 62 Cost (% of income per capita) 90.9 Cost (% of the property value) 33.6 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 9 Dealing with construction permits (rank) 19 Procedures (number) 40 Procedures (number) 17 Time (days) 382 Time (days) 71 Cost (% of claim) 31.4 Cost (% of income per capita) 428.4 Osun, Osogbo Aggregate ranking 23 Starting a business (rank) 30 Registering property (rank) 36 Procedures (number) 10 Procedures (number) 14 Time (days) 35 Time (days) 93 Cost (% of income per capita) 86.1 Cost (% of the property value) 22.3 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 11 Dealing with construction permits (rank) 9 Procedures (number) 40 Procedures (number) 14 Time (days) 438 Time (days) 84 Cost (% of claim) 30.7 Cost (% of income per capita) 278.9 STATE TABLES 45 Oyo, Ibadan Aggregate ranking 26 Starting a business (rank) 24 Registering property (rank) 33 Procedures (number) 9 Procedures (number) 17 Time (days) 31 Time (days) 65 Cost (% of income per capita) 110.2 Cost (% of the property value) 24.0 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 20 Dealing with construction permits (rank) 23 Procedures (number) 40 Procedures (number) 12 Time (days) 439 Time (days) 137 Cost (% of claim) 37.2 Cost (% of income per capita) 527.7 Plateau, Jos Aggregate ranking 15 Starting a business (rank) 4 Registering property (rank) 13 Procedures (number) 8 Procedures (number) 9 Time (days) 31 Time (days) 66 Cost (% of income per capita) 63.7 Cost (% of the property value) 17.6 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 20 Dealing with construction permits (rank) 24 Procedures (number) 40 Procedures (number) 15 Time (days) 498 Time (days) 84 Cost (% of claim) 34.6 Cost (% of income per capita) 552.0 Rivers, Port Harcourt Aggregate ranking 27 Starting a business (rank) 29 Registering property (rank) 37 Procedures (number) 10 Procedures (number) 13 Time (days) 38 Time (days) 201 Cost (% of income per capita) 71.7 Cost (% of the property value) 23.2 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 22 Dealing with construction permits (rank) 15 Procedures (number) 40 Procedures (number) 11 Time (days) 375 Time (days) 148 Cost (% of claim) 46.7 Cost (% of income per capita) 429.1 Sokoto, Sokoto Aggregate ranking 12 Starting a business (rank) 23 Registering property (rank) 21 Procedures (number) 9 Procedures (number) 12 Time (days) 31 Time (days) 86 Cost (% of income per capita) 103.7 Cost (% of the property value) 15.0 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 16 Dealing with construction permits (rank) 2 Procedures (number) 40 Procedures (number) 13 Time (days) 638 Time (days) 63 Cost (% of claim) 27.1 Cost (% of income per capita) 154.2 Taraba, Jalingo Aggregate ranking 11 Starting a business (rank) 6 Registering property (rank) 5 Procedures (number) 8 Procedures (number) 12 Time (days) 33 Time (days) 22 Cost (% of income per capita) 60.0 Cost (% of the property value) 8.2 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 18 Dealing with construction permits (rank) 21 Procedures (number) 40 Procedures (number) 15 Time (days) 327 Time (days) 84 Cost (% of claim) 52.6 Cost (% of income per capita) 464.7 46 DOING BUSINESS IN NIGERIA 2010 Yobe, Damaturu Aggregate ranking 6 Starting a business (rank) 13 Registering property (rank) 5 Procedures (number) 8 Procedures (number) 9 Time (days) 38 Time (days) 80 Cost (% of income per capita) 61.9 Cost (% of the property value) 5.2 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 2 Dealing with construction permits (rank) 22 Procedures (number) 40 Procedures (number) 18 Time (days) 368 Time (days) 65 Cost (% of claim) 26.1 Cost (% of income per capita) 475.7 Zamfara, Gusau Aggregate ranking 9 Starting a business (rank) 15 Registering property (rank) 3 Procedures (number) 8 Procedures (number) 10 Time (days) 36 Time (days) 32 Cost (% of income per capita) 71.5 Cost (% of the property value) 8.1 Minimum capital (% of income per capita) 0 Enforcing contracts (rank) 13 Dealing with construction permits (rank) 18 Procedures (number) 40 Procedures (number) 14 Time (days) 402 Time (days) 57 Cost (% of claim) 36.0 Cost (% of income per capita) 1,052.5 Doing Business Indicators 48 DOING BUSINESS IN NIGERIA 2010 Starting a business Dealing with construction permits Paid-in Ease of minimum Ease of Cost dealing with Cost capital starting a (% of construction Procedures Time (% of income (% of income business Procedures Time income permits (number) (days) per capita) per capita) (rank) (number) (days) per capita) (rank) Abia, Aba 9 33 67.8 0 18 16 79 718.1 30 Adamawa, Yola 7 44 74.7 0 20 11 69 395.1 4 Akwa Ibom , Uyo 8 34 65.1 0 7 14 111 617.1 29 Anambra, Onitsha 9 39 84.4 0 27 16 99 574.3 31 Bauchi, Bauchi 10 36 64.9 0 21 11 59 564.2 7 Bayelsa, Yenagoa 11 47 84.7 0 37 15 81 632.9 25 Benue, Makurdi 8 36 65.0 0 10 14 83 441.4 11 Borno, Maiduguri 8 34 71.4 0 11 13 65 697.6 14 Cross River, Calabar 9 47 103.7 0 35 14 138 187.4 17 Delta, Warri 9 51 84.4 0 31 16 97 392.4 20 Ebonyi, Abakaliki 10 39 68.4 0 28 23 97 420.5 28 Edo, Benin City 8 45 60.5 0 16 14 89 624.4 26 Ekiti, Ado-Ekiti 9 40 103.7 0 32 14 82 451.7 12 Enugu, Enugu 9 31 97.5 0 21 16 88 1,509.1 34 FCT, Abuja 5 22 58.5 0 1 17 98 950.0 35 Gombe, Gombe 8 24 66.2 0 4 11 97 522.6 13 Imo , Owerri 10 39 85.9 0 33 18 84 654.8 32 Jigawa, Dutse 7 35 81.2 0 17 10 47 396.7 1 Kaduna, Kaduna 9 31 69.5 0 14 15 125 643.8 33 Kano, Kano 9 38 77.8 0 26 14 56 94.6 3 Katsina, Katsina 9 37 77.8 0 25 16 70 435.6 15 Kebbi, Birnin Kebbi 8 30 61.7 0 3 13 68 445.3 8 Kogi, Lokoja 8 28 61.8 0 2 12 78 424.2 6 Kwara, Ilorin 8 34 87.5 0 19 13 52 473.7 5 Lagos, Lagos 8 31 77.0 0 8 18 350 580.3 35 Nasarawa, Lafia 7 29 87.6 0 12 16 86 512.2 27 Niger, Minna 7 32 74.7 0 9 12 66 584.3 10 Ogun, Abeokuta 10 40 90.9 0 36 18 102 713.9 37 Ondo, Akure 10 37 90.9 0 33 17 71 428.4 19 Osun, Osogbo 10 35 86.1 0 30 14 84 278.9 9 Oyo , Ibadan 9 31 110.2 0 24 12 137 527.7 23 Plateau, Jos 8 31 63.7 0 4 15 84 552.0 24 Rivers , Port Harcourt 10 38 71.7 0 29 11 148 429.1 15 Sokoto, Sokoto 9 31 103.7 0 23 13 63 154.2 2 Taraba, Jalingo 8 33 60.0 0 6 15 84 464.7 21 Yobe, Damaturu 8 38 61.9 0 13 18 65 475.7 22 Zamfara, Gusau 8 36 71.5 0 15 14 57 1,052.5 18 DOING BUSINESS INDICATORS 49 Registering property Enforcing contracts Cost Ease of Ease of (% of registering enforcing Procedures Time property property Procedures Time Cost contracts (number) (days) value) (rank) (number) (days) (% of claim) (rank) Abia, Aba 13 106 18.5 30 40 464 47.6 30 Adamawa, Yola 13 120 12.2 25 40 729 40.5 32 Akwa Ibom , Uyo 12 55 15.6 17 40 428 46.8 28 Anambra, Onitsha 13 212 15.4 30 40 600 42.6 31 Bauchi, Bauchi 10 77 11.1 12 40 455 27.4 10 Bayelsa, Yenagoa 13 84 14.3 23 40 393 36.7 14 Benue, Makurdi 9 98 8.1 11 40 606 39.7 29 Borno, Maiduguri 8 14 14.1 2 40 371 26.2 5 Cross River, Calabar 13 70 15.0 20 40 835 52.8 37 Delta, Warri 13 76 25.7 28 40 492 37.1 27 Ebonyi, Abakaliki 12 91 14.3 21 40 545 46.3 32 Edo, Benin City 15 69 27.6 32 40 314 28.7 6 Ekiti, Ado-Ekiti 15 59 28.3 29 40 797 44.6 35 Enugu, Enugu 12 73 11.2 14 40 970 45.4 36 FCT, Abuja 10 51 13.0 9 40 381 42.9 17 Gombe, Gombe 8 16 6.6 1 40 470 27.9 12 Imo , Owerri 9 147 21.3 25 40 510 52.9 34 Jigawa, Dutse 11 28 11.1 5 40 261 28.6 4 Kaduna, Kaduna 12 130 13.6 23 40 431 26.2 7 Kano, Kano 11 31 10.8 4 40 720 29.7 23 Katsina, Katsina 11 33 11.0 8 40 285 26.0 1 Kebbi, Birnin Kebbi 9 195 12.0 16 40 356 26.2 3 Kogi, Lokoja 9 33 15.7 10 40 534 36.6 25 Kwara, Ilorin 8 78 20.9 15 40 774 30.0 25 Lagos, Lagos 13 82 20.9 27 39 457 32.0 15 Nasarawa, Lafia 11 102 13.7 18 40 275 36.4 8 Niger, Minna 11 86 15.4 19 40 1130 26.5 23 Ogun, Abeokuta 15 101 16.2 35 40 455 37.1 18 Ondo, Akure 16 62 33.6 34 40 382 31.4 9 Osun, Osogbo 14 93 22.3 36 40 438 30.7 11 Oyo , Ibadan 17 65 24.0 33 40 439 37.2 20 Plateau, Jos 9 66 17.6 13 40 498 34.6 20 Rivers , Port Harcourt 13 201 23.2 37 40 375 46.7 22 Sokoto, Sokoto 12 86 15.0 21 40 638 27.1 16 Taraba, Jalingo 12 22 8.2 5 40 327 52.6 18 Yobe, Damaturu 9 80 5.2 5 40 368 26.1 2 Zamfara, Gusau 10 32 8.1 3 40 402 36.0 13 LIST OF PROCEDURES List of Starting a business procedures ABIA, Aba Standard company legal form: Limited Liability Company Starting a business Paid-in minimum capital requirement: none Data as of: January 2010 Dealing with Procedure 1. Check the availability of company’s name with the Corporate Affairs Commission (CAC) construction permits Time: 2 days Cost: NGN 200 Registering property Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the company name is usually 2 days. The company’s name reservation lasts 60 days but can be renewed for a similar period. Procedure 2. Prepare the requisite incorporation documents and pay the stamp duty Time: 7 days Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra stamped copy of memorandum and articles of association + NGN 500 for incorpora- tion forms) Comments: This procedure involves the following tasks: a. Preparing and printing the memorandum and articles of association; b. Completing the requisite statutory forms, and; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. There is a stamp duty office located in the state capital in Umuahia and housed in the same premises with the CAC. Procedure 3. Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary public Time: 1 day Cost: NGN 500 Comments: A sworn declaration that the requirements of the Companies and Allied Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the state or federal High Court. The com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at the state High Court. Procedure 4*. Pay incorporation fees to the Corporate Affairs Commission at a designated bank Time: 1 day Cost: NGN 27,000 ( NGN 20,000 filing fees for company whose share capital is NGN 1,546,353 + NGN 3,000 for certified true copy of memorandum and articles of asso- ciation + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for certified true copy of particulars of shareholders) Comments: Payment is made to any of the receiving banks designated by the Cor- porate Affairs Commission. Procedure 5. Register the company with the Corporate Affairs Commission Time: 16 days Cost: NGN 60,000 (legal fees) Comments: The applicant must file with the CAC the required incorporation docu- ments and forms, which include: a. Stamped memorandum and articles of association (2 copies); b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. 52 DOING BUSINESS IN NIGERIA 2010 The CAC introduced a same-day incorporation option at an increased statutory Procedure 9. Pay registration fees for business premises into a fee (5 times that of standard incorporation). The fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every government account at a designated bank NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Time: 1 day 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Cost: No cost NGN 7,000. Comments: Fees for the business premises permit are paid into a government ac- There is a legal requirement for the company's incorporators to hire a CAC accredited count at a designated bank. professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the *This procedure can be completed simultaneously with previous procedures. country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 60,000 to handle the entire incorporation process in this state. STARTING A BUSINESS ADAMAWA, Yola Procedure 6. Register with the integrated Tax Office of the Standard company legal form: Limited Liability Company Federal Board of Inland Revenue for income tax and VAT Paid in minimum capital requirement: none Time: 5 days Data as of: January 2010 Cost: No cost Comments: Entrepreneurs can register for both corporate income tax and VAT at Procedure 1. Check the availability of company’s name with the the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Corporate Affairs Commission (CAC) Service (FIRS) will require the applicant to complete tax registration forms. The new Time: 7 days company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate. Cost: NGN 200 A form obtained from the tax office is filled and the following documents submitted Comments: The Corporate Affairs Commission online system allows for online with it: search of unique company names upon the purchase of an e-payment card for a a. Taxpayer registration input form (TRIF/2006/001 COYS); flat fee of NGN 200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The time b. Completed FIRS questionnaire; to conduct the availability of name search, receive confirmation and reserve the c. Copy of memorandum and articles of association; company name is usually a week in this state. The company’s name reservation lasts d. Names and addresses of directors; 60 days but can be renewed for a similar period. e. Copy of the certificate of incorporation; Procedure 2. Prepare the requisite incorporation documents and f. Name, address of tax adviser; pay the stamp duty g. Letter of appointment of tax adviser and a letter of acceptance. Time: 14 days The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra completed. Upon receipt of the completed taxpayer registration input form and all stamped copy of memorandum and articles of association + NGN 500 for incorpora- documents, a tax reference number is allocated. An application must be filed for the tion forms) tax clearance certificate. Its issuance is not automatic. Comments: This procedure involves the following tasks: The fees for the tax clearance issuance are as follows: for newly registered companies a. Preparing and printing the memorandum and articles of association; within 6 months of incorporation: no fee; for companies that are yet to commence b. Completing the requisite statutory forms, and; business and show up for registration after 6 months of incorporation, if they request c. Having the memorandum and articles of association stamped by the Federal for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Board of Inland Revenue Service. time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. There is a stamp duty office located in the state capital in Yola and it is not housed in the same premises with the CAC. The reason why this procedure is lengthy is the Companies required to register for VAT should complete the VAT registration form poor capacity of those who prepare the incorporation documents. The inexperience (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the of the lawyers and poor exposure of the promoters of the company is a major chal- nearest integrated tax office, which will issue a taxpayer identification number (TIN). lenge. The promoters do not always have the requisite information, documents or According to the VAT Act, companies required to register for VAT must do so within 6 understanding, required to prepare the memorandum and articles of association and months from the date of starting business operations. The TIN is issued in 1-2 days, therefore have to source professional help, adding time to this procedure. but it is mailed with the VAT certificate, which is issued in a week. Procedure 3. Declaration of Compliance (Form CAC 4) signed Procedure 7*. Register for personal income tax PAYE at the State before a Commissioner for Oaths or notary public Tax Office Time: 1 day Time: 2 days Cost: NGN 200 Cost: No cost Comments: A sworn declaration that the requirements of the Companies and Allied Comments: The employers in the newly incorporated company are required to reg- Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged ister with the relevant state tax authority for the purposes of deducting income tax in the formation of the company or (ii) by a person named in the memorandum and from employees. Once an application is filed with a copy of the certificate of incor- articles of association as a director or secretary of the company. This procedure can poration attached, a reference file is then opened for the company. There is no cost be done before a notary public or filed at the state or federal High Court. The com- related to this registration. mon practice is for this declaration to be sworn before a Commissioner of Oaths at the state High Court. Procedure 8*. Obtain a business premises permit from the state’s Ministry of Commerce and Industry Procedure 4. Register the company with the Corporate Affairs Time: 3 days Commission Cost: NGN 4,000 Time: 18 days Comments: Following incorporation with the CAC, a newly established business Cost: NGN 92,000 (NGN 65,000 for legal fees + registration fees of NGN 10,000 for must register and obtain a business premises permit from the Ministry of Commerce first 1,000,000 share capital and NGN 10,000 for each additional 1,000,000 + NGN and Industry. The fees vary from NGN 400 to NGN 100,000. The registration fee for 7,000 for certified true copies of memorandum and articles of association and par- a medium sized manufacturing or commercial company is NGN 4,000 for the initial ticulars of directors and shareholders) registration and NGN 2,000 for the subsequent annual renewals. Comments: The applicant must file with the CAC, the required incorporation docu- ments and forms, which include: a. Stamped memorandum and articles of association (2 copies); b. Form CAC 3, Notice of registered address; LIST OF PROCE %63&4t STARTING A BUSINESS 53 STARTING A BUSINESS c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; AKWA IBOM, Uyo e. Copy of the reservation of company name approval; Standard company legal form: Limited Liability Company f. Form CAC 2, Statement of share capital and return of allotment of shares. Paid in minimum capital requirement: none The CAC introduced a same-day incorporation option at an increased statutory Data as of: January 2010 fee (5 times that of standard incorporation). The fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Procedure 1. Check the availability of company’s name with the NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Corporate Affairs Commission (CAC) 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Time: 4 days NGN 7,000.Payment is received at the cashier's desk in the CAC. Cost: NGN 200 There is a legal requirement for the company's incorporators to hire a CAC accredited Comments: The Corporate Affairs Commission online system allows for online professional usually a lawyer to undertake the administrative incorporation proce- search of unique company names upon the purchase of an e-payment card for a dures. Given that the use of lawyers for such purposes is mandatory throughout the flat fee of NGN 200 from an accredited bank. The system is widely used but in most country, lawyer fees are accounted for in the overall incorporation costs. On average, cases, applicants have to go to the CAC office to complete this procedure. The time a lawyer will charge NGN 65,000 to handle the entire incorporation process in this to conduct the availability of name search, receive confirmation and reserve the state. company name is usually 3 to 4 days. The company’s name reservation lasts 60 days but can be renewed for a similar period. Procedure 5. Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VAT Procedure 2. Prepare the requisite incorporation documents and Time: 2 days pay the stamp duty Cost: No cost Time: 7 days Comments: Entrepreneurs can register for both corporate income tax and VAT at Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue stamped copy of memorandum and articles of association + NGN 500 for incorpora- Service (FIRS) will require the applicant to complete tax registration forms. The new tion forms) company registers at a Federal Tax Office nearest to its place of business or registered Comments: This procedure involves the following tasks: office. A letter is written to the tax authority applying for a tax clearance certificate. A form obtained from the tax office is filled and the following documents submitted a. Preparing and printing the memorandum and articles of association; with it: b. Completing the requisite statutory forms, and; a. Taxpayer registration input form (TRIF/2006/001 COYS); c. Having the memorandum and articles of association stamped by the Federal b. Completed FIRS questionnaire; Board of Inland Revenue Service. c. Copy of memorandum and articles of association; There is no stamp duty office in this state and the procedure is usually done in the nearest city where there is one. The time for preparation of documents and stamp- d. Names and addresses of directors; ing presented here is based on an assumption that the stamping is conducted at the e. Copy of the certificate of incorporation; stamp duty office in Umuahia or Port Harcourt and accounts for the travel time. Ad- f. Name, address of tax adviser; ditional costs for handling this procedure out of state is not charged separately but g. Letter of appointment of tax adviser and a letter of acceptance. included in the professional charges of the lawyer or incorporation agent used. The application forms must be in triplicate and the original certificate of incorpora- Procedure 3. Declaration of Compliance (Form CAC 4) signed tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all before a Commissioner for Oaths or notary public documents, a tax reference number is allocated. An application must be filed for the Time: 1 day tax clearance certificate. Its issuance is not automatic. Cost: NGN 200 The fees for the tax clearance issuance are as follows: for newly registered companies Comments: A sworn declaration that the requirements of the Companies and Allied within 6 months of incorporation: no fee; for companies that are yet to commence Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged business and show up for registration after 6 months of incorporation, if they request in the formation of the company or (ii) by a person named in the memorandum and for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first articles of association as a director or secretary of the company. This procedure can time and NGN 20,000 is payable for subsequent years until it files a notice of com- be done before a notary public or filed at the state or federal High Court. The com- mencement of business. mon practice is for this declaration to be sworn before a Commissioner of Oaths at Companies required to register for VAT should complete the VAT registration form the state High Court. (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the nearest integrated tax office, which will issue a taxpayer identification number (TIN). Procedure 4*. Obtain bank draft from a bank for payment of the According to the VAT Act, companies required to register for VAT must do so within 6 registration fees months from the date of starting business operations. The TIN is issued in 1-2 days, Time: 1 day but it is mailed with the VAT certificate, which is issued in a week. Cost: NGN 27,200 ( NGN 200 for bank draft charges + NGN 20,000 filing fees for com- pany whose share capital is NGN 1,546,353 + NGN 3,000 for certified true copy of Procedure 6. Register for personal income tax PAYE at the State memorandum and articles of association + NGN 2,000 for certified true copy of par- Tax Office ticulars of directors + NGN 2,000 for certified true copy of particulars of shareholders) Time: 1 day Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Cost: No cost rate Affairs Commission as the mode of payment of registration fees. The cost of the Comments: The employers in the newly incorporated company are required to reg- bank draft may vary slightly depending on the bank but it is typically around NGN ister with the relevant state tax authority for the purposes of deducting income tax 200 for a draft in the amount of the CAC registration fees. from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no cost Procedure 5. Register the company with the Corporate Affairs related to this registration. Commission Time: 14 days Procedure 7. Register business premises with the Ministry of Cost: NGN 50,000 (legal fees) Commerce and Industry Comments: The applicant must file with the Corporate Affairs Commission the re- Time: 1 day quired incorporation documents and forms, which include: Cost: NGN 10,000 a. Stamped memorandum and articles of association (2 copies); Comments: The newly incorporated company is required to register its business b. Form CAC 3, Notice of registered address; premises with the state’s Ministry of Commerce. Payments are made in cash directly to the Ministry of Commerce and Industry and a permit for business premises regis- c. Form CAC 7, Particulars of directors; tration is issued. 54 DOING BUSINESS IN NIGERIA 2010 d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESS e. Copy of the reservation of company name approval; ANAMBRA, Onitsha f. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutory fee Paid in minimum capital requirement: none (5 times that of standard incorporation). The fee schedule for registration is the fol- Data as of: January 2010 lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Procedure 1. Check the availability of company’s name with the 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Corporate Affairs Commission (CAC) NGN 7,000.Payment is received at the cashier's desk in the CAC. Time: 2 days There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for online country, lawyer fees are accounted for in the overall incorporation costs. On average, a search of unique company names upon the purchase of an e-payment card for a lawyer will charge NGN 50,000 to handle the entire incorporation process in this state. flat fee of NGN 200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The time Procedure 6. Register with the integrated Tax Office of the to conduct the availability of name search, receive confirmation and reserve the Federal Board of Inland Revenue for income tax and VAT company name is usually 2 days. The company’s name reservation lasts 60 days but can be renewed for a similar period. Time: 2 days Cost: No cost Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at pay the stamp duty the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 7 days Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra office. A letter is written to the tax authority applying for a tax clearance certificate. stamped copy of memorandum and articles of association + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submitted tion forms) with it: Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal d. Names and addresses of directors; Board of Inland Revenue Service. e. Copy of the certificate of incorporation; There is no stamp duty office in this state and the procedure is usually done in the nearest city where there is one. The time for preparation of documents and stamp- f. Name, address of tax adviser; ing presented here is based on an assumption that the stamping is conducted at g. Letter of appointment of tax adviser and a letter of acceptance. the stamp duty office in Enugu and accounts for the travel time. Additional costs for The application forms must be in triplicate and the original certificate of incorpora- handling this procedure out of state are not charged separately but included in the tion must be presented for 'sighting' by the controller before registration can be professional charges of the lawyer or incorporation agent used. completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for the Procedure 3. Declaration of Compliance (Form CAC 4) signed tax clearance certificate. Its issuance is not automatic. before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companies Time: 1 day within 6 months of incorporation: no fee; for companies that are yet to commence Cost: NGN 200 business and show up for registration after 6 months of incorporation, if they request for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Comments: A sworn declaration that the requirements of the Companies and Allied time and NGN 20,000 is payable for subsequent years until it files a notice of com- Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged mencement of business. in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration form be done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the mon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN). the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 4. Pay incorporation fees to the Corporate Affairs but it is mailed with the VAT certificate, which is issued in a week. Commission at a designated bank Procedure 7. Register for personal income tax PAYE at the State Time: 1 day Tax Office Cost: NGN 27,000 (NGN 20,000 filing fees for company whose share capital is Time: 2 days NGN1,546,353 + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified true copy of particulars of directors + NGN Cost: No cost 2,000 for certified true copy of particulars of shareholders) Comments: The employers in the newly incorporated company are required to reg- Comments: Payment is made to any of the receiving banks designated by the Cor- ister with the relevant state tax authority for the purposes of deducting income tax porate Affairs Commission. from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no cost Procedure 5. Register the company with the Corporate Affairs related to this registration. Commission Procedure 8. Register business premises with the Ministry of Time: 16 days Commerce and Industry Cost: NGN 80,000 (legal fees) Time: 3 days Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: NGN 10,000 quired incorporation documents and forms, which include: Comments: The newly incorporated company is required to register its business a. Stamped memorandum and articles of association (2 copies); premises with the state’s Ministry of Commerce. Payments are made in cash directly b. Form CAC 3, Notice of registered address; to the Ministry of Commerce and Industry and a permit for business premises regis- c. Form CAC 7, Particulars of directors; tration is issued. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; *This procedure can be completed simultaneously with previous procedures. LIST OF PROCE %63&4t STARTING A BUSINESS 55 f. Form CAC 2, Statement of share capital and return of allotment of shares. Procedure 9*. Pay registration fees for business premises into a The CAC introduced a same-day incorporation option at an increased statutory fee government account at a designated bank (5 times that of standard incorporation). The fee schedule for registration is the fol- Time: 1 day lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Cost: NGN 10,000 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Comments: The business premises permit fees for first time registration are set at NGN 7,000.Payment is received at the cashier's desk in the CAC. NGN 10,000 for business situated in urban areas and NGN 5,000 for rural areas. The renewal fees are NGN 5,000 and NGN 1,000 respectively. Fees for the business prem- There is a legal requirement for the company's incorporators to hire a CAC accredited ises permit are paid into a government account at a designated bank. professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, *This procedure can be completed simultaneously with previous procedures. a lawyer will charge NGN 80,000 to handle the entire incorporation process in this BAUCHI, Bauchi state. Standard company legal form: Limited Liability Company Procedure 6. Register with the integrated Tax Office of the Paid in minimum capital requirement: none Federal Board of Inland Revenue for income tax and VAT Data as of: January 2010 Time: 5 days Procedure 1. Check the availability of company’s name with the Cost: No cost Corporate Affairs Commission (CAC) Comments: Entrepreneurs can register for both corporate income tax and VAT at Time: 3 days the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Cost: NGN 200 Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Comments: The Corporate Affairs Commission online system allows for online office. A letter is written to the tax authority applying for a tax clearance certificate. search of unique company names upon the purchase of an e-payment card for a A form obtained from the tax office is filled and the following documents submitted flat fee of NGN 200 from an accredited bank. The system is widely used but in most with it: cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the a. Taxpayer registration input form (TRIF/2006/001 COYS); company name usually is 3 days in this state. The company name reservation lasts 60 b. Completed FIRS questionnaire; days but can be renewed for a similar period. c. Copy of memorandum and articles of association; d. Names and addresses of directors; Procedure 2. Prepare the requisite incorporation documents e. Copy of the certificate of incorporation; Time: 4 days f. Name, address of tax adviser; Cost: NGN 500 (costs of incorporation forms) g. Letter of appointment of tax adviser and a letter of acceptance. Comments: This procedure involves the following tasks: The application forms must be in triplicate and the original certificate of incorpora- a. Preparing and printing the memorandum and articles of association; tion must be presented for 'sighting' by the controller before registration can be b. Completing the requisite statutory forms, and; completed. Upon receipt of the completed taxpayer registration input form and all c. Having the memorandum and articles of association stamped by the Federal documents, a tax reference number is allocated. An application must be filed for the Board of Inland Revenue Service. tax clearance certificate. Its issuance is not automatic. There is a stamp duty office located in the state capital in Bauchi and housed in the The fees for the tax clearance issuance are as follows: for newly registered companies same premises with the CAC within 6 months of incorporation: no fee; for companies that are yet to commence business and show up for registration after 6 months of incorporation, if they request Procedure 3. Pay stamp duty into a government account at a for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- designated bank mencement of business. Time: 1 day Companies required to register for VAT should complete the VAT registration form Cost: NGN 12,598 (stamp duty at 0.75% of share capital + NGN 1,000 for extra (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the stamped copy of memorandum and articles of association) nearest integrated tax office, which will issue a taxpayer identification number (TIN). Comments: Payment is made at any of the receiving banks designated by the stamp According to the VAT Act, companies required to register for VAT must do so within 6 duty office of the Federal Board of Inland Revenue. months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Procedure 4. Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary public Procedure 7*. Register for personal income tax PAYE at the State Time: 1 day Tax Office Cost: NGN 100 Time: 2 days Comments: A sworn declaration that the requirements of the Companies and Allied Cost: No cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged Comments: The employers in the newly incorporated company are required to reg- in the formation of the company or (ii) by a person named in the memorandum and ister with the relevant state tax authority for the purposes of deducting income tax articles of association as a director or secretary of the company. This procedure can from employees. Once an application is filed with a copy of the certificate of incor- be done before a notary public or filed at the state or federal High Court. The com- poration attached, a reference file is then opened for the company. There is no cost mon practice is for this declaration to be sworn before a Commissioner of Oaths at related to this registration. the state High Court. Procedure 8. Obtain a business premises permit from the state’s Procedure 5. Pay incorporation fees to the Corporate Affairs Ministry of Commerce and Industry Commission at a designated bank Time: 7 days Time: 1 day Cost: No cost Cost: NGN 27,000 (NGN 10,000 Incorporation fees for the first 1,000,000 share capital Comments: Following incorporation with Corporate Affairs Commission, a newly + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000 established business must register and obtain a business premises permit from the for certified true copy of memorandum and articles of association, + NGN 2,000 for Ministry of Commerce and Industry. certified true copy of particulars of directors, +NGN 2,000 for certified true copy of particulars of shareholders) Comments: Payment is made to any of the receiving banks designated by the Cor- porate Affairs Commission. 56 DOING BUSINESS IN NIGERIA 2010 Procedure 6. Register the company with the Corporate Affairs Procedure 9. Receive an inspection from the Ministry of Commission Commerce and Industry for business premises registration Time: 14 days Time: 4 days Cost: NGN 50,000 (legal fees) Cost: No cost Comments: The applicant must file with the Corporate Affairs Commission the re- Comments: After the submission of all application documents, an inspection of the quired incorporation documents and forms, which include: business premises is carried out by an officer from the Ministry of Commerce and a. Stamped memorandum and articles of association (2 copies); Industry. The Ministry of Commerce may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity. b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; Procedure 10. Pay registration fees and obtain business premises d. Form CAC 4, Declaration of compliance and the prescribed registration fees; permit from the Ministry of Commerce and Industry e. Copy of the reservation of company name approval; Time: 1 day f. Form CAC 2, Statement of share capital and return of allotment of shares. Cost: NGN 10,000 The CAC introduced a same-day incorporation option at an increased statutory Comments: The cost of business premises registration is a 'fixed' charge depending fee (5 times that of standard incorporation). The fee schedule for registration is the on the type of company. In this case the company is considered to be in Category A following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every and located in the suburbs of the city. For category A which includes a company car- NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN rying out general commercial activities, the fee is NGN 10,000 for first time registra- 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): tion upon incorporation, and subsequent annual payments of NGN 5,000 as renewal NGN 7,000.Payment is received at the cashier's desk in the CAC. fee. The fees are paid directly to the Ministry of Commerce and Industry. A business There is a legal requirement for the company's incorporators to hire a CAC accredited premises permit is issued to the applicant after payment is made. professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, BAYELSA, Yenagoa a lawyer will charge NGN 50,000 to handle the entire incorporation process in this Standard company legal form: Limited Liability Company state. Paid in minimum capital requirement: none Procedure 7. Register with the integrated Tax Office of the Data as of: January 2010 Federal Board of Inland Revenue for income tax and VAT Procedure 1. Check the availability of company’s name with the Time: 5 days Corporate Affairs Commission (CAC) Cost: No cost Time: 5 days Comments: Entrepreneurs can register for both corporate income tax and VAT at Cost: NGN 200 the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Comments: The Corporate Affairs Commission online system allows for online Service (FIRS) will require the applicant to complete tax registration forms. The new search of unique company names upon the purchase of an e-payment card for a company registers at a Federal Tax Office nearest to its place of business or registered flat fee of NGN 200 from an accredited bank. The system is widely used but in most office. A letter is written to the tax authority applying for a tax clearance certificate. cases, applicants have to go to the CAC office to complete this procedure. The time A form obtained from the tax office is filled and the following documents submitted to conduct the availability of name search, receive confirmation and reserve the with it:– company name is usually no more than 5 days. The company name reservation lasts a. Taxpayer registration input form (TRIF/2006/001 COYS); 60 days but can be renewed for a similar period. b. Completed FIRS questionnaire; c. Copy of memorandum and articles of association; Procedure 2. Prepare the requisite incorporation documents and d. Names and addresses of directors; pay the stamp duty e. Copy of the certificate of incorporation; Time: 10 days f. Name, address of tax adviser; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra stamped copy of memorandum and articles of association + NGN 500 for incorpora- g. Letter of appointment of tax adviser and a letter of acceptance. tion forms) The application forms must be in triplicate and the original certificate of incorpora- Comments: This procedure involves the following tasks: tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all a. Preparing and printing the memorandum and articles of association; documents, a tax reference number is allocated. An application must be filed for the b. Completing the requisite statutory forms, and; tax clearance certificate. Its issuance is not automatic. c. Having the memorandum and articles of association stamped by the Federal The fees for the tax clearance issuance are as follows: for newly registered companies Board of Inland Revenue Service. within 6 months of incorporation: no fee; for companies that are yet to commence The recent reduction in stamp duty payment to 0.75% of the nominal share capital is business and show up for registration after 6 months of incorporation, if they request still not widely disseminated in the state. As such, the lawyers still obtain stamp duty for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first payments at 1.5% of share capital from entrepreneurs and only pay over the amount time and NGN 20,000 is payable for subsequent years until it files a notice of com- of the official rate to the stamp duty office. Since this procedure is usually handled by mencement of business. the lawyers, the entrepreneurs in this state who are not aware of the reduced official Companies required to register for VAT should complete the VAT registration form costs associated with handling the stamping of the incorporation documents pay (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the more than their counterparts in other states. nearest integrated tax office, which will issue a taxpayer identification number (TIN). According to the VAT Act, companies required to register for VAT must do so within 6 Procedure 3. Declaration of Compliance (Form CAC 4) signed months from the date of starting business operations. The TIN is issued in 1-2 days, before a Commissioner for Oaths or notary public but it is mailed with the VAT certificate, which is issued in a week. Time: 1 day Procedure 8. Register for personal income tax PAYE at the State Cost: NGN 500 Tax Office Comments: A sworn declaration that the requirements of the Companies and Allied Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged Time: 2 days in the formation of the company or (ii) by a person named in the memorandum and Cost: No cost articles of association as a director or secretary of the company. This procedure can Comments: The employers in the newly incorporated company are required to reg- be done before a notary public or filed at the state or federal High Court. The com- ister with the relevant state tax authority for the purposes of deducting income tax mon practice is for this declaration to be sworn before a Commissioner of Oaths at from employees. Once an application is filed with a copy of the certificate of incor- the state High Court. poration attached, a reference file is then opened for the company. There is no cost related to this registration. LIST OF PROCE %63&4t STARTING A BUSINESS 57 Procedure 4*. Obtain bank draft from a bank for payment of the According to the VAT Act, companies required to register for VAT must do so within 6 registration fees months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Time: 1 day Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 10,000 for incorporation Procedure 7. Register for personal income tax PAYE at the State fees for the first 1,000,000 share capital + NGN 10,000 for each additional 1,000,000 Tax Office share capital or less thereof + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified true copy of particulars of directors + Time: 2 days NGN 2,000 for certified true copy of particulars of shareholders) Cost: No cost Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Comments: The employers in the newly incorporated company are required to reg- rate Affairs Commission as the mode of payment of registration fees. The cost of ister with the relevant state tax authority for the purposes of deducting income tax the bank draft may vary slightly depending on the bank but it is typically within the from employees. Once an application is filed with a copy of the certificate of incor- range of NGN 200 for a draft in the amount of the CAC registration fees. poration attached, a reference file is then opened for the company. There is no cost related to this registration. Procedure 5. Register the company with the Corporate Affairs Commission Procedure 8. Receive an inspection from the Ministry of Time: 15 days Commerce and Industry for business premises registration Cost: NGN 80,000 (legal fees) Time: 4 days Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: No cost quired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of the a. Stamped memorandum and articles of association (2 copies); business premises is carried out by an officer from the Ministry of Commerce and Industry. The Ministry of Commerce may conduct an inspection of the premises to b. Form CAC 3, Notice of registered address; confirm the location of the business and determine the type of business activity. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Procedure 9. Pay registration fees for business premises into a e. Copy of the reservation of company name approval; government account at a designated bank f. Form CAC 2, Statement of share capital and return of allotment of shares. Time: 1 day The CAC introduced a same-day incorporation option at an increased statutory Cost: NGN 10,000 fee (5 times that of standard incorporation). The fee schedule for registration is the Comments: The payment of the business premises registration fees is made directly following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every into the government bank account at a designated bank. NGN 10,000 is the approxi- NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN mate cost of business premises registration for a medium sized company carrying on 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): general commercial activities. NGN 7,000.Payment is received at the cashier's desk in the CAC. There is a legal requirement for the company's incorporators to hire a CAC accredited Procedure 10. Obtain treasury receipt from the Federal Board of professional usually a lawyer to undertake the administrative incorporation proce- Inland Revenue dures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 1 day country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 80,000 to handle the entire incorporation process in this Cost: No cost state. Comments: A bank teller issued by the designated bank is presented to the Federal Board of Inland Revenue as proof that payment was made into the designated gov- Procedure 6. Register with the integrated Tax Office of the ernment account. FIRS, thereafter issues an official treasury receipt which must be Federal Board of Inland Revenue for income tax and VAT presented to the Ministry of Commerce and Industry. Time: 6 days Procedure 11. Obtain a business premises permit from the state’s Cost: No cost Ministry of Commerce and Industry Comments: Entrepreneurs can register for both corporate income tax and VAT at Time: 1 day the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new Cost: No cost company registers at a Federal Tax Office nearest to its place of business or registered Comments: An official treasury receipt issued by the FIRS is required to be presented office. A letter is written to the tax authority applying for a tax clearance certificate. to the Ministry of Commerce to evidence payment. Thereafter, a business premises A form obtained from the tax office is filled and the following documents submitted permit is issued. with it: a. Taxpayer registration input form (TRIF/2006/001 COYS); *This procedure can be completed simultaneously with previous procedures. b. Completed FIRS questionnaire; c. Copy of memorandum and articles of association; STARTING A BUSINESS d. Names and addresses of directors; BENUE, Makurdi e. Copy of the certificate of incorporation; Standard company legal form: Limited Liability Company f. Name, address of tax adviser; Paid in minimum capital requirement: none g. Letter of appointment of tax adviser and a letter of acceptance. Data as of: January 2010 The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be Procedure 1. Check the availability of company’s name with the completed. Upon receipt of the completed taxpayer registration input form and all Corporate Affairs Commission (CAC) documents, a tax reference number is allocated. An application must be filed for the Time: 3 days tax clearance certificate. Its issuance is not automatic. Cost: NGN 200 The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commence Comments: The Corporate Affairs Commission online system allows for online business and show up for registration after 6 months of incorporation, if they request search of unique company names upon the purchase of an e-payment card for a for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first flat fee of NGN 200 from an accredited bank. The system is widely used but in most time and NGN 20,000 is payable for subsequent years until it files a notice of com- cases, applicants have to go to the CAC office to complete this procedure. The time mencement of business. to conduct the availability of name search, receive confirmation and reserve the company name usually takes 3 days. The company name reservation lasts 60 days Companies required to register for VAT should complete the VAT registration form but can be renewed for a similar period. (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the nearest integrated tax office, which will issue a taxpayer identification number (TIN). 58 DOING BUSINESS IN NIGERIA 2010 Procedure 2. Prepare the requisite incorporation documents and vice (FIRS) will require the applicant to complete tax registration forms. The new com- pany registers at a Federal Tax Office nearest to its place of business or registered office. pay the stamp duty A letter is written to the tax authority applying for a tax clearance certificate. A form Time: 7 days obtained from the tax office is filled and the following documents submitted with it: Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra a. Taxpayer registration input form (TRIF/2006/001 COYS); stamped copy of memorandum and articles of association + NGN 500 for incorpora- b. Completed FIRS questionnaire; tion forms) c. Copy of memorandum and articles of association; Comments: This procedure involves the following tasks: d. Names and addresses of directors; a. Preparing and printing the memorandum and articles of association; e. Copy of the certificate of incorporation; b. Completing the requisite statutory forms, and; f. Name, address of tax adviser; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. g. Letter of appointment of tax adviser and a letter of acceptance. There is a stamp duty office located in the state capital in Makurdi and housed in the The application forms must be in triplicate and the original certificate of incorpora- same premises with the CAC. tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all Procedure 3. Declaration of Compliance (Form CAC 4) signed documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic. before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companies Time: 1 day within 6 months of incorporation: no fee; for companies that are yet to commence Cost: NGN 50 business and show up for registration after 6 months of incorporation, if they request Comments: A sworn declaration that the requirements of the Companies and Allied for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged time and NGN 20,000 is payable for subsequent years until it files a notice of com- in the formation of the company or (ii) by a person named in the memorandum and mencement of business. articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration form be done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the mon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN). the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 4. Obtain bank draft from a bank for payment of the but it is mailed with the VAT certificate, which is issued in a week. registration fees Time: 1 day Procedure 7. Register for personal income tax PAYE at the State Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 10,000 for Incorporation Tax Office fees for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 Time: 1 day share capital or less thereof + NGN 3,000 for certified true copy of memorandum and Cost: No cost articles of association + NGN 2,000 for certified true copy of particulars of directors + Comments: The employers in the newly incorporated company are required to reg- NGN 2,000 for certified true copy of particulars of shareholders) ister with the relevant state tax authority for the purposes of deducting income tax Comments: Applicant is required to obtain a bank draft in the name of the Corpo- from employees. Once an application is filed with a copy of the certificate of incor- rate Affairs Commission as the mode of payment of registration fees. The cost of the poration attached, a reference file is then opened for the company. There is no cost bank draft may vary slightly depending on the bank but it is typically around NGN related to this registration. 200 for a draft in the amount of the CAC registration fees. Procedure 8. Register business premises with the Ministry of Procedure 5. Register the company with the Corporate Affairs Commerce and Industry Commission Time: 1 day Time: 21 days Cost: NGN 10,000 Cost: NGN 50,000 (legal fees) Comments: The newly incorporated company is required to register its business Comments: The applicant must file with the Corporate Affairs Commission the re- premises with the state’s Ministry of Commerce and Industry. Payments are made quired incorporation documents and forms, which include: in cash directly to the Ministry of Commerce and Industry and a permit for business a. Stamped memorandum and articles of association (2 copies); premises registration is thereafter issued. b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; STARTING A BUSINESS d. Form CAC 4, Declaration of compliance and the prescribed registration fees; BORNO, Maiduguri e. Copy of the reservation of company name approval; Standard company legal form: Limited Liability Company f. Form CAC 2, Statement of share capital and return of allotment of shares. Paid in minimum capital requirement: none The CAC introduced a same-day incorporation option at an increased statutory fee Data as of: January 2010 (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Procedure 1. Check the availability of company’s name with the 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Corporate Affairs Commission (CAC) 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Time: 4 days NGN 7,000.Payment is received at the cashier's desk in the CAC. Cost: NGN 200 There is a legal requirement for the company's incorporators to hire a CAC accredited Comments: The Corporate Affairs Commission online system allows for online professional usually a lawyer to undertake the administrative incorporation proce- search of unique company names upon the purchase of an e-payment card for a dures. Given that the use of lawyers for such purposes is mandatory throughout the flat fee of NGN 200 from an accredited bank. The system is widely used but in most country, lawyer fees are accounted for in the overall incorporation costs. On average, a cases, applicants have to go to the CAC office to complete this procedure. The time lawyer will charge NGN 50,000 to handle the entire incorporation process in this state. to conduct the availability of name search, receive confirmation and reserve the company name is usually 4 days. The company name reservation lasts 60 days but Procedure 6. Register with the integrated Tax Office of the can be renewed for a similar period. Federal Board of Inland Revenue for income tax and VAT Time: 1 day Cost: No cost Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Ser- LIST OF PROCE %63&4t STARTING A BUSINESS 59 Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue pay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The new Time: 7 days company registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra office. A letter is written to the tax authority applying for a tax clearance certificate. stamped copy of memorandum and articles of association + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submitted tion forms) with it: Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal d. Names and addresses of directors; Board of Inland Revenue Service. e. Copy of the certificate of incorporation; There is no stamp duty office in this state and the procedure is usually done in the f. Name, address of tax adviser; nearest city where there is one. The time for preparation of documents and stamp- g. Letter of appointment of tax adviser and a letter of acceptance. ing presented here is based on an assumption that the stamping is conducted at the stamp duty office in Bauchi or Adamawa and accounts for the travel time. Additional The application forms must be in triplicate and the original certificate of incorpora- costs for handling this procedure out of state are not charged separately but includ- tion must be presented for 'sighting' by the controller before registration can be ed in the professional charges of the lawyer or incorporation agent used. completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for the Procedure 3. Declaration of Compliance (Form CAC 4) signed tax clearance certificate. Its issuance is not automatic. before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commence Time: 1 day business and show up for registration after 6 months of incorporation, if they request Cost: NGN 100 for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Comments: A sworn declaration that the requirements of the Companies and Allied time and NGN 20,000 is payable for subsequent years until it files a notice of com- Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged mencement of business. in the formation of the company or (ii) by a person named in the memorandum and Companies required to register for VAT should complete the VAT registration form articles of association as a director or secretary of the company. This procedure can (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the be done before a notary public or filed at the state or federal High Court. The com- nearest integrated tax office, which will issue a taxpayer identification number (TIN). mon practice is for this declaration to be sworn before a Commissioner of Oaths at According to the VAT Act, companies required to register for VAT must do so within 6 the state High Court. months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Procedure 4. Pay incorporation fees to the Corporate Affairs Commission at a designated bank Procedure 7. Register for personal income tax PAYE at the State Time: 1 day Tax Office Cost: NGN 27,000 (NGN 10,000 for incorporation fees for the first 1,000,000 share Time: 2 days capital + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN Cost: No cost 3,000 for certified true copy of memorandum and articles of association + NGN2,000 Comments: The employers in the newly incorporated company are required to reg- for certified true copy of particulars of directors + NGN 2,000 for certified true copy ister with the relevant state tax authority for the purposes of deducting income tax of particulars of shareholders) from employees. Once an application is filed with a copy of the certificate of incor- Comments: Payment is made to any of the receiving banks designated by the Cor- poration attached, a reference file is then opened for the company. There is no cost porate Affairs Commission. related to this registration. Procedure 5. Register the company with the Corporate Affairs Procedure 8. Register business premises with the Ministry of Commission Commerce and Industry Time: 14 days Time: 1 day Cost: NGN 60,000 (legal fees) Cost: NGN 10,000 Comments: The applicant must file with the Corporate Affairs Commission the re- Comments: The newly incorporated company is required to register its business quired incorporation documents and forms, which include: premises with the state Ministry of Commerce. Payments are made in cash directly to a. Stamped memorandum and articles of association (2 copies); the Ministry of Commerce and Industry and a permit for business premises registra- b. Form CAC 3, Notice of registered address; tion is issued. c. Form CAC 7, Particulars of directors; STARTING A BUSINESS d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; CROSS RIVER, Calabar f. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutory fee Paid in minimum capital requirement: none (5 times that of standard incorporation). The fee schedule for registration is the fol- Data as of: January 2010 lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Procedure 1. Check the availability of company’s name with the 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Corporate Affairs Commission (CAC) NGN 7,000.Payment is received at the cashier's desk in the CAC. Time: 4 days There is a legal requirement for the company's incorporators to hire a CAC accredited Cost: NGN 200 professional usually a lawyer to undertake the administrative incorporation proce- Comments: The Corporate Affairs Commission online system allows for online dures. Given that the use of lawyers for such purposes is mandatory throughout the search of unique company names upon the purchase of an e-payment card for a country, lawyer fees are accounted for in the overall incorporation costs. On average, a flat fee of NGN 200 from an accredited bank. The system is widely used but in most lawyer will charge NGN 60,000 to handle the entire incorporation process in this state. cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the Procedure 6. Register with the integrated Tax Office of the company name is usually 4 days in this state. The company name reservation lasts 60 Federal Board of Inland Revenue for income tax and VAT days but can be renewed for a similar period. Time: 4 days Cost: No cost 60 DOING BUSINESS IN NIGERIA 2010 Procedure 2. Prepare the requisite incorporation documents and Procedure 6. Register with the integrated Tax Office of the pay the stamp duty Federal Board of Inland Revenue for income tax and VAT Time: 9 days Time: 5 days Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Cost: No cost stamped copy of memorandum and articles of association + NGN 500 for incorpora- Comments: Entrepreneurs can register for both corporate income tax and VAT at tion forms) the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Comments: This procedure involves the following tasks: Service (FIRS) will require the applicant to complete tax registration forms. The new a. Preparing and printing the memorandum and articles of association; company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate. b. Completing the requisite statutory forms, and; A form obtained from the tax office is filled and the following documents submitted c. Having the memorandum and articles of association stamped by the Federal with it: Board of Inland Revenue Service. a. Taxpayer registration input form (TRIF/2006/001 COYS); There is no stamp duty office in Cross River State, and incorporation documents have b. Completed FIRS questionnaire; to be stamped at the closest stamp duty office in Port Harcourt, adding time to this procedure. c. Copy of memorandum and articles of association; The recent reduction in stamp duty payment to 0.75% of the nominal share capital is d. Names and addresses of directors; still not widely disseminated in the state. As such, the lawyers still obtain stamp duty e. Copy of the certificate of incorporation; payments at 1.5% of share capital from entrepreneurs and only pay over the amount f. Name, address of tax adviser; of the official rate to the stamp duty office. Since this procedure is usually handled by g. Letter of appointment of tax adviser and a letter of acceptance. the lawyers, the entrepreneurs in this state who are not aware of the reduced official costs associated with handling the stamping of the incorporation documents pay The application forms must be in triplicate and the original certificate of incorpora- more than their counterparts in other states. tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all Procedure 3. Declaration of Compliance (Form CAC 4) signed documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic. before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companies Time: 1 day within 6 months of incorporation: no fee; for companies that are yet to commence Cost: NGN 50 business and show up for registration after 6 months of incorporation, if they request Comments: A sworn declaration that the requirements of the Companies and Allied for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged time and NGN 20,000 is payable for subsequent years until it files a notice of com- in the formation of the company or (ii) by a person named in the memorandum and mencement of business. articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration form be done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the mon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN). the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 4. Pay incorporation fees to the Corporate Affairs but it is mailed with the VAT certificate, which is issued in a week. Commission at a designated bank Time: 1 day Procedure 7. Register for personal income tax PAYE at the State Cost: NGN 27,000 (NGN 10,000 for incorporation fees per 1,000,000 share capital + Tax Office NGN 10,000 for every 1,000,000 share capital thereafter + NGN 3,000 for certified Time: 2 days true copy of memorandum and articles of association + NGN 2,000 for certified true Cost: No cost copy of particulars of directors + NGN 2,000 for certified true copy of particulars of Comments: The employers in the newly incorporated company are required to reg- shareholders) ister with the relevant state tax authority for the purposes of deducting income tax Comments: Payment is made at any of the receiving banks designated by the Cor- from employees. Once an application is filed with a copy of the certificate of incor- porate Affairs Commission. poration attached, a reference file is then opened for the company. There is no cost related to this registration. Procedure 5. Register the company with the Corporate Affairs Commission Procedure 8. Obtain a business premises permit from the Time: 21 days Department of Investment Promotion Cost: NGN 100,000 (legal fees) Time: 3 days Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: No cost quired incorporation documents and forms, which include: Comments: Following incorporation with Corporate Affairs Commission, a newly a. Stamped memorandum and articles of association (2 copies); established business must register and obtain a business premises permit from the b. Form CAC 3, Notice of registered address; Department of Investment Promotion. c. Form CAC 7, Particulars of directors; Procedure 9. Pay registration fees for business premises into a d. Form CAC 4, Declaration of compliance and the prescribed registration fees; government account at a designated bank e. Copy of the reservation of company name approval; Time: 1 day f. Form CAC 2, Statement of share capital and return of allotment of shares. Cost: NGN 20,000 The CAC introduced a same-day incorporation option at an increased statutory fee Comments: There is no fee schedule and an individual assessment is made for each (5 times that of standard incorporation). The fee schedule for registration is the fol- business. The fees can range from NGN 1,500 to NGN 250,000. Fees for the business lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN premises permit are paid into a government account at a designated bank. 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashier's desk in the CAC. There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 100,000 to handle the entire incorporation process in this state. LIST OF PROCE %63&4t STARTING A BUSINESS 61 STARTING A BUSINESS The CAC introduced a same-day incorporation option at an increased statutory fee DELTA, Warri (5 times that of standard incorporation). The fee schedule for registration is the fol- Standard company legal form: Limited Liability Company lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Paid in minimum capital requirement: none 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Data as of: January 2010 NGN 7,000.Payment is received at the cashier's desk in the CAC. Procedure 1. Check the availability of company’s name with the There is a legal requirement for the company's incorporators to hire a CAC accredited Corporate Affairs Commission (CAC) professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 7 days country, lawyer fees are accounted for in the overall incorporation costs. On average, Cost: NGN 200 a lawyer will charge NGN 70,000 to handle the entire incorporation process in this Comments: The Corporate Affairs Commission online system allows for online state. search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in most Procedure 5. Register with the integrated Tax Office of the cases, applicants have to go to the CAC office to complete this procedure. The time Federal Board of Inland Revenue for income tax and VAT to conduct the availability of name search, receive confirmation and reserve the Time: 7 days company name is usually a week in this state. The company name reservation lasts Cost: No cost 60 days but can be renewed for a similar period. Comments: Entrepreneurs can register for both corporate income tax and VAT at Procedure 2. Prepare the requisite incorporation documents and the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue pay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Time: 5 days office. A letter is written to the tax authority applying for a tax clearance certificate. Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra A form obtained from the tax office is filled and the following documents submitted stamped copy of memorandum and articles of association + NGN 500 for incorpora- with it: tion forms + NGN 3,000 transport costs to Asaba) a. Taxpayer registration input form (TRIF/2006/001 COYS); Comments: This procedure involves the following tasks: b. Completed FIRS questionnaire; a. Preparing and printing the memorandum and articles of association; c. Copy of memorandum and articles of association; b. Completing the requisite statutory forms, and; d. Names and addresses of directors; c. Having the memorandum and articles of association stamped by the Federal e. Copy of the certificate of incorporation; Board of Inland Revenue Service. f. Name, address of tax adviser; There is a stamp duty office located in the state capital in Asaba and is not housed in g. Letter of appointment of tax adviser and a letter of acceptance. the same premises with the CAC. The application forms must be in triplicate and the original certificate of incorpora- The recent reduction in stamp duty payment to 0.75% of the nominal share capital is tion must be presented for 'sighting' by the controller before registration can be still not widely disseminated in the state. As such, the lawyers still obtain stamp duty completed. Upon receipt of the completed taxpayer registration input form and all payments at 1.5% of share capital from entrepreneurs and only pay over the amount documents, a tax reference number is allocated. An application must be filed for the of the official rate to the stamp duty office. Since this procedure is usually handled by tax clearance certificate. Its issuance is not automatic. the lawyers, the entrepreneurs in this state who are not aware of the reduced official costs associated with handling the stamping of the incorporation documents pay The fees for the tax clearance issuance are as follows: for newly registered companies more than their counterparts in other states. within 6 months of incorporation: no fee; for companies that are yet to commence business and show up for registration after 6 months of incorporation, if they request Procedure 3. Declaration of Compliance (Form CAC 4) signed for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first before a Commissioner for Oaths or notary public time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. Time: 2 days Companies required to register for VAT should complete the VAT registration form Cost: NGN 200 (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Comments: A sworn declaration that the requirements of the Companies and Allied nearest integrated tax office, which will issue a taxpayer identification number (TIN). Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged According to the VAT Act, companies required to register for VAT must do so within 6 in the formation of the company or (ii) by a person named in the memorandum and months from the date of starting business operations. The TIN is issued in 1-2 days, articles of association as a director or secretary of the company. This procedure can but it is mailed with the VAT certificate, which is issued in a week. be done before a notary public or filed at the state or federal High Court. The com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at Procedure 6. Register for personal income tax PAYE at the State the state High Court. Tax Office Time: 4 days Procedure 4. Register the company with the Corporate Affairs Commission Cost: No cost Comments: The employers in the newly incorporated company are required to reg- Time: 20 days ister with the relevant state tax authority for the purposes of deducting income tax Cost: NGN 97,000 (NGN 70,000 for legal fees + NGN 20,000 for incorporation fees + from employees. Once an application is filed with a copy of the certificate of incor- NGN 2,000 for certified true copy of particulars of directors + NGN 3,000 for certified poration attached, a reference file is then opened for the company. There is no cost true copy of the memorandum and articles of association + NGN 2,000 for certified related to this registration. true copy of particulars of shareholders) Comments: The applicant must file with the Corporate Affairs Commission the re- Procedure 7. Receive an inspection from the Ministry of quired incorporation documents and forms, which include: Commerce and Industry for business premises registration a. Stamped memorandum and articles of association (2 copies); Time: 4 days b. Form CAC 3, Notice of registered address; Cost: No cost c. Form CAC 7, Particulars of directors; Comments: After the submission of all application documents, an inspection of the d. Form CAC 4, Declaration of compliance and the prescribed registration fees; business premises is carried out by an officer from the Ministry of Commerce and e. Copy of the reservation of company name approval; Industry. The Ministry of Commerce may conduct an inspection of the premises to f. Form CAC 2, Statement of share capital and return of allotment of shares. confirm the location of the business and determine the type of business activity. 62 DOING BUSINESS IN NIGERIA 2010 Procedure 8. Pay registration fees for business premises into a Procedure 4. Obtain bank draft from a bank for payment of the government account at a designated bank registration fees Time: 1 day Time: 1 day Cost: NGN 20,000 Cost: NGN 27,200 (NGN 200 for bank draft charges + incorporation fees of NGN Comments: The payment of the business premises registration fees is made directly 10,000 for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 into the government bank account at a designated bank. NGN 20,000 is the approxi- share capital or less thereof + NGN 3,000 for certified true copy of memorandum and mate cost of business premises registration for a medium sized company carrying on articles of association + NGN 2,000 for certified true copy of particulars of directors + general commercial activities. NGN 2,000 for certified true copy of particulars of shareholders) Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Procedure 9. Obtain a business premises permit from the state’s rate Affairs Commission as the mode of payment of registration fees. The cost of the Ministry of Commerce and Industry bank draft may vary slightly depending on the bank but it is typically around NGN 200 for a draft in the amount of the CAC registration fees. Time: 1 day Cost: No cost Procedure 5. Register the company with the Corporate Affairs Comments: Following payment of the assessed registration fees for business prem- Commission ises permit into a designated government account, the Ministry of Commerce and Time: 21 days Industry issues a business premises permit to the new business. Cost: NGN 60,000 (legal fees) STARTING A BUSINESS Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: EBONYI, Abakaliki a. Stamped memorandum and articles of association (2 copies); Standard company legal form: Limited Liability Company b. Form CAC 3, Notice of registered address; Paid in minimum capital requirement: none c. Form CAC 7, Particulars of directors; Data as of: January 2010 d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Procedure 1. Check the availability of company’s name with the e. Copy of the reservation of company name approval; Corporate Affairs Commission (CAC) f. Form CAC 2, Statement of share capital and return of allotment of shares. Time: 2 days The CAC introduced a same-day incorporation option at an increased statutory fee Cost: NGN 200 (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Comments: The Corporate Affairs Commission online system allows for online 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN search of unique company names upon the purchase of an e-payment card for a 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): flat fee of NGN 200 from an accredited bank. The system is widely used but in most NGN 7,000. cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the There is a legal requirement for the company's incorporators to hire a CAC accredited company name is usually 2 days. The company’s name reservation lasts 60 days but professional usually a lawyer to undertake the administrative incorporation proce- can be renewed for a similar period. dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, a Procedure 2. Prepare the requisite incorporation documents and lawyer will charge NGN 60,000 to handle the entire incorporation process in this state. pay the stamp duty Procedure 6. Register with the integrated Tax Office of the Time: 7 days Federal Board of Inland Revenue for income tax and VAT Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Time: 4 days stamped copy of memorandum and articles of association + NGN 500 for incorpora- tion forms) Cost: No cost Comments: This procedure involves the following tasks: Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue a. Preparing and printing the memorandum and articles of association; Service (FIRS) will require the applicant to complete tax registration forms. The new b. Completing the requisite statutory forms, and; company registers at a Federal Tax Office nearest to its place of business or registered c. Having the memorandum and articles of association stamped by the Federal office. A letter is written to the tax authority applying for a tax clearance certificate. Board of Inland Revenue Service. A form obtained from the tax office is filled and the following documents submitted There is no stamp duty office in this state and the procedure is usually done in the with it: nearest city where there is one. The time for preparation of documents and stamp- a. Taxpayer registration input form (TRIF/2006/001 COYS); ing presented here is based on an assumption that the stamping is conducted at b. Completed FIRS questionnaire; the stamp duty office in Enugu and accounts for the travel time. Additional costs for c. Copy of memorandum and articles of association; handling this procedure out of state are not charged separately but included in the professional charges of the lawyer or incorporation agent used. d. Names and addresses of directors; e. Copy of the certificate of incorporation; Procedure 3. Declaration of Compliance (Form CAC 4) signed f. Name, address of tax adviser; before a Commissioner for Oaths or notary public g. Letter of appointment of tax adviser and a letter of acceptance. Time: 1 day The application forms must be in triplicate and the original certificate of incorpora- Cost: NGN 200 tion must be presented for 'sighting' by the controller before registration can be Comments: A sworn declaration that the requirements of the Companies and Allied completed. Upon receipt of the completed taxpayer registration input form and all Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged documents, a tax reference number is allocated. An application must be filed for the in the formation of the company or (ii) by a person named in the memorandum and tax clearance certificate. Its issuance is not automatic. articles of association as a director or secretary of the company. This procedure can The fees for the tax clearance issuance are as follows: for newly registered companies be done before a notary public or filed at the state or federal High Court. The com- within 6 months of incorporation: no fee; for companies that are yet to commence mon practice is for this declaration to be sworn before a Commissioner of Oaths at business and show up for registration after 6 months of incorporation, if they request the state High Court. for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the nearest integrated tax office, which will issue a taxpayer identification number (TIN). According to the VAT Act, companies required to register for VAT must do so within 6 LIST OF PROCE %63&4t STARTING A BUSINESS 63 months from the date of starting business operations. The TIN is issued in 1-2 days, c. Having the memorandum and articles of association stamped by the Federal but it is mailed with the VAT certificate, which is issued in a week. Board of Inland Revenue Service. There is a stamp duty office located in the state capital in Benin and is not housed in Procedure 7*. Register for personal income tax PAYE at the State the same premises with the CAC. Tax Office Time: 2 days Procedure 3. Declaration of Compliance (Form CAC 4) signed Cost: No cost before a Commissioner for Oaths or notary public Comments: The employers in the newly incorporated company are required to reg- Time: 1 day ister with the relevant state tax authority for the purposes of deducting income tax Cost: NGN 200 from employees. Once an application is filed with a copy of the certificate of incor- Comments: A sworn declaration that the requirements of the Companies and Allied poration attached, a reference file is then opened for the company. There is no cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged related to this registration. in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure can Procedure 8. Receive an inspection from the Ministry of be done before a notary public or filed at the state or federal High Court. The com- Commerce and Industry for business premises registration mon practice is for this declaration to be sworn before a Commissioner of Oaths at Time: 1 day the state High Court. Cost: No cost Procedure 4. Register the company with the Corporate Affairs Comments: After the submission of all application documents, an inspection of the Commission business premises is carried out by an officer from the Ministry of Commerce and Industry. The Ministry of Commerce may conduct an inspection of the premises to Time: 21 days confirm the location of the business and determine the type of business activity. Cost: NGN 67,000 (NGN 40,000 for legal fees + registration fees of NGN 10,000 for first 1,000,000 share capital and NGN 10,000 for each additional 1,000,000 + NGN Procedure 9. Pay registration fees for business premises into a 7,000 for certified true copies of memorandum and articles of association and par- government account at a designated bank ticulars of directors and shareholders) Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: Cost: NGN 5,000 a. Stamped memorandum and articles of association (2 copies); Comments: The payment of the business premises registration fees is made directly into the government bank account at a designated bank. NGN 5,000 is the approxi- b. Form CAC 3, Notice of registered address; mate cost of business premises registration for a medium sized company carrying on c. Form CAC 7, Particulars of directors; general commercial activities. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; Procedure 10. Obtain a business premises permit from the state’s f. Form CAC 2, Statement of share capital and return of allotment of shares. Ministry of Commerce and Industry The CAC introduced a same-day incorporation option at an increased statutory fee Time: 1 day (5 times that of standard incorporation). The fee schedule for registration is the fol- Cost: No cost lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Comments: Following payment of the assessed registration fees for business prem- 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN ises permit into a designated government account, the Ministry of Commerce and 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Industry issues a business premises permit to the new business. NGN 7,000.Payment is received at the cashier's desk in the CAC. There is a legal requirement for the company's incorporators to hire a CAC accredited *This procedure can be completed simultaneously with previous procedures. professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, STARTING A BUSINESS a lawyer will charge NGN 40,000 to handle the entire incorporation process in this EDO, Benin City state. Standard company legal form: Limited Liability Company Procedure 5. Register with the integrated Tax Office of the Paid in minimum capital requirement: none Federal Board of Inland Revenue for income tax and VAT Data as of: January 2010 Time: 7 days Procedure 1. Check the availability of company’s name with the Cost: No cost Corporate Affairs Commission (CAC) Comments: Entrepreneurs can register for both corporate income tax and VAT at Time: 7 days the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Cost: NGN 200 Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Comments: The Corporate Affairs Commission online system allows for online office. A letter is written to the tax authority applying for a tax clearance certificate. search of unique company names upon the purchase of an e-payment card for a A form obtained from the tax office is filled and the following documents submitted flat fee of NGN 200 from an accredited bank. The system is widely used but in most with it: cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the a. Taxpayer registration input form (TRIF/2006/001 COYS); company name usually is a week in this state. The company name reservation lasts b. Completed FIRS questionnaire; 60 days but can be renewed for a similar period. c. Copy of memorandum and articles of association; d. Names and addresses of directors; Procedure 2. Prepare the requisite incorporation documents and e. Copy of the certificate of incorporation; pay the stamp duty f. Name, address of tax adviser; Time: 7 days g. Letter of appointment of tax adviser and a letter of acceptance. Cost: NGN 16,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra stamped copy of memorandum and articles of association + NGN 500 for incorpora- The application forms must be in triplicate and the original certificate of incorpora- tion forms + NGN 3,000 transport costs to Asaba) tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all Comments: This procedure involves the following tasks: documents, a tax reference number is allocated. An application must be filed for the a. Preparing and printing the memorandum and articles of association; tax clearance certificate. Its issuance is not automatic. b. Completing the requisite statutory forms, and; 64 DOING BUSINESS IN NIGERIA 2010 The fees for the tax clearance issuance are as follows: for newly registered companies c. Having the memorandum and articles of association stamped by the Federal within 6 months of incorporation: no fee; for companies that are yet to commence Board of Inland Revenue Service. business and show up for registration after 6 months of incorporation, if they request There is no stamp duty office in this state and the procedure is usually done in the for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first nearest city where there is one. The time for preparation of documents and stamp- time and NGN 20,000 is payable for subsequent years until it files a notice of com- ing presented here is based on an assumption that the stamping is conducted at the mencement of business. stamp duty office in Akure, Ondo and accounts for the travel time. Additional costs Companies required to register for VAT should complete the VAT registration form for handling this procedure out of state are not charged separately but included in (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the the professional charges of the lawyer or incorporation agent used. nearest integrated tax office, which will issue a taxpayer identification number (TIN). According to the VAT Act, companies required to register for VAT must do so within 6 Procedure 3. Declaration of Compliance (Form CAC 4) signed months from the date of starting business operations. The TIN is issued in 1-2 days, before a Commissioner for Oaths or notary public but it is mailed with the VAT certificate, which is issued in a week. Time: 1 day Cost: NGN 20 Procedure 6*. Register for personal income tax PAYE at the State Comments: A sworn declaration that the requirements of the Companies and Allied Tax Office Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged Time: 2 days in the formation of the company or (ii) by a person named in the memorandum and Cost: No cost articles of association as a director or secretary of the company. This procedure can Comments: The employers in the newly incorporated company are required to reg- be done before a notary public or filed at the state or federal High Court. The com- ister with the relevant state tax authority for the purposes of deducting income tax mon practice is for this declaration to be sworn before a Commissioner of Oaths at from employees. Once an application is filed with a copy of the certificate of incor- the state High Court. poration attached, a reference file is then opened for the company. There is no cost related to this registration. Procedure 4. Register the company with the Corporate Affairs Commission Procedure 7. Register business premises with the Ministry of Time: 21 days Commerce and Industry Cost: NGN 127,000 (NGN 100,000 for legal fees + Incorporation fees of NGN 10,000 Time: 1 day for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 share Cost: No cost capital or less thereof + NGN 3,000 for certified true copy of memorandum and ar- ticles of association + NGN 2,000 for certified true copy of particulars of directors + Comments: Following incorporation with Corporate Affairs Commission, a newly NGN 2,000 for certified true copy of particulars of shareholders) established business must register and obtain a business premises permit from the Ministry of Commerce and Industry. Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: Procedure 8. Pay registration fees for business premises into a a. Stamped memorandum and articles of association (2 copies); government account at a designated bank b. Form CAC 3, Notice of registered address; Time: 1 day c. Form CAC 7, Particulars of directors; Cost: NGN 10,000 d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Comments: The payment of the business premises registration fees is made directly e. Copy of the reservation of company name approval; into the government bank account at a designated bank. NGN 10,000 is the approxi- f. Form CAC 2, Statement of share capital and return of allotment of shares. mate cost of business premises registration for a medium sized company carrying on general commercial activities. The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the fol- *This procedure can be completed simultaneously with previous procedures. lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN STARTING A BUSINESS 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashier's desk in the CAC. EKITI, Ado-Ekiti There is a legal requirement for the company's incorporators to hire a CAC accredited Standard company legal form: Limited Liability Company professional usually a lawyer to undertake the administrative incorporation proce- Paid in minimum capital requirement: none dures. Given that the use of lawyers for such purposes is mandatory throughout the Data as of: January 2010 country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 100,000 to handle the entire incorporation process in this Procedure 1. Check the availability of company’s name with the state. Corporate Affairs Commission (CAC) Time: 7 days Procedure 5. Register with the integrated Tax Office of the Cost: NGN 200 Federal Board of Inland Revenue for income tax and VAT Comments: The Corporate Affairs Commission online system allows for online Time: 5 days search of unique company names upon the purchase of an e-payment card for a Cost: No cost flat fee of NGN 200 from an accredited bank. The system is widely used but in most Comments: Entrepreneurs can register for both corporate income tax and VAT at cases, applicants have to go to the CAC office to complete this procedure. The time the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue to conduct the availability of name search, receive confirmation and reserve the Service (FIRS) will require the applicant to complete tax registration forms. The new company name usually takes about 7 days. The company name reservation lasts 60 company registers at a Federal Tax Office nearest to its place of business or registered days but can be renewed for a similar period. office. A letter is written to the tax authority applying for a tax clearance certificate. A form obtained from the tax office is filled and the following documents submitted Procedure 2. Prepare the requisite incorporation documents and with it: pay the stamp duty a. Taxpayer registration input form (TRIF/2006/001 COYS); Time: 3 days b. Completed FIRS questionnaire; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra c. Copy of memorandum and articles of association; stamped copy of memorandum and articles of association + NGN 500 for incorpora- d. Names and addresses of directors; tion forms) e. Copy of the certificate of incorporation; Comments: This procedure involves the following tasks: f. Name, address of tax adviser; a. Preparing and printing the memorandum and articles of association; g. Letter of appointment of tax adviser and a letter of acceptance. b. Completing the requisite statutory forms, and; LIST OF PROCE %63&4t STARTING A BUSINESS 65 The application forms must be in triplicate and the original certificate of incorpora- to conduct the availability of name search, receive confirmation and reserve the tion must be presented for 'sighting' by the controller before registration can be company name usually takes 2 days. The company name reservation lasts 60 days completed. Upon receipt of the completed taxpayer registration input form and all but can be renewed for a similar period. documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic. Procedure 2. Prepare the requisite incorporation documents and The fees for the tax clearance issuance are as follows: for newly registered companies pay the stamp duty within 6 months of incorporation: no fee; for companies that are yet to commence Time: 6 days business and show up for registration after 6 months of incorporation, if they request Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first stamped copy of memorandum and articles of association + NGN 500 for incorpora- time and NGN 20,000 is payable for subsequent years until it files a notice of com- tion forms) mencement of business. Comments: This procedure involves the following tasks: Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the a. Preparing and printing the memorandum and articles of association; nearest integrated tax office, which will issue a taxpayer identification number (TIN). b. Completing the requisite statutory forms, and; According to the VAT Act, companies required to register for VAT must do so within 6 c. Having the memorandum and articles of association stamped by the Federal months from the date of starting business operations. The TIN is issued in 1-2 days, Board of Inland Revenue Service. but it is mailed with the VAT certificate, which is issued in a week. There is a stamp duty office located in the state capital in Enugu and housed in the same premises with the CAC. Procedure 6*. Register for personal income tax PAYE at the State Tax Office Procedure 3. Declaration of Compliance (Form CAC 4) signed Time: 2 days before a Commissioner for Oaths or notary public Cost: No cost Time: 1 day Comments: The employers in the newly incorporated company are required to reg- Cost: NGN 200 ister with the relevant state tax authority for the purposes of deducting income tax Comments: A sworn declaration that the requirements of the Companies and Allied from employees. Once an application is filed with a copy of the certificate of incor- Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged poration attached, a reference file is then opened for the company. There is no cost in the formation of the company or (ii) by a person named in the memorandum and related to this registration. articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the state or federal High Court. The com- Procedure 7. Receive an inspection from the Ministry of mon practice is for this declaration to be sworn before a Commissioner of Oaths at Commerce and Industry for business premises registration the state High Court. Time: 1 day Cost: No cost Procedure 4. Obtain bank draft from a bank for payment of the Comments: After the submission of all application documents, an inspection of the registration fees business premises is carried out by an officer from the Ministry of Commerce and Time: 1 day Industry. The Ministry of Commerce may conduct an inspection of the premises to Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 20,000 Incorporation confirm the location of the business and determine the type of business activity. fees (NGN 10,000 for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000 for certified true copy of memo- Procedure 8. Pay registration fees for business premises into a randum and articles of association + NGN 2,000 for certified true copy of particulars government account at a designated bank of directors, + NGN 2,000 for certified true copy of particulars of shareholders) Time: 1 day Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Cost: NGN 20,000 rate Affairs Commission as the mode of payment of registration fees. The cost of the bank draft may vary slightly depending on the bank but it is typically around NGN Comments: The payment of the business premises registration fees is made directly 200 for a draft in the amount of the CAC registration fees. into the government bank account at a designated bank. NGN 20,000 is the approxi- mate cost of business premises registration for a medium sized company carrying on general commercial activities. Procedure 5. Register the company with the Corporate Affairs Commission Procedure 9*. Obtain a business premises permit from the state’s Time: 14 days Ministry of Commerce and Industry Cost: NGN 100,000 (legal fees) Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: No cost quired incorporation documents and forms, which include: Comments: Following payment of the assessed registration fees for business prem- a. Stamped memorandum and articles of association (2 copies); ises permit into a designated government account, the Ministry of Commerce and b. Form CAC 3, Notice of registered address; Industry issues a business premises permit to the new business. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; *This procedure can be completed simultaneously with previous procedures. e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. STARTING A BUSINESS The CAC introduced a same-day incorporation option at an increased statutory ENUGU, Enugu fee (5 times that of standard incorporation). The fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Standard company legal form: Limited Liability Company NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Paid in minimum capital requirement: none 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Data as of: January 2010 NGN 7,000. There is a legal requirement for the company's incorporators to hire a CAC accredited Procedure 1. Check the availability of company’s name with the professional usually a lawyer to undertake the administrative incorporation proce- Corporate Affairs Commission (CAC) dures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 2 days country, lawyer fees are accounted for in the overall incorporation costs. On average, Cost: NGN 200 a lawyer will charge NGN 100,000 to handle the entire incorporation process in this Comments: The Corporate Affairs Commission online system allows for online state. search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The time 66 DOING BUSINESS IN NIGERIA 2010 STARTING A BUSINESS Procedure 6. Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VAT FEDERAL CAPITAL TERRITORY, Abuja Time: 5 days Standard company legal form: Limited Liability Company Cost: No cost Paid in minimum capital requirement: none Comments: Entrepreneurs can register for both corporate income tax and VAT at Data as of: January 2010 the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new Procedure 1. Check the availability of company’s name with the company registers at a Federal Tax Office nearest to its place of business or registered Corporate Affairs Commission (CAC) office. A letter is written to the tax authority applying for a tax clearance certificate. Time: 1 day A form obtained from the tax office is filled and the following documents submitted Cost: NGN 200 with it: Comments: The Corporate Affairs Commission online system allows for online a. Taxpayer registration input form (TRIF/2006/001 COYS); search of unique company names upon the purchase of an e-payment card for a flat b. Completed FIRS questionnaire; fee of NGN 200 from an accredited bank. The system is widely used and works much c. Copy of memorandum and articles of association; faster in this city since the CAC headquarters is here. Applicants prefer to go to the CAC office physically to use their systems to complete this procedure. The time to d. Names and addresses of directors; conduct the availability of name search, receive confirmation and reserve the com- e. Copy of the certificate of incorporation; pany name usually takes 1-2 days. The company name reservation lasts 60 days but f. Name, address of tax adviser; can be renewed for a similar period. g. Letter of appointment of tax adviser and a letter of acceptance. The application forms must be in triplicate and the original certificate of incorpora- Procedure 2. Prepare the requisite incorporation documents and tion must be presented for 'sighting' by the controller before registration can be pay the stamp duty completed. Upon receipt of the completed taxpayer registration input form and all Time: 6 days documents, a tax reference number is allocated. An application must be filed for the Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra tax clearance certificate. Its issuance is not automatic. stamped copy of memorandum and articles of association + NGN 500 for incorpora- The fees for the tax clearance issuance are as follows: for newly registered companies tion forms) within 6 months of incorporation: no fee; for companies that are yet to commence Comments: This procedure involves the following tasks: business and show up for registration after 6 months of incorporation, if they request a. Preparing and printing the memorandum and articles of association; for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- b. Completing the requisite statutory forms, and; mencement of business. c. Having the memorandum and articles of association stamped by the Federal Companies required to register for VAT should complete the VAT registration form Board of Inland Revenue Service. (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the There is a stamp duty office located in Abuja and housed in the same premises with nearest integrated tax office, which will issue a taxpayer identification number (TIN). the CAC. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 3. Declaration of Compliance (Form CAC 4) signed but it is mailed with the VAT certificate, which is issued in a week. before a Commissioner for Oaths or notary public Time: 1 day Procedure 7*. Register for personal income tax PAYE at the State Cost: NGN 200 Tax Office Comments: A sworn declaration that the requirements of the Companies and Allied Time: 2 days Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged Cost: No cost in the formation of the company or (ii) by a person named in the memorandum and Comments: The employers in the newly incorporated company are required to reg- articles of association as a director or secretary of the company. This procedure can ister with the relevant state tax authority for the purposes of deducting income tax be done before a notary public or filed at the state or federal High Court. The com- from employees. Once an application is filed with a copy of the certificate of incor- mon practice is for this declaration to be sworn before a Commissioner of Oaths at poration attached, a reference file is then opened for the company. There is no cost the state High Court. related to this registration. Procedure 4. Register the company with the Corporate Affairs Procedure 8. Obtain a business premises permit from the state’s Commission Ministry of Commerce and Industry Time: 9 days Time: 1 day Cost: NGN 77,000 (NGN 50,000 for legal fees + NGN 20,000 incorporation fees [NGN Cost: No cost 10,000 for company whose nominal share capital is NGN 1,000,000 or less + NGN Comments: Following incorporation with Corporate Affairs Commission, a newly 10,000 for the remaining NGN 263,870 share capital] + NGN 3,000 for certified true established business must register and obtain a business premises permit from the copy of memorandum and articles of association + NGN 2,000 for certified true copy Ministry of Commerce and Industry. of particulars of directors + NGN 2,000 for certified true copy of particulars of share- holders) Procedure 9. Pay registration fees for business premises into a Comments: The applicant must file with the Corporate Affairs Commission the re- government account at a designated bank quired incorporation documents and forms, which include: Time: 1 day a. Stamped memorandum and articles of association (2 copies); Cost: NGN 10,000 b. Form CAC 3, Notice of registered address; Comments: The payment of the business premises registration fees is made directly c. Form CAC 7, Particulars of directors; into the government bank account at a designated bank. NGN 10,000 is the approxi- d. Form CAC 4, Declaration of compliance and the prescribed registration fees; mate cost of business premises registration for a medium sized company carrying on e. Copy of the reservation of company name approval; general commercial activities. f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory fee *This procedure can be completed simultaneously with previous procedures. (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashier's desk in the CAC. LIST OF PROCE %63&4t STARTING A BUSINESS 67 There is a legal requirement for the company's incorporators to hire a CAC accredited Comments: This procedure involves the following tasks: professional usually a lawyer to undertake the administrative incorporation proce- a. Preparing and printing the memorandum and articles of association; dures. Given that the use of lawyers for such purposes is mandatory throughout the b. Completing the requisite statutory forms, and; country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 50,000 to handle the entire incorporation process in this c. Having the memorandum and articles of association stamped by the Federal state. Board of Inland Revenue Service. There is no stamp duty office in this state and the procedure is usually done in the Procedure 5. Register at the integrated Tax Office for corporate nearest city where there is one. The time for preparation of documents and stamp- income tax, VAT, and PAYE ing presented here is based on an assumption that the stamping is conducted at the stamp duty office in Bauchi and accounts for the travel time. Additional costs for Time: 5 days handling this procedure out of state are not charged separately but included in the Cost: No cost professional charges of the lawyer or incorporation agent used. Comments: In Abuja, entrepreneurs can register for corporate income tax, VAT and PAYE at the new Integrated Tax Office. For corporate income tax: The Federal Inland Procedure 3. Declaration of Compliance (Form CAC 4) signed Revenue Service (FIRS) will require the applicant to complete tax registration forms. before a Commissioner for Oaths or notary public The new company registers at a Federal Tax Office nearest to its place of business or Time: 1 day registered office. A letter is written to the tax authority applying for a tax clearance certificate. A form obtained from the tax office is filled and the following documents Cost: NGN 20 submitted with it: Comments: A sworn declaration that the requirements of the Companies and Allied a. Taxpayer registration input form (TRIF/2006/001 COYS); Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and b. Completed FIRS questionnaire; articles of association as a director or secretary of the company. This procedure can c. Copy of memorandum and articles of association; be done before a notary public or filed at the state or federal High Court. The com- d. Names and addresses of directors; mon practice is for this declaration to be sworn before a Commissioner of Oaths at e. Copy of the certificate of incorporation; the state High Court. f. Name, address of tax adviser; Procedure 4. Pay incorporation fees to the Corporate Affairs g. Letter of appointment of tax adviser and a letter of acceptance. Commission at a designated bank The application forms must be in triplicate and the original certificate of incorpora- Time: 1 day tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capital documents, a tax reference number is allocated. An application must be filed for the + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000 tax clearance certificate. Its issuance is not automatic. for certified true copy of memorandum and articles of association, + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for certified true copy of The fees for the tax clearance issuance are as follows: for newly registered companies particulars of shareholders) within 6 months of incorporation, tax clearance certificate: no fee; for companies that are yet to commence business and show up for registration after 6 months of in- Comments: Payment is made to any of the receiving banks designated by the Cor- corporation, if they request for tax clearance certificate a pre-operation levy of NGN porate Affairs Commission. 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of commencement of business. Procedure 5. Register the company with the Corporate Affairs Companies required to register for VAT should complete the VAT registration form Commission (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Time: 5 days nearest integrated tax office, which will issue a taxpayer identification number (TIN). Cost: NGN 50,000 (legal fees) According to the VAT Act, companies required to register for VAT must do so within 6 Comments: The applicant must file with the Corporate Affairs Commission the re- months from the date of starting business operations. The TIN is issued in 1-2 days, quired incorporation documents and forms, which include: but it is mailed with the VAT certificate, which is issued in a week. For PAYE’s regis- tration, all employers shall register with the Integrated Tax Office for the purposes a. Stamped memorandum and articles of association (2 copies); of deducting income tax from employees. Once the application is filed with a copy b. Form CAC 3, Notice of registered address; of the certificate of incorporation attached, a reference file is then opened for the c. Form CAC 7, Particulars of directors; company. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; STARTING A BUSINESS f. Form CAC 2, Statement of share capital and return of allotment of shares. GOMBE, Gombe The CAC introduced a same-day incorporation option at an increased statutory fee Standard company legal form: Limited Liability Company (5 times that of standard incorporation). The fee schedule for registration is the fol- Paid in minimum capital requirement: none lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Data as of: January 2010 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedure 1. Check the availability of company’s name with the NGN 7,000.Payment is received at the cashier's desk in the CAC. Corporate Affairs Commission (CAC) There is a legal requirement for the company's incorporators to hire a CAC accredited Time: 5 days professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the Cost: NGN 200 country, lawyer fees are accounted for in the overall incorporation costs. On average, a Comments: The Corporate Affairs Commission online system allows for online lawyer will charge NGN 50,000 to handle the entire incorporation process in this state. search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in most Procedure 6. Register with the integrated Tax Office of the cases, applicants have to go to the CAC office to complete this procedure. The time Federal Board of Inland Revenue for income tax and VAT to conduct the availability of name search, receive confirmation and reserve the company name is usually no more than 5 days. The company name reservation lasts Time: 4 days 60 days but can be renewed for a similar period. Cost: No cost Comments: Entrepreneurs can register for both corporate income tax and VAT at Procedure 2. Prepare the requisite incorporation documents and the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue pay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The new Time: 5 days company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate. Cost: NGN 15,098 (NGN 500 for incorporation forms + stamp duty at 0.75% + NGN A form obtained from the tax office is filled and the following documents submitted 1,000 for stamping of extra copy of memorandum and articles of association + NGN with it: 2,000 for transport costs to and from Bauchi where stamping is handled) 68 DOING BUSINESS IN NIGERIA 2010 a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. d. Names and addresses of directors; There is no stamp duty office in this state and the procedure is usually done in the e. Copy of the certificate of incorporation; nearest city where there is one. The time for preparation of documents and stamp- f. Name, address of tax adviser; ing presented here is based on an assumption that the stamping is conducted at the g. Letter of appointment of tax adviser and a letter of acceptance. stamp duty office in Umuahia or Port Harcourt and accounts for the travel time. Ad- The application forms must be in triplicate and the original certificate of incorpora- ditional costs for handling this procedure out of state are not charged separately but tion must be presented for 'sighting' by the controller before registration can be included in the professional charges of the lawyer or incorporation agent used. completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for the Procedure 3. Declaration of Compliance (Form CAC 4) signed tax clearance certificate. Its issuance is not automatic. before a Commissioner for Oaths or notary public The fees for the tax clearance issuance are as follows: for newly registered companies Time: 1 day within 6 months of incorporation: no fee; for companies that are yet to commence Cost: NGN 500 business and show up for registration after 6 months of incorporation, if they request Comments: A sworn declaration that the requirements of the Companies and Allied for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged time and NGN 20,000 is payable for subsequent years until it files a notice of com- in the formation of the company or (ii) by a person named in the memorandum and mencement of business. articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration form be done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the mon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN). the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 4. Pay incorporation fees to the Corporate Affairs but it is mailed with the VAT certificate, which is issued in a week. Commission at a designated bank Procedure 7. Register for personal income tax PAYE at the State Time: 1 day Tax Office Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capi- tal + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000 Time: 2 days for certified true copy of memorandum and articles of association, + NGN 2,000 for Cost: No cost certified true copy of particulars of directors, + NGN 2,000 for certified true copy of Comments: The employers in the newly incorporated company are required to reg- particulars of shareholders) ister with the relevant state tax authority for the purposes of deducting income tax Comments: Payment is made to any of the receiving banks designated by the Cor- from employees. Once an application is filed with a copy of the certificate of incor- porate Affairs Commission. poration attached, a reference file is then opened for the company. There is no cost related to this registration. Procedure 5. Register the company with the Corporate Affairs Commission Procedure 8. Register business premises with the Ministry of Time: 21 days Commerce and Industry Cost: NGN 80,000 (legal fees) Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: NGN 10,000 quired incorporation documents and forms, which include: Comments: The newly incorporated company is required to register its business a. Stamped memorandum and articles of association (2 copies); premises with the state Ministry of Commerce. Payments are made in cash directly to the Ministry of Commerce and Industry and a permit for business premises registra- b. Form CAC 3, Notice of registered address; tion is issued. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESS e. Copy of the reservation of company name approval; IMO, Owerri f. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the fol- Paid in minimum capital requirement: none lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Data as of: January 2010 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedure 1. Check the availability of company’s name with the NGN 7,000.Payment is received at the cashier's desk in the CAC. Corporate Affairs Commission (CAC) There is a legal requirement for the company's incorporators to hire a CAC accredited Time: 2 days professional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for online country, lawyer fees are accounted for in the overall incorporation costs. On average, search of unique company names upon the purchase of an e-payment card for a a lawyer will charge NGN 80,000 to handle the entire incorporation process in this flat fee of NGN 200 from an accredited bank. The system is widely used but in most state. cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the Procedure 6. Register with the integrated Tax Office of the company name is usually 2 days. The company name reservation lasts 60 days but Federal Board of Inland Revenue for income tax and VAT can be renewed for a similar period. Time: 4 days Cost: No cost Procedure 2. Prepare the requisite incorporation documents and pay the stamp duty Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 7 days Service (FIRS) will require the applicant to complete tax registration forms. The new Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra company registers at a Federal Tax Office nearest to its place of business or registered stamped copy of memorandum and articles of association + NGN 500 for incorpora- office. A letter is written to the tax authority applying for a tax clearance certificate. tion forms) A form obtained from the tax office is filled and the following documents submitted Comments: This procedure involves the following tasks: with it: LIST OF PROCE %63&4t STARTING A BUSINESS 69 a. Taxpayer registration input form (TRIF/2006/001 COYS); STARTING A BUSINESS b. Completed FIRS questionnaire; JIGAWA, Dutse c. Copy of memorandum and articles of association; Standard company legal form: Limited Liability Company d. Names and addresses of directors; Paid in minimum capital requirement: none e. Copy of the certificate of incorporation; Data as of: January 2010 f. Name, address of tax adviser; Procedure 1. Check the availability of company’s name with the g. Letter of appointment of tax adviser and a letter of acceptance. Corporate Affairs Commission (CAC) The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be Time: 4 days completed. Upon receipt of the completed taxpayer registration input form and all Cost: NGN 200 documents, a tax reference number is allocated. An application must be filed for the Comments: The Corporate Affairs Commission online system allows for online tax clearance certificate. Its issuance is not automatic. search of unique company names upon the purchase of an e-payment card for a The fees for the tax clearance issuance are as follows: for newly registered companies flat fee of NGN 200 from an accredited bank. The system is widely used but in most within 6 months of incorporation: no fee; for companies that are yet to commence cases, applicants have to go to the CAC office to complete this procedure. The time business and show up for registration after 6 months of incorporation, if they request to conduct the availability of name search, receive confirmation and reserve the for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first company name usually takes about 4 days in this state. The company name reserva- time and NGN 20,000 is payable for subsequent years until it files a notice of com- tion lasts 60 days but can be renewed for a similar period. mencement of business. Companies required to register for VAT should complete the VAT registration form Procedure 2. Prepare the requisite incorporation documents and (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the pay the stamp duty nearest integrated tax office, which will issue a taxpayer identification number (TIN). Time: 5 days According to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 18,098 (stamp duty of 0.75% of the share capital + NGN 1,000 for extra months from the date of starting business operations. The TIN is issued in 1-2 days, stamping of a copy of the memorandum and articles of association + NGN 500 for but it is mailed with the VAT certificate, which is issued in a week. the incorportaion forms + NGN 5,000 to and from Kano where stamping is handled) Comments: This procedure involves the following tasks: Procedure 7*. Register for personal income tax PAYE at the State Tax Office a. Preparing and printing the memorandum and articles of association; Time: 2 days b. Completing the requisite statutory forms, and; Cost: No cost c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income tax There is no stamp duty office in this state and the procedure is usually done in the from employees. Once an application is filed with a copy of the certificate of incor- nearest city where there is one. The time for preparation of documents and stamp- poration attached, a reference file is then opened for the company. There is no cost ing presented here is based on an assumption that the stamping is conducted at related to this registration. the stamp duty office in Kano and accounts for the travel time. Additional costs for handling this procedure out of state is not charged separately but included in the professional charges of the lawyer or incorporation agent used. Procedure 8. Receive an inspection from the Ministry of Commerce and Industry for business premises registration Procedure 3. Declaration of Compliance (Form CAC 4) signed Time: 1 day before a Commissioner for Oaths or notary public Cost: No cost Time: 1 day Comments: After the submission of all application documents, an inspection of the Cost: NGN 200 business premises is carried out by an officer from the Ministry of Commerce and Industry. The Ministry of Commerce may conduct an inspection of the premises to Comments: A sworn declaration that the requirements of the Companies and Allied confirm the location of the business and determine the type of business activity. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure can Procedure 9. Pay registration fees for business premises into a be done before a notary public or filed at the state or federal High Court. The com- government account at a designated bank mon practice is for this declaration to be sworn before a Commissioner of Oaths at Time: 1 day the state High Court. Cost: NGN 12,000 Comments: The payment of the business premises registration fees is made directly Procedure 4. Register the company with the Corporate Affairs into the government bank account at a designated bank. NGN 12,000 is the approxi- Commission mate cost of business premises registration for a medium sized company carrying on Time: 18 days general commercial activities. Cost: NGN 87,000 (NGN 60,000 for legal fees + NGN 20,000 incorporation fees [NGN 10,000 for the first 1,000,000 share capital + NGN 10,000 each additional 1,000,000 Procedure 10*. Obtain a business premises permit from the share capital or less thereof] + NGN 3,000 for certified true copy of memorandum state’s Ministry of Commerce and Industry and articles of association + NGN 2,000 for certified true copy of particulars of direc- Time: 1 day tors + NGN 2,000 for certified true copy of particulars of shareholders) Cost: No cost Comments: The applicant must file with the Corporate Affairs Commission the re- Comments: Following payment of the assessed registration fees for business prem- quired incorporation documents and forms, which include: ises permit into a designated government account, the Ministry of Commerce and a. Stamped memorandum and articles of association (2 copies); Industry issues a business premises permit to the new business. b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; *This procedure can be completed simultaneously with previous procedures. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashier's desk in the CAC. 70 DOING BUSINESS IN NIGERIA 2010 There is a legal requirement for the company's incorporators to hire a CAC accredited STARTING A BUSINESS professional usually a lawyer to undertake the administrative incorporation proce- KADUNA, Kaduna dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, Standard company legal form: Limited Liability Company a lawyer will charge NGN 60,000 to handle the entire incorporation process in this Paid in minimum capital requirement: none state. Data as of: January 2010 Procedure 5. Register with the integrated Tax Office of the Procedure 1. Check the availability of company’s name with the Federal Board of Inland Revenue for income tax and VAT Corporate Affairs Commission (CAC) Time: 4 days Time: 2 days Cost: No cost Cost: NGN 200 Comments: Entrepreneurs can register for both corporate income tax and VAT at Comments: The Corporate Affairs Commission online system allows for online the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue search of unique company names upon the purchase of an e-payment card for a Service (FIRS) will require the applicant to complete tax registration forms. The new flat fee of NGN 200 from an accredited bank. The system is widely used but in most company registers at a Federal Tax Office nearest to its place of business or registered cases, applicants have to go to the CAC office to complete this procedure. The time office. A letter is written to the tax authority applying for a tax clearance certificate. to conduct the availability of name search, receive confirmation and reserve the A form obtained from the tax office is filled and the following documents submitted company name usually takes 2 days. The company name reservation lasts 60 days with it: but can be renewed for a similar period. a. Taxpayer registration input form (TRIF/2006/001 COYS); Procedure 2. Prepare the requisite incorporation documents and b. Completed FIRS questionnaire; pay the stamp duty c. Copy of memorandum and articles of association; Time: 4 days d. Names and addresses of directors; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra e. Copy of the certificate of incorporation; stamped copy of memorandum and articles of association + NGN 500 for incorpora- f. Name, address of tax adviser; tion forms) g. Letter of appointment of tax adviser and a letter of acceptance. Comments: This procedure involves the following tasks: The application forms must be in triplicate and the original certificate of incorpora- a. Preparing and printing the memorandum and articles of association; tion must be presented for 'sighting' by the controller before registration can be b. Completing the requisite statutory forms, and; completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for the c. Having the memorandum and articles of association stamped by the Federal tax clearance certificate. Its issuance is not automatic. Board of Inland Revenue Service. The fees for the tax clearance issuance are as follows: for newly registered companies There is a stamp duty office located in the state capital in Kaduna and housed in the within 6 months of incorporation: no fee; for companies that are yet to commence same premises with the CAC. business and show up for registration after 6 months of incorporation, if they request for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Procedure 3. Declaration of Compliance (Form CAC 4) signed time and NGN 20,000 is payable for subsequent years until it files a notice of com- before a Commissioner for Oaths or notary public mencement of business. Time: 1 day Companies required to register for VAT should complete the VAT registration form Cost: NGN 100 (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Comments: A sworn declaration that the requirements of the Companies and Allied nearest integrated tax office, which will issue a taxpayer identification number (TIN). Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged According to the VAT Act, companies required to register for VAT must do so within 6 in the formation of the company or (ii) by a person named in the memorandum and months from the date of starting business operations. The TIN is issued in 1-2 days, articles of association as a director or secretary of the company. This procedure can but it is mailed with the VAT certificate, which is issued in a week. be done before a notary public or filed at the state or federal High Court. The com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at Procedure 6. Register for personal income tax PAYE at the State the state High Court. Tax Office Time: 2 days Procedure 4. Pay incorporation fees to the Corporate Affairs Cost: No cost Commission at a designated bank Comments: The employers in the newly incorporated company are required to reg- Time: 1 day ister with the relevant state tax authority for the purposes of deducting income tax Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capi- from employees. Once an application is filed with a copy of the certificate of incor- tal + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000 poration attached, a reference file is then opened for the company. There is no cost for certified true copy of memorandum and articles of association + NGN 2,000 for related to this registration. certified true copy of particulars of directors, + NGN 2,000 for certified true copy of particulars of shareholders) Procedure 7. Register business premises with the Ministry of Comments: Payment is made to any of the receiving banks designated by the Cor- Commerce and Industry porate Affairs Commission. Time: 1 day Cost: NGN 20,000 Procedure 5. Register the company with the Corporate Affairs Comments: The newly incorporated company is required to register its business Commission premises with the state’s Ministry of Commerce and industry. Payments are made Time: 14 days in cash directly to the Ministry of Commerce and Industry and a permit for business Cost: NGN 60,000 (legal fees) premises registration is thereafter issued. Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. LIST OF PROCE %63&4t STARTING A BUSINESS 71 The CAC introduced a same-day incorporation option at an increased statutory fee Procedure 9. Obtain a business premises permit from the state’s (5 times that of standard incorporation). The fee schedule for registration is the fol- Ministry of Commerce and Industry lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Time: 1 day 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Cost: NGN 7,100 (NGN 100 for application form + NGN 7,000 for business premises NGN 7,000. Payment is received at the cashier's desk in the CAC. registration fee) There is a legal requirement for the company's incorporators to hire a CAC accredited Comments: The following documents must be submitted: application form, evi- professional usually a lawyer to undertake the administrative incorporation proce- dence of registration with Corporate Affairs Commission and tax clearance certifi- dures. Given that the use of lawyers for such purposes is mandatory throughout the cate. In Kaduna town the fees for business premises registration range between NGN country, lawyer fees are accounted for in the overall incorporation costs. On average, 700 and NGN 20,000. For a medium size manufacturing company, the fee amounts a lawyer will charge NGN 60,000 to handle the entire incorporation process in this to NGN 7,000 and NGN 5,000 for subsequent annual renewals of the permit. state. *This procedure can be completed simultaneously with previous procedures. Procedure 6. Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VAT STARTING A BUSINESS Time: 5 days KANO, Kano Cost: No cost Standard company legal form: Limited Liability Company Comments: Entrepreneurs can register for both corporate income tax and VAT at Paid in minimum capital requirement: none the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new Data as of: January 2010 company registers at a Federal Tax Office nearest to its place of business or registered Procedure 1. Check the availability of company’s name with the office. A letter is written to the tax authority applying for a tax clearance certificate. A form obtained from the tax office is filled and the following documents submitted Corporate Affairs Commission (CAC) with it: Time: 2 days a. Taxpayer registration input form (TRIF/2006/001 COYS); Cost: NGN 200 b. Completed FIRS questionnaire; Comments: The Corporate Affairs Commission online system allows for online c. Copy of memorandum and articles of association; search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in most d. Names and addresses of directors; cases, applicants have to go to the CAC office to complete this procedure. The time e. Copy of the certificate of incorporation; to conduct the availability of name search, receive confirmation and reserve the f. Name, address of tax adviser; company name usually takes 2 days. The company name reservation lasts 60 days g. Letter of appointment of tax adviser and a letter of acceptance. but can be renewed for a similar period. The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be Procedure 2. Prepare the requisite incorporation documents and completed. Upon receipt of the completed taxpayer registration input form and all pay the stamp duty documents, a tax reference number is allocated. An application must be filed for the Time: 7 days tax clearance certificate. Its issuance is not automatic. Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra The fees for the tax clearance issuance are as follows: for newly registered companies stamped copy of memorandum and articles of association + NGN 500 for incorpora- within 6 months of incorporation: no fee; for companies that are yet to commence tion forms) business and show up for registration after 6 months of incorporation, if they request Comments: This procedure involves the following tasks: for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first a. Preparing and printing the memorandum and articles of association; time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. b. Completing the requisite statutory forms, and; Companies required to register for VAT should complete the VAT registration form c. Having the memorandum and articles of association stamped by the Federal (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Board of Inland Revenue Service. nearest integrated tax office, which will issue a taxpayer identification number (TIN). There is a stamp duty office located in the state capital in Kano and housed in the According to the VAT Act, companies required to register for VAT must do so within 6 same premises with the CAC. months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Procedure 3. Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary public Procedure 7*. Register for personal income tax PAYE at the State Time: 1 day Tax Office Cost: NGN 50 Time: 3 days Comments: A sworn declaration that the requirements of the Companies and Allied Cost: No cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged Comments: The employers in the newly incorporated company are required to reg- in the formation of the company or (ii) by a person named in the memorandum and ister with the relevant state tax authority for the purposes of deducting income tax articles of association as a director or secretary of the company. This procedure can from employees. Once an application is filed with a copy of the certificate of incor- be done before a notary public or filed at the state or federal High Court. The com- poration attached, a reference file is then opened for the company. There is no cost mon practice is for this declaration to be sworn before a Commissioner of Oaths at related to this registration. the state High Court. Procedure 8. Receive an inspection from the Ministry of Procedure 4. Pay incorporation fees to the Corporate Affairs Commerce/SBIR for business premises registration Commission at a designated bank Time: 3 days Time: 1 day Cost: No cost Cost: NGN 27,000 (NGN 10,000 incorporation fees for the first 1,000,000 share capital Comments: After the submission of all application documents, an inspection of the + NGN 10,000 each additional 1,000,000 share capital or less thereof + NGN 3,000 business premises is carried out by an officer from the Ministry of Commerce and for certified true copy of memorandum and articles of association + NGN 2,000 for Industry. The Ministry of Commerce may conduct an inspection of the premises to certified true copy of particulars of directors + NGN 2,000 for certified true copy of confirm the location of the business and determine the type of business activity. particulars of shareholders) Comments: Payment is made to any of the receiving banks designated by the Cor- porate Affairs Commission. 72 DOING BUSINESS IN NIGERIA 2010 Procedure 5. Register the company with the Corporate Affairs Procedure 8. Receive an inspection from the Ministry of Commission Commerce and Industry for business premises registration Time: 18 days Time: 1 day Cost: NGN 60,000 (legal fees) Cost: No cost Comments: The applicant must file with the Corporate Affairs Commission the re- Comments: After the submission of all application documents, an inspection of the quired incorporation documents and forms, which include: business premises is carried out by an officer from the Ministry of Commerce and a. Stamped memorandum and articles of association (2 copies); Industry. The Ministry of Commerce may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity. b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; Procedure 9. Obtain a business premises permit from the state’s d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Ministry of Commerce and Industry e. Copy of the reservation of company name approval; Time: 3 days f. Form CAC 2, Statement of share capital and return of allotment of shares. Cost: NGN 20,000 The CAC introduced a same-day incorporation option at an increased statutory fee Comments: The fees for the business premises permit are paid directly to the Min- (5 times that of standard incorporation). The fee schedule for registration is the fol- istry. The fees depend on the type of activity, category of business (limited liability lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN company, partnership or sole proprietorship), size of the business, and its location, 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN and range from NGN 600 to NGN 100,000. For a medium manufacturing company 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): located in Kano metropolis the business premises permit costs NGN 20,000. The an- NGN 7,000.Payment is received at the cashier's desk in the CAC. nual renewal fee is the same as initial registration. There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- *This procedure can be completed simultaneously with previous procedures. dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 60,000 to handle the entire incorporation process in this STARTING A BUSINESS state. KATSINA, Katsina Procedure 6. Register with the integrated Tax Office of the Standard company legal form: Limited Liability Company Federal Board of Inland Revenue for income tax and VAT Paid in minimum capital requirement: none Time: 5 days Data as of: January 2010 Cost: No cost Procedure 1. Check the availability of company’s name with the Comments: Entrepreneurs can register for both corporate income tax and VAT at Corporate Affairs Commission (CAC) the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 5 days Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 200 office. A letter is written to the tax authority applying for a tax clearance certificate. Comments: The Corporate Affairs Commission online system allows for online A form obtained from the tax office is filled and the following documents submitted search of unique company names upon the purchase of an e-payment card for a with it: flat fee of NGN 200 from an accredited bank. The system is widely used but in most a. Taxpayer registration input form (TRIF/2006/001 COYS); cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the b. Completed FIRS questionnaire; company name is usually no more than 5 days. The company name reservation lasts c. Copy of memorandum and articles of association; 60 days but can be renewed for a similar period. d. Names and addresses of directors; e. Copy of the certificate of incorporation; Procedure 2. Prepare the requisite incorporation documents f. Name, address of tax adviser; Time: 4 days g. Letter of appointment of tax adviser and a letter of acceptance. Cost: NGN 500 (cost of incorporation forms) The application forms must be in triplicate and the original certificate of incorpora- Comments: This procedure involves the following tasks: tion must be presented for 'sighting' by the controller before registration can be a. Preparing and printing the memorandum and articles of association; completed. Upon receipt of the completed taxpayer registration input form and all b. Completing the requisite statutory forms, and; documents, a tax reference number is allocated. An application must be filed for the c. Having the memorandum and articles of association stamped by the Federal tax clearance certificate. Its issuance is not automatic. Board of Inland Revenue Service. The fees for the tax clearance issuance are as follows: for newly registered companies There is a stamp duty office located in the state capital in Katsina and housed in the within 6 months of incorporation: no fee; for companies that are yet to commence same premises with the CAC. The stamp duty office does not accept cash payment business and show up for registration after 6 months of incorporation, if they request over a certain threshold. for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. Procedure 3. Pay stamp duty into a government account at a designated bank Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Time: 1 day nearest integrated tax office, which will issue a taxpayer identification number (TIN). Cost: NGN 12,598 (stamp duty of 0.75% of share capital + NGN 1,000 for extra According to the VAT Act, companies required to register for VAT must do so within 6 stamped copy of memorandum and articles of association) months from the date of starting business operations. The TIN is issued in 1-2 days, Comments: Payment is made at any of the receiving banks designated by the stamp but it is mailed with the VAT certificate, which is issued in a week. duty office of the Federal Board of Inland Revenue Department. Procedure 7*. Register for personal income tax PAYE at the State Procedure 4. Stamping the memorandum and articles of Tax Office association at the stamp duty office Time: 2 days Time: 1 day Cost: No cost Cost: No cost Comments: The employers in the newly incorporated company are required to reg- Comments: Upon payment of the stamp duty fee at a designated bank, a bank de- ister with the relevant state tax authority for the purposes of deducting income tax posit slip is issued. The deposit slip is presented at the stamp duty office and thereaf- from employees. Once an application is filed with a copy of the certificate of incor- ter 2 copies of the memorandum and articles of association are stamped. poration attached, a reference file is then opened for the company. There is no cost related to this registration. LIST OF PROCE %63&4t STARTING A BUSINESS 73 Procedure 5*. Declaration of Compliance (Form CAC 4) signed Companies required to register for VAT should complete the VAT registration form before a Commissioner for Oaths or notary public (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the nearest integrated tax office, which will issue a taxpayer identification number (TIN). Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 50 months from the date of starting business operations. The TIN is issued in 1-2 days, Comments: A sworn declaration that the requirements of the Companies and Allied but it is mailed with the VAT certificate, which is issued in a week. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Procedure 8*. Register for personal income tax PAYE at the State articles of association as a director or secretary of the company. This procedure can Tax Office be done before a notary public or filed at the state or federal High Court. The com- Time: 2 days mon practice is for this declaration to be sworn before a Commissioner of Oaths at the state High Court. Cost: No cost Comments: The employers in the newly incorporated company are required to reg- Procedure 6. Register the company with the Corporate Affairs ister with the relevant state tax authority for the purposes of deducting income tax Commission from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no cost Time: 21 days related to this registration. Cost: NGN 87,000 (NGN 20,000 for CAC registration fees + NGN 7,000 for obtaining certified true copies of the company documents + NGN 60,000 for legal fees) Procedure 9. Register business premises with the Ministry of Comments: The applicant must file with the Corporate Affairs Commission the re- Commerce and Industry quired incorporation documents and forms, which include: Time: 1 day a. Stamped memorandum and articles of association (2 copies); Cost: NGN 20,000 b. Form CAC 3, Notice of registered address; Comments: The newly incorporated company is required to register its business c. Form CAC 7, Particulars of directors; premises with the state Ministry of Commerce. Payments are made in cash directly d. Form CAC 4, Declaration of compliance and the prescribed registration fees; to the Ministry of Commerce and Industry and a permit for business premises regis- e. Copy of the reservation of company name approval; tration is issued. f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory fee *This procedure can be completed simultaneously with previous procedures. (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN STARTING A BUSINESS 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): KEBBI, Birnin Kebbi NGN 7,000.Payment is received at the cashier's desk in the CAC. Standard company legal form: Limited Liability Company There is a legal requirement for the company's incorporators to hire a CAC accredited Paid in minimum capital requirement: none professional usually a lawyer to undertake the administrative incorporation proce- Data as of: January 2010 dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, Procedure 1. Check the availability of company’s name with the a lawyer will charge NGN 60,000 to handle the entire incorporation process in this Corporate Affairs Commission (CAC) state. Time: 3 days Cost: NGN 200 Procedure 7. Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VAT Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a Time: 3 days flat fee of NGN 200 from an accredited bank. The system is widely used but in most Cost: No cost cases, applicants have to go to the CAC office to complete this procedure. The time Comments: Entrepreneurs can register for both corporate income tax and VAT at to conduct the availability of name search, receive confirmation and reserve the the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue company name is usually 3 days in this state. The company’s name reservation lasts Service (FIRS) will require the applicant to complete tax registration forms. The new 60 days but can be renewed for a similar period. company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate. Procedure 2. Prepare the requisite incorporation documents and A form obtained from the tax office is filled and the following documents submitted pay the stamp duty with it: Time: 7 days a. Taxpayer registration input form (TRIF/2006/001 COYS); Cost: NGN 23,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra b. Completed FIRS questionnaire; stamped copy of memorandum and articles of association + NGN 500 for incorpo- c. Copy of memorandum and articles of association; ration forms + NGN 10,000 transport costs to Sokoto to handle stamping of docu- d. Names and addresses of directors; ments) e. Copy of the certificate of incorporation; Comments: This procedure involves the following tasks: f. Name, address of tax adviser; a. Preparing and printing the memorandum and articles of association; g. Letter of appointment of tax adviser and a letter of acceptance. b. Completing the requisite statutory forms, and; The application forms must be in triplicate and the original certificate of incorpora- c. Having the memorandum and articles of association stamped by the Federal tion must be presented for 'sighting' by the controller before registration can be Board of Inland Revenue Service. completed. Upon receipt of the completed taxpayer registration input form and all There is no stamp duty office in this state and the procedure is usually done in the documents, a tax reference number is allocated. An application must be filed for the nearest city where there is one. The time for preparation of documents and stamp- tax clearance certificate. Its issuance is not automatic. ing presented here is based on an assumption that the stamping is conducted at the The fees for the tax clearance issuance are as follows: for newly registered companies stamp duty office in Sokoto and accounts for the travel time. Transportation costs to within 6 months of incorporation: no fee; for companies that are yet to commence and from Sokoto are included in the cost for this procedure and the common prac- business and show up for registration after 6 months of incorporation, if they request tice is for the lawyers to charge this separately from the professional fees. for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- Procedure 3. Declaration of Compliance (Form CAC 4) signed mencement of business. before a Commissioner for Oaths or notary public Time: 1 day Cost: NGN 50 74 DOING BUSINESS IN NIGERIA 2010 Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companies Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commence in the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they request articles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first be done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business. the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Procedure 4. Pay incorporation fees to the Corporate Affairs nearest integrated tax office, which will issue a taxpayer identification number (TIN). Commission at a designated bank According to the VAT Act, companies required to register for VAT must do so within 6 Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Cost: NGN 27,000 (NGN 20,000 registration fees [NGN 10,000 for first 1 million shares and then NGN 10,000 for every 1 million or part thereof]+ NGN 3,000 certified true Procedure 7. Register for personal income tax PAYE at the State copy of memorandum and articles of association + NGN 2,000 certified true copy of particulars of directors + NGN 2,000 certified true copy of particulars of sharehold- Tax Office ers) Time: 1 day Comments: Payment is made to any of the receiving banks designated by the Cor- Cost: No cost porate Affairs Commission. Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income tax Procedure 5. Register the company with the Corporate Affairs from employees. Once an application is filed with a copy of the certificate of incor- Commission poration attached, a reference file is then opened for the company. There is no cost Time: 14 days related to this registration. Cost: NGN 35,000 (legal fees) Procedure 8. Register business premises with the Ministry of Comments: The applicant must file with the Corporate Affairs Commission the re- Commerce and Industry quired incorporation documents and forms, which include: Time: 1 day a. Stamped memorandum and articles of association (2 copies); Cost: NGN 10,000 b. Form CAC 3, Notice of registered address; Comments: The newly incorporated company is required to register its business c. Form CAC 7, Particulars of directors; premises with the state Ministry of Commerce. Payments are made in cash directly d. Form CAC 4, Declaration of compliance and the prescribed registration fees; to the Ministry of Commerce and Industry and a permit for business premises regis- e. Copy of the reservation of company name approval; tration is issued. f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory fee STARTING A BUSINESS (5 times that of standard incorporation). The fee schedule for registration is the fol- KOGI, Lokoja lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Standard company legal form: Limited Liability Company 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Paid in minimum capital requirement: none NGN 7,000.Payment is received at the cashier's desk in the CAC. Data as of: January 2010 There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- Procedure 1. Check the availability of company’s name with the dures. Given that the use of lawyers for such purposes is mandatory throughout the Corporate Affairs Commission (CAC) country, lawyer fees are accounted for in the overall incorporation costs. On average, Time: 3 days a lawyer will charge NGN 35,000 to handle the entire incorporation process in this Cost: NGN 200 state. Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a Procedure 6. Register with the integrated Tax Office of the flat fee of NGN 200 from an accredited bank. The system is widely used but in most Federal Board of Inland Revenue for income tax and VAT cases, applicants have to go to the CAC office to complete this procedure. The time Time: 2 days to conduct the availability of name search, receive confirmation and reserve the Cost: No cost company name is usually 2 to 3 days in this state. The company’s name reservation lasts 60 days but can be renewed for a similar period. Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new Procedure 2. Prepare the requisite incorporation documents and company registers at a Federal Tax Office nearest to its place of business or registered pay the stamp duty office. A letter is written to the tax authority applying for a tax clearance certificate. Time: 6 days A form obtained from the tax office is filled and the following documents submitted Cost: NGN 18,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra with it: stamped copy of memorandum and articles of association + NGN 500 for incorpora- a. Taxpayer registration input form (TRIF/2006/001 COYS); tion forms + NGN 5,000 transport costs to Abuja to handle stamping) b. Completed FIRS questionnaire; Comments: This procedure involves the following tasks: c. Copy of memorandum and articles of association; a. Preparing and printing the memorandum and articles of association; d. Names and addresses of directors; b. Completing the requisite statutory forms, and; e. Copy of the certificate of incorporation; c. Having the memorandum and articles of association stamped by the Federal f. Name, address of tax adviser; Board of Inland Revenue Service. g. Letter of appointment of tax adviser and a letter of acceptance. There is no stamp duty office in this state and the procedure is usually done in the nearest city where there is one. The time for preparation of documents and stamp- The application forms must be in triplicate and the original certificate of incorpora- ing presented here is based on an assumption that the stamping is conducted at the tion must be presented for 'sighting' by the controller before registration can be stamp duty office in Abuja and accounts for the travel time. Transportation costs to completed. Upon receipt of the completed taxpayer registration input form and all and from Abuja are included in the cost for this procedure and the common practice documents, a tax reference number is allocated. An application must be filed for the is for the lawyers to charge this separately from the professional fees. tax clearance certificate. Its issuance is not automatic. LIST OF PROCE %63&4t STARTING A BUSINESS 75 Procedure 3. Declaration of Compliance (Form CAC 4) signed The application forms must be in triplicate and the original certificate of incorpora- before a Commissioner for Oaths or notary public tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all Time: 1 day documents, a tax reference number is allocated. An application must be filed for the Cost: NGN 200 tax clearance certificate. Its issuance is not automatic. Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companies Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commence in the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they request articles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first be done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business. the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Procedure 4*. Pay incorporation fees to the Corporate Affairs nearest integrated tax office, which will issue a taxpayer identification number (TIN). Commission at a designated bank According to the VAT Act, companies required to register for VAT must do so within 6 Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days, Cost: NGN 27,000 (NGN 20,000 registration fees (NGN 10,000 for first 1 million shares but it is mailed with the VAT certificate, which is issued in a week. and then NGN 10,000 for every 1 million or part thereof)+ NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 certified true Procedure 7. Register for personal income tax PAYE at the State copy of particulars of directors + NGN 2,000 certified true copy of particulars of Tax Office shareholders) Time: 1 day Comments: Payment is made to any of the receiving banks designated by the Cor- Cost: No cost porate Affairs Commission. Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income tax Procedure 5. Register the company with the Corporate Affairs from employees. Once an application is filed with a copy of the certificate of incor- Commission poration attached, a reference file is then opened for the company. There is no cost Time: 14 days related to this registration. Cost: NGN 40,000 (legal fees) Comments: The applicant must file with the Corporate Affairs Commission the re- Procedure 8. Register business premises with the Ministry of quired incorporation documents and forms, which include: Commerce and Industry a. Stamped memorandum and articles of association (2 copies); Time: 1 day b. Form CAC 3, Notice of registered address; Cost: NGN 10,000 c. Form CAC 7, Particulars of directors; Comments: The newly incorporated company is required to register its business premises with the state Ministry of Commerce. Payments are made in cash directly to d. Form CAC 4, Declaration of compliance and the prescribed registration fees; the Ministry of Commerce and Industry and a permit for business premises registra- e. Copy of the reservation of company name approval; tion is issued. f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory fee *This procedure can be completed simultaneously with previous procedures. (5 times that of standard incorporation). The fee schedule for registration is the fol- lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN STARTING A BUSINESS 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): KWARA, Ilorin NGN 7,000. Standard company legal form: Limited Liability Company There is a legal requirement for the company's incorporators to hire a CAC accredited Paid in minimum capital requirement: none professional usually a lawyer to undertake the administrative incorporation proce- Data as of: January 2010 dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, Procedure 1. Check the availability of company’s name with the a lawyer will charge NGN 40,000 to handle the entire incorporation process in this Corporate Affairs Commission (CAC) state. Time: 3 days Procedure 6. Register with the integrated Tax Office of the Cost: NGN 200 Federal Board of Inland Revenue for income tax and VAT Comments: The Corporate Affairs Commission online system allows for online Time: 1 day search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in most Cost: No cost cases, applicants have to go to the CAC office to complete this procedure. The time Comments: Entrepreneurs can register for both corporate income tax and VAT at to conduct the availability of name search, receive confirmation and reserve the the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue company name is usually 3 days in this state. The company’s name reservation lasts Service (FIRS) will require the applicant to complete tax registration forms. The new 60 days but can be renewed for a similar period. company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate. Procedure 2. Prepare the requisite incorporation documents and A form obtained from the tax office is filled and the following documents submitted pay the stamp duty with it: Time: 7 days a. Taxpayer registration input form (TRIF/2006/001 COYS); Cost: NGN 18,098 (stamp duty of 0.75% per share capital + NGN 500 for incorpora- b. Completed FIRS questionnaire; tion forms + NGN 1,000 for stamping of extra copies of memorandum and articles of c. Copy of memorandum and articles of association; association + NGN 5,000 transport costs to and from Ibadan to handle the stamping) d. Names and addresses of directors; Comments: This procedure involves the following tasks: e. Copy of the certificate of incorporation; a. Preparing and printing the memorandum and articles of association; f. Name, address of tax adviser; b. Completing the requisite statutory forms, and; g. Letter of appointment of tax adviser and a letter of acceptance. c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. 76 DOING BUSINESS IN NIGERIA 2010 There is no stamp duty office in this state and the procedure is usually done in the The application forms must be in triplicate and the original certificate of incorpora- nearest city where there is one. The time for preparation of documents and stamp- tion must be presented for 'sighting' by the controller before registration can be ing presented here is based on an assumption that the stamping is conducted at the completed. Upon receipt of the completed taxpayer registration input form and all stamp duty office in Ibadan, Oyo State and accounts for the travel time. Transporta- documents, a tax reference number is allocated. An application must be filed for the tion costs to and from Ibadan are included in the cost for this procedure and the com- tax clearance certificate. Its issuance is not automatic. mon practice is for the lawyers to charge this separately from the professional fees. The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commence Procedure 3. Declaration of Compliance (Form CAC 4) signed business and show up for registration after 6 months of incorporation, if they request before a Commissioner for Oaths or notary public for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Time: 1 day time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. Cost: NGN 50 Companies required to register for VAT should complete the VAT registration form Comments: A sworn declaration that the requirements of the Companies and Allied (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged nearest integrated tax office, which will issue a taxpayer identification number (TIN). in the formation of the company or (ii) by a person named in the memorandum and According to the VAT Act, companies required to register for VAT must do so within 6 articles of association as a director or secretary of the company. This procedure can months from the date of starting business operations. The TIN is issued in 1-2 days, be done before a notary public or filed at the state or federal High Court. The com- but it is mailed with the VAT certificate, which is issued in a week. mon practice is for this declaration to be sworn before a Commissioner of Oaths at the state High Court. Procedure 7. Register for personal income tax PAYE at the State Procedure 4*. Pay incorporation fees to the Corporate Affairs Tax Office Commission at a designated bank Time: 2 days Time: 1 day Cost: No cost Cost: NGN 27,000 (NGN 20,000 registration fees [NGN 10,000 for first 1 million shares Comments: The employers in the newly incorporated company are required to reg- and then NGN 10,000 for every 1 million or part thereof]+ NGN 3,000 certified true ister with the relevant state tax authority for the purposes of deducting income tax copy of memorandum and articles of association + NGN 2,000 certified true copy of from employees. Once an application is filed with a copy of the certificate of incor- particulars of directors + NGN 2,000 certified true copy of particulars of shareholders) poration attached, a reference file is then opened for the company. There is no cost related to this registration. Comments: Payment is made at any of the receiving banks designated by the Cor- porate Affairs Commission. Procedure 8. Register business premises with the Ministry of Procedure 5. Register the company with the Corporate Affairs Commerce and Industry Commission Time: 1 day Time: 14 days Cost: NGN 40,000 Cost: NGN 50,000 Comments: The newly incorporated company is required to register its business premises with the state Ministry of Commerce. Payments are made in cash directly Comments: The applicant must file with the Corporate Affairs Commission the re- to the Ministry of Commerce and Industry and a permit for business premises regis- quired incorporation documents and forms, which include: tration is thereafter issued. a. Stamped memorandum and articles of association (2 copies); b. Form CAC 3, Notice of registered address; *This procedure can be completed simultaneously with previous procedures. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESS e. Copy of the reservation of company name approval; LAGOS, Lagos f. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the fol- Paid in minimum capital requirement: none lowing: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN Data as of: January 2010 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedure 1. Check the availability of company’s name with the NGN 7,000. Payment is received at the cashier's desk in the CAC. Corporate Affairs Commission (CAC) There is a legal requirement for the company's incorporators to hire a CAC accredited Time: 2 days professional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for online country, lawyer fees are accounted for in the overall incorporation costs. On average, a search of unique company names upon the purchase of an e-payment card for a lawyer will charge NGN 50,000 to handle the entire incorporation process in this state. flat fee of NGN 200 from an accredited bank. The system is widely used, but in most cases applicants have to go to the CAC office to complete this procedure. The time to Procedure 6. Register with the integrated Tax Office of the conduct the availability of name search, receive confirmation and reserve the com- Federal Board of Inland Revenue for income tax and VAT pany name is usually 2 days. The company name reservation lasts 60 days, but can be Time: 5 days renewed for a similar period. Cost: No cost Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Ser- pay the stamp duty vice (FIRS) require the applicant to complete tax registration forms. The new compa- Time: 7 days ny registers at a Federal Tax Office nearest to its place of business or registered office. Cost: NGN 13,098 (stamp duty at 0.75% per share capital + NGN 500 for incorpora- A letter is written to the tax authority applying for a tax clearance certificate. A form tion forms + NGN 1,000 for stamping of extra copies of memorandum and articles of obtained from the tax office is filled and the following documents submitted with it: association) a. Taxpayer registration input form (TRIF/2006/001 COYS); Comments: This procedure involves the following tasks: b. Completed FIRS questionnaire; a. Preparing and printing the memorandum and articles of association; c. Copy of memorandum and articles of association; b. Completing the requisite statutory forms, and; d. Names and addresses of directors; c. Having the memorandum and articles of association stamped by the Federal e. Copy of the certificate of incorporation; Board of Inland Revenue Service. f. Name, address of tax adviser; There are two stamp duty offices located in the state. One of the stamp duty offices g. Letter of appointment of tax adviser and a letter of acceptance. is housed in the same premises as the CAC. LIST OF PROCE %63&4t STARTING A BUSINESS 77 Procedure 3. Declaration of Compliance (Form CAC 4) signed Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the before a Commissioner for Oaths or notary public nearest integrated tax office, which will issue a taxpayer identification number (TIN). Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 200 months from the date of starting business operations. The TIN is issued in 1-2 days, Comments: A sworn declaration that the requirements of the Companies and Allied but it is mailed with the VAT certificate, which is issued in a week. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Procedure 6*. Register for personal income tax PAYE at the State articles of association as a director or secretary of the company. This procedure can Tax Office be done before a notary public or filed at the state or federal High Court. The com- Time: 2 days mon practice is for this declaration to be sworn before a Commissioner of Oaths at Cost: No cost the state High Court. Comments: The employers in the newly incorporated company are required to reg- Procedure 4. Register the company with the Corporate Affairs ister with the relevant state tax authority for the purposes of deducting income tax from employees. Once an application is filed with a copy of the certificate of incor- Commission poration attached, a reference file is then opened for the company. There is no cost Time: 11 days related to this registration. Cost: NGN 87,000 (NGN 60,000 for legal fees + NGN 20,000 registration fees (NGN 10,000 for first 1 million shares and then NGN 10,000 for every 1 million or part Procedure 7*. Receive a visit from a local government inspection thereof)+ NGN 3,000 for certified true copy of memorandum and articles of associa- officer tion + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for Time: 7 days certified true copy of particulars of shareholders) Cost: No cost Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: Comments: The inspector visits the premises to determine their size and to ascer- tain that the business is not in an area prohibited or restricted by any law. The local a. Stamped memorandum and articles of association (2 copies); government issues a demand notice of any fees or taxes to be paid, with details on b. Form CAC 3, Notice of registered address; the payment method, the receiving bank, and the due date. Upon payment, the c. Form CAC 7, Particulars of directors; company has in effect fulfilled its obligation. The local government periodically d. Form CAC 4, Declaration of compliance and the prescribed registration fees; checks payment and enforces court action on any default. The state and the local government determine through physical inspections which businesses are operating e. Copy of the reservation of company name approval; within its jurisdiction and issue various levies, assessments, and charges for payment f. Form CAC 2, Statement of share capital and return of allotment of shares. by the company concerned. Failure to pay can lead to legal action in state and lower The Corporate Affairs Commission introduced a same-day incorporation option at division courts. an increased statutory fee (5 times that of standard incorporation). Fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN Procedure 8. Pay fees at a designated bank 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN Time: 1 day 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000. Payment is received at the cashier's desk in the CAC. Cost: NGN 18,500 There is a legal requirement for the company's incorporators to hire a CAC accredited Comments: The initial registration fee varies depending on the company size be- professional, usually a lawyer, to undertake the administrative incorporation proce- tween NGN 5,000 for small businesses and NGN 50,000 for large-scale businesses. dures. Given that the use of lawyers for such purposes is mandatory throughout the NGN 18,500 is the approximate cost of business premises registration for a medium country, lawyer fees are accounted for in the overall incorporation costs. On average, sized company carrying on general commercial activities in the city. The registration a lawyer will charge NGN 60,000 to handle the entire incorporation process in this must be renewed each year (NGN 5,000 for each renewal). Fees are paid into a gov- state. ernment account in a designated bank. Procedure 5. Register with the integrated Tax Office of the *This procedure can be completed simultaneously with previous procedures. Federal Board of Inland Revenue for income tax and VAT Time: 4 days STARTING A BUSINESS Cost: No cost NASARAWA, Lafia Comments: Entrepreneurs can register for both corporate income tax and VAT at Standard company legal form: Limited Liability Company the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Paid in minimum capital requirement: none Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Data as of: January 2010 office. A letter is written to the tax authority applying for a tax clearance certificate. Procedure 1. Check the availability of company’s name with the A form obtained from the tax office is filled and the following documents submitted with it: Corporate Affairs Commission (CAC) a. Taxpayer registration input form (TRIF/2006/001 COYS); Time: 5 days b. Completed FIRS questionnaire; Cost: NGN 200 c. Copy of memorandum and articles of association; Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a d. Names and addresses of directors; flat fee of NGN 200 from an accredited bank. The system is widely used, but in most e. Copy of the certificate of incorporation; cases applicants have to go to the CAC office to complete this procedure. The time f. Name, address of tax adviser; to conduct the availability of name search, receive confirmation and reserve the g. Letter of appointment of tax adviser and a letter of acceptance. company name is usually as much as 5 days. The company name reservation lasts 60 days, but can be renewed for a similar period. The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all Procedure 2. Prepare the requisite incorporation documents and documents, a tax reference number is allocated. An application must be filed for the pay the stamp duty tax clearance certificate. Its issuance is not automatic. Time: 7 days The fees for the tax clearance issuance are as follows: for newly registered companies Cost: NGN 18,098 (NGN 500 for incorporation forms + stamp duty at 0.75% of share within 6 months of incorporation: no fee; for companies that are yet to commence capital + NGN 5,000 for transportation costs to Abuja + NGN 1,000 for stamping of business and show up for registration after 6 months of incorporation, if they request additional copies each of the memorandum and articles of association) for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Comments: This procedure involves the following tasks: time and NGN 20,000 is payable for subsequent years until it files a notice of com- a. Preparing and printing the memorandum and articles of association; mencement of business. 78 DOING BUSINESS IN NIGERIA 2010 b. Completing the requisite statutory forms, and: The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be c. Having the memorandum and articles of association stamped by the Federal completed. Upon receipt of the completed taxpayer registration input form and all Board of Inland Revenue Service. documents, a tax reference number is allocated. An application must be filed for the There is no stamp duty office in this state and the procedure is usually done in the tax clearance certificate. Its issuance is not automatic. nearest city where there is one. The fees for the tax clearance issuance are as follows: for newly registered companies The time for preparation of documents and stamping presented here is based on an within 6 months of incorporation: no fee; for companies that are yet to commence assumption that the stamping is conducted at the stamp duty office in Abuja and business and show up for registration after 6 months of incorporation, if they request accounts for the travel time. Transportation costs to and from Abuja are included in for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first the cost for this procedure and the common practice is for the lawyers to charge this time and NGN 20,000 is payable for subsequent years until it files a notice of com- separately from the professional fees. mencement of business. Companies required to register for VAT should complete the VAT registration form Procedure 3. Declaration of Compliance (Form CAC 4) signed (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the before a Commissioner for Oaths or notary public nearest integrated tax office, which will issue a taxpayer identification number (TIN). Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 200 months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Comments: A sworn declaration that the requirements of the Companies and Allied Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Procedure 6. Register for personal income tax PAYE at the State articles of association as a director or secretary of the company. This procedure can Tax Office be done before a notary public or filed at the state or federal High Court. The com- Time: 1 day mon practice is for this declaration to be sworn before a Commissioner of Oaths at Cost: No cost the state High Court. Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income tax Procedure 4. Register the company with the Corporate Affairs from employees. Once an application is filed with a copy of the certificate of incor- Commission poration attached, a reference file is then opened for the company. There is no cost Time: 12 days related to this registration. Cost: NGN 107,000 (NGN 80,000 for legal fees + NGN 27,000 registration fees con- sisting of NGN 10,000 for the first 1 million shares and NGN10,000 for every 1 million Procedure 7. Register business premises with the Ministry of or part thereof + NGN 7,000 for certified copies of memorandum and articles of as- Commerce and Industry sociation, particulars of directors and shareholders) Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: NGN 10,000 quired incorporation documents and forms, which include: Comments: The newly incorporated company is required to register its business a. Stamped memorandum and articles of association ( 2 copies); premises with the state Ministry of Commerce. Payments are made in cash directly b. Form CAC 3, Notice of registered address; to the Ministry of Commerce and Industry and a permit for business premises regis- c. Form CAC 7, Particulars of directors; tration is issued. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESS e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. NIGER, Minna The CAC introduced a same-day incorporation option at an increased statutory Standard company legal form: Limited Liability Company fee (5 times that of standard incorporation). The fee schedule for registration is the Paid in minimum capital requirement: none following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Data as of: January 2010 NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedure 1. Check the availability of company’s name with the NGN 7,000. Payment is received at the cashier's desk in the CAC. Corporate Affairs Commission (CAC) There is a legal requirement for the company's incorporators to hire a CAC accredited Time: 5 days professional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, Comments: The Corporate Affairs Commission online system allows for online a lawyer will charge NGN 80,000 to handle the entire incorporation process in this search of unique company names upon the purchase of an e-payment card for a state. flat fee of NGN 200 from an accredited bank. The system is widely used, but in most cases applicants have to go to the CAC office to complete this procedure. The time to Procedure 5. Register with the integrated Tax Office of the conduct the availability of name search, receive confirmation and reserve the com- Federal Board of Inland Revenue for income tax and VAT pany name is usually as much as 5 days in this state. The company name reservation lasts 60 days, but can be renewed for a similar period. Time: 2 days Cost: No cost Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at pay the stamp duty the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 7 days Service (FIRS) will require the applicant to complete tax registration forms. The new Cost: NGN 18,098 (NGN 500 for the incorporation forms + stamp duty at 0.75% of company registers at a Federal Tax Office nearest to its place of business or registered share capital + NGN 5, 000 transport costs to Abuja for stamping + NGN 1,000 for office. A letter is written to the tax authority applying for a tax clearance certificate. stamping of extra copies of memorandum and articles of association) A form obtained from the tax office is filled and the following documents submitted with it: Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. d. Names and addresses of directors; There is no stamp duty office in this state and the procedure is usually done in the e. Copy of the certificate of incorporation; nearest city where there is one. The time for preparation of documents and stamping f. Name, address of tax adviser; shown here is based on an assumption that the stamping is conducted at the stamp g. Letter of appointment of tax adviser and a letter of acceptance. duty office in Kaduna or Abuja and accounts for the travel time. Transportation cost to handle the stamping out-of-state is included in the cost for this procedure and the common practice is for lawyers to charge this separately from the professional fees. LIST OF PROCE %63&4t STARTING A BUSINESS 79 Procedure 3. Declaration of Compliance (Form CAC 4) signed Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the before a Commissioner for Oaths or notary public nearest integrated tax office, which will issue a taxpayer identification number (TIN). Time: 1 day According to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 200 months from the date of starting business operations. The TIN is issued in 1-2 days, Comments: A sworn declaration that the requirements of the Companies and Allied but it is mailed with the VAT certificate, which is issued in a week. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Procedure 6*. Register for personal income tax PAYE at the State articles of association as a director or secretary of the company. This procedure can Tax Office be done before a notary public or filed at the state or federal High Court. The com- Time: 1 day mon practice is for this declaration to be sworn before a Commissioner of Oaths at Cost: No cost the state High Court. Comments: The employers in the newly incorporated company are required to reg- Procedure 4. Register the company with the Corporate Affairs ister with the relevant state tax authority for the purposes of deducting income tax from employees. Once an application is filed with a copy of the certificate of incor- Commission poration attached, a reference file is then opened for the company. There is no cost Time: 14 days related to this registration. Cost: NGN 87,000 (NGN 60,000 for legal fees + NGN 20,000 registration fees [NGN 10,000 for first 1 million shares and then NGN 10,000 for every 1 million or part Procedure 7. Register business premises with the Ministry of thereof)+ NGN 3,000 for certified true copy of memorandum and articles of associa- Commerce and Industry tion + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for Time: 3 days certified true copy of particulars of shareholders) Cost: NGN 10,000 Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: Comments: The newly incorporated company is required to register its business premises with the state Ministry of Commerce. Payments are made in cash directly a. Stamped memorandum and articles of association ( 2 copies); to the Ministry of Commerce and Industry and a permit for business premises regis- b. Form CAC 3, Notice of registered address; tration is issued. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; *This procedure can be completed simultaneously with previous procedures. e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. STARTING A BUSINESS The CAC introduced a same-day incorporation option at an increased statutory OGUN, Abeokuta fee (5 times that of standard incorporation). The fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Standard company legal form: Limited Liability Company NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Paid in minimum capital requirement: none 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Data as of: January 2010 NGN 7,000. Payment is received at the cashier's desk in the CAC. There is a legal requirement for the company's incorporators to hire a CAC accredited Procedure 1. Check the availability of company’s name with the professional usually a lawyer to undertake the administrative incorporation proce- Corporate Affairs Commission (CAC) dures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 2 days country, lawyer fees are accounted for in the overall incorporation costs. On average, Cost: NGN 200 a lawyer will charge NGN 60,000 to handle the entire incorporation process in this Comments: The Corporate Affairs Commission online system allows for online state. search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used, but in most Procedure 5. Register with the integrated Tax Office of the cases applicants have to go to the CAC office to complete this procedure. The time to Federal Board of Inland Revenue for income tax and VAT conduct the availability of name search, receive confirmation and reserve the com- Time: 2 days pany name is usually 2 days. The company name reservation lasts 60 days, but can be Cost: No cost renewed for a similar period. Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Procedure 2. Prepare the requisite incorporation documents and Service (FIRS) will require the applicant to complete tax registration forms. The new pay the stamp duty company registers at a Federal Tax Office nearest to its place of business or registered Time: 9 days office. A letter is written to the tax authority applying for a tax clearance certificate. Cost: NGN 13,098 (stamp duty at 0.75% per share capital + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submitted tion forms + NGN 1,000 for stamping of extra copies of memorandum and articles of with it: association) a. Taxpayer registration input form (TRIF/2006/001 COYS); Comments: This procedure involves the following tasks: b. Completed FIRS questionnaire; a. Preparing and printing the memorandum and articles of association; c. Copy of memorandum and articles of association; b. Completing the requisite statutory forms, and; d. Names and addresses of directors; c. Having the memorandum and articles of association stamped by the Federal e. Copy of the certificate of incorporation; Board of Inland Revenue Service. f. Name, address of tax adviser; There is no stamp duty office in this state and the procedure is usually done in the g. Letter of appointment of tax adviser and a letter of acceptance. nearest city where there is one. The time for preparation of documents and stamp- ing presented here is based on an assumption that the stamping is conducted at the The application forms must be in triplicate and the original certificate of incorpora- stamp duty office in Lagos or Ibadan and accounts for the travel time. Most incor- tion must be presented for 'sighting' by the controller before registration can be porators have shown a preference to stamp the documents in Ibadan because it has completed. Upon receipt of the completed taxpayer registration input form and all less volume of transactions than Lagos and time is saved this way. The transportation documents, a tax reference number is allocated. An application must be filed for the cost is not charged separately, but is included in the final bill charged by the lawyers tax clearance certificate. Its issuance is not automatic. for handling the incorporation. The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commence business and show up for registration after 6 months of incorporation, if they request for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. 80 DOING BUSINESS IN NIGERIA 2010 Procedure 3. Declaration of Compliance (Form CAC 4) signed documents, a tax reference number is allocated. An application must be filed for the before a Commissioner for Oaths or notary public tax clearance certificate. Its issuance is not automatic. Time: 1 day The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commence Cost: NGN 200 business and show up for registration after 6 months of incorporation, if they request Comments: A sworn declaration that the requirements of the Companies and Allied for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged time and NGN 20,000 is payable for subsequent years until it files a notice of com- in the formation of the company or (ii) by a person named in the memorandum and mencement of business. articles of association as a director or secretary of the company. This procedure can Companies required to register for VAT should complete the VAT registration form be done before a notary public or filed at the state or federal High Court. The com- (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the mon practice is for this declaration to be sworn before a Commissioner of Oaths at nearest integrated tax office, which will issue a taxpayer identification number (TIN). the state High Court. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, Procedure 4. Pay incorporation fees to the Corporate Affairs but it is mailed with the VAT certificate, which is issued in a week. Commission at a designated bank Time: 1 day Procedure 7*. Register for personal income tax PAYE at the State Cost: NGN 27,000 (NGN 20,000 incorporation fees (NGN 10,000 for company whose Tax Office nominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGN Time: 2 days 546,350 share capital + NGN 3,000 for certified true copy of memorandum and ar- Cost: No cost ticles of association + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for certified true copy of particulars of shareholders) Comments: The employers in the newly incorporated company are required to reg- ister with the relevant state tax authority for the purposes of deducting income tax Comments: Payment is made to any of the receiving banks designated by the Cor- from employees. Once an application is filed with a copy of the certificate of incor- porate Affairs Commission. poration attached, a reference file is then opened for the company. There is no cost related to this registration. Procedure 5. Register the company with the Corporate Affairs Commission Procedure 8. Receive an inspection from the Ministry of Time: 18 days Commerce and Industry for business premises registration Cost: NGN 80,000 (legal fees) Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: No cost quired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of the a. Stamped memorandum and articles of association ( 2 copies); business premises is carried out by an officer from the Ministry of Commerce and b. Form CAC 3, Notice of registered address; Industry. The Ministry of Commerce may conduct an inspection of the premises to c. Form CAC 7, Particulars of directors; confirm the location of the business and determine the type of business activity. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Procedure 9. Pay registration fees for business premises into a e. Copy of the reservation of company name approval; government account at a designated bank f. Form CAC 2, Statement of share capital and return of allotment of shares. Time: 1 day The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the Cost: NGN 20,000 following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Comments: The business permit fee for a general merchant in urban areas of Ogun NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN state is NGN 20,000 for first time registration and NGN 10,000 for a renewal. Fees are 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): paid directly into a government account in a designated bank. NGN 7,000. There is a legal requirement for the company's incorporators to hire a CAC accredited Procedure 10. Obtain a business premises permit from the state’s professional usually a lawyer to undertake the administrative incorporation proce- Ministry of Commerce and Industry dures. Given that the use of lawyers for such purposes is mandatory throughout the Time: 2 days country, lawyer fees are accounted for in the overall incorporation costs. On average, Cost: No cost a lawyer will charge NGN 80,000 to handle the entire incorporation process in this Comments: Following payment of the assessed registration fees for business prem- state. ises permit into a designated government account, the Ministry of Commerce and Industry registers and issues a business premises permit to the new business. Procedure 6. Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VAT *This procedure can be completed simultaneously with previous procedures. Time: 5 days Cost: No cost STARTING A BUSINESS Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue ONDO, Akure Service (FIRS) will require the applicant to complete tax registration forms. The new Standard company legal form: Limited Liability Company company registers at a Federal Tax Office nearest to its place of business or registered Paid in minimum capital requirement: none office. A letter is written to the tax authority applying for a tax clearance certificate. A form obtained from the tax office is filled and the following documents submitted Data as of: January 2010 with it: Procedure 1. Check the availability of company’s name with the a. Taxpayer registration input form (TRIF/2006/001 COYS); Corporate Affairs Commission (CAC) b. Completed FIRS questionnaire; Time: 2 days c. Copy of memorandum and articles of association; Cost: NGN 200 d. Names and addresses of directors; Comments: The Corporate Affairs Commission online system allows for online e. Copy of the certificate of incorporation; search of unique company names upon the purchase of an e-payment card for a f. Name, address of tax adviser; flat fee of NGN 200 from an accredited bank. The system is widely used, but in most g. Letter of appointment of tax adviser and a letter of acceptance. cases applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the com- The application forms must be in triplicate and the original certificate of incorpora- pany name is usually 2 days. The company name reservation lasts 60 days, but can be tion must be presented for 'sighting' by the controller before registration can be renewed for a similar period. completed. Upon receipt of the completed taxpayer registration input form and all LIST OF PROCE %63&4t STARTING A BUSINESS 81 Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue pay the stamp duty Service (FIRS) will require the applicant to complete tax registration forms. The new Time: 4 days company registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra office. A letter is written to the tax authority applying for a tax clearance certificate. stamped copy of memorandum and articles of association + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submitted tion forms) with it: Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal d. Names and addresses of directors; Board of Inland Revenue Service. e. Copy of the certificate of incorporation; There is a stamp duty office located in the state capital in Akure and housed in the f. Name, address of tax adviser; same premises with the CAC. g. Letter of appointment of tax adviser and a letter of acceptance. Procedure 3. Declaration of Compliance (Form CAC 4) signed The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be before a Commissioner for Oaths or notary public completed. Upon receipt of the completed taxpayer registration input form and all Time: 1 day documents, a tax reference number is allocated. An application must be filed for the Cost: NGN 50 tax clearance certificate. Its issuance is not automatic. Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companies Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commence in the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they request articles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first be done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business. the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Procedure 4*. Obtain bank draft from a bank for payment of the nearest integrated tax office, which will issue a taxpayer identification number (TIN). registration fees According to the VAT Act, companies required to register for VAT must do so within 6 Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Cost: NGN 200 Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Procedure 7*. Register for personal income tax PAYE at the State rate Affairs Commission as the mode of payment of registration fees. The cost of the Tax Office bank draft may vary slightly depending on the bank, but it is typically around NGN 200 for a draft in the amount of the CAC registration fees. Time: 2 days Cost: No cost Procedure 5. Register the company with the Corporate Affairs Comments: The employers in the newly incorporated company are required to reg- Commission ister with the relevant state tax authority for the purposes of deducting income tax Time: 21 days from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no cost Cost: NGN 107,000 (NGN 80,000 for legal fees + NGN 20,000 iIncorporation fees related to this registration. (NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGN 546,350 share capital + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified true Procedure 8. Receive assessment by the State Board of Internal copy of particulars of directors + NGN 2,000 for certified true copy of particulars of Revenue for Registration of Business Premises shareholders) Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: No cost quired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of the a. Stamped memorandum and articles of association ( 2 copies); business premises is carried out by officers from the State Board of Internal Revenue b. Form CAC 3, Notice of registered address; (SBIR). The SBIR may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Procedure 9. Pay registration fees for business premises into a e. Copy of the reservation of company name approval; government account at a designated bank f. Form CAC 2, Statement of share capital and return of allotment of shares. Time: 1 day The CAC introduced a same-day incorporation option at an increased statutory Cost: NGN 20,000 fee (5 times that of standard incorporation). The fee schedule for registration is the Comments: The payment of the business premises registration fees is made directly following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every into the government bank account at a designated bank. NGN 20,000 is the approxi- NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN mate cost of business premises registration for a medium sized company carrying on 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): general commercial activities. NGN 7,000. There is a legal requirement for the company's incorporators to hire a CAC accredited Procedure 10. Register business premises with the State Board of professional usually a lawyer to undertake the administrative incorporation proce- Internal Revenue dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, Time: 2 days a lawyer will charge NGN 80,000 to handle the entire incorporation process in this Cost: No cost state. Comments: Following payment of the assessed registration fees for business prem- ises permit into a designated government account, the State Board of Internal Rev- Procedure 6. Register with the integrated Tax Office of the enue registers and issues a business premises permit to the new business. Federal Board of Inland Revenue for income tax and VAT Time: 4 days *This procedure can be completed simultaneously with previous procedures. Cost: No cost 82 DOING BUSINESS IN NIGERIA 2010 STARTING A BUSINESS c. Form CAC 3, Notice of registered address; OSUN, Osogbo d. Form CAC 7, Particulars of directors; Standard company legal form: Limited Liability Company e. Form CAC 4, Declaration of compliance and the prescribed registration fees; Paid in minimum capital requirement: none f. Copy of the reservation of company name approval: Data as of: January 2010 g. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory Procedure 1. Check the availability of company’s name with the fee (5 times that of standard incorporation). The fee schedule for registration is the Corporate Affairs Commission (CAC) following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Time: 2 days NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Cost: NGN 200 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000. Comments: The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a There is a legal requirement for the company's incorporators to hire a CAC accredited flat fee of NGN 200 from an accredited bank. The system is widely used, but in most professional usually a lawyer to undertake the administrative incorporation proce- cases, applicants have to go to the CAC office to complete this procedure. The time dures. Given that the use of lawyers for such purposes is mandatory throughout the to conduct the availability of name search, receive confirmation and reserve the country, lawyer fees are accounted for in the overall incorporation costs. On average, a company name is usually 2 days. The company name reservation lasts 60 days, but lawyer will charge NGN 80,000 to handle the entire incorporation process in this state. can be renewed for a similar period. Procedure 6. Register with the integrated Tax Office of the Procedure 2. Prepare the requisite incorporation documents and Federal Board of Inland Revenue for income tax and VAT pay the stamp duty Time: 4 days Time: 3 days Cost: No cost Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Comments: Entrepreneurs can register for both corporate income tax and VAT at stamped copy of memorandum and articles of association + NGN 500 for incorpora- the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue tion forms) Service (FIRS) will require the applicant to complete tax registration forms. The new Comments: This procedure involves the following tasks: company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate. a. Preparing and printing the memorandum and articles of association; A form obtained from the tax office is filled and the following documents submitted b. Completing the requisite statutory forms, and; with it: c. Having the memorandum and articles of association stamped by the Federal a. Taxpayer registration input form (TRIF/2006/001 COYS); Board of Inland Revenue Service. b. Completed FIRS questionnaire; There is no stamp duty office in this state and the procedure is usually done in the c. Copy of memorandum and articles of association; nearest city where there is one. The time for preparation of documents and stamp- ing presented here is based on an assumption that the stamping is conducted at the d. Names and addresses of directors; stamp duty office in Ibadan and accounts for the travel time. In practice, lawyers do e. Copy of the certificate of incorporation; not charge a separate transportation fee to stamp the documents in Ibadan. Trans- f. Name, address of tax adviser; portation costs are billed into the lawyer's legal fees. g. Letter of appointment of tax adviser and a letter of acceptance. The application forms must be in triplicate and the original certificate of incorpora- Procedure 3. Declaration of Compliance (Form CAC 4) signed tion must be presented for 'sighting' by the controller before registration can be before a Commissioner for Oaths or notary public completed. Upon receipt of the completed taxpayer registration input form and all Time: 1 day documents, a tax reference number is allocated. An application must be filed for the Cost: NGN 100 tax clearance certificate. Its issuance is not automatic. Comments: A sworn declaration that the requirements of the Companies and Allied The fees for the tax clearance issuance are as follows: for newly registered companies Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged within 6 months of incorporation: no fee; for companies that are yet to commence in the formation of the company or (ii) by a person named in the memorandum and business and show up for registration after 6 months of incorporation, if they request articles of association as a director or secretary of the company. This procedure can for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first be done before a notary public or filed at the state or federal High Court. The com- time and NGN 20,000 is payable for subsequent years until it files a notice of com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at mencement of business. the state High Court. Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Procedure 4*. Obtain bank draft from a bank for payment of the nearest integrated tax office, which will issue a taxpayer identification number (TIN). registration fees According to the VAT Act, companies required to register for VAT must do so within 6 Time: 1 day months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Cost: NGN 200 Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Procedure 7*. Register for personal income tax PAYE at the State rate Affairs Commission as the mode of payment of registration fees. The cost of the Tax Office bank draft may vary slightly depending on the bank but it is typically around NGN 200 for a draft in the amount of the CAC registration fees. Time: 2 days Cost: No cost Procedure 5. Register the company with the Corporate Affairs Comments: The employers in the newly incorporated company are required to reg- Commission ister with the relevant state tax authority for the purposes of deducting income tax Time: 21 days from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no cost Cost: NGN 107,000 (NGN 80,000 for legal fees + NGN 20,000 incorporation fees related to this registration. [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified Procedure 8. Receive an inspection from the Ministry of true copy of memorandum and articles of association + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for certified true copy of particulars of Commerce and Industry for business premises registration shareholders) Time: 1 day Comments: The applicant must file with the Corporate Affairs Commission the re- Cost: No cost quired incorporation documents and forms, which include: Comments: After the submission of all application documents, an inspection of the a. Stamped memorandum and articles of association ( 2 copies); business premises is carried out by an officer from the Ministry of Commerce and b. Form CAC 2, statement of share capital; Industry. The Ministry of Commerce may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity. LIST OF PROCE %63&4t STARTING A BUSINESS 83 Procedure 9. Pay registration fees for business premises into a NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified true government account at a designated bank copy of particulars of directors + NGN 2,000 for certified true copy of particulars of Time: 1 day shareholders) Cost: NGN 12,500 Comments: The applicant must file with the Corporate Affairs Commission the re- Comments: The payment of the business premises registration fees is made directly quired incorporation documents and forms, which include: into the government bank account at a designated bank. NGN 12,500 is the approxi- a. Stamped memorandum and articles of association ( 2 copies); mate cost of business premises registration for a medium sized company carrying on b. Form CAC 3, Notice of registered address; general commercial activities. c. Form CAC 7, Particulars of directors; Procedure 10. Obtain a business premises permit from the state’s d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Ministry of Commerce and Industry e. Copy of the reservation of company name approval; Time: 1 day f. Form CAC 2, Statement of share capital and return of allotment of shares. Cost: No cost The CAC introduced a same-day incorporation option at an increased statutory Comments: Following payment of the assessed registration fees for business prem- fee (5 times that of standard incorporation). The fee schedule for registration is the ises permit into a designated government account, the Ministry of Commerce and following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Industry registers and issues a business premises permit to the new business. NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000. Payment is received at the cashier's desk in the CAC. *This procedure can be completed simultaneously with previous procedures. There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- STARTING A BUSINESS dures. Given that the use of lawyers for such purposes is mandatory throughout the OYO, Ibadan country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 80,000 to handle the entire incorporation process in this Standard company legal form: Limited Liability Company state. Paid in minimum capital requirement: none Data as of: January 2010 Procedure 5. Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VAT Procedure 1. Check the availability of company’s name with the Time: 4 days Corporate Affairs Commission (CAC) Cost: No cost Time: 2 days Comments: Entrepreneurs can register for both corporate income tax and VAT at Cost: NGN 200 the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Comments: The Corporate Affairs Commission online system allows for online Service (FIRS) will require the applicant to complete tax registration forms. The new search of unique company names upon the purchase of an e-payment card for a company registers at a Federal Tax Office nearest to its place of business or registered flat fee of NGN 200 from an accredited bank. The system is widely used, but in most office. A letter is written to the tax authority applying for a tax clearance certificate. cases, applicants have to go to the CAC office to complete this procedure. The time A form obtained from the tax office is filled and the following documents submitted to conduct the availability of name search, receive confirmation and reserve the with it: company name is usually 2 days. The company name reservation lasts 60 days, but a. Taxpayer registration input form (TRIF/2006/001 COYS); can be renewed for a similar period. b. Completed FIRS questionnaire; Procedure 2. Prepare the requisite incorporation documents and c. Copy of memorandum and articles of association; pay the stamp duty d. Names and addresses of directors; Time: 4 days e. Copy of the certificate of incorporation; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra f. Name, address of tax adviser; stamped copy of memorandum and articles of association + NGN 500 for incorpora- g. Letter of appointment of tax adviser and a letter of acceptance. tion forms) The application forms must be in triplicate and the original certificate of incorpora- Comments: This procedure involves the following tasks: tion must be presented for 'sighting' by the controller before registration can be a. Preparing and printing the memorandum and articles of association; completed. Upon receipt of the completed taxpayer registration input form and all b. Completing the requisite statutory forms, and; documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic. c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commence There is a stamp duty office located in the state capital in Ibadan and housed in the business and show up for registration after 6 months of incorporation, if they request same premises with the CAC. for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- Procedure 3. Declaration of Compliance (Form CAC 4) signed mencement of business. before a Commissioner for Oaths or notary public Companies required to register for VAT should complete the VAT registration form Time: 1 day (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Cost: NGN 50 nearest integrated tax office, which will issue a taxpayer identification number (TIN). Comments: A sworn declaration that the requirements of the Companies and Allied According to the VAT Act, companies required to register for VAT must do so within 6 Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged months from the date of starting business operations. The TIN is issued in 1-2 days, in the formation of the company or (ii) by a person named in the memorandum and but it is mailed with the VAT certificate, which is issued in a week. articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the state or federal High Court. The com- Procedure 6*. Register for personal income tax PAYE at the State mon practice is for this declaration to be sworn before a Commissioner of Oaths at Tax Office the state High Court. Time: 2 days Cost: No cost Procedure 4. Register the company with the Corporate Affairs Comments: The employers in the newly incorporated company are required to reg- Commission ister with the relevant state tax authority for the purposes of deducting income tax Time: 15 days from employees. Once an application is filed with a copy of the certificate of incor- Cost: NGN 107,000 (NGN 80,000 for legal fees + NGN 20,000 incorporation fees poration attached, a reference file is then opened for the company. There is no cost [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + related to this registration. 84 DOING BUSINESS IN NIGERIA 2010 Procedure 7. Receive an inspection from the Ministry of Comments: A sworn declaration that the requirements of the Companies and Allied Commerce and Industry for business premises registration Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Time: 1 day articles of association as a director or secretary of the company. This procedure can Cost: No cost be done before a notary public or filed at the state or federal High Court. The com- Comments: After the submission of all application documents, an inspection of the mon practice is for this declaration to be sworn before a Commissioner of Oaths at business premises is carried out by an officer from the Ministry of Commerce and the state High Court. Industry. The Ministry of Commerce may conduct an inspection of the premises to confirm the location of the business and determine the type of business activity. Procedure 4. Obtain bank draft from a bank for payment of the registration fees Procedure 8. Pay registration fees for business premises into a Time: 1 day government account at a designated bank Cost: NGN 27,200 (NGN 200 for bank draft charges+ NGN 20,000 incorporation fees Time: 1 day [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + Cost: NGN 50,000 NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified Comments: The payment of the business premises registration fees is made directly true copy of memorandum and articles of association + NGN 2,000 for certified true into the government bank account at a designated bank. NGN 50,000 is the approxi- copy of particulars of directors + NGN 2,000 for certified true copy of particulars of mate cost of business premises registration for a medium sized company carrying on shareholders) general commercial activities. Comments: Applicant is required to obtain a bank draft in the name of the Corpo- rate Affairs Commission as the mode of payment of registration fees. The cost of the Procedure 9. Obtain a business premises permit from the state’s bank draft may vary slightly depending on the bank, but it is typically around NGN Ministry of Commerce and Industry 200 for a draft in the amount of the CAC registration fees. Time: 3 days Procedure 5. Register the company with the Corporate Affairs Cost: No cost Commission Comments: Following payment of the assessed registration fees for business prem- Time: 14 days ises permit into a designated government account, the Ministry of Commerce and Industry registers and issues a business premises permit to the new business. Cost: NGN 50,000 (legal fees) Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: *This procedure can be completed simultaneously with previous procedures. a. Stamped memorandum and articles of association ( 2 copies); STARTING A BUSINESS b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; PLATEAU, Jos d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Standard company legal form: Limited Liability Company e. Copy of the reservation of company name approval; Paid in minimum capital requirement: none f. Form CAC 2, Statement of share capital and return of allotment of shares. Data as of: January 2010 The CAC introduced a same-day incorporation option at an increased statutory Procedure 1. Check the availability of company’s name with the fee (5 times that of standard incorporation). The fee schedule for registration is the Corporate Affairs Commission (CAC) following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Time: 5 days 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Cost: NGN 200 NGN 7,000. Comments: The Corporate Affairs Commission online system allows for online There is a legal requirement for the company's incorporators to hire a CAC accredited search of unique company names upon the purchase of an e-payment card for a professional usually a lawyer to undertake the administrative incorporation proce- flat fee of NGN 200 from an accredited bank. The system is widely used, but in most dures. Given that the use of lawyers for such purposes is mandatory throughout the cases applicants have to go to the CAC office to complete this procedure. The time to country, lawyer fees are accounted for in the overall incorporation costs. On average, conduct the availability of name search, receive confirmation and reserve the com- a lawyer will charge NGN 50,000 to handle the entire incorporation process in this pany name is usually as long as 5 days. The company name reservation lasts 60 days, state. but can be renewed for a similar period. Procedure 6. Register with the integrated Tax Office of the Procedure 2. Prepare the requisite incorporation documents and Federal Board of Inland Revenue for income tax and VAT pay the stamp duty Time: 1 day Time: 7 days Cost: No cost Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra Comments: Entrepreneurs can register for both corporate income tax and VAT at stamped copy of memorandum and articles of association + NGN 500 for incorpora- the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue tion forms) Service (FIRS) will require the applicant to complete tax registration forms. The new Comments: This procedure involves the following tasks: company registers at a Federal Tax Office nearest to its place of business or registered a. Preparing and printing the memorandum and articles of association; office. A letter is written to the tax authority applying for a tax clearance certificate. b. Completing the requisite statutory forms, and; A form obtained from the tax office is filled and the following documents submitted with it: c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. a. Taxpayer registration input form (TRIF/2006/001 COYS); There is no stamp duty office in this state and the procedure is usually done in the b. Completed FIRS questionnaire; nearest city where there is one. The time for preparation of documents and stamp- c. Copy of memorandum and articles of association; ing presented here is based on an assumption that the stamping is conducted at d. Names and addresses of directors; the stamp duty office in Abuja and accounts for the travel time. The transportation e. Copy of the certificate of incorporation; cost and out of pocket expenses associated with this procedure are not charged separately, but are included in the final bill charged by the lawyers for handling the f. Name, address of tax adviser; incorporation. g. Letter of appointment of tax adviser and a letter of acceptance. The application forms must be in triplicate and the original certificate of incorpora- Procedure 3*. Declaration of Compliance (Form CAC 4) signed tion must be presented for 'sighting' by the controller before registration can be before a Commissioner for Oaths or notary public completed. Upon receipt of the completed taxpayer registration input form and all Time: 1 day documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic. Cost: NGN 50 LIST OF PROCE %63&4t STARTING A BUSINESS 85 The fees for the tax clearance issuance are as follows: for newly registered companies Procedure 3. Declaration of Compliance (Form CAC 4) signed within 6 months of incorporation: no fee; for companies that are yet to commence business and show up for registration after 6 months of incorporation, if they request before a Commissioner for Oaths or notary public for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Time: 1 day time and NGN 20,000 is payable for subsequent years until it files a notice of com- Cost: NGN 500 mencement of business. Comments: A sworn declaration that the requirements of the Companies and Allied Companies required to register for VAT should complete the VAT registration form Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the in the formation of the company or (ii) by a person named in the memorandum and nearest integrated tax office, which will issue a taxpayer identification number (TIN). articles of association as a director or secretary of the company. This procedure can According to the VAT Act, companies required to register for VAT must do so within 6 be done before a notary public or filed at the state or federal High Court. The com- months from the date of starting business operations. The TIN is issued in 1-2 days, mon practice is for this declaration to be sworn before a Commissioner of Oaths at but it is mailed with the VAT certificate, which is issued in a week. the state High Court. Procedure 7. Register for personal income tax PAYE at the State Procedure 4. Pay incorporation fees to the Corporate Affairs Tax Office Commission at a designated bank Time: 1 day Time: 1 day Cost: No cost Cost: NGN 27,000 (NGN 20,000 incorporation fees [NGN 10,000 for company whose Comments: The employers in the newly incorporated company are required to reg- nominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGN ister with the relevant state tax authority for the purposes of deducting income tax 546,350 share capital] + NGN 3,000 for certified true copy of memorandum and ar- from employees. Once an application is filed with a copy of the certificate of incor- ticles of association + NGN 2,000 for certified true copy of particulars of directors + poration attached, a reference file is then opened for the company. There is no cost NGN 2,000 for certified true copy of particulars of shareholders) related to this registration. Comments: Payment is made to any of the receiving banks designated by the Cor- porate Affairs Commission. Procedure 8. Register business premises with the Ministry of Commerce and Industry Procedure 5. Register the company with the Corporate Affairs Time: 2 days Commission Cost: NGN 8,000 Time: 11 days Comments: The newly incorporated company is required to register its business Cost: NGN 60,000 (legal fees) premises with the state Ministry of Commerce. Payments are made in cash directly Comments: The applicant must file with the Corporate Affairs Commission the re- to the Ministry of Commerce and Industry and a permit for business premises regis- quired incorporation documents and forms, which include: tration is issued. a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address; *This procedure can be completed simultaneously with previous procedures. c. Form CAC 7, Particulars of directors; d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESS e. Copy of the reservation of company name approval; RIVERS, Port Harcourt f. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutory Paid in minimum capital requirement: none fee (5 times that of standard incorporation). The fee schedule for registration is the Data as of: January 2010 following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Procedure 1. Check the availability of company’s name with the 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Corporate Affairs Commission (CAC) NGN 7,000. Time: 10 days There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for online country, lawyer fees are accounted for in the overall incorporation costs. On average, a search of unique company names upon the purchase of an e-payment card for a lawyer will charge NGN 60,000 to handle the entire incorporation process in this state. flat fee of NGN 200 from an accredited bank. The system is widely used, but in most cases applicants have to go to the CAC office to complete this procedure. The time Procedure 6. Register with the integrated Tax Office of the to conduct the availability of name search, receive confirmation and reserve the Federal Board of Inland Revenue for income tax and VAT company name is usually as long as 10 days. The company name reservation lasts 60 days, but can be renewed for a similar period. Time: 3 days Cost: No cost Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at pay the stamp duty the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 7 days Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra office. A letter is written to the tax authority applying for a tax clearance certificate. stamped copy of memorandum and articles of association + NGN 500 for incorpora- A form obtained from the tax office is filled and the following documents submitted tion forms) with it: Comments: This procedure involves the following tasks: a. Taxpayer registration input form (TRIF/2006/001 COYS); a. Preparing and printing the memorandum and articles of association; b. Completed FIRS questionnaire; b. Completing the requisite statutory forms, and; c. Copy of memorandum and articles of association; c. Having the memorandum and articles of association stamped by the Federal d. Names and addresses of directors; Board of Inland Revenue Service. e. Copy of the certificate of incorporation; There is a stamp duty office located in the state capital in Port Harcourt and housed in the same premises with the CAC. f. Name, address of tax adviser; g. Letter of appointment of tax adviser and a letter of acceptance. The application forms must be in triplicate and the original certificate of incorpora- tion must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic. 86 DOING BUSINESS IN NIGERIA 2010 The fees for the tax clearance issuance are as follows: for newly registered companies Procedure 2. Prepare the requisite incorporation documents and within 6 months of incorporation: no fee; for companies that are yet to commence pay the stamp duty business and show up for registration after 6 months of incorporation, if they request Time: 5 days for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of com- Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra mencement of business. stamped copy of memorandum and articles of association + NGN 500 for incorpora- tion forms) Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Comments: This procedure involves the following tasks: nearest integrated tax office, which will issue a taxpayer identification number (TIN). a. Preparing and printing the memorandum and articles of association; According to the VAT Act, companies required to register for VAT must do so within 6 b. Completing the requisite statutory forms, and; months from the date of starting business operations. The TIN is issued in 1-2 days, c. Having the memorandum and articles of association stamped by the Federal but it is mailed with the VAT certificate, which is issued in a week. Board of Inland Revenue Service. Procedure 7. Register for personal income tax PAYE at the State There is a stamp duty office located in the state capital in Sokoto and housed in the same premises with the CAC. Tax Office Time: 2 days Procedure 3. Declaration of Compliance (Form CAC 4) signed Cost: No cost before a Commissioner for Oaths or notary public Comments: The employers in the newly incorporated company are required to reg- Time: 1 day ister with the relevant state tax authority for the purposes of deducting income tax Cost: NGN 20 from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no cost Comments: A sworn declaration that the requirements of the Companies and Allied related to this registration. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Procedure 8. Receive an inspection from the Ministry of articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the state or federal High Court. The com- Commerce and Industry for business premises registration mon practice is for this declaration to be sworn before a Commissioner of Oaths at Time: 1 day the state High Court. Cost: No cost Comments: After the submission of all application documents, an inspection of the Procedure 4. Pay incorporation fees to the Corporate Affairs business premises is carried out by an officer from the Ministry of Commerce and Commission at a designated bank Industry. The Ministry of Commerce may conduct an inspection of the premises to Time: 1 day confirm the location of the business and determine the type of business activity. Cost: NGN 27,000 (NGN 20,000 Incorporation fees [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + NGN 10,000 for the remaining NGN Procedure 9. Pay registration fees for business premises into a 546,350 share capital] + NGN 3,000 for certified true copy of Memorandum and Ar- government account at a designated bank ticles of Association + NGN 2,000 for certified true copy of particulars of directors + Time: 1 day NGN 2,000 for certified true copy of particulars of shareholders) Cost: NGN 10,000 Comments: Payment is made to any of the receiving banks designated by the Cor- Comments: The payment of the business premises registration fees is made directly porate Affairs Commission. into the government bank account at a designated bank. NGN 10,000 is the approxi- mate cost of business premises registration for a medium sized company carrying on Procedure 5. Register the company with the Corporate Affairs general commercial activities. Commission Time: 11 days Procedure 10. Obtain a business premises permit from the state’s Cost: NGN 100,000 (legal fees) Ministry of Commerce and Industry Comments: The applicant must file with the Corporate Affairs Commission the re- Time: 1 day quired incorporation documents and forms, which include: Cost: No cost a. Stamped memorandum and articles of association ( 2 copies); Comments: Following payment of the assessed registration fees for business prem- b. Form CAC 3, Notice of registered address; ises permit into a designated government account, the Ministry of Commerce and c. Form CAC 7, Particulars of directors; Industry registers and issues a business premises permit to the new business. d. Form CAC 4, Declaration of compliance and the prescribed registration fees; e. Copy of the reservation of company name approval; STARTING A BUSINESS f. Form CAC 2, Statement of share capital and return of allotment of shares. SOKOTO, Sokoto The CAC introduced a same-day incorporation option at an increased statutory Standard company legal form: Limited Liability Company fee (5 times that of standard incorporation). The fee schedule for registration is the Paid in minimum capital requirement: none following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Data as of: January 2010 NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedure 1. Check the availability of company’s name with the NGN 7,000. Corporate Affairs Commission (CAC) There is a legal requirement for the company's incorporators to hire a CAC accredited Time: 2 days professional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, Comments: The Corporate Affairs Commission online system allows for online a lawyer will charge NGN 100,000 to handle the entire incorporation process in this search of unique company names upon the purchase of an e-payment card for a state. flat fee of NGN 200 from an accredited bank. The system is widely used, but in most cases applicants have to go to the CAC office to complete this procedure. The time to Procedure 6. Register with the integrated Tax Office of the conduct the availability of name search, receive confirmation and reserve the com- pany name is usually 2 days. The company name reservation lasts 60 days, but can be Federal Board of Inland Revenue for income tax and VAT renewed for a similar period. Time: 4 days Cost: No cost Comments: Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new LIST OF PROCE %63&4t STARTING A BUSINESS 87 company registers at a Federal Tax Office nearest to its place of business or registered Comments: The Corporate Affairs Commission online system allows for online office. A letter is written to the tax authority applying for a tax clearance certificate. search of unique company names upon the purchase of an e-payment card for a A form obtained from the tax office is filled and the following documents submitted flat fee of NGN 200 from an accredited bank. The system is widely used, but in most with it: cases applicants have to go to the CAC office to complete this procedure. The time to a. Taxpayer registration input form (TRIF/2006/001 COYS); conduct the availability of name search, receive confirmation and reserve the com- pany name is usually 3-4 days. The company name reservation lasts 60 days, but can b. Completed FIRS questionnaire; be renewed for a similar period. c. Copy of memorandum and articles of association; d. Names and addresses of directors; Procedure 2. Prepare the requisite incorporation documents and e. Copy of the certificate of incorporation; pay the stamp duty f. Name, address of tax adviser; Time: 4 days g. Letter of appointment of tax adviser and a letter of acceptance. Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra The application forms must be in triplicate and the original certificate of incorpora- stamped copy of memorandum and articles of association + NGN 500 for incorpora- tion must be presented for 'sighting' by the controller before registration can be tion forms) completed. Upon receipt of the completed taxpayer registration input form and all Comments: This procedure involves the following tasks: documents, a tax reference number is allocated. An application must be filed for the a. Preparing and printing the memorandum and articles of association; tax clearance certificate. Its issuance is not automatic. b. Completing the requisite statutory forms, and; The fees for the tax clearance issuance are as follows: for newly registered companies c. Having the memorandum and articles of association stamped by the Federal within 6 months of incorporation: no fee; for companies that are yet to commence Board of Inland Revenue Service. business and show up for registration after 6 months of incorporation, if they request for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first There is no stamp duty office in this state and the procedure is usually done in the time and NGN 20,000 is payable for subsequent years until it files a notice of com- nearest city where there is one.The time for preparation of documents and stamp- mencement of business. ing presented here is based on an assumption that the stamping is conducted at the stamp duty office in Yola and accounts for the travel time. The transportation Companies required to register for VAT should complete the VAT registration form cost and out of pocket expenses associated with this procedure are not charged (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the separately, but are included in the final bill charged by the lawyers for handling the nearest integrated tax office, which will issue a taxpayer identification number (TIN). incorporation. According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. Procedure 3. Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary public Procedure 7*. Register for personal income tax PAYE at the State Time: 1 day Tax Office Cost: NGN 200 Time: 2 days Comments: A sworn declaration that the requirements of the Companies and Allied Cost: No cost Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Comments: The employers in the newly incorporated company are required to reg- articles of association as a director or secretary of the company. This procedure can ister with the relevant state tax authority for the purposes of deducting income tax be done before a notary public or filed at the state or federal High Court. The com- from employees. Once an application is filed with a copy of the certificate of incor- mon practice is for this declaration to be sworn before a Commissioner of Oaths at poration attached, a reference file is then opened for the company. There is no cost the state High Court. related to this registration. Procedure 8. Receive an inspection from the Ministry of Procedure 4*. Obtain bank draft from a bank for payment of the Commerce and Industry for business premises registration registration fees Time: 1 day Time: 7 days Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 20,000 Incorporation fees Cost: No cost [NGN 10,000 for company whose nominal share capital is NGN1,000,000 or less + Comments: After the submission of all application documents, an inspection of the NGN10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified business premises is carried out by an officer from the Ministry of Commerce and true copy of memorandum and articles of association + NGN 2,000 for certified true Industry. The Ministry of Commerce may conduct an inspection of the premises to copy of particulars of directors + NGN 2,000 for certified true copy of particulars of confirm the location of the business and determine the type of business activity. shareholders) Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Procedure 9*. Obtain a business premises permit from the state’s rate Affairs Commission as the mode of payment of registration fees. The cost of the Ministry of Commerce and Industry bank draft may vary slightly depending on the bank, but it is typically around NGN Time: 1 day 200 for a draft in the amount of the CAC registration fees. Cost: NGN 20,000 Comments: The owner applies at the Ministry of Commerce and Industry for a Procedure 5. Register the company with the Corporate Affairs business premises permit. The fees are paid at the Ministry. The business permit fee Commission for general business activities is NGN 20,000 for initial registration, and 50% of this Time: 14 days amount for subsequent annual renewals. Cost: NGN 50,000 (legal fees) Comments: The applicant must file with the Corporate Affairs Commission the re- *This procedure can be completed simultaneously with previous procedures. quired incorporation documents and forms, which include: a. Stamped memorandum and articles of association (2 copies); STARTING A BUSINESS b. Form CAC 3, Notice of registered address; TARABA, Jalingo c. Form CAC 7, Particulars of directors; Standard company legal form: Limited Liability Company d. Form CAC 4, Declaration of compliance and the prescribed registration fees; Paid in minimum capital requirement: none e. Copy of the reservation of company name approval; Data as of: January 2010 f. Form CAC 2, Statement of share capital and return of allotment of shares. The CAC introduced a same-day incorporation option at an increased statutory Procedure 1. Check the availability of company’s name with the fee (5 times that of standard incorporation). The fee schedule for registration is the Corporate Affairs Commission (CAC) following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every Time: 4 days NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Cost: NGN 200 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000. 88 DOING BUSINESS IN NIGERIA 2010 STARTING A BUSINESS There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- YOBE, Damaturu dures. Given that the use of lawyers for such purposes is mandatory throughout the Standard company legal form: Limited Liability Company country, lawyer fees are accounted for in the overall incorporation costs. On average, Paid in minimum capital requirement: none a lawyer will charge NGN 50,000 to handle the entire incorporation process in this state. Data as of: January 2010 Procedure 1. Check the availability of company’s name with the Procedure 6. Register with the integrated Tax Office of the Corporate Affairs Commission (CAC) Federal Board of Inland Revenue for income tax and VAT Time: 3 days Time: 5 days Cost: NGN 200 Cost: No cost Comments: The Corporate Affairs Commission online system allows for online Comments: Entrepreneurs can register for both corporate income tax and VAT at search of unique company names upon the purchase of an e-payment card for a the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue flat fee of NGN 200 from an accredited bank. The system is widely used, but in most Service (FIRS) will require the applicant to complete tax registration forms. The new cases applicants have to go to the CAC office to complete this procedure. The time to company registers at a Federal Tax Office nearest to its place of business or registered conduct the availability of name search, receive confirmation and reserve the com- office. A letter is written to the tax authority applying for a tax clearance certificate. pany name is usually 3 days. The company name reservation lasts 60 days, but can be A form obtained from the tax office is filled and the following documents submitted renewed for a similar period. with it: a. Taxpayer registration input form (TRIF/2006/001 COYS); Procedure 2. Prepare the requisite incorporation documents and b. Completed FIRS questionnaire; pay the stamp duty c. Copy of memorandum and articles of association; Time: 20 days d. Names and addresses of directors; Cost: NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra e. Copy of the certificate of incorporation; stamped copy of memorandum and articles of association + NGN 500 for incorpora- f. Name, address of tax adviser; tion forms) g. Letter of appointment of tax adviser and a letter of acceptance. Comments: This procedure involves the following tasks: The application forms must be in triplicate and the original certificate of incorpora- a. Preparing and printing the memorandum and articles of association; tion must be presented for 'sighting' by the controller before registration can be b. Completing the requisite statutory forms, and; completed. Upon receipt of the completed taxpayer registration input form and all c. Having the memorandum and articles of association stamped by the Federal documents, a tax reference number is allocated. An application must be filed for the Board of Inland Revenue Service. tax clearance certificate. Its issuance is not automatic. The time for preparation of documents and stamping presented here is based on an The fees for the tax clearance issuance are as follows: for newly registered companies assumption that the stamping is conducted at the stamp duty office in Maiduguri, within 6 months of incorporation: no fee; for companies that are yet to commence Borno State, and accounts for the travel time. The transportation cost and out of business and show up for registration after 6 months of incorporation, if they request pocket expenses associated with this procedure are not charged separately, but are for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first included in the final bill charged by the lawyers for handling the incorporation. time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. Procedure 3. Declaration of Compliance (Form CAC 4) signed Companies required to register for VAT should complete the VAT registration form before a Commissioner for Oaths or notary public (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the Time: 1 day nearest integrated tax office, which will issue a taxpayer identification number (TIN). According to the VAT Act, companies required to register for VAT must do so within 6 Cost: NGN 200 months from the date of starting business operations. The TIN is issued in 1-2 days, Comments: A sworn declaration that the requirements of the Companies and Allied but it is mailed with the VAT certificate, which is issued in a week. Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and Procedure 7. Register for personal income tax PAYE at the State articles of association as a director or secretary of the company. This procedure can Tax Office be done before a notary public or filed at the state or federal High Court. The com- mon practice is for this declaration to be sworn before a Commissioner of Oaths at Time: 2 days the state High Court. Cost: No cost Comments: The employers in the newly incorporated company are required to reg- Procedure 4. Obtain bank draft from a bank for payment of the ister with the relevant state tax authority for the purposes of deducting income tax registration fees from employees. Once an application is filed with a copy of the certificate of incor- Time: 1 day poration attached, a reference file is then opened for the company. There is no cost related to this registration. Cost: NGN 27,200 (NGN 200 for bank draft charges + NGN 20,000 incorporation fees [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + Procedure 8. Register business premises with the Ministry of NGN 10,000 for the remaining NGN 546,350 share capital] + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified true Commerce and Industry copy of particulars of directors + NGN 2,000 for certified true copy of particulars of Time: 2 days shareholders) Cost: NGN 2,000 Comments: Applicant is required to obtain a bank draft in the name of the Corpo- Comments: The newly incorporated company is required to register its business rate Affairs Commission as the mode of payment of registration fees. The cost of the premises with the state Ministry of Commerce. Payments are made in cash directly bank draft may vary slightly depending on the bank but it is typically around NGN to the Ministry of Commerce and Industry and a permit for business premises regis- 200 for a draft in the amount of the CAC registration fees. tration is thereafter issued. Procedure 5. Register the company with the Corporate Affairs *This procedure can be completed simultaneously with previous procedures. Commission Time: 7 days Cost: NGN 50,000 (legal fees) Comments: The applicant must file with the Corporate Affairs Commission the re- quired incorporation documents and forms, which include: a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address; c. Form CAC 7, Particulars of directors; LIST OF PROCE %63&4t STARTING A BUSINESS 89 d. Form CAC 4, Declaration of compliance and the prescribed registration fees; STARTING A BUSINESS e. Copy of the reservation of company name approval; ZAMFARA, Gusau f. Form CAC 2, Statement of share capital and return of allotment of shares. Standard company legal form: Limited Liability Company The CAC introduced a same-day incorporation option at an increased statutory Paid in minimum capital requirement: none fee (5 times that of standard incorporation). The fee schedule for registration is the Data as of: January 2010 following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN Procedure 1. Check the availability of company’s name with the 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Corporate Affairs Commission (CAC) NGN 7,000. Time: 3 days There is a legal requirement for the company's incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation proce- Cost: NGN 200 dures. Given that the use of lawyers for such purposes is mandatory throughout the Comments: The Corporate Affairs Commission online system allows for online country, lawyer fees are accounted for in the overall incorporation costs. On average, a search of unique company names upon the purchase of an e-payment card for a flat lawyer will charge NGN 50,000 to handle the entire incorporation process in this state. fee of NGN200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The time to con- Procedure 6. Register with the integrated Tax Office of the duct the availability of name search, receive confirmation and reserve the company Federal Board of Inland Revenue for income tax and VAT name usually takes 3 days. The company name reservation lasts 60 days but can be renewed for a similar period. Time: 5 days Cost: No cost Procedure 2. Prepare the requisite incorporation documents and Comments: Entrepreneurs can register for both corporate income tax and VAT at pay the stamp duty the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Time: 8 days Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered Cost: NGN 23,098 (stamp duty at 0.75% of share capital + NGN 500 for incorporation office. A letter is written to the tax authority applying for a tax clearance certificate. forms + NGN 1,000 for stamping extra copies each of the memorandum and articles A form obtained from the tax office is filled and the following documents submitted of association + NGN 10,000 transport costs to Sokoto to handle stamping of the with it: incorporation documents) a. Taxpayer registration input form (TRIF/2006/001 COYS); Comments: This procedure involves the following tasks: b. Completed FIRS questionnaire; a. Preparing and printing the memorandum and articles of association; c. Copy of memorandum and articles of association; b. Completing the requisite statutory forms, and; d. Names and addresses of directors; c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service. e. Copy of the certificate of incorporation; There is no stamp duty office in this state and the procedure is usually done in the f. Name, address of tax adviser; nearest city where there is one. The time for preparation of documents and stamp- g. Letter of appointment of tax adviser and a letter of acceptance. ing presented here is based on an assumption that the stamping is conducted at the The application forms must be in triplicate and the original certificate of incorpora- stamp duty office in Sokoto and accounts for the travel time. Transportation cost to tion must be presented for 'sighting' by the controller before registration can be handle the stamping out-of-state is included in the cost for this procedure and the completed. Upon receipt of the completed taxpayer registration input form and all common practice is for the lawyers to charge this separately from the professional documents, a tax reference number is allocated. An application must be filed for the fees. tax clearance certificate. Its issuance is not automatic. The fees for the tax clearance issuance are as follows: for newly registered companies Procedure 3. Declaration of Compliance (Form CAC 4) signed within 6 months of incorporation: no fee; for companies that are yet to commence before a Commissioner for Oaths or notary public business and show up for registration after 6 months of incorporation, if they request Time: 1 day for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first Cost: NGN 200 time and NGN 20,000 is payable for subsequent years until it files a notice of com- mencement of business. Comments: A sworn declaration that the requirements of the Companies and Allied Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged Companies required to register for VAT should complete the VAT registration form in the formation of the company or (ii) by a person named in the memorandum and (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the articles of association as a director or secretary of the company. This procedure can nearest integrated tax office, which will issue a taxpayer identification number (TIN). be done before a notary public or filed at the state or federal High Court. The com- According to the VAT Act, companies required to register for VAT must do so within 6 mon practice is for this declaration to be sworn before a Commissioner of Oaths at months from the date of starting business operations. The TIN is issued in 1-2 days, the state High Court. but it is mailed with the VAT certificate, which is issued in a week. Procedure 4. Pay incorporation fees to the Corporate Affairs Procedure 7*. Register for personal income tax PAYE at the State Commission at a designated bank Tax Office Time: 1 day Time: 2 days Cost: NGN 27,000 (NGN 20,000 registration fees [NGN 10,000 for first 1 million shares Cost: No cost and then NGN 10,000 for every 1 million of part thereof] + NGN 3,000 for certified Comments: The employers in the newly incorporated company are required to reg- true copy of memorandum and articles of association + NGN 2,000 for certified true ister with the relevant state tax authority for the purposes of deducting income tax copy of particulars of directors + NGN 2,000 for certified true copy of particulars of from employees. Once an application is filed with a copy of the certificate of incor- shareholders) poration attached, a reference file is then opened for the company. There is no cost Comments: Payment is made to any of the receiving banks designated by the Cor- related to this registration. porate Affairs Commission. Procedure 8. Register business premises with the Ministry of Procedure 5. Register the company with the Corporate Affairs Commerce and Industry Commission Time: 1 day Time: 14 days Cost: NGN 5,000 Cost: NGN 50,000 (legal fees) Comments: The newly incorporated company is required to register its business Comments: The applicant must file with the Corporate Affairs Commission the re- premises with the state Ministry of Commerce. Payments are made in cash directly quired incorporation documents and forms, which include: to the Ministry of Commerce and Industry and a permit for business premises regis- tration is issued. a. Stamped memorandum and articles of association ( 2 copies); b. Form CAC 3, Notice of registered address; *This procedure can be completed simultaneously with previous procedures. c. Form CAC 7, Particulars of directors; 90 DOING BUSINESS IN NIGERIA 2010 d. Form CAC 4, Declaration of compliance and the prescribed registration fees; LIST OF PROCEDURES e. Copy of the reservation of company name approval; f. Form CAC 2, Statement of share capital and return of allotment of shares. Dealing with construction permits The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). The fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN ABIA, Aba 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): Procedures to build a warehouse NGN 7,000. Warehouse value: US$ 443,000 = NGN 59,003,170 There is a legal requirement for the company's incorporators to hire a CAC accredited Data as of: January 2010 professional usually a lawyer to undertake the administrative incorporation proce- dures. Given that the use of lawyers for such purposes is mandatory throughout the Procedure 1. Obtain an environmental impact assessment report country, lawyer fees are accounted for in the overall incorporation costs. On average, a from a registered town planner lawyer will charge NGN 50,000 to handle the entire incorporation process in this state. Time: 14 days Procedure 6. Register with the integrated Tax Office of the Cost: NGN 100,000 (town planner fee) Federal Board of Inland Revenue for income tax and VAT Comments: BuildCo hires a registered town planner to analyze the site and draft Time: 5 days an environmental impact assessment (EIA) report. The EIA report lists the potential impact of the project on the environment, such as the noise, traffic and increase Cost: No cost in human density issues that might arise as a result of the development. In order Comments: Entrepreneurs can register for both corporate income tax and VAT at to draft the report, the town planner first verifies the survey plan (attached to the the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's Service (FIRS) will require the applicant to complete tax registration forms. The new architects and engineers, before conducting an on-site inspection. If deemed neces- company registers at a Federal Tax Office nearest to its place of business or registered sary, he may conduct interviews with relevant stakeholders living in the area. After office. A letter is written to the tax authority applying for a tax clearance certificate. the inspection, the town planner drafts the EIA report. Site Analysis Reports are only A form obtained from the tax office is filled and the following documents submitted required of residential buildings. Commercial buildings require an EIA. with it: a. Taxpayer registration input form (TRIF/2006/001 COYS); Procedure 2. Apply for a building permit at the Aba Town b. Completed FIRS questionnaire; Planning Authority c. Copy of memorandum and articles of association; Time: 1 day d. Names and addresses of directors; Cost: NGN 248,990 (NGN 55,740 planning rate + NGN 146,250 inspection fee + NGN e. Copy of the certificate of incorporation; 5,000 registration fee + NGN 2,000 charting fee + NGN 10,000 fencing fee + NGN f. Name, address of tax adviser; 5,000 certificate of fitness for habitation fee + NGN 10,000 stage permits + NGN 5,000 commencement of foundation fee + NGN 5,000 local government fee + NGN g. Letter of appointment of tax adviser and a letter of acceptance. 5,000 administration fee) The application forms must be in triplicate and the original certificate of incorpora- Comments: In order to obtain a building permit, BuildCo must submit a duly com- tion must be presented for 'sighting' by the controller before registration can be pleted application form to the Aba Town Planning Authority, along with the follow- completed. Upon receipt of the completed taxpayer registration input form and all ing documents: documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic. a. Proof of ownership (such as a certificate of occupancy); The fees for the tax clearance issuance are as follows: for newly registered companies b. Survey plan (attached to the certificate of occupancy); within 6 months of incorporation: no fee; for companies that are yet to commence c. Five sets of drawings duly signed by a registered architect, including: business and show up for registration after 6 months of incorporation, if they request t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first age system, construction details, doors and windows schedules); time and NGN 20,000 is payable for subsequent years until it files a notice of com- t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO mencement of business. beams, columns, staircases, etc.); Companies required to register for VAT should complete the VAT registration form t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the lighting point layout, schedule of fittings and fixtures); nearest integrated tax office, which will issue a taxpayer identification number (TIN). t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM According to the VAT Act, companies required to register for VAT must do so within 6 disposal layout, schedule of sanitary fittings); months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week. d. Environmental impact assessment report; e. Three-year tax clearance certificate; Procedure 7. Register for personal income tax PAYE at the State f. Certificate of structural stability signed by a registered engineer. Tax Office The documents are reviewed by the Aba Town Planning Authority. An on-site inspec- Time: 3 days tion will follow. Once the building approval has been granted, two copies of the Cost: No cost drawing are given back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies of its building plans when inspections occur during construc- Comments: The employers in the newly incorporated company are required to reg- tion. ister with the relevant state tax authority for the purposes of deducting income tax from employees. Once an application is filed with a copy of the certificate of incor- poration attached, a reference file is then opened for the company. There is no cost Procedure 3. Receive a pre-approval inspection from the Aba related to this registration. Town Planning Authority Time: 1 day Procedure 8. Register business premises with the Ministry of Cost: No cost Commerce and Industry Comments: Within 7 working days after BuildCo has submitted its application, the Time: 1 day Aba Town Planning Authority conducts an on-site inspection to verify that the plot Cost: NGN 10,000 reflects the details provided in the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback de- Comments: The newly incorporated company is required to register its business tails, adjoining land and power and water connections are described. The inspection premises with the state Ministry of Commerce. Payments are made in cash directly report is then attached to the documents and drawings BuildCo submitted originally, to the Ministry of Commerce and Industry and a permit for business premises regis- and forwarded to the Town Planning Authority for final review and approval. tration is thereafter issued. *This procedure can be completed simultaneously with previous procedures. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 91 Procedure 4. Obtain a building permit from the Aba Town Procedure 10. Receive an inspection at second floor level by the Planning Authority Aba Town Planning Authority Time: 21 days Time: 1 day Cost: No cost Cost: No cost Comments: After the inspection and the payments have been completed, the Aba Comments: Once the walls of the second floor are complete, BuildCo's architect Town Planning Authority examines the documents submitted and issues BuildCo a must notify the Aba Town Planning Authority. A team of inspectors visits the con- building permit, along with signed copies of the plan. BuildCo must keep one copy struction-site to ensure that the project is duly supervised and that the construction on the construction-site, to be presented when inspectors from the Aba Town Plan- follows the specifications mentioned in the building plan previously provided by ning Authority come during construction for inspection. When BuildCo retrieves its BuildCo. Construction work does not stop during the inspection. If a problem is iden- building permit, it informs the Town Planning Authority of the day when the con- tified, the inspection teams issues a stop order requesting the issue to be resolved struction starts, so as to schedule an initial inspection. before construction proceeds further. If there is no problem, the Town Planning Authority issues BuildCo a receipt stating that the construction has been carried out Procedure 5. Dig a borehole to obtain water according to the approved building plans. Time: 7 days Procedure 11. Receive an inspection at roof level by the Aba Cost: NGN 500,000 Town Planning Authority Comments: The public water supply system is very unreliable. It is common practice for construction companies to hire the services of a private borehole company to drill Time: 1 day and install a borehole of commercial capacity. Cost: No cost Comments: Once the roof of the building is complete, BuildCo's architect must Procedure 6*. Pay a compensation to the natives notify the Aba Town Planning Authority. A team of inspectors visits the construction- Time: 1 day site to ensure that the project is duly supervised and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Cost: NGN 200,000 Construction work does not stop during the inspection. If a problem is identified, the Comments: With the Land Use Act of 1978, the government appropriated land on inspection teams issues a stop order requesting the issue to be resolved before con- which local tribes lived. Since then, in Aba, construction companies wishing to de- struction proceeds further. If there is no problem, the Town Planning Authority issues velop a project must pay compensation to those natives, and hire some of them as BuildCo a receipt stating that the construction has been carried out according to the masons or security guards on the site. Cost varies on a case by case basis, and highly approved building plans. depends on the negotiation skills of the construction company. Procedure 12. Obtain a certificate of fitness for habitation from Procedure 7. Receive an inspection at setting out level by the Aba the Aba Town Planning Authority Town Planning Authority Time: 7 days Time: 1 day Cost: No cost Cost: No cost Comments: After the building has been completed, the Aba Town Planning Author- Comments: Before the construction starts. BuildCo must wait for the Aba Town Plan- ity issues BuildCo a certificate of fitness for habitation that certifies that the construc- ning Authority to send a team of inspectors to the construction-site to conduct an in- tion has been carried out according to the approved building plans, and that BuildCo spection. The purpose of the inspection is to ensure that the related stage has been can now occupy the building. completed successfully, that the project is duly supervised, and that the construction follows the specifications mentioned in the building plan previously provided by Procedure 13*. Obtain a permanent phone connection BuildCo. At the end of the inspection, the Town Planning Authority issues BuildCo a receipt stating that the construction has been carried out according to the approved Time: 1 day building plans. Cost: NGN 5,000 (wireless land line) Comments: Nigerian Telecommunications Limited (NITEL), the public company Procedure 8. Receive an inspection at foundation level by the historically in charge of providing phone landlines in Nigeria, is no longer function- Aba Town Planning Authority ing. Most Nigerian companies use a cell phone, with a subscription to one of the Time: 1 day operators available in the country (MTN, ZAIN, GLO or ETISALAT). In Aba, Nigerian companies also have the option of using a fixed wireless phone (MULTILINKS), at a Cost: No cost higher cost (NGN 5,000). The phone line can be connected at any time before and Comments: Once the setting out is complete, BuildCo's architect must notify the during the construction. Aba Town Planning Authority. A team of inspectors visits the construction-site to en- sure that the project is duly supervised and that the construction follows the specifi- Procedure 14. Apply to the Power Holding Company of Nigeria cations mentioned in the building plan previously provided by BuildCo. Construction (PHCN) for a permanent electricity connection work does not stop during the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before construction Time: 1 day proceeds further. If there is no problem, the Town Planning Authority issues BuildCo Cost: NGN 31,500 (3 phase credit meter) a receipt stating that the construction has been carried out according to the ap- Comments: BuildCo applies for a permanent electricity connection by submitting a proved building plans. form and the relevant company documents to PHCN. On the application form, Build- Co must indicate its consumption capacity as well as the 3 phase meter required. An Procedure 9. Receive an inspection at first floor level by the Aba inspection is then conducted. PHCN has not yet started introducing 3 phase pre-paid Town Planning Authority meters in Abia. At the moment, new connections are supplied with a credit meter. Time: 1 day Procedure 15. Receive an inspection from PHCN and pay the Cost: No cost electricity fees at the bank Comments: Once the ceiling of the first floor is complete, BuildCo's architect must notify the Aba Town Planning Authority. A team of inspectors visits the construction- Time: 1 day site to ensure that the project is duly supervised and that the construction follows Cost: No cost the specifications mentioned in the building plan previously provided by BuildCo. Comments: After submitting the documents to PHCN, an electrical contractor Construction work does not stop during the inspection. If a problem is identified, the licensed by LECAN (Licensed Electrical Contractors of Nigeria) carries out an inspec- inspection teams issues a stop order requesting the issue to be resolved before con- tion on behalf of PHCN. After the inspection, the electrical contractor drafts a report struction proceeds further. If there is no problem, the Town Planning Authority issues and submits it to PHCN. BuildCo a receipt stating that the construction has been carried out according to the approved building plans. 92 DOING BUSINESS IN NIGERIA 2010 Procedure 16. Obtain a permanent electricity connection from Procedure 5. Receive a pre-approval inspection from the PHCN Adamawa State Urban Planning and Development Authority Time: 21 days Time: 1 day Cost: NGN 25,000 (contractor fees) Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN con- Comments: After BuildCo's application has been reviewed, the Adamawa State Ur- nects BuildCo's warehouse to electricity. ban Planning and Development Authority conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suit- able for the proposed project. The inspectors draft a report in which the plot, roads, *This procedure can be completed simultaneously with previous procedures. setback details, adjoining land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted for DEALING WITH CONSTRUCTION PERMITS approval, and forwarded to the Adamawa State Urban Planning and Development ADAMAWA, Yola Authority for final review and approval. Procedures to build a warehouse Procedure 6. Obtain a building permit from the Adamawa State Warehouse value: US$ 443,000 = NGN 59,003,170 Urban Planning and Development Authority Data as of: January 2010 Time: 5 days Procedure 1. Obtain an environmental impact assessment report Cost: No cost from a registered town planner Comments: After the inspection and the payments have been completed, BuildCo's Time: 19 days application is reviewed by the housing department, the engineering department and the health department. Once each department has endorsed the drawings, the Cost: NGN 43,000 (0.25% of the first NGN 2 million of the warehouse value + 0.2% of application goes to the director of planning for final approval. the next NGN 3 million + 0.1% of the next 15 million + 0.05% of the next 30 million + 0.02% of the next NGN 50 million) Procedure 7. Dig a borehole to obtain water Comments: BuildCo hires a registered town planner to analyze the site and draft an environmental impact assessment (EIA) report. The EIA report lists the potential im- Time: 7 days pact of the project on the environment, such as the noise, traffic and increase in hu- Cost: NGN 500,000 man density issues that might arise as a result of the development. In order to draft Comments: The public water supply system is very unreliable. It is common practice the report, the town planner first verifies the site plan (attached to the certificate of for construction companies to hire the services of a private borehole company to drill occupancy) as well as the preliminary drawings prepared by BuildCo's architects and and install a borehole of commercial capacity. engineers, before conducting an on-site inspection. If deemed necessary, he may conduct interviews with relevant stakeholders living in the area. After the inspection, Procedure 8*. Obtain a permanent phone connection the town planner drafts the EIA report, and gives 3 copies to Buildco, and retains one Time: 1 day copy for himself. The cost of the EIA depends on the size of the project. Cost: NGN 6,000 (handset + connection) Procedure 2. Obtain a proof of ownership from the Ministry of Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Land and Survey torically in charge of providing phone landlines in Nigeria, is no longer functioning. Most Nigerian companies use a cell phone, with a subscription to one of the opera- Time: 5 days tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Cost: No cost connected at any time before and during the construction. Comments: In addition to the certificate of ownership, which BuildCo already pos- sesses, BuildCo must obtain a proof of ownership from the Ministry of Lands and Sur- Procedure 9. Apply to the Power Holding Company of Nigeria vey, in order to ensure that all ground rent payments on the property are up to date. (PHCN) for a permanent electricity connection Time: 1 day Procedure 3. Obtain a building plan approval from the Ministry Cost: NGN 52,500 (3 phase pre-paid meter) of Works Comments: BuildCo applies for a permanent electricity connection by submitting Time: 5 days a form and the relevant company documents to PHCN. On the application form, Cost: NGN 5,000 BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- Comments: Since the project involves a multi-storied building, BuildCo must submit paid) required. An inspection is then conducted. Payment for the meter is made at a all drawings and proofs of ownership to the Ministry of Works, where public archi- designated bank. tects and engineers review and approve the drawings. Procedure 10. Receive an inspection from PHCN and pay the Procedure 4. Apply for a building permit at the Adamawa State electricity fees at the bank Urban Planning and Development Authority Time: 1 day Time: 1 day Cost: No cost Cost: NGN 4,500 (NGN 2,500 building plan approval + NGN 2,000 insurance of build- Comments: The PHCN business unit sends out a team to inspect the building. In ing permit) practice this is usually done on the same day the application is made. After the in- Comments: In order to obtain a building permit, BuildCo must submit a duly com- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at a pleted application form to the Adamawa State Urban Planning and Development designated bank. BuildCo must then submit the receipt of the payment to the local Authority, along with the following documents: PHCN for the electricity connection to proceed. a. Proof of ownership (such as a certificate of occupancy); b. Survey plan (attached to the certificate of occupancy); Procedure 11. Obtain a permanent electricity connection from PHCN c. Drawings duly signed by a registered architect, including: Time: 24 days t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- age system, construction details, doors and windows schedules); Cost: No cost t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Comments: Once the inspection and the payment have been completed, PHCN con- beams, columns, staircases, etc.); nects BuildCo's warehouse to electricity. Even though the actual connection can be made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- lighting point layout, schedule of fittings and fixtures); ed consumption monthly fee to PHCN. Except for the application and the inspection, t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM all other electricity related processes are handled by a contractor licensed by LECAN disposal layout, waste disposal layout, schedule of sanitary fittings). (Licensed Electrical Contractors of Nigeria). The documents are reviewed by officers at the Adamawa State Urban Planning and Development Authority. An on-site inspection will follow. *This procedure can be completed simultaneously with previous procedures. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 93 DEALING WITH CONSTRUCTION PERMITS Procedure 5. Obtain a building plan approval from the Uyo AKWA IBOM, Uyo Capital City Development Authority and pay the setting out fee Procedures to build a warehouse Time: 60 days Warehouse value: US$ 443,000 = NGN 59,003,170 Cost: NGN 1,000 (setting out fee) Data as of: January 2010 Comments: After the inspection and the payments have been completed, the Direc- tor of Development Control makes a recommendation to the Chairman, in charge Procedure 1. Obtain an environmental impact assessment report of the final approval. Before approval is given, the Uyo Capital City Development and a site analysis report from a registered town planner Authority (UCCDA) sends the drawings to an external consultant for review, which Time: 10 days explains why this procedure is time consuming. If granted, the UCCDA gives BuildCo Cost: NGN 115,000 (NGN 100,000 environmental impact assessment report + NGN a set of buildings plans marked with stamps of approval, along with a letter of ap- 15,000 site analysis report) proval bearing the signature of the Director and the Executive Secretary and a regis- tration number to be displayed on the construction-site. The approval is valid for 18 Comments: BuildCo hires a registered town planner to analyze the site and draft an months, after which a revalidation will be required. When coming to the Authority to environmental impact assessment (EIA) report. The EIA report lists the potential im- obtain its building plan approval, BuildCo pays a setting out inspection fee of NGN pact of the project on the environment, such as the noise, traffic and increase in hu- 1,000 at the cash office. man density issues that might arise as a result of the development. In order to draft the report, the town planner first verifies the site plan (attached to the certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's architects Procedure 6. Dig a borehole to obtain water and engineers, before conducting an on-site inspection. If deemed necessary, he Time: 14 days may conduct interviews with relevant stakeholders living in the area. The same town Cost: NGN 500,000 planner also prepares a site analysis report (SAR), which details the location, acces- Comments: The public water supply system is very unreliable. It is common practice sibility and topography of the site, as well as the proximity of the site to essential for construction companies to hire the services of a private borehole company to drill services: electricity source, water source, hospital, commercial area, airport, etc. After and install a borehole of commercial capacity. the inspection, the town planner drafts the EIA report and SAR, and gives 2 copies of each report to Buildco, and retains one copy for himself. Procedure 7*. Pay a compensation to the natives Procedure 2. Swear an affidavit of plot ownership at the High Time: 7 days Court Cost: NGN 200,000 Time: 1 day Comments: With the Land Use Act of 1978, the government appropriated land on which local tribes lived. Since then, in Uyo, construction companies wishing to de- Cost: NGN 200 (court fee) velop a project must pay compensation to those natives, and hire some of them as Comments: BuildCo must swear an affidavit at the State High Court deposing to cer- masons or security guards on the site. Cost varies on a case by case basis, and highly tify his ownership of the land on which the construction is to be made. depends on the negotiation skills of the construction company. Procedure 3. Apply for a building plan approval at the Uyo Procedure 8. Receive an inspection at setting out level from the Capital City Development Authority Uyo Capital City Development Authority Time: 1 day Time: 1 day Cost: NGN 79,500 (NGN 10,000 inspection fee + NGN 60,000 approval fee [NGN Cost: No cost 50,000 for the first floor level and NGN 10,000 for each additional floor level] + NGN Comments: Once the construction reaches the setting out stage, BuildCo's architect 7,500 fencing fee + NGN 2,000 security post fee) must notify the Uyo Capital City Development Authority that sends a team of inspec- Comments: In order to obtain a building plan approval, BuildCo must submit a duly tors to the construction-site. The purpose of the inspection is to ensure that the re- completed application form to the Uyo Capital City Development Authority, along lated stage has been completed successfully, that the project is duly supervised, and with the following documents: that the construction follows the specifications mentioned in the building plan pre- a. Proof of ownership (such as a certificate of occupancy); viously provided by BuildCo. Construction work does not stop during the inspection. b. Survey plan (attached to the certificate of occupancy); c. Drawings duly signed by a registered architect, including: Procedure 9. Receive an inspection during construction from the Uyo Capital City Development Authority t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- age system, construction details, doors and windows schedules); Time: 1 day t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Cost: No cost beams, columns, staircases, etc.); Comments: Although the National Building code lists a precise inspection schedule, t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  inspections in Uyo do not follow any particular order. During construction, a team lighting point layout, schedule of fittings and fixtures); of inspectors from the Uyo Capital City Development Authority randomly visits the site to ensure that the construction company has a building permit, that the project t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM is duly supervised, and that the construction follows the specifications mentioned in disposal layout, waste disposal layout, schedule of sanitary fittings). the building plan previously provided by BuildCo. Construction work does not stop The documents are reviewed by officers at the Uyo Capital City Development Au- during the inspection. In practice, during construction, 2 of these random inspec- thority (UCCDA). An on-site inspection will follow. After the inspection, BuildCo is tions occur. required to make the necessary payment at the accounts department in the UCCDA premises. Procedure 10. Receive an inspection during construction from the Uyo Capital City Development Authority Procedure 4. Receive a pre-approval inspection from the Uyo Capital City Development Authority Time: 1 day Cost: No cost Time: 1 day Comments: Same as above. Cost: No cost Comments: After BuildCo's application has been reviewed, the Uyo Capital City De- Procedure 11*. Obtain a permanent phone connection velopment Authority conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the proposed Time: 1 day project. The inspectors draft a report in which the plot, roads, setback details, adjoin- Cost: NGN 6,000 (handset + connection) ing land and power and water connections are described. The report is then attached Comments: Nigerian Telecommunications Limited (NITEL), the public company his- to the documents and drawings BuildCo submitted for approval, and forwarded to torically in charge of providing phone landlines in Nigeria, is no longer functioning. the Director of Development Control for final review and approval. Most Nigerian companies use a cell phone, with a subscription to one of the opera- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be connected at any time before and during the construction. 94 DOING BUSINESS IN NIGERIA 2010 Procedure 12. Apply to the Power Holding Company of Nigeria t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  lighting point layout, schedule of fittings and fixtures); (PHCN) for a permanent electricity connection t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Time: 1 day disposal layout, schedule of sanitary fittings); Cost: NGN 52,500 (3 phase pre-paid meter) d. Site analysis report; Comments: BuildCo applies for a permanent electricity connection by submitting a e. Three-year tax clearance certificate; form and the relevant company documents to PHCN. On the application form, Build- Co must indicate its consumption capacity as well as the meter (3 phase pre-paid) f. Certificate of structural stability signed by a registered engineer; required. Electricity connection fees are usually paid with a bank draft. g. Receipt of payment of fees. The documents are reviewed by Anambra State Urban Development Board. An on- Procedure 13. Receive an inspection from PHCN and pay the site inspection will follow. Once the building approval has been granted, two copies electricity fees at the bank of the drawing are given back to BuildCo to be kept on-site. BuildCo may need to Time: 1 day present the stamped copies of its building plans when inspections occur during construction. Cost: No cost Comments: The PHCN business unit sends out a team to inspect the building. In Procedure 3. Pay the building plan approval fees at a designated practice this is usually done on the same day the application is made. bank Procedure 14. Obtain a permanent electricity connection from Time: 1 day PHCN Cost: NGN 57,010 (NGN 500 application form + NGN 5,000 registration fee + NGN 19,510 inspection fee [NGN 5 per cubic meter] + NGN 100 filing fee + NGN 300 build- Time: 18 days ing regulation fee + NGN 10,000 development fee [NGN 10 per square meter of the Cost: No cost area of the plot] + NGN 2,000 approval fee + NGN 5,000 building completion fee + Comments: Once the inspection and the payment have been completed, PHCN con- NGN 5,000 setting out fee + NGN 9,600 fencing fee) nects BuildCo's warehouse to electricity. Even though the actual connection can be Comments: BuildCo is given a payment order to be submitted to and paid at a made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can designated bank. After payment, BuildCo is given a teller – or bank receipt – to be take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- submitted back to the Anambra State Urban Development Board. The Board then ed consumption monthly fee to PHCN. Except for the application and the inspection, schedules a pre-approval inspection at BuildCo's development site. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Procedure 4. Receive a pre-approval inspection from the Anambra State Urban Development Board *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: No cost DEALING WITH CONSTRUCTION PERMITS Comments: After BuildCo's application has been reviewed, the Anambra State Urban ANAMBRA, Onitsha Development Board conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the proposed project. Procedures to build a warehouse The inspectors draft a report in which the plot, roads, setback details, adjoining land Warehouse value: US$ 443,000 = NGN 59,003,170 and power and water connections are described. The report is then attached to the Data as of: January 2010 documents and drawings BuildCo submitted for approval, and forwarded to the Ana- mbra State Urban Development Board for final review and approval. Procedure 1. Obtain a site analysis report and a town planner Technical Report (TPTR) from a registered town planner Procedure 5. Obtain a building plan approval from the Anambra Time: 14 days State Urban Development Board Cost: NGN 62,500 (NGN 22,500 site analysis report + NGN 40,000 TPTR) Time: 21 days Comments: BuildCo hires a registered town planner to draft a site analysis report Cost: No cost and a town planners Technical Report (TPTR), documents both drafted by the same Comments: After the inspection and the payments have been completed, the docu- town planner at the same time. To obtain the site analysis report, BuildCo must ments submitted for approval - along with the inspection report, the receipt issued provide the town planner with the survey plan (usually attached to the Certificate by the bank and the remaining copies of the plan - are scrutinized by the engineers of Occupancy) and the site plan (prepared by BuildCo's architect). The town planner and architects working for the Anambra State Urban Development Board. After each then checks his records, conducts an on-site inspection and drafts the report. For the professional has cleared BuildCo's application, the zonal town planner of the Ana- TPTR, BuildCo must provide the architectural plan, the location plan and the survey mbra Urban Development Board puts a final stamp on the application, granting the plan to the town planner, who will verify the location, the access to roads and the approval. If the approval hasn't been granted in 21 days, BuildCo can assume that surrounding car parks. After this inspection, the town planner drafts a report con- the permission has been granted de facto and proceed with the construction. With taining the layout plan (position of the warehouse within the plot) and the percent- the building plan approval, BuildCo is given a Work Progress Chart on which inspec- age of the built area within the plot of land. Contrary to the site analysis report, the tors will record every inspection conducted during construction. The inspection TPTR is required only for commercial and industrial buildings, and contrary to the schedule mentioned on the Work Progress Chart is not followed dutifully, but serves environmental impact assessment report, the TPTR is required even of warehouses as a guideline. storing non hazardous material Procedure 6. Dig a borehole to obtain water Procedure 2. Apply for a building plan approval at the Anambra Time: 7 days State Urban Development Board Cost: NGN 500,000 Time: 1 day Comments: The public water supply system is very unreliable. It is common practice Cost: No cost for construction companies to hire the services of a private borehole company to drill Comments: In order to obtain a building plan approval, BuildCo must submit a duly and install a borehole of commercial capacity. completed application form to the Anambra State Urban Development Board, along with the following documents: Procedure 7*. Pay a compensation to the natives a. Proof of ownership (such as a certificate of occupancy); Time: 1 day b. Survey plan (attached to the certificate of occupancy); Cost: NGN 200,000 c. Five sets of drawings duly signed by a registered architect, including: Comments: With the Land Use Act of 1978, the government appropriated land on t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- which local tribes lived. Since then, in Onitsha, construction companies wishing to age system, construction details, doors and windows schedules); develop a project must pay compensation to those natives, and hire some of them as t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO masons or security guards on the site. Cost varies on a case by case basis, and highly beams, columns, staircases, etc.); depends on the negotiation skills of the construction company. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 95 Procedure 8. Receive an inspection at setting out level from the Comments: BuildCo applies for a permanent electricity connection by submitting a form and the relevant company documents to PHCN. On the application form, Anambra State Urban Development Board BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- Time: 2 days paid) required. An inspection is then conducted. Payment for the meter is made at a Cost: No cost designated bank. Comments: Once the setting out is complete, BuildCo's architect must notify the An- ambra State Urban Development Board. A team of inspectors visits the construction- Procedure 15. Receive an inspection from PHCN and pay the site to ensure that the project is duly supervised and that the construction follows electricity fees at the bank the specifications mentioned in the building plan previously provided by BuildCo. Time: 1 day Construction work does not stop during the inspection. If a problem is identified, the Cost: No cost inspection teams issues a stop order requesting the issue to be resolved before con- struction proceeds further. If there is no problem, the inspecting team signs the work Comments: The PHCN business unit sends out a team to inspect the building. In progress chart kept on-site by the supervising architect. practice this is usually done on the same day the application is made. After the in- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at Procedure 9. Receive an inspection at first floor level from the a designated bank. Anambra State Urban Development Board Procedure 16. Obtain a permanent electricity connection from Time: 1 day PHCN Cost: No cost Time: 26 days Comments: Once the foundation is complete, BuildCo's architect must notify the Cost: No cost Anambra State Urban Development Board. A team of inspectors visits the construc- tion-site to ensure that the project is duly supervised and that the construction fol- Comments: Once the inspection and the payment have been completed, PHCN con- lows the specifications mentioned in the building plan previously provided by Build- nects BuildCo's warehouse to electricity. Even though the actual connection can be Co. Construction work does not stop during the inspection. If a problem is identified, made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can the inspection teams issues a stop order requesting the issue to be resolved before take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- construction proceeds further. If there is no problem, the inspecting team signs the ed consumption monthly fee to PHCN. Except for the application and the inspection, work progress chart kept on-site by the supervising architect. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Procedure 10. Receive an inspection at second floor level from the Anambra State Urban Development Board *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: No cost DEALING WITH CONSTRUCTION PERMITS Comments: Once the first floor is complete, BuildCo's architect must notify the Ana- BAUCHI, Bauchi mbra State Urban Development Board. A team of inspectors visits the construction- Procedures to build a warehouse site to ensure that the project is duly supervised and that the construction follows Warehouse value: US$ 443,000 = NGN 59,003,170 the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. If a problem is identified, the Data as of: January 2010 inspection teams issues a stop order requesting the issue to be resolved before con- struction proceeds further. If there is no problem, the inspecting team signs the work Procedure 1. Obtain an environmental impact assessment report progress chart kept on-site by the supervising architect. and a site analysis report from a town planner at the Bauchi State Urban Development Board Procedure 11. Request and receive a final inspection from the Time: 5 days Anambra State Urban Development Board Cost: NGN 50,000 (town planner fees) Time: 1 day Comments: BuildCo hires a registered town planner to analyze the site and draft an Cost: No cost environmental impact assessment (EIA) report. The EIA report lists the potential im- Comments: BuildCo notifies the Anambra State Urban Development Board that the pact of the project on the environment, such as the noise, traffic and increase in hu- construction is completed. A final inspection ensues, during which the Urban Devel- man density issues that might arise as a result of the development. In order to draft opment Board ensures that BuildCo's warehouse abide by the details provided in the the report, the town planner first verifies the site plan (attached to the certificate drawings and by the safety/construction standards described in the law. of occupancy) as well as the preliminary drawings prepared by BuildCo's architects and engineers, before conducting an on-site inspection. If deemed necessary, he may conduct interviews with relevant stakeholders living in the area. The same town Procedure 12. Obtain a certificate of completion from the planner also prepares a site analysis report (SAR), which details the location, acces- Anambra State Urban Development Board sibility and topography of the site, as well as the proximity of the site to essential Time: 21 days services: electricity source, water source, hospital, commercial area, airport, etc. After Cost: No cost the inspection, the town planner drafts the EIA report and SAR, and gives 2 copies Comments: After the final inspection, the Anambra State Urban Development Board of each report to Buildco, and retains one copy for himself. BuildCo has the choice issues BuildCo a certificate of completion attesting that the construction has been between hiring a professional from the Bauchi State Urban Development Board, a carried out according to the building plans submitted, and that BuildCo can now oc- common practice, or hire a private professional. cupy the building. Procedure 2. Apply for a building plan approval at the Bauchi Procedure 13*. Obtain a permanent phone connection State Urban Development Board Time: 1 day Time: 1 day Cost: NGN 6,000 (handset + connection) Cost: No cost Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Comments: In order to obtain a building plan approval, BuildCo must submit a duly torically in charge of providing phone landlines in Nigeria, is no longer functioning. completed application form to the Bauchi State Urban Development Board, along Most Nigerian companies use a cell phone, with a subscription to one of the opera- with the following documents: tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be a. Proof of ownership (such as a certificate of occupancy); connected at any time before and during the construction. b. Survey plan (attached to the certificate of occupancy); c. Four sets of drawings duly signed by a registered architect, including: Procedure 14. Apply to the Power Holding Company of Nigeria t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- (PHCN) for a permanent electricity connection age system, construction details, doors and windows schedules); Time: 1 day t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Cost: NGN 62,500 (NGN 10,000 processing fee + NGN 52,500 pre-paid 3 phase meter) beams, columns, staircases, etc.); 96 DOING BUSINESS IN NIGERIA 2010 t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Procedure 9. Apply to the Power Holding Company of Nigeria lighting point layout, schedule of fittings and fixtures); (PHCN) for a permanent electricity connection t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); Time: 1 day d. Environmental impact assessment report; Cost: NGN 52,500 (3 phase pre-paid meter) e. Site analysis report. Comments: BuildCo applies for a permanent electricity connection by submitting a form and the relevant company documents to PHCN. On the application form, Build- The documents are reviewed by Bauchi State Urban Development Board. An on-site Co must indicate its consumption capacity as well as the meter (3 phase pre-paid) inspection will follow. Once the building approval has been granted, two copies required. An inspection is then conducted. of the drawing are given back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies of its building plans when inspections occur during Procedure 10. Receive an inspection from PHCN and pay the construction. electricity fees at the bank Procedure 3. Receive a pre-approval inspection from the Bauchi Time: 1 day State Urban Development Board Cost: No cost Time: 1 day Comments: The PHCN business unit sends out a team to inspect the building. After Cost: No cost the inspection, BuildCo is given a bill to pay for the meter, which BuildCo must pres- ent at a designated bank. BuildCo must then submit the receipt of the payment to Comments: After BuildCo's application has been reviewed, the Bauchi State Urban the local PHCN for the electricity connection to proceed. Development Board conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the proposed proj- Procedure 11. Obtain a permanent electricity connection from ect. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The report is then attached to PHCN the documents and drawings BuildCo submitted for approval, and forwarded to the Time: 26 days Bauchi State Urban Development Board for final review and approval. Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN Procedure 4. Obtain a building plan approval from the Bauchi connects BuildCo's warehouse to electricity. Even though the actual connection can State Urban Development Board be made in about a week, due to supply problems of 3 phase pre-paid meters, it can Time: 14 days take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Cost: NGN 260,000 (NGN 200 per square meter) ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Comments: After the inspection and the payments have been completed, the (Licensed Electrical Contractors of Nigeria). Bauchi State Urban Development Board examines the documents submitted and issues BuildCo a building permit. Based on the 1970 law, the fee should be NGN 200 per square meter, but the law is currently being reviewed. Payment is made in cash *This procedure can be completed simultaneously with previous procedures. at the Bauchi State Urban Development Board. DEALING WITH CONSTRUCTION PERMITS Procedure 5. Dig a borehole to obtain water BAYELSA, Yenagoa Time: 7 days Procedures to build a warehouse Cost: NGN 500,000 Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: The public water supply system is very unreliable. It is common practice Data as of: January 2010 for construction companies to hire the services of a private borehole company to drill and install a borehole of commercial capacity. Procedure 1. Obtain an environmental impact assessment Report and a site analysis report from a registered town planner Procedure 6. Receive an inspection at setting out level by the Bauchi State Urban Development Board Time: 7 days Cost: NGN 110,000 (NGN 95,000 environmental impact assessment report + NGN Time: 1 day 15,000 site analysis report) Cost: No cost Comments: BuildCo hires a registered town planner, recognized by the Bayelsa Capi- Comments: Once the foundation is complete, BuildCo's architect must notify the tal City Development Authority, to analyze the site and draft an environmental im- Bauchi State Urban Development Board. A team of inspectors visits the construction- pact assessment (EIA) report. The EIA report lists the potential impact of the project site to ensure that the project is duly supervised and that the construction follows on the environment, such as the noise, traffic and increase in human density issues the specifications mentioned in the building plan previously provided by BuildCo. that might arise as a result of the development. In order to draft the report, the town Construction work does not stop during the inspection. planner first verifies the site plan (attached to the certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's architects and engineers, before Procedure 7. Receive an inspection at lintel level by the Bauchi conducting an on-site inspection. If deemed necessary, he may conduct interviews State Urban Development Board with relevant stakeholders living in the area. The same town planner also prepares Time: 1 day a site analysis report (SAR), which details the location, accessibility and topography Cost: No cost of the site, as well as the proximity of the site to essential services: electricity source, water source, hospital, commercial area, airport, etc. After the inspection, the town Comments: Once the lintel is complete, BuildCo's architect must notify the Bauchi planner drafts the EIA report and SAR, and gives 3 copies of each report to Buildco, State Urban Development Board. A team of inspectors visits the construction-site and retains one copy for himself. to ensure that the project is duly supervised and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Con- Procedure 2. Swear deposition on the application form before struction work does not stop during the inspection. the Commissioner of Oaths Procedure 8*. Obtain a permanent phone connection Time: 1 day Time: 1 day Cost: NGN 200 Cost: NGN 10,000 (wireless land line) Comments: BuildCo has to swear deposition on the application forms before the Commissioner of Oaths, in order to attest the authenticity of its ownership of the Comments: Nigerian Telecommunications Limited (NITEL), the public company property in question. historically in charge of providing phone landlines in Nigeria, is no longer function- ing. Most Nigerian companies use a cell phone, with a subscription to one of the operators available in the country (MTN, ZAIN, GLO or ETISALAT). In Bauchi, Nigerian companies also have the option of using a fixed wireless phone (MULTILINKS), at a higher cost (NGN 10,000). The phone line can be connected at any time before and during the construction. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 97 Procedure 3. Apply for a building plan approval at the Bayelsa Procedure 7. Obtain a building plan approval from the Bayelsa Capital City Development Authority Capital City Development Authority Time: 7 days Time: 30 days Cost: No cost Cost: No cost Comments: In order to obtain a building plan approval, BuildCo must submit a duly Comments: After the inspection and the payments have been completed, BuildCo completed application form to the Bayelsa Capital City Development Authority (BC- submits the sets of drawings to the Bayelsa Capital City Development Authority (BC- CDA), along with the following documents: CDA). The documents are reviewed by the Director of Development Control, who a. Proof of ownership (such as a certificate of occupancy); subsequently writes a report with recommendations to the Executive Secretary in charge of the final approval. If granted, the BCCDA gives BuildCo a set of buildings b. Survey plan (attached to the certificate of occupancy); plans marked with stamps of approval, along with a letter of approval bearing the c. Three sets of drawings duly signed by a registered architect, including: signature of the Director and the Executive Secretary and a registration number t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- to be displayed on the construction-site. The building plan approval is valid for 24 age system, construction details, doors and windows schedules); months. t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Procedure 8. Dig a borehole to obtain water t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Time: 14 days lighting point layout, schedule of fittings and fixtures); Cost: NGN 500,000 t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Comments: The public water supply system is very unreliable. It is common practice disposal layout, schedule of sanitary fittings); for construction companies to hire the services of a private borehole company to drill d. Environmental impact assessment report; and install a borehole of commercial capacity. e. Site analysis report; f. Three-year tax clearance certificate; Procedure 9*. Pay a compensation to the natives g. Certificate of structural stability signed by a registered engineer; Time: 7 days h. Receipt of payment of the development levy. Cost: NGN 200,000 The documents are reviewed by the Director of Development Control at the BCCDA, Comments: With the Land Use Act of 1978, the government appropriated land on and the drawings are used to calculate the applicable fees. BuildCo is also given an which local tribes lived. Since then, in Yenagoa, construction companies wishing to application form, which is required to be sworn to before the Commissioner of Oaths. develop a project must pay compensation to those natives, and hire some of them as Once the building approval has been granted, two copies of the drawing are given masons or security guards on the site. Cost varies on a case by case basis, and highly back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies depends on the negotiation skills of the construction company. BuildCo may have to of its building plans when inspections occur during construction. meet with the village head or his representative. Negotiations can take up to 7 days. Procedure 4. Pay the building plan approval fees at a designated Procedure 10. Receive an inspection during construction from bank the Capital City Development Authority Time: 1 day Time: 1 day Cost: NGN 109,900 (NGN 15,000 inspection fee + NGN 2,000 commercial registration Cost: No cost fee + NGN 92,900 approval fee [NGN 100 per square meter of the plot]) Comments: Although the National Building code lists a precise inspection schedule, Comments: BuildCo is given a payment order to be submitted to and paid at a des- inspections in Yenagoa do not follow any particular order. During construction, a ignated bank. After payment, BuildCo is given a teller – or bank receipt – to be sub- team of inspectors from the Bayelsa Capital City Development Authority randomly mitted back to the Bayelsa Capital City Development Authority. The Authority then visits the site to ensure that the construction company has a building permit, that schedules an on-site inspection. the project is duly supervised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. In practice, during construction, 2 inspections Procedure 5. Receive a pre-approval inspection from the Bayelsa occur. Capital City Development Authority Time: 1 day Procedure 11. Receive an inspection during construction from Cost: No cost the Capital City Development Authority Comments: After BuildCo's application has been reviewed, the Bayelsa Capital City Time: 1 day Development Authority conducts an on-site inspection to verify that the plot reflects Cost: No cost the details provided in the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback details, adjoin- Comments: Same as above. ing land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted for approval, and forwarded to Procedure 12*. Obtain a permanent phone connection the Bayelsa Capital City Development Authority for final review and approval. Time: 1 day Cost: NGN 6,000 (handset + connection) Procedure 6. Submit additional documents to the Bayelsa Capital Comments: Nigerian Telecommunications Limited (NITEL), the public company his- City Development Authority torically in charge of providing phone landlines in Nigeria, is no longer functioning. Time: 1 day Most Nigerian companies use a cell phone, with a subscription to one of the opera- Cost: No cost tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be connected at any time before and during the construction. Comments: After inspection, BuildCo must present these additional document to the Bayelsa Capital City Development Authority: Procedure 13. Apply to the Power Holding Company of Nigeria a. Title document proving ownership; (PHCN) for a permanent electricity connection b. Application form, duly sworn before the Commissioner of Oaths; Time: 1 day c. Three-year tax clearance certificate; Cost: NGN 52,500 (3 phase pre-paid meter) d. Certificate of incorporation; Comments: BuildCo applies to PHCN by submitting a form and the relevant com- e. Articles of association; pany documents. On the application form, BuildCo must indicate its consumption f. Receipt of payment of fees. capacity as well as the meter (3 phase pre-paid) required. An inspection is then con- The Bayelsa Capital City Development Authority receives the documents and opens ducted. Payment for the meter is made at a designated bank. a file for BuildCo attached to a registration number. 98 DOING BUSINESS IN NIGERIA 2010 Procedure 14. Receive an inspection from PHCN and pay the Procedure 3. Obtain a building permit from the Benue Urban electricity fees at the bank Development Board Time: 1 day Time: 30 days Cost: No cost Cost: No cost Comments: The PHCN business unit sends out a team to inspect the building. In Comments: After the inspection and the payments have been completed, the Benue practice this is usually done on the same day the application is made. After the in- Urban Development Board examines the documents submitted and issues BuildCo spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at a building permit. a designated bank. Procedure 4. Dig a borehole to obtain water Procedure 15. Obtain a permanent electricity connection from Time: 7 days PHCN Cost: NGN 500,000 Time: 14 days Comments: The public water supply system is very unreliable. It is common practice Cost: No cost for construction companies to hire the services of a private borehole company to drill Comments: Once the inspection and the payment have been completed, PHCN and install a borehole of commercial capacity. connects BuildCo's warehouse to electricity. Even though the actual connection can be made in a matter of days, it can take longer for the actual meter to arrive. In the Procedure 5. Receive an inspection during construction from the meantime, BuildCo pays an estimated consumption monthly fee to PHCN. Except for Benue Urban Development Board the application and the inspection, all other electricity related processes are handled Time: 1 day by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Cost: No cost Comments: Although the National Building Code lists a precise inspection sched- *This procedure can be completed simultaneously with previous procedures. ule, inspections in Makurdi do not follow any particular order. During construction, a team of inspectors from the Urban Development Board randomly visits the site DEALING WITH CONSTRUCTION PERMITS to ensure that the construction company has a building permit, that the project is BENUE, Makurdi duly supervised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop Procedures to build a warehouse during the inspection. In response to an increase in building collapse in Nigeria, Warehouse value: US$ 443,000 = NGN 59,003,170 the government has set up a Prevention Inspection and Failure Analysis Committee Data as of: January 2010 (PIFAC) to check the quality and standard of buildings. The team of inspectors in charge of carrying inspections for the Urban Development Board - who are assigned Procedure 1. Apply for a building permit at the Benue Urban designated parts of the city (North, South) - report to PIFAC. The Task Force reporting Development Board to the Commissioner of PIFAC also visits the site to ensure that construction is be- Time: 1 day ing supervised by qualified professionals and that the building is up to standards. In practice, an average of four inspections occur during construction. Cost: NGN 95,085 (NGN 65,050 development fee [NGN 50 per square meter] + NGN 35 jacket fee + NGN 30,000 service drawing fee [NGN 10,000 per set of drawing : me- Procedure 6. Receive an inspection during construction from the chanical, electrical and engineering]) Benue Urban Development Board Comments: In order to obtain a building permit, BuildCo must submit an applica- tion form to the Urban Development Board, along with the following documents: Time: 1 day a. Proof of ownership (such as a certificate of occupancy); Cost: No cost b. Survey plan (attached to the certificate of occupancy); Comments: Same as above. c. Drawings duly signed by a registered architect, including: Procedure 7. Receive an inspection during construction from the t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Benue Urban Development Board age system, construction details, doors and windows schedules); Time: 1 day t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Cost: No cost t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Comments: Same as above. lighting point layout, schedule of fittings and fixtures); Procedure 8. Receive an inspection during construction from the t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); Benue Urban Development Board f. Three-year tax clearance certificate. Time: 1 day The documents are reviewed by the Urban Development Board control team, com- Cost: No cost prised of architects, town planners, surveyors and engineers. An on-site inspection Comments: Same as above. will follow. Procedure 9. Request and receive a final inspection from the Procedure 2. Receive a pre-approval inspection by the Benue Benue Urban Development Board Urban Development Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: BuildCo notifies the Benue Urban Development Board that the con- Comments: After BuildCo's application has been reviewed, the Benue Urban De- struction is completed. A final inspection ensues, during which the Urban Develop- velopment Board conducts an on-site inspection to verify that the plot reflects the ment Board ensures that BuildCo's warehouse abide by the details provided in the details provided in the drawings and that the land is suitable for the proposed proj- drawings and by the safety/construction standards described in the law. ect. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The report is then attached to Procedure 10. Obtain a certificate of completion from the Benue the documents and drawings BuildCo submitted for approval, and forwarded to the Urban Development Board Benue Urban Development Board for final review and approval. Time: 7 days Cost: NGN 10,000 Comments: After the final inspection, the Benue Urban Development Board issues BuildCo a certificate of completion attesting that the construction has been carried out according to the building plans submitted, and that BuildCo can now occupy the building. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 99 Procedure 11*. Obtain a permanent phone connection Procedure 2. Apply for a development permit at the Borno Urban Time: 1 day and Regional Planning and Development Board Cost: NGN 5,000 (wireless land line) Time: 1 day Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Cost: No cost torically in charge of providing phone landlines in Nigeria, is no longer functioning. Comments: In order to obtain a development permit, BuildCo must submit a duly Most Nigerian companies use a cell phone, with a subscription to one of the opera- completed application form to the Borno Urban and Regional Planning and Develop- tors available in the country (MTN, ZAIN, GLO or ETISALAT). In Makurdi, Nigerian ment Board along with the following documents: companies also have the option of using a fixed wireless phone (MULTILINKS), at a a. Proof of ownership (such as a certificate of occupancy); higher cost (NGN 5,000). The phone line can be connected at any time before and during the construction. b. Survey plan (attached to the certificate of occupancy); c. Three sets of drawings duly signed by a registered architect, including: Procedure 12. Apply to the Power Holding Company of Nigeria t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- (PHCN) for a permanent electricity connection age system, construction details, doors and windows schedules); Time: 1 day t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Cost: NGN 52,500 (3 phase pre-paid meter) beams, columns, staircases, etc.); Comments: BuildCo applies for a permanent electricity connection by submitting t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  a form and the relevant company documents to PHCN. On the application form, lighting point layout, schedule of fittings and fixtures); BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM paid) required. An inspection is then conducted. Payment for the meter is made at a disposal layout, schedule of sanitary fittings); designated bank. d. environmental impact assessment report. The documents are reviewed by the Borno Urban and Regional Planning and Devel- Procedure 13. Receive an inspection from PHCN and pay the opment Board. An on-site inspection will follow. electricity fees at the bank Time: 1 day Procedure 3. Receive a pre-approval inspection from the Borno Cost: No cost Urban and Regional Planning and Development Board Comments: The PHCN business unit sends out a team to inspect the building. In Time: 1 day practice this is usually done on the same day the application is made. After the in- Cost: No cost spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at Comments: After BuildCo's application has been reviewed, inspectors from the a designated bank. Borno Urban and Regional Planning and Development Board conduct an on-site in- spection to verify that the plot reflects the details provided in the drawings and that Procedure 14. Obtain a permanent electricity connection from the land is suitable for the proposed project. The inspectors draft a report in which PHCN the plot, roads, setback details, adjoining land and power and water connections are Time: 30 days described. The report is then attached to the documents and drawings BuildCo sub- Cost: NGN 20,000 (contractor fee) mitted for approval, and forwarded to the Borno Urban and Regional Planning and Development Board for final review and approval. Comments: Once the inspection and the payment have been completed, PHCN con- nects BuildCo's warehouse to electricity. Even though the actual connection can be Procedure 4. Obtain a development permit from the Borno Urban made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- and Regional Planning and Development Board ed consumption monthly fee to PHCN. Except for the application and the inspection, Time: 15 days all other electricity related processes are handled by a contractor licensed by LECAN Cost: NGN 270,180 (NGN 200 per square meter for development permit fee + NGN (Licensed Electrical Contractors of Nigeria). 10,000 inspection fee) Comments: After the inspection and the payments have been completed, the docu- *This procedure can be completed simultaneously with previous procedures. ments submitted for approval – along with the inspection report – are reviewed by the Urban and Regional Planning and Development Board for final approval. If granted, BuildCo is issued a development permit. DEALING WITH CONSTRUCTION PERMITS BORNO, Maiduguri Procedure 5. Dig a borehole to obtain water Procedures to build a warehouse Time: 7 days Warehouse value: US$ 443,000 = NGN 59,003,170 Cost: NGN 700,000 Data as of: January 2010 Comments: The public water supply system being very unreliable, the common practice is for construction companies to hire the services of a private borehole Procedure 1. Obtain an environmental impact assessment report company to drill and install a borehole of commercial capacity. As water sources from a registered town planner are located deep under the ground in Maiduguri, it can be very expensive to drill a Time: 5 days borehole. Cost: NGN 50,000 Procedure 6. Receive an inspection during construction from the Comments: BuildCo hires a registered town planner to analyze the site and draft an environmental impact assessment (EIA) report. The EIA report lists the potential im- Borno Urban and Regional Planning and Development Board pact of the project on the environment, such as the noise, traffic and increase in hu- Time: 1 day man density issues that might arise as a result of the development. In order to draft Cost: No cost the report, the town planner first verifies the survey plan (attached to the certificate Comments: Once the foundation is complete, BuildCo's architect must notify the of occupancy) as well as the preliminary drawings prepared by BuildCo's architects Borno Urban and Regional Planning and Development Board. A team of town plan- and engineers, before conducting an on-site inspection. If deemed necessary, he ners, architects, structural engineers and mechanical engineers visits the construc- may conduct interviews with relevant stakeholders living in the area. After the in- tion-site to ensure that the project is duly supervised and that the construction spection, the town planner drafts the EIA report. follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. 100 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Procedure 7. Receive an inspection during construction from the District Planning Area Inspectors CROSS RIVER, Calabar Time: 1 day Procedures to build a warehouse Cost: No cost Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: During construction, a team of inspectors from the District Planning Data as of: January 2010 Area – under whose jurisdiction the building is located – inspects the building and drafts an inspection report. Procedure 1. Obtain an environmental impact statement from a registered town planner Procedure 8. Receive a final fire inspection from the Fire Time: 14 days Directorate Cost: NGN 150,000 (town planner fee) Time: 1 day Comments: BuildCo contracts the service of a registered town planner to conduct Cost: No cost an inspection and prepare the environmental impact statement (EIS). The EIS is a combination of the environmental impact assessment report and the site analysis Comments: By Law, BuildCo is required to go to the Fire Directorate to ask for a fire report into one document. Three copies are required. The EIS report describes the inspection. A fire team accompanies BuildCo back to the site to inspect it, in order to nature and use of the building, and how its operation will affect the neighboring en- ensure that the construction has proper fire exits, sprinkler, fire alarms, etc. vironment. It also describes the layout, vegetation, topography of the site and acces- sibility of the site to essential services. The town planners have a professional scale of Procedure 9. Obtain a certificate of completion and fitness for fees, but most of the times they negotiate out of it. habitation for habitation from the Borno Urban and Regional Planning & Development Board Procedure 2. Apply for a building plan approval at the Town Time: 7 days Planning Department of the Cross River Ministry of Lands and Cost: No cost Housing Comments: In practice, the certificate can be issued by the Engineering Department Time: 1 day in 7 days. However, before the certificate can be officially issued, proof must be made Cost: No cost that the property does not deteriorate when in use. The property is thus observed Comments: In order to obtain a building plan approval, BuildCo must submit a duly during 6 months, at the end of which the certificate is issued. The building, however, completed application form to the Town Planning Department, along with the fol- can be occupied and used after 7 days. This certificate is not required to obtain utility lowing documents: connection. a. Proof of ownership (such as a certificate of occupancy); Procedure 10*. Obtain a permanent phone connection b. Survey plan (attached to the certificate of occupancy); Time: 1 day c. Three sets of drawings duly signed by a registered architect, including: Cost: NGN 6,000 (handset + connection) t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Comments: Nigerian Telecommunications Limited (NITEL), the public company his- age system, construction details, doors and windows schedules); torically in charge of providing phone landlines in Nigeria, is no longer functioning. t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Most Nigerian companies use a cell phone, with a subscription to one of the opera- beams, columns, staircases, etc.); tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  connected at any time before and during the construction. lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 11. Apply to the Power Holding Company of Nigeria disposal layout, schedule of sanitary fittings); (PHCN) for a permanent electricity connection d. Environmental Impact Statement; Time: 1 day e. Three-year tax clearance certificate; Cost: NGN 52,500 (3 phase pre-paid meter) f. Receipt of payment of the fees. Comments: BuildCo applies to PHCN by submitting a form and the relevant com- The documents are registered by the Town Planning Department and reviewed by pany documents. On the application form, BuildCo must indicate its consumption the Architectural, Engineering and Health departments. An on-site inspection will capacity as well as the meter (3 phase pre-paid) required. An inspection is then follow. The reason why BuildCo must submit 3 sets of drawings is that, after the conducted. building approval has been granted, two copies are given back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies of its building plans when Procedure 12. Receive an inspection from PHCN and pay the inspections occur during construction. electricity fees at the bank Time: 1 day Procedure 3. Receive a pre-approval inspection from the Town Cost: No cost Planning Department of the Cross River Ministry of Lands and Comments: The PHCN business unit sends out a team to inspect the building. Housing Time: 1 day Procedure 13. Obtain a permanent electricity connection from Cost: No cost PHCN Comments: After BuildCo's application has been reviewed, the Town Planning De- Time: 24 days partment conducts an on-site inspection to verify that the plot reflects the details Cost: No cost provided in the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback details, adjoining land and Comments: Once the inspection and the payment have been completed, PHCN power and water connections are described. Inspectors also assess what fees need to connects BuildCo's warehouse to electricity. Even though the actual connection can be paid. The report is then attached to the documents and drawings BuildCo submit- be made in 3 days, due to supply problems of 3 phase pre-paid meters, it can take ted for approval, and forwarded to the Director of Town Planning Department who longer for the actual meter to arrive. In the meantime, BuildCo pays an estimated makes recommendations to the Commissioner for final approval. The pre-approval consumption monthly fee to PHCN. Except for the application and the inspection, inspection is usually carried out within 7 days of the submission of the documents. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Procedure 4. Pay the building plan approval fees at a designated bank *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: NGN 70,000 (NGN 60,000 approval fee [NGN 50,000 first floor level + NGN10,000 per additional floor level] + NGN 5,000 fencing fee + NGN 5,000 security post fee) LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 101 Comments: BuildCo is given a payment order to be submitted to and paid at a Procedure 11. Obtain a permanent electricity connection from designated bank. After payment, BuildCo is given a teller – or bank receipt – to be submitted back to the Town Planning Department. PHCN Time: 26 days Procedure 5. Obtain a building plan approval from the Town Cost: No cost Planning Department of the Cross River Ministry of Lands and Comments: Once the inspection and the payment have been completed, PHCN con- Housing nects BuildCo's warehouse to electricity. Even though the actual connection can be Time: 90 days made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Cost: No cost ed consumption monthly fee to PHCN. Except for the application and the inspection, Comments: After the inspection and the payments have been completed, the Town all other electricity related processes are handled by a contractor licensed by LECAN Planning department examines BuildCo's application, along with the inspection (Licensed Electrical Contractors of Nigeria). report. If approval is granted, the Town Planning Departments gives BuildCo a set of building plans marked with stamps of approval, along with a letter of approval Procedure 12. Apply for water connection to the Cross River State from the Town Planning Department and a registration number to be displayed on Water Corporation the construction-site. The approval is valid for 18 months, after which a revalidation is required. Time: 1 day Cost: NGN 2,000 Procedure 6. Receive an inspection during construction from the Comments: The Cross River State Water Corporation is very efficient. Nobody relies Town Planning Department of the Cross River Ministry of Lands on boreholes for water supply. Connection costs only NGN 2,000 but the developer and Housing must provide all necessary plumbing material. The developer is merely required to Time: 1 day visit the water corporation office, fill the form and pay the fees. Cost: No cost Procedure 13. Receive an inspection from the Cross River State Comments: Although the National Building code lists a precise inspection schedule, Water Corporation inspections in Calabar do not follow any particular order. During construction, a team of inspectors from the Town Planning Department randomly visits the site to Time: 1 day ensure that the construction company has a building permit, that the project is duly Cost: No cost supervised, and that the construction follows the specifications mentioned in the Comments: After receiving BuildCo's application, the Cross River State Water Corpo- building plan previously provided by BuildCo. Construction work does not stop dur- ration conducts an on-site inspection. ing the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before construction proceeds further. In practice, Procedure 14*. Obtain a permanent water connection from the 2 inspections occur during construction. Cross River State Water Corporation Time: 5 days Procedure 7. Receive an inspection during construction from the Town Planning Department of the Cross River Ministry of Lands Cost: No cost and Housing Comments: Connection is completed within 5 days. Time: 1 day Cost: No cost *This procedure can be completed simultaneously with previous procedures. Comments: Same as above. DEALING WITH CONSTRUCTION PERMITS Procedure 8*. Obtain a permanent phone connection DELTA, Warri Time: 1 day Procedures to build a warehouse Cost: NGN 5,250 (NGN 5,000 handset + NGN 250 sim card) Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Data as of: January 2010 torically in charge of providing phone landlines in Nigeria, is no longer functioning. Most Nigerian companies use a cell phone, with a subscription to one of the opera- Procedure 1. Obtain a fire safety report from the Fire Service tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Department connected at any time before and during the construction. Time: 8 days Cost: NGN 20,000 Procedure 9. Apply to the Power Holding Company of Nigeria (PHCN) for a permanent electricity connection Comments: BuildCo goes to the Fire Service Department to submit the architectural and site plans, which the department inspects. Then the Fire Service Department Time: 1 day comes to inspect the plot, determine the potential fire hazards and advise the con- Cost: NGN 62,500 (NGN 52,500 per 3 phase pre-paid meter + NGN 10,000 process- struction company on the precautions to be taken. A fire safety report is issued and ing fee) given to BuildCo at the end of the inspection. Comments: BuildCo applies for a permanent electricity connection by submitting a form and the relevant company documents to PHCN. On the application form, Procedure 2*. Obtain a site analysis report from a registered BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- town planner paid) required. Time: 3 days Cost: NGN 5,000 (town planner fee) Procedure 10. Receive an inspection from PHCN and pay the electricity fees at the bank Comments: BuildCo hires a registered town planner to analyze the site and draft a site analysis report (SAR), which details the location, accessibility and topography Time: 1 day of the site, as well as the proximity of the site to essential services: electricity source, Cost: No cost water source, hospital, commercial area, airport, etc. In Delta, the report is required Comments: The PHCN business unit sends out a team to inspect the building. In of all heavy constructions, including warehouses. practice this is usually done on the same day the application is made. 102 DOING BUSINESS IN NIGERIA 2010 Procedure 3. Apply for a building plan approval at the Town Procedure 7. Dig a borehole to obtain water Planning Office of the Delta State Ministry of Land Time: 7 days Time: 1 day Cost: NGN 200,000 Cost: No cost Comments: The public water supply system being very unreliable, the common Comments: In order to obtain a building plan approval, BuildCo must submit a duly practice is for construction companies to hire the services of a private borehole completed application form to the Town Planning Office of the Ministry of Land, company to drill and install a borehole of commercial capacity. Warri is located only along with the following documents: 6 meters above sea level, and drinkable water can be found close to the surface. As a a. Proof of ownership (such as a certificate of occupancy); result, it is less expensive to drill a borehole in Delta state. b. Survey plan (attached to the certificate of occupancy); Procedure 8*. Pay a compensation to the natives c. Five sets of drawings duly signed by a registered architect, including: Time: 1 day t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Cost: NGN 200,000 age system, construction details, doors and windows schedules); Comments: With the Land Use Act of 1978, the government appropriated land on t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO which local tribes lived. Since then, in Warri, construction companies wishing to de- beams, columns, staircases, etc.); velop a project must pay compensation to those natives, and hire some of them as t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  masons or security guards on the site. Cost varies on a case by case basis, and highly lighting point layout, schedule of fittings and fixtures); depends on the negotiation skills of the construction company. t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); Procedure 9. Receive an inspection during construction from the d. Site analysis report; Town Planning Office of the Delta state Ministry of Land e. Three-year tax clearance certificate; Time: 1 day f. Fire safety report; Cost: No cost g. Certificate of structural stability signed by a registered engineer. Comments: Although the National Building code lists a precise inspection schedule, The documents are first reviewed by the area planning officer, who checks whether inspections in Warri do not follow any particular order. During construction, a team the documents are in order before submitting them to a technical assistant who of inspectors from the Ministry of Land randomly visits the site to ensure that the determines the value of the plot. The cashier then issues a bill to be taken by BuildCo construction company has a building permit, that the project is duly supervised, and to a designated bank for payment. An on-site inspection will follow. Once the build- that the construction follows the specifications mentioned in the building plan pre- ing approval has been granted, two copies of the drawing are given back to BuildCo viously provided by BuildCo. Construction work does not stop during the inspection. to be kept on-site. BuildCo may need to present the stamped copies of its building In practice, during construction, 2 inspections occur. plans when inspections occur during construction. In Delta, it is not required of construction companies to obtain an environmental impact assessment report for Procedure 10. Receive an inspection during construction from warehouses. Only bigger structures, or warehouses storing hazardous substances, the Town Planning Office of the Delta state Ministry of Land would be asked to submit one. Time: 1 day Cost: No cost Procedure 4. Pay the building plan approval fees at a designated bank Comments: Same as above. Time: 1 day Procedure 11. Receive a final inspection from the Town Planning Cost: NGN 123,225 (NGN 25 per cubic meter in permit fee + NGN 2,500 registrar fee Office of the Delta state Ministry of Land + NGN 25 allotment fee) Time: 1 day Comments: BuildCo is given a payment order to be submitted to and paid at a Cost: No cost designated bank. After payment, BuildCo is given a teller – or bank receipt – to be submitted back to the Town Planning Office. The Office then schedules an on-site in- Comments: By law, the company has to notify in writing that the construction has spection. Until few months ago, payment was to be made at the office, but to avoid been completed. BuildCo notifies the Town Planning Office that the construction is corruption, payment must now be made at a bank. completed. A final inspection ensues, during which the Town Planning Office ensures that BuildCo's warehouse abide by the details provided in the drawings and by the Procedure 5. Receive a pre-approval inspection from the Town safety/construction standards described in the law. In practice, however, construc- Planning Office of the Delta State Ministry of Land tion companies rarely bother with obtaining the certificate of completion. Time: 1 day Procedure 12. Obtain a certificate of fitness for habitation from Cost: No cost the Town Planning Office of the Delta State Ministry of Land Comments: After BuildCo's application has been reviewed, the Town Planning Office Time: 7 days conducts an on-site inspection to verify that the plot reflects the details provided in Cost: No cost the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and Comments: If the final inspection determines that the construction has been carried water connections are described. The report is then attached to the documents and out according to the building plans submitted, the Town Planning Office issues a cer- drawings BuildCo submitted for approval, and forwarded to the Town Planning Of- tificate of fitness for habitation giving BuildCo the right to occupy the building. fice for final review and approval. Procedure 13*. Obtain a permanent phone connection Procedure 6. Obtain a building plan approval from the Town Time: 1 day Planning Office of the Delta State Ministry of Land Cost: NGN 6,000 (handset + connection) Time: 30 days Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Cost: No cost torically in charge of providing phone landlines in Nigeria, is no longer functioning. Comments: After the inspection and the payments have been completed, the docu- Most Nigerian companies use a cell phone, with a subscription to one of the opera- ments submitted for approval - along with the inspection report, the receipt issued tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be by the bank and the remaining three copies of the plan - are given to the town plan- connected at any time before and during the construction. ner for final approval. The documents are sent to an area planning officer, who then sends them to the Asaba headquarters for scrutiny by the director or commissioner Procedure 14. Apply to the Power Holding Company of Nigeria of Town Planning, which explains why the procedure is time consuming. If granted, (PHCN) for a permanent electricity connection the authority issues BuildCo a building plan approval authorizing the construction of Time: 1 day the warehouse to proceed. The approval is valid for 2 years. Cost: NGN 52,500 (3 phase pre-paid meter) LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 103 Comments: BuildCo applies for a permanent electricity connection by submitting e. Three-year tax clearance certificate. a form and the relevant company documents to PHCN. On the application form, BuildCo is informed of the fees on the same day of the application. Fees are paid at BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- the account department in the ACTDB premises. The submitted documents are re- paid) required. An inspection is then conducted. Payment for the meter is made at a viewed by the architectural, planning, engineering, and health departments of the designated bank. ACTDB. After review, the documents are appended with the signature of approval of ACTDB's General Manager. An on-site inspection will follow. Once the building ap- Procedure 15. Receive an inspection from PHCN and pay the proval has been granted, two copies of the drawing are given back to BuildCo to be electricity fees at the bank kept on-site. BuildCo may need to present the stamped copies of its building plans Time: 1 day when inspections occur during construction. Cost: No cost Procedure 3. Receive a pre-approval inspection from the Comments: The PHCN business unit sends out a team to inspect the building. In Abakaliki Capital Territory Development Board practice this is usually done on the same day the application is made. After the in- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at Time: 1 day a designated bank. Cost: No cost Comments: After BuildCo's application has been reviewed, the Abakaliki Capital Procedure 16. Obtain a permanent electricity connection from Territory Development Board conducts an on-site inspection to verify that the plot PHCN reflects the details provided in the drawings and that the land is suitable for the pro- Time: 37 days posed project. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The report is then Cost: No cost attached to the documents and drawings BuildCo submitted for approval, and for- Comments: Once the inspection and the payment have been completed, PHCN con- warded to the Abakaliki Capital Territory Development Board Urban for final review nects BuildCo's warehouse to electricity. Even though the actual connection can be and approval. made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Procedure 4. Obtain a building plan approval from the Abakaliki ed consumption monthly fee to PHCN. Except for the application and the inspection, Capital Territory Development Board all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Time: 28 days Cost: No cost *This procedure can be completed simultaneously with previous procedures. Comments: After the inspection and the payments have been completed, the Abakaliki Capital Territory Development Board examines the documents submitted and issues BuildCo a building permit, along with 2 signed copies of the plan and a DEALING WITH CONSTRUCTION PERMITS work progress chart to be signed after each inspection during construction. The ap- EBONYI, Abakaliki proval is valid for 2 years, after which revalidation is needed. Procedures to build a warehouse Procedure 5. Dig a borehole to obtain water Warehouse value: US$ 443,000 = NGN 59,003,170 Data as of: January 2010 Time: 14 days Cost: NGN 500,000 Procedure 1. Obtain a site analysis report from a registered town Comments: The public water supply system is very unreliable. It is common practice planner for construction companies to hire the services of a private borehole company to drill Time: 5 days and install a borehole of commercial capacity. Cost: NGN 15,000 (town planner fee) Procedure 6. Receive an inspection at setting out and setting-out Comments: BuildCo hires a registered town planner to analyze the site and draft a site analysis report (SAR), which details the location, accessibility and topography stage from the Abakaliki Capital Territory Development Board of the site, as well as the proximity of the site to essential services: electricity source, Time: 1 day water source, hospital, commercial area, airport, etc. In Ebonyi, the report is required Cost: No cost of all heavy constructions, including warehouses. The town planner typically carries Comments: Once the construction reaches the setting out stage, BuildCo's architect out an inspection of the site, drafts the report, and give four copies to BuildCo. must notify the Abakaliki Capital Territory Development Board which within 2 days sends a team of inspectors to the construction-site. The purpose of the inspection is Procedure 2. Apply for a building plan approval at the Abakaliki to ensure that the related stage has been completed successfully, that the project is Capital Territory Development Board duly supervised, and that the construction follows the specifications mentioned in Time: 1 day the building plan previously provided by BuildCo. Construction work does not stop Cost: NGN 76,794 (NGN 500 application form + NGN 3,000 registration fee [NGN during the inspection. After the inspection has been completed, the inspectors sign 2,500 ground floor + NGN 500 additional floors] + NGN 18,580 development rate the work progress chart. [NGN20 per square meter of the plot area] + NGN 31,214 inspection fee [NGN 8 per cubic meter of the building volume] + NGN 10,500 setting out fee + NGN 7,500 Procedure 7. Receive an inspection at completion of excavation fencing fee + NGN 5,500 building certificate of completion fee) for concrete foundation stage from the Abakaliki Capital Comments: In order to obtain a building approval, BuildCo must submit a duly Territory Development Board completed application form to the General Manager of the Abakaliki Capital Territory Time: 1 day Development Board (ACTDB), along with the following documents: Cost: No cost a. Proof of ownership (such as a certificate of occupancy); Comments: Once the construction reaches the completion of excavation for con- b. Survey plan (attached to the certificate of occupancy); crete foundation stage, BuildCo's architect must notify the Abakaliki Capital Territory c. Four sets of drawings duly signed by a registered architect, including: Development Board which within 2 days sends a team of inspectors to the construc- tion-site. The purpose of the inspection is to ensure that the related stage has been t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- completed successfully, that the project is duly supervised, and that the construction age system, construction details, doors and windows schedules); follows the specifications mentioned in the building plan previously provided by t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO BuildCo. Construction work does not stop during the inspection. After the inspection beams, columns, staircases, etc.); has been completed, the inspectors sign the work progress chart. t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); d. Site analysis report; 104 DOING BUSINESS IN NIGERIA 2010 Procedure 8. Receive an inspection at laying of concrete Procedure 13. Receive inspection after rods for slabs are ready foundation stage from the Abakaliki Capital Territory for concrete from the Abakaliki Capital Territory Development Development Board Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: Once the construction reaches the laying of concrete foundation stage, Comments: Once the slabs are ready for concrete, BuildCo's architect must notify BuildCo's architect must notify the Abakaliki Capital Territory Development Board the Abakaliki Capital Territory Development Board which within 2 days sends a team which within 2 days sends a team of inspectors to the construction-site. The purpose of inspectors to the construction-site. The purpose of the inspection is to ensure that of the inspection is to ensure that the related stage has been completed successfully, the related stage has been completed successfully, that the project is duly super- that the project is duly supervised, and that the construction follows the specifica- vised, and that the construction follows the specifications mentioned in the building tions mentioned in the building plan previously provided by BuildCo. Construction plan previously provided by BuildCo. Construction work does not stop during the work does not stop during the inspection. After the inspection has been completed, inspection. After the inspection has been completed, the inspectors sign the work the inspectors sign the work progress chart. progress chart. Procedure 9. Receive an inspection at provision of damp proof Procedure 14. Receive an inspection at completion of wall plate course stage from the Abakaliki Capital Territory Development and roof members stage from the Abakaliki Capital Territory Board Development Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: Once the construction reaches the damp proof course stage, BuildCo's Comments: Once the construction reaches the completion of wall plate stage, Build- architect must notify the Abakaliki Capital Territory Development Board which Co's architect must notify the Abakaliki Capital Territory Development Board which within 2 days sends a team of inspectors to the construction-site. The purpose of the within 2 days sends a team of inspectors to the construction-site. The purpose of the inspection is to ensure that the related stage has been completed successfully, that inspection is to ensure that the related stage has been completed successfully, that the project is duly supervised, and that the construction follows the specifications the project is duly supervised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. After the inspection has been completed, the does not stop during the inspection. After the inspection has been completed, the inspectors sign the work progress chart. inspectors sign the work progress chart. Procedure 10. Receive an inspection at internal partition of the Procedure 15. Receive an inspection at fitting of doors and rooms stage from the Abakaliki Capital Territory Development windows and completion of ceiling stage from the Abakaliki Board Capital Territory Development Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: Once the construction reaches the partition of the room stage, BuildCo's Comments: Once the construction reaches the completion of ceiling stage, Build- architect must notify the Abakaliki Capital Territory Development Board which Co's architect must notify the Abakaliki Capital Territory Development Board which within 2 days sends a team of inspectors to the construction-site. The purpose of the within 2 days sends a team of inspectors to the construction-site. The purpose of the inspection is to ensure that the related stage has been completed successfully, that inspection is to ensure that the related stage has been completed successfully, that the project is duly supervised, and that the construction follows the specifications the project is duly supervised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. After the inspection has been completed, the does not stop during the inspection. After the inspection has been completed, the inspectors sign the work progress chart. inspectors sign the work progress chart. Procedure 11. Receive an inspection at setting of external Procedure 16. Receive an inspection at excavation and walls up to last floor stage from the Abakaliki Capital Territory construction of septic tank stage from the Abakaliki Capital Development Board Territory Development Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: Once the construction reaches the setting of external walls stage, Build- Comments: Once the construction reaches the excavation of the septic tank stage, Co's architect must notify the Abakaliki Capital Territory Development Board which BuildCo's architect must notify the Abakaliki Capital Territory Development Board within 2 days sends a team of inspectors to the construction-site. The purpose of the which within 2 days sends a team of inspectors to the construction-site. The purpose inspection is to ensure that the related stage has been completed successfully, that of the inspection is to ensure that the related stage has been completed successfully, the project is duly supervised, and that the construction follows the specifications that the project is duly supervised, and that the construction follows the specifica- mentioned in the building plan previously provided by BuildCo. Construction work tions mentioned in the building plan previously provided by BuildCo. Construction does not stop during the inspection. After the inspection has been completed, the work does not stop during the inspection. After the inspection has been completed, inspectors sign the work progress chart. the inspectors sign the work progress chart. Procedure 12. Receive an inspection at reinforcement and casting Procedure 17. Receive an inspection upon completion of the of lintels stage from the Abakaliki Capital Territory Development building from the Abakaliki Capital Territory Development Board Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: Once the construction is completed, BuildCo's architect must notify the Comments: Once the construction reaches the lintels stage, BuildCo's architect Abakaliki Capital Territory Development Board which within 2 days sends a team of must notify the Abakaliki Capital Territory Development Board which within 2 days inspectors to the construction-site. The purpose of the inspection is to ensure that sends a team of inspectors to the construction-site. The purpose of the inspection is the related stage has been completed successfully, that the project is duly super- to ensure that the related stage has been completed successfully, that the project is vised, and that the construction follows the specifications mentioned in the building duly supervised, and that the construction follows the specifications mentioned in plan previously provided by BuildCo. Construction work does not stop during the the building plan previously provided by BuildCo. Construction work does not stop inspection. After the inspection has been completed, the inspectors sign the work during the inspection. After the inspection has been completed, the inspectors sign progress chart. the work progress chart. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 105 DEALING WITH CONSTRUCTION PERMITS Procedure 18. Request and receive a final inspection from the Abakaliki Capital Territory Development Board EDO, Benin City Time: 1 day Procedures to build a warehouse Cost: No cost Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: After construction is complete, BuildCo applies to the Abakaliki Capital Data as of: January 2010 Territory Development Board for a certificate of completion. BuildCo must attach the work progress chart to indicate that the stages of construction have been duly Procedure 1. Obtain an environmental impact assessment report complied with. This certificate proves that the construction meets all specifications and a site analysis report from a registered town planner and qualifications for habitation. A final inspection ensues, during which the Capital Time: 7 days Territory Development Authority ensures that BuildCo's warehouse abide by the Cost: NGN 50,000 (town planner fee) details provided in the drawings and by the safety/construction standards described Comments: BuildCo hires a registered town planner to analyze the site and draft an in the law. environmental impact assessment (EIA) report. The EIA report lists the potential im- pact of the project on the environment, such as the noise, traffic and increase in hu- Procedure 19. Obtain a certificate of completion from the man density issues that might arise as a result of the development. In order to draft Abakaliki Capital Territory Development Board the report, the town planner first verifies the site plan (attached to the certificate Time: 3 days of occupancy) as well as the preliminary drawings prepared by BuildCo's architects Cost: No cost and engineers, before conducting an on-site inspection. If deemed necessary, he may conduct interviews with relevant stakeholders living in the area. The same town Comments: After the final inspection, the Abakaliki Capital Territory Development planner also prepares a site analysis report (SAR), which details the location, acces- Board issues BuildCo a certificate of completion attesting that the construction has sibility and topography of the site, as well as the proximity of the site to essential been carried out according to the building plans submitted, and that BuildCo can services: electricity source, water source, hospital, commercial area, airport, etc. After now occupy the building. the inspection, the town planner drafts the EIA report and SAR, and gives 3 copies of each report to Buildco, and retains one copy for himself. Procedure 20*. Obtain a permanent phone connection Time: 1 day Procedure 2*. Obtain a fire safety report from the Fire Service Cost: NGN 6,000 (handset + connection) Department Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Time: 5 days torically in charge of providing phone landlines in Nigeria, is no longer functioning. Cost: NGN 7,000 Most Nigerian companies use a cell phone, with a subscription to one of the opera- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Comments: BuildCo requests a fire safety report to the Fire Service Department connected at any time before and during the construction. and submits the architectural drawing for examination. The fire safety report details whether the proposed project is exposed to any fire-related risks, and details how Procedure 21. Apply to the Power Holding Company of Nigeria the flames should be contained in the event of a fire. (PHCN) for a permanent electricity connection Procedure 3. Apply for a building permit at the Edo Town Time: 1 day Planning Authority Cost: NGN 52,500 (3 phase pre-paid meter) Time: 1 day Comments: BuildCo applies for a permanent electricity connection by submitting a Cost: No cost form and the relevant company documents to PHCN. On the application form, Build- Co must indicate its consumption capacity as well as the meter (3 phase pre-paid) re- Comments: In order to obtain a building permit, BuildCo must submit a duly com- quired. An inspection is then conducted. Fees are paid through a bank draft to PHCN. pleted application form to the Edo Town Planning Authority, along with the follow- ing documents: Procedure 22. Receive an inspection from PHCN and pay the a. Proof of ownership (such as a certificate of occupancy); electricity fees at the bank b. Survey plan (attached to the certificate of occupancy); Time: 1 day c. Four sets of drawings duly signed by a registered architect, including: Cost: No cost t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Comments: The PHCN business unit sends out a team to inspect the building. In age system, construction details, doors and windows schedules); practice this is usually done on the same day the application is made. t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Procedure 23. Obtain a permanent electricity connection from t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  PHCN lighting point layout, schedule of fittings and fixtures); Time: 30 days t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Cost: No cost disposal layout, schedule of sanitary fittings); Comments: Once the inspection and the payment have been completed, PHCN con- d. Environmental impact assessment report; nects BuildCo's warehouse to electricity. Even though the actual connection can be e. Site analysis report; made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can f. Three-year tax clearance certificate; take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- g. Fire safety report. ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN The documents are reviewed by officers of the Edo Town Planning Authority. An (Licensed Electrical Contractors of Nigeria). on-site inspection will follow. Once the building approval has been granted, two copies of the drawing are given back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies of its building plans when inspections occur during *This procedure can be completed simultaneously with previous procedures. construction. Procedure 4. Receive a pre-approval inspection from the Edo Town Planning Authority Time: 1 day Cost: No cost Comments: After BuildCo's application has been reviewed, the Edo Town Planning Authority conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. They also assess the fees to be paid by 106 DOING BUSINESS IN NIGERIA 2010 BuildCo. The report is then attached to the documents and drawings BuildCo submit- Comments: BuildCo applies for a permanent electricity connection by submitting ted for approval, and forwarded to the Edo Town Planning Authority for final review a form and the relevant company documents to PHCN. On the application form, and approval. BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- paid) required. An inspection is then conducted. Payment for the meter is made at a Procedure 5. Obtain a building permit from the Edo Town designated bank. Planning Authority Time: 30 days Procedure 13. Receive an inspection from PHCN and pay the electricity fees at the bank Cost: NGN 150,000 Time: 1 day Comments: After the inspection and the payments have been completed, the Edo Town Planning Authority examines the documents submitted and issues BuildCo Cost: No cost a building permit. The approval is valid for 24 months, after which a revalidation is Comments: The PHCN business unit sends out a team to inspect the building. In required. practice this is usually done on the same day the application is made. After the in- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at Procedure 6. Dig a borehole to obtain water a designated bank. Time: 14 days Procedure 14. Obtain a permanent electricity connection from Cost: NGN 500,000 PHCN Comments: The public water supply system is very unreliable. It is common practice for construction companies to hire the services of a private borehole company to drill Time: 30 days and install a borehole of commercial capacity. Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN con- Procedure 7*. Pay a compensation to the natives nects BuildCo's warehouse to electricity. Even though the actual connection can be Time: 7 days made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Cost: NGN 200,000 (NGN 100,000 per plot) ed consumption monthly fee to PHCN. Except for the application and the inspection, Comments: With the Land Use Act of 1978, the government appropriated land on all other electricity related processes are handled by a contractor licensed by LECAN which local tribes lived. Since then, in Benin City, construction companies wishing to (Licensed Electrical Contractors of Nigeria). develop a project must pay compensation to those natives, and hire some of them as masons or security guards on the site. Cost varies on a case by case basis, and highly depends on the negotiation skills of the construction company. Negotiations can *This procedure can be completed simultaneously with previous procedures. take up to 7 days. DEALING WITH CONSTRUCTION PERMITS Procedure 8. Receive an inspection during construction from the EKITI, Ado-Ekiti Edo Town Planning Authority Procedures to build a warehouse Time: 1 day Warehouse value: US$ 443,000 = NGN 59,003,170 Cost: No cost Data as of: January 2010 Comments: Although the National Building code lists a precise inspection schedule, inspections in Benin City do not follow any particular order. During construction, Procedure 1. Obtain an environmental impact assessment report a team of inspectors from the Town Planning Authority randomly visits the site to from a registered town planner ensure that the construction company has a building permit, that the project is duly supervised, and that the construction follows the specifications mentioned in the Time: 7 days building plan previously provided by BuildCo. Construction work does not stop dur- Cost: NGN 75,000 (town planner fee) ing the inspection. If a problem is identified, the inspection teams issues a stop order Comments: BuildCo hires a registered town planner to analyze the site and draft an requesting the issue to be resolved before construction proceeds further. In practice, environmental impact assessment (EIA) report. The EIA report lists the potential im- during construction, 3 inspections happen. pact of the project on the environment, such as the noise, traffic and increase in hu- man density issues that might arise as a result of the development. In order to draft Procedure 9. Receive an inspection during construction from the the report, the town planner first verifies the site plan (attached to the certificate of Edo Town Planning Authority occupancy) as well as the preliminary drawings prepared by BuildCo's architects and Time: 1 day engineers, before conducting an on-site inspection. If deemed necessary, he may conduct interviews with relevant stakeholders living in the area. Cost: No cost Comments: Same as above. Procedure 2. Obtain a land use clearance from the Ministry of Lands and Housing Procedure 10. Receive an inspection during construction from Time: 7 days the Edo Town Planning Authority Cost: NGN 5,000 Time: 1 day Comments: BuildCo must obtain a land use clearance to confirm that the use of the Cost: No cost land on which the company plans to build the warehouse is suitable for the project. Comments: Same as above. In order to obtain this document, the company must submit to the Ministry of Lands and Housing: Procedure 11*. Obtain a permanent phone connection a. Survey plan; Time: 1 day b. Preliminary drawings; Cost: NGN 6,000 (handset + connection) c. Receipt of the sale of the land or CFO (as proof of ownership); Comments: Nigerian Telecommunications Limited (NITEL), the public company his- d. Affidavit. torically in charge of providing phone landlines in Nigeria, is no longer functioning. Most Nigerian companies use a cell phone, with a subscription to one of the opera- Procedure 3. Apply for a building permit at the Ministry of Lands tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be and Housing connected at any time before and during the construction. Time: 1 day Procedure 12. Apply to the Power Holding Company of Nigeria Cost: No cost (PHCN) for a permanent electricity connection Comments: In order to obtain a building permit, BuildCo must submit a duly com- Time: 1 day pleted application form to the Ministry of Lands and Housing, along with the follow- ing documents: Cost: NGN 52,500 (3 phase pre-paid meter) a. Proof of ownership (such as a certificate of occupancy); LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 107 b. Survey plan (attached to the certificate of occupancy); Procedure 9. Receive an inspection at damp-proof course stage c. Four sets of drawings duly signed by a registered architect, including: from the Ministry of Lands and Housing t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Time: 1 day age system, construction details, doors and windows schedules); Cost: No cost t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Comments: Once the construction reaches the flooring stage, BuildCo's architect must notify the Ministry of Lands and Housing that sends a team of inspectors to the t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  construction-site. The purpose of the inspection is to ensure that the related stage lighting point layout, schedule of fittings and fixtures); has been completed successfully, that the project is duly supervised, and that the t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM construction follows the specifications mentioned in the building plan previously disposal layout, schedule of sanitary fittings); provided by BuildCo. Construction work does not stop during the inspection. d. Environmental impact assessment report; e. Land use clearance; Procedure 10. Receive an inspection at roof level from the f. Three-year tax clearance certificate. Ministry of Lands and Housing The documents are reviewed by officers at the Ministry of Lands and Housing, who Time: 1 day assess the fees to be paid, based on the size of the building, the use of the building Cost: No cost and the location of the plot. An on-site inspection will follow. Once the building ap- Comments: Once the construction reaches the roofing stage, BuildCo's architect proval has been granted, two copies of the drawing are given back to BuildCo to be must notify the Ministry of Lands and Housing that sends a team of inspectors to the kept on-site. BuildCo may need to present the stamped copies of its building plans construction-site. The purpose of the inspection is to ensure that the related stage when inspections occur during construction. has been completed successfully, that the project is duly supervised, and that the construction follows the specifications mentioned in the building plan previously Procedure 4. Pay the building permit fees at a designated bank provided by BuildCo. Construction work does not stop during the inspection. Time: 1 day Cost: NGN 60,000 Procedure 11*. Obtain a permanent phone connection Comments: BuildCo is given a payment order to be submitted to and paid at a Time: 1 day designated bank. After payment, BuildCo is given a teller – or bank receipt – to be Cost: NGN 6,000 (handset + connection) submitted back to the Ministry of Lands and Housing. Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. Procedure 5. Receive a pre-approval inspection from the Ministry Most Nigerian companies use a cell phone, with a subscription to one of the opera- of Lands and Housing tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Time: 1 day connected at any time before and during the construction. Cost: No cost Procedure 12. Apply to the Power Holding Company of Nigeria Comments: After BuildCo's application has been reviewed, the Ministry of Lands (PHCN) for a permanent electricity connection and Housing conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the proposed project. The Time: 1 day inspectors draft a report in which the plot, roads, setback details, adjoining land and Cost: NGN 52,500 (3 phase pre-paid meter) power and water connections are described. The report is then attached to the docu- Comments: BuildCo applies for a permanent electricity connection by submitting ments and drawings BuildCo submitted for approval, and forwarded to the Ministry a form and the relevant company documents to PHCN. On the application form, of Lands and Housing for final review and approval. BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- paid) required. An inspection is then conducted. Payment for the meter is made at a Procedure 6. Obtain a building permit from the Ministry of Lands designated bank. and Housing Time: 22 days Procedure 13. Receive an inspection from PHCN and pay the Cost: No cost electricity fees at the bank Comments: After the inspection and the payments have been completed, the Min- Time: 1 day istry of Lands and Housing examines the documents submitted and issues BuildCo a Cost: No cost building permit, along with 2 signed copies of the plan. BuildCo must keep one copy Comments: The PHCN business unit sends out a team to inspect the building. In on the construction-site, to be presented when inspectors from the Ministry of Lands practice this is usually done on the same day the application is made. After the in- and Housing come during construction for inspection. spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at a designated bank. Procedure 7. Dig a borehole to obtain water Time: 14 days Procedure 14. Obtain a permanent electricity connection from Cost: NGN 500,000 PHCN Comments: The public water supply system is very unreliable. It is common practice Time: 23 days for construction companies to hire the services of a private borehole company to drill Cost: No cost and install a borehole of commercial capacity. Comments: Once the inspection and the payment have been completed, PHCN con- nects BuildCo's warehouse to electricity. Even though the actual connection can be Procedure 8. Receive an inspection at setting out level by the made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can Ministry of Lands and Housing take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Time: 1 day ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Cost: No cost (Licensed Electrical Contractors of Nigeria). Comments: Once the construction reaches the setting out stage, BuildCo's architect must notify the Ministry of Lands and Housing that sends a team of inspectors to the construction-site. The purpose of the inspection is to ensure that the related stage *This procedure can be completed simultaneously with previous procedures. has been completed successfully, that the project is duly supervised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. 108 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Procedure 5. Dig a borehole to obtain water ENUGU, Enugu Time: 14 days Procedures to build a warehouse Cost: NGN 2,000,000 Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: The public water supply system being very unreliable, the common Data as of: January 2010 practice is for construction companies to hire the services of a private borehole com- pany to drill and install a borehole of commercial capacity. Enugu's soil being very Procedure 1. Obtain a site analysis report from a registered town rich in coal, the water located under the city is unfit for drinking. As a result, bore- planner holes must be sunk outside the city, often in an area called the "Ninth Mile". Most Time: 7 days companies have boreholes there and bring water to the site via trucks. Cost: NGN 20,000 Procedure 6*. Pay a compensation to the natives Comments: BuildCo hires a registered town planner to analyze the site and draft a site analysis report (SAR), which details the location, accessibility and topography Time: 1 day of the site, as well as the proximity of the site to essential services: electricity source, Cost: NGN 200,000 water source, hospital, commercial area, airport, etc. Comments: With the Land Use Act of 1978, the government appropriated land on which local tribes lived. Since then, in Enugu, construction companies wishing to Procedure 2. Apply for a building approval at the Enugu Town develop a project must pay compensation to those natives, and hire some of them as Planning Authority masons or security guards on the site. Cost varies on a case by case basis, and highly Time: 1 day depends on the negotiation skills of the construction company. Cost: NGN 55,100 (NGN 100 filing fee + NGN 2,500 registration fee + NGN 15,000 inspection fee + NGN 5,500 building certificate of completion fee + NGN 8,500 stage Procedure 7. Receive an inspection at setting out level from the of work fee + NGN 4,000 ministry fee + NGN 9,500 fencing fee + NGN 10,000 plan- Enugu Town Planning Authority ning fee) Time: 1 day Comments: In order to obtain a building approval, BuildCo must submit a duly Cost: No cost completed application form to the Enugu Town Planning Authority, along with the Comments: Once the setting out is complete, BuildCo's architect must notify the following documents: Enugu Town Planning Authority. A team of inspectors visits the construction-site a. Proof of ownership (such as a certificate of occupancy); to ensure that the project is duly supervised and that the construction follows the b. Survey plan (attached to the certificate of occupancy); specifications mentioned in the building plan previously provided by BuildCo. Con- struction work does not stop during the inspection. If a problem is identified, the c. Four sets of drawings duly signed by a registered architect, including: inspection teams issues a stop order requesting the issue to be resolved before con- t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- struction proceeds further. age system, construction details, doors and windows schedules); t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Procedure 8. Receive an inspection at foundation level from the beams, columns, staircases, etc.); Enugu Town Planning Authority t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Time: 1 day lighting point layout, schedule of fittings and fixtures); Cost: No cost t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Comments: Once the foundation is complete, BuildCo's architect must notify the disposal layout, schedule of sanitary fittings); Enugu Town Planning Authority. A team of inspectors visits the construction-site d. Site analysis report; to ensure that the project is duly supervised and that the construction follows the e. Three-year tax clearance certificate; specifications mentioned in the building plan previously provided by BuildCo. Con- f. Local Government Area Capitation Rate. struction work does not stop during the inspection. If a problem is identified, the The documents are reviewed by officers of the Enugu Town Planning Authority. The inspection teams issues a stop order requesting the issue to be resolved before con- day after the documents have been submitted, the building company is informed struction proceeds further. about the fees to be paid. An on-site inspection will follow. Once the building ap- proval has been granted, two copies of the drawing are given back to BuildCo to be Procedure 9. Receive an inspection at first floor level from the kept on-site. BuildCo may need to present the stamped copies of its building plans Enugu Town Planning Authority when inspections occur during construction. Time: 1 day Cost: No cost Procedure 3. Receive a pre-approval inspection from the Enugu Comments: Once the construction reaches the first floor, BuildCo's architect must Town Planning Authority notify the Enugu Town Planning Authority that sends a team of inspectors to the Time: 1 day construction-site. The purpose of the inspection is to ensure that the related stage Cost: No cost has been completed successfully, that the project is duly supervised, and that the Comments: After BuildCo's application has been reviewed, the Enugu Town Plan- construction follows the specifications mentioned in the building plan previously ning Authority conducts an on-site inspection to verify that the plot reflects the provided by BuildCo. Construction work does not stop during the inspection. If a details provided in the drawings and that the land is suitable for the proposed proj- problem is identified, the inspection teams issues a stop order requesting the issue ect. The inspectors draft a report in which the plot, roads, setback details, adjoining to be resolved before construction proceeds further. land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted for approval, and forwarded to the Procedure 10. Receive an inspection at second floor level from Enugu Town Planning Authority for final review and approval. the Enugu Town Planning Authority Time: 1 day Procedure 4. Obtain a building approval from the Enugu Town Cost: No cost Planning Authority Comments: Once the construction reaches the second floor, BuildCo's architect Time: 18 days must notify the Enugu Town Planning Authority that sends a team of inspectors to Cost: No cost the construction-site. The purpose of the inspection is to ensure that the related Comments: After the inspection and the payments have been completed, BuildCo's stage has been completed successfully, that the project is duly supervised, and that application is reviewed by the health unit, works department and town planning the construction follows the specifications mentioned in the building plan previously unit of the Enugu Town Planning Authority. After review, BuildCo's application is provided by BuildCo. Construction work does not stop during the inspection. If a recommended to the Chairman of the Town Planning Authority for final approval. In problem is identified, the inspection teams issues a stop order requesting the issue Enugu, a silent-is-consent rule applies: if the building permit approval is not issued to be resolved before construction proceeds further. within 21 days, the building company can assume that approval has been granted and start construction. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 109 DEALING WITH CONSTRUCTION PERMITS Procedure 11. Request and receive a final inspection from the Enugu Town Planning Authority FEDERAL CAPITAL TERRITORY, Abuja Time: 1 day Procedures to build a warehouse Cost: No cost Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: When the construction is complete, BuildCo must apply to the Enugu Data as of: January 2010 Town Planning Authority for a certificate of completion and fitness for habitation for habitation. A final inspection follows, during which the Town Planning Authority Procedure 1. Obtain an environmental impact assessment report ensures that BuildCo's warehouse abide by the details provided in the drawings and from a registered town planner conforms to the safety/construction standards described in the law. Time: 7 days Cost: NGN 150,000 (town planner fee) Procedure 12. Obtain a certificate of completion from the Enugu Comments: BuildCo hires a registered town planner to analyze the site and draft an Town Planning Authority environmental impact assessment (EIA) report. The EIA report lists the potential im- Time: 7 days pact of the project on the environment, such as the noise, traffic and increase in hu- Cost: No cost man density issues that might arise as a result of the development. In order to draft the report, the town planner first verifies the site plan (attached to the certificate of Comments: After the final inspection, the Enugu Town Planning Authority issues occupancy) as well as the preliminary drawings prepared by BuildCo's architects and BuildCo a certificate of completion attesting that the construction has been carried engineers, before conducting an on-site inspection. If deemed necessary, he may out according to the building plans submitted, and that BuildCo can now occupy the conduct interviews with relevant stakeholders living in the area. After the inspection, building. the town planner drafts the EIA report, and gives 3 copies to Buildco, and retains one copy for himself. Procedure 13*. Obtain a permanent phone connection Time: 1 day Procedure 2. Apply for a construction permit at the Abuja Cost: NGN 6,000 (handset + connection) Development Control Department Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Time: 1 day torically in charge of providing phone landlines in Nigeria, is no longer functioning. Cost: NGN 4,500 (NGN 1,000 application form + NGN 3,500 building bylaws) Most Nigerian companies use a cell phone, with a subscription to one of the opera- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Comments: In order to obtain a construction permit, BuildCo must submit a duly connected at any time before and during the construction. completed application form to the Abuja Development Control Department, along with the following documents: Procedure 14. Apply to the Power Holding Company of Nigeria a. Proof of ownership (such as a certificate of occupancy); (PHCN) for a permanent electricity connection b. Survey plan (attached to the certificate of occupancy); Time: 1 day c. Five sets of drawings duly signed by a registered architect, including: Cost: NGN 52,500 (3 phase pre-paid meter) t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Comments: BuildCo applies for a permanent electricity connection by submitting age system, construction details, doors and windows schedules); a form and the relevant company documents to PHCN. On the application form, t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- beams, columns, staircases, etc.); paid) required. An inspection is then conducted. Payment for the meter is made at a t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  designated bank. lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 15. Receive an inspection from PHCN and pay the disposal layout, schedule of sanitary fittings); electricity fees at the bank d. Environmental impact assessment report; Time: 1 day e. Site analysis report. Cost: No cost The documents are reviewed by a government architect, structural and electrical en- Comments: The PHCN business unit sends out a team to inspect the building. In gineers sitting at the Abuja Development Control Department. An on-site inspection practice this is usually done on the same day the application is made. After the in- will follow. Once the building approval has been granted, two copies of the draw- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at ing are given back to BuildCo to be kept on-site. BuildCo may need to present the a designated bank. stamped copies of its building plans when inspections occur during construction. Procedure 16. Obtain a permanent electricity connection from Procedure 3. Receive a pre-approval inspection from the Abuja PHCN Development Control Department Time: 33 days Time: 1 day Cost: No cost Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN con- Comments: After BuildCo's application has been reviewed, the Abuja Development nects BuildCo's warehouse to electricity. Even though the actual connection can be Control Department conducts an on-site inspection to verify that the plot reflects the made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can details provided in the drawings and that the land is suitable for the proposed proj- take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- ect. The inspectors draft a report in which the plot, roads, setback details, adjoining ed consumption monthly fee to PHCN. Except for the application and the inspection, land and power and water connections are described. The report is then attached to all other electricity related processes are handled by a contractor licensed by LECAN the documents and drawings BuildCo submitted for approval, and forwarded to the (Licensed Electrical Contractors of Nigeria). Abuja Development Control Department for final review and approval. Prior to the inspection, BuildCo must in practice have set the site beacons on the plot, though it *This procedure can be completed simultaneously with previous procedures. is the legal responsibility of the Development Control department to do so. Procedure 4. Pay the construction permit fees at a designated bank Time: 1 day Cost: NGN 975,450 (NGN 250 per cubic meter) Comments: BuildCo is given a payment order to be submitted to and paid at a designated bank. After payment, BuildCo is given a teller – or bank receipt – to be submitted back to the Abuja Development Control Department. 110 DOING BUSINESS IN NIGERIA 2010 Procedure 5. Obtain a construction permit from the Abuja Procedure 11*. Obtain a permanent phone connection Development Control Department Time: 1 day Time: 30 days Cost: NGN 6,000 (handset + connection) Cost: No cost Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Comments: After the inspection and the payments have been completed, the torically in charge of providing phone landlines in Nigeria, is no longer functioning. documents submitted for approval – along with the inspection report, the proof of Most Nigerian companies use a cell phone, with a subscription to one of the opera- payment and the 3 remaining copies of the plan – are submitted to the Abuja De- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be velopment Control department for final approval. If granted, the department issues connected at any time before and during the construction. BuildCo a building plan approval authorizing the construction of the warehouse to proceed. The department plans to require the submission of soft copies of the build- Procedure 12. Apply to the Power Holding Company of Nigeria ing plans (in pdf) in the future. The architects, however, fret that this would increase (PHCN) for a permanent electricity connection the risk of seeing their plans stolen. Time: 1 day Cost: NGN 62,500 (NGN 52,500 per 3 phase meter + NGN 10,000 processing fee) Procedure 6*. Pay a compensation to the natives Comments: BuildCo applies for a permanent electricity connection by submitting Time: 1 day a form and the relevant company documents to PHCN. On the application form, Cost: NGN 200,000 BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- Comments: With the Land Use Act of 1978, the government appropriated land on paid) required. An inspection is then conducted. Payment for the meter is made at a which local tribes lived. Since then, in Abuja, construction companies wishing to designated bank. develop a project must pay compensation to those natives, with the assistance of the Development Control department. All parties sign a contract, maintain records of Procedure 13. Receive an inspection from PHCN and pay the the transaction, take pictures of the beneficiaries, to avoid further disputes. Cost var- electricity fees at the bank ies on a case by case basis, and depends on the number of "economic tree" (mango Time: 1 day trees, for example) located on the property. Cost: No cost Procedure 7. Receive an inspection at setting out level from the Comments: The PHCN business unit sends out a team to inspect the building. In Abuja Development Control Department practice this is usually done on the same day the application is made. After the in- spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at Time: 2 days a designated bank. Cost: NGN 20,000 Comments: Before starting the construction, BuildCo must confirm with the Devel- Procedure 14. Obtain a permanent electricity connection from opment Control Department that the construction abides by approved plans and PHCN construction standards. For that purpose, the Development Control Department Time: 34 days conducts an on-site inspection at setting out stage. Even though it is by law the responsibility of the Development Control Department to put the beacons on the Cost: No cost construction-site, it is BuildCo which, in practice, takes care of it. Comments: Once the inspection and the payment have been completed, PHCN con- nects BuildCo's warehouse to electricity. Even though the actual connection can be Procedure 8. Receive an inspection during construction from the made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can Abuja Development Control Department take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- ed consumption monthly fee to PHCN. Except for the application and the inspection, Time: 1 day all other electricity related processes are handled by a contractor licensed by LECAN Cost: NGN 20,000 (Licensed Electrical Contractors of Nigeria). Comments: Although the National Building code lists a precise inspection schedule, inspections in Abuja do not follow any particular order. During construction, a team Procedure 15. Apply for water connection to the Federal Capital of inspectors from the Development Control Department randomly visits the site to Territory (FCT) Water Board ensure that the construction company has a building permit, that the project is duly Time: 1 day supervised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop dur- Cost: NGN 10,000 ing the inspection. In practice, during construction, 2 inspections occur. Comments: The FCT Water Board covers most of the city and only warehouses located in remote parts of Abuja would require a borehole. Connection costs only Procedure 9. Receive an inspection during construction from the NGN 10,000 but the developer must provide all necessary plumbing material. The Abuja Development Control Department developer is merely required to visit the water corporation office, fill the form and pay the fees. Time: 1 day Cost: NGN 20,000 Procedure 16. Receive an inspection from the FCT Water Board Comments: Same as above. Time: 1 day Cost: No cost Procedure 10. Obtain a certificate of completion from the Abuja Development Control department Comments: After receiving BuildCo's application, the FCT Water Board conducts an on-site inspection. Time: 18 days Cost: NGN 500 Procedure 17*. Obtain a permanent water connection from the Comments: By law, BuildCo must apply to the Abuja Development Control Depart- FCT Water Board ment for a certificate of completion, which would be issued after a final inspection of Time: 5 days the site. In practice, however, this procedure is neither adhered to nor enforced. Cost: No cost Comments: Connection to water supply is completed within 5 days. *This procedure can be completed simultaneously with previous procedures. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 111 DEALING WITH CONSTRUCTION PERMITS Procedure 5. Receive a pre-approval inspection from the Town GOMBE, Gombe Planning Department of the Ministry of Water Resources, Procedures to build a warehouse Environment and Town Planning Warehouse value: US$ 443,000 = NGN 59,003,170 Time: 1 day Data as of: January 2010 Cost: No cost Comments: After BuildCo's application has been reviewed, inspectors from the Town Procedure 1. Obtain an environmental impact assessment report Planning Department of the Ministry of Water Resources, Environment and Town from the Gombe State Environmental Protection Authority Planning – typically a town planner and an architect – conduct an on-site inspec- Time: 10 days tion to verify that the plot reflects the details provided in the drawings and that the Cost: NGN 50,000 land is suitable for the proposed project. The inspectors draft a report in which the Comments: BuildCo applies to the Gombe State Environmental Protection Authority plot, roads, setback details, adjoining land and power and water connections are de- for an environmental impact assessment (EIA) report. The EIA report lists the poten- scribed. The report is then attached to the documents and drawings BuildCo submit- tial impact of the project on the environment, such as the noise, traffic and increase ted for approval, and forwarded to the Town Planning Department of the Ministry of in human density issues that might arise as a result of the development. In order to Water Resources, Environment and Town Planning for final review and approval. draft the report, an environmental consultant from the Authority first verifies the survey plan (attached to the certificate of occupancy) as well as the preliminary Procedure 6. Obtain a building plan approval from the Town drawings prepared by BuildCo's architects and engineers, before conducting an on- Planning Department of the Ministry of Water Resources, site inspection. If deemed necessary, he may conduct interviews with relevant stake- Environment and Town Planning holders living in the area. After the inspection, the consultant drafts the EIA report, Time: 30 days and gives 3 copies to BuildCo. Cost: NGN 149,604 (NGN 115 per square meter) Procedure 2. Obtain a site analysis report from a consultant at Comments: After the inspection and the payments have been completed, the docu- ments submitted for approval – along with the inspection report – are given to the the Abubakar Tafawa Balewa University Director of Town Planning for final approval. If granted, BuildCo is issued a building Time: 5 days plan approval. Payment is made in cash at the Town Planning Department. On the Cost: NGN 50,000 approval is mentioned that the BuildCo must remain open to inspections by the staff Comments: BuildCo hires a consultant from the Abubakar Tafawa Balewa University of the Gombe State Urban Planning and Development Board, but in practice, these to analyze the site and draft a site analysis report (SAR), which details the location, inspections almost never happen. accessibility and topography of the site, as well as the proximity of the site to essen- tial services: electricity source, water source, hospital, commercial area, airport, etc. Procedure 7. Dig a borehole to obtain water The consultant typically carries out an inspection of the site, drafts the report, and Time: 7 days gives three copies to BuildCo. Cost: NGN 500,000 Comments: The public water supply system is very unreliable. It is common practice Procedure 3. Obtain a fire safety report from the Fire Service for construction companies to hire the services of a private borehole company to drill Department of the Ministry of Housing and Transport and install a borehole of commercial capacity. Time: 7 days Cost: No cost Procedure 8*. Obtain a permanent phone connection Comments: BuildCo submits the preliminary drawings to the Fire Service Depart- Time: 1 day ment for examination. Based on its assessment of the drawings, the Fire Service De- Cost: NGN 6,000 (handset + connection) partments drafts a report, in which it details the possible fire hazards caused by the Comments: Nigerian Telecommunications Limited (NITEL), the public company his- construction, as well as the necessary fire precautions and escape provisions to be torically in charge of providing phone landlines in Nigeria, is no longer functioning. taken by BuildCo. Three copies of the report are given to BuildCo. Previously, this pro- Most Nigerian companies use a cell phone, with a subscription to one of the opera- cedure was only required of commercial and industrial buildings. However, the state tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be of Gombe is pushing for the implementation of the National Fire Code 2008 which connected at any time before and during the construction. requires fire inspections for all types of buildings. Procedure 9. Apply to the Power Holding Company of Nigeria Procedure 4. Apply for a building plan approval at the Town (PHCN) for a permanent electricity connection Planning Department of the Ministry of Water Resources, Environment and Town Planning Time: 1 day Time: 1 day Cost: NGN 52,500 (3 phase pre-paid meter) Cost: No cost Comments: BuildCo applies to PHCN by submitting a form and the relevant company documents. On the application form, BuildCo must indicate its consumption capacity Comments: In order to obtain a building plan approval, BuildCo must submit a duly as well as the meter (3 phase pre-paid) required. An inspection is then conducted. completed application form to the Town Planning Department of the Ministry of Water Resources, Environment and Town Planning, along with the following docu- Procedure 10. Receive an inspection from PHCN and pay the ments: electricity fees at the bank a. Proof of ownership (such as a certificate of occupancy); Time: 1 day b. Survey plan (attached to the certificate of occupancy); Cost: No cost c. Six sets of drawings duly signed by a registered architect, including: Comments: The PHCN business unit sends out a team to inspect the building. t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- age system, construction details, doors and windows schedules); Procedure 11. Obtain a permanent electricity connection from t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO PHCN beams, columns, staircases, etc.); Time: 34 days t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  lighting point layout, schedule of fittings and fixtures); Cost: No cost t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Comments: Once the inspection and the payment have been completed, PHCN disposal layout, schedule of sanitary fittings); connects BuildCo's warehouse to electricity. Even though the actual connection can be made in 5 days, due to supply problems of 3 phase pre-paid meters, it can take d. Environmental impact assessment report; longer for the actual meter to arrive. In the meantime, BuildCo pays an estimated e. Site analysis report. consumption monthly fee to PHCN. Except for the application and the inspection, The documents are reviewed by the Town Planning Department. An on-site inspec- all other electricity related processes are handled by a contractor licensed by LECAN tion will follow. (Licensed Electrical Contractors of Nigeria). *This procedure can be completed simultaneously with previous procedures. 112 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Procedure 4. Receive a pre-approval inspection from the Owerri IMO, Owerri Capital Development Authority Procedures to build a warehouse Time: 1 day Warehouse value: US$ 443,000 = NGN 59,003,170 Cost: No cost Data as of: January 2010 Comments: After BuildCo's application has been reviewed, the Owerri Capital De- velopment Authority (OCDA) conducts an on-site inspection to verify that the plot Procedure 1. Obtain an environmental impact assessment report reflects the details provided in the drawings and that the land is suitable for the pro- from a registered town planner posed project. The inspectors draft a report in which the plot, roads, setback details, Time: 20 days adjoining land and power and water connections are described. The report is then Cost: NGN 175,000 attached to the documents and drawings BuildCo submitted for approval, and for- warded to the Owerri Capital Development Authority for final review and approval. Comments: BuildCo hires a registered town planner to analyze the site and draft an environmental impact assessment (EIA) report. The EIA report lists the potential im- pact of the project on the environment, such as the noise, traffic and increase in hu- Procedure 5. Obtain a building plan approval from the Owerri man density issues that might arise as a result of the development. In order to draft Capital Development Authority the report, the town planner first verifies the site plan (attached to the certificate of Time: 14 days occupancy) as well as the preliminary drawings prepared by BuildCo's architects and Cost: No cost engineers, before conducting an on-site inspection. If deemed necessary, he may Comments: After the inspection and the payments have been completed, the gen- conduct interviews with relevant stakeholders living in the area. After the inspection, eral manager at OCDA gives the final approval and grants BuildCo a development the town planner drafts the EIA report, and gives three copies to Buildco, and retains permit. The building plan approval number is written on the permit, which the com- one copy for himself. This procedure is usually done by a registered town planner but pany can display outside the construction-site. The current Director of Owerri Capital can also be done by a registered architect or a real estate surveyor. The fees men- Development Authority enforces a statutory limit of 2 weeks for the processing of tioned are the fees paid in practice, but federal government guidelines limit the fees building permits applications. to be paid for this procedure to 1.5 to 2% of the value of the project. Procedure 6. Dig a borehole to obtain water Procedure 2*. Obtain a fencing permit from the Owerri Capital Development Authority Time: 7 days Time: 7 days Cost: NGN 500,000 Cost: NGN 13,000 (NGN 6,500 per plot) Comments: The public water supply system is very unreliable. It is common practice for construction companies to hire the services of a private borehole company to drill Comments: In order to obtain the fencing permit BuildCo must submit the survey and install a borehole of commercial capacity. plan, 3 years tax clearance, proof of ownership and fencing drawings to the Owerri Capital Development Authority. The purpose of this permit is to ensure that the pro- Procedure 7*. Pay a compensation to the natives posed development project will occur within the limits of the plots. Time: 1 day Procedure 3. Apply for a development permit at the Owerri Cost: NGN 200,000 Capital Development Authority Comments: With the Land Use Act of 1978, the government appropriated land on Time: 1 day which local tribes lived. Since then, in Owerri, construction companies wishing to develop a project must pay compensation to those natives, and hire some of them as Cost: NGN 66,018 (NGN 6,250 registration + NGN 39,018 inspection [NGN 10 per m3] masons or security guards on the site. Cost varies on a case by case basis, and highly + NGN 7,000 survey service fee [NGN 3,500 per plot] + NGN 5,000 charting fee [NGN depends on the negotiation skills of the construction company. 2,500 per plot] + NGN 6,250 building plan preparation fee + NGN 2,500 certificate of fitness for habitation fee) Procedure 8. Receive an inspection at setting out level from the Comments: In order to obtain a development permit, BuildCo must submit a duly Owerri Capital Development Authority completed application form to the Owerri Capital Development Authority (OCDA), along with the following documents: Time: 1 day a. Proof of ownership (such as a certificate of occupancy); Cost: No cost b. Survey plan (attached to the certificate of occupancy); Comments: Once the setting out is complete, BuildCo's architect must notify the Owerri Capital Development Authority. A team of inspectors (a building inspector, a c. Five sets of drawings duly signed by a registered architect, including: structural engineer, an architect and a builder) visits the construction-site to ensure t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- that the project is duly supervised and that the construction follows the specifica- age system, construction details, doors and windows schedules); tions mentioned in the building plan previously provided by BuildCo. Construction t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO work does not stop during the inspection. If a problem is identified, the inspection beams, columns, staircases, etc.); teams issues a stop order requesting the issue to be resolved before construction t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  proceeds further. If the issue remains unresolved, the building may be marked for lighting point layout, schedule of fittings and fixtures); demolition. t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); Procedure 9. Receive an inspection at foundation level from the Owerri Capital Development Authority d. Environmental impact assessment report; Time: 1 day e. Three-year tax clearance certificate; Cost: No cost f. Receipt of payment of fees. Comments: Once the foundation is complete, BuildCo's architect must notify the The documents are reviewed by the Owerri Capital Development Authority, which Owerri Capital Development Authority. A team of inspectors (a building inspector, a then informs BuildCo of the fees to be paid. The fees can be paid in three ways: cash structural engineer, an architect and a builder) visits the construction-site to ensure at the account section of OCDA, within the same building; by check at OCDA; or in a that the project is duly supervised and that the construction follows the specifica- bank account, against a teller to be brought back to OCDA. An on-site inspection will tions mentioned in the building plan previously provided by BuildCo. Construction follow. Once the building approval has been granted, two copies of the drawings are work does not stop during the inspection. If a problem is identified, the inspection returned to BuildCo to be kept on-site. BuildCo may need to present the stamped teams issues a stop order requesting the issue to be resolved before construction copies of its building plans when inspections occur during construction. proceeds further. If the issue remains unresolved, the building may be marked for demolition. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 113 Procedure 10. Receive an inspection at first floor level from the Procedure 16. Apply to the Power Holding Company of Nigeria Owerri Capital Development Authority (PHCN) for a permanent electricity connection Time: 1 day Time: 1 day Cost: No cost Cost: NGN 52,500 (3 phase pre-paid meter) Comments: Once the first floor is complete, BuildCo's architect must notify the Comments: BuildCo applies for a permanent electricity connection by submitting Owerri Capital Development Authority. A team of inspectors (a building inspector, a a form and the relevant company documents to PHCN. On the application form, structural engineer, an architect and a builder) visits the construction-site to ensure BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- that the project is duly supervised and that the construction follows the specifica- paid) required. An inspection is then conducted. Payment for the meter is made at a tions mentioned in the building plan previously provided by BuildCo. Construction designated bank. work does not stop during the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before construction Procedure 17. Receive an inspection from PHCN and pay the proceeds further. If the issue remains unresolved, the building may be marked for electricity fees at the bank demolition. Time: 1 day Procedure 11. Receive an inspection at second floor level from Cost: No cost the Owerri Capital Development Authority Comments: The PHCN business unit sends out a team to inspect the building. In practice this is usually done on the same day the application is made. After the in- Time: 1 day spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at a Cost: No cost designated bank. BuildCo must then submit the receipt of the payment to the local Comments: Once the second floor is complete, BuildCo's architect must notify the PHCN for the electricity connection to proceed. Owerri Capital Development Authority. A team of inspectors (a building inspector, a structural engineer, an architect and a builder) visits the construction-site to ensure Procedure 18. Obtain a permanent electricity connection from that the project is duly supervised and that the construction follows the specifica- PHCN tions mentioned in the building plan previously provided by BuildCo. Construction Time: 26 days work does not stop during the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before construction Cost: No cost proceeds further. If the issue remains unresolved, the building may be marked for Comments: Once the inspection and the payment have been completed, PHCN demolition. connects BuildCo's warehouse to electricity. Even though the actual connection can be made in 7 days, due to supply problems of 3 phase pre-paid meters, it can take Procedure 12. Receive an inspection at roof level from the Owerri longer for the actual meter to arrive. In the meantime, BuildCo pays an estimated Capital Development Authority consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Time: 1 day (Licensed Electrical Contractors of Nigeria). Cost: No cost Comments: Once the roof is complete, BuildCo's architect must notify the Owerri *This procedure can be completed simultaneously with previous procedures. Capital Development Authority. A team of inspectors (a building inspector, a struc- tural engineer, an architect and a builder) visits the construction-site to ensure that the project is duly supervised and that the construction follows the specifications DEALING WITH CONSTRUCTION PERMITS mentioned in the building plan previously provided by BuildCo. Construction work JIGAWA, Dutse does not stop during the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before construction proceeds Procedures to build a warehouse further. If the issue remains unresolved, the building may be marked for demolition. Warehouse value: US$ 443,000 = NGN 59,003,170 Data as of: January 2010 Procedure 13. Receive a final inspection from the Owerri Capital Development Authority Procedure 1. Apply for a building plan approval at the Dutse Capital Development Authority Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: BuildCo notifies the Owerri Capital Development Authority that the construction is completed. A final inspection ensues, during which the Capital Devel- Comments: In order to obtain a building plan approval, BuildCo must submit a duly opment Authority ensures that BuildCo's warehouse abides by the details provided completed application form to the Dutse Capital Development Authority along with in the drawings and by the safety/construction standards described in the law. the following documents: a. Proof of ownership (such as a certificate of occupancy); Procedure 14. Obtain a certificate of fitness for habitation from b. Survey plan (attached to the certificate of occupancy); the Owerri Capital Development Authority c. Drawings duly signed by a registered architect, including: Time: 7 days t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Cost: No cost age system, construction details, doors and windows schedules); Comments: After the final inspection, the Owerri Capital Development Authority is- t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO sues BuildCo a certificate of fitness for habitation attesting that the construction has beams, columns, staircases, etc.); been carried out according to the building plans submitted, and that BuildCo can t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  now occupy the building. lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 15*. Obtain a permanent phone connection disposal layout, waste disposal layout, schedule of sanitary fittings). Time: 1 day The documents are reviewed by the a government architect, structural engineer Cost: NGN 6,000 (handset + connection) and electrical engineer. Jigawa state is a new state, semi-rural, created out of Kano Comments: Nigerian Telecommunications Limited (NITEL), the public company his- state. As such, while the construction permit process follows that of Kano's, Jigawa torically in charge of providing phone landlines in Nigeria, is no longer functioning. has been trying to encourage people to build by simplifying the construction permit Most Nigerian companies use a cell phone, with a subscription to one of the opera- procedures. As a result, Jigawa imposes few administrative requirements on devel- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be opers. The environmental assessment report, for example, is required only of large connected at any time before and during the construction. constructions with a large impact on the environment, such as a dam. Similarly, even though by law the Dutse Capital Development Authority is supposed to conduct a pre-approval inspection, this inspection rarely occurs in practice. 114 DOING BUSINESS IN NIGERIA 2010 Procedure 2. Obtain a building plan approval at the Dutse Capital Procedure 9. Receive an inspection from PHCN and pay the Development Authority electricity fees at the bank Time: 9 days Time: 1 day Cost: NGN 50,000 Cost: No cost Comments: After the payments have been completed, the documents submitted Comments: The PHCN business unit sends out a team to inspect the building. In for approval – along with the inspection report – are reviewed by the executive practice this is usually done on the same day the application is made. After the in- secretary of the Dutse Capital Development Authority for final approval. If granted, spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at a BuildCo is issued a development permit. The document requires BuildCo's construc- designated bank. BuildCo must then submit the receipt of the payment to the local tion to be duly supervised by the registered engineer/architect hired by BuildCo, PHCN for the electricity connection to proceed. which is why the state, and the Council of Registered Engineers (COREN) has recently improved its selection and testing process of registered engineers. Procedure 10. Obtain a permanent electricity connection from PHCN Procedure 3. Dig a borehole to obtain water Time: 24 days Time: 7 days Cost: NGN 5,000 (contractor's fees) Cost: NGN 500,000 Comments: Once the inspection and the payment have been completed, PHCN con- Comments: The public water supply system being very unreliable, the common nects BuildCo's warehouse to electricity. Even though the actual connection can be practice is for construction companies to hire the services of a private borehole com- made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can pany to drill and install a borehole of commercial capacity. Part of Jigawa sits on a take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- large aquifer zone, but drilling a borehole in one of Dutse rocky areas would be more ed consumption monthly fee to PHCN. Except for the application and the inspection, expensive. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Procedure 4. Receive an inspection during construction from the Dutse Capital Development Authority *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: No cost DEALING WITH CONSTRUCTION PERMITS Comments: Although the National Building code lists a precise inspection schedule, KADUNA, Kaduna inspections in Dutse do not follow any particular order. During construction, a team of inspectors from the Dutse Capital Development Authority randomly visits the site Procedures to build a warehouse to ensure that the construction company has a building permit, that the project is Warehouse value: US$ 443,000 = NGN 59,003,170 duly supervised, and that the construction follows the specifications mentioned in Data as of: January 2010 the building plan previously provided by BuildCo. The number of inspections con- ducted depends on the location of the project and the "visibility" (i.e. interest) of the Procedure 1. Obtain an environmental impact assessment report project. There is limited inspection capacity in Jigawa, so the state relies a lot on "self and a site analysis report from a town planner of the Kaduna checking" by the registered architect and engineer in charge of supervision the proj- Environmental Protection Authority (KEPA) ect. Construction work does not stop during the inspection. In practice, two inspec- Time: 16 days tions are conducted during construction. Cost: NGN 90,000 (NGN 25,000 EIA official fee + NGN 35,000 EIA consultant fee + Procedure 5. Receive an inspection during construction from the NGN 30,000 site analysis report fee) Dutse Capital Development Authority Comments: BuildCo hires a registered town planner to analyze the site and draft an environmental impact assessment (EIA) report. The EIA report lists the potential im- Time: 1 day pact of the project on the environment, such as the noise, traffic and increase in hu- Cost: No cost man density issues that might arise as a result of the development. In order to draft Comments: Same as above. the report, the town planner first verifies the site plan (attached to the certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's architects Procedure 6. Submit a report of completion to the Dutse Capital and engineers, before conducting an on-site inspection. If deemed necessary, he Development Authority may conduct interviews with relevant stakeholders living in the area. The same town Time: 1 day planner also prepares a site analysis report (SAR), which details the location, acces- sibility and topography of the site, as well as the proximity of the site to essential Cost: No cost services: electricity source, water source, hospital, commercial area, airport, etc. After Comments: Once the construction is completed, BuildCo's architect submits the the inspection, the town planner drafts the EIA report and SAR, and gives 2 copies final report to the officer of the development authority in charge of the project. No of each report to Buildco, and retains one copy for himself. By law BuildCo should be document or final certificate of completion is issued. able to engage any registered town planner prepare the report, which is then sub- mitted to the Kaduna Environmental Protection Authority. However, the usual prac- Procedure 7*. Obtain a permanent phone connection tice is for BuildCo to pay the town planners in KEPA to prepare the EIA report. Time: 1 day Cost: NGN 6,000 (handset + connection) Procedure 2. Apply for a planning permission at the Kaduna State Urban Planning and Development Authority Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. Time: 1 day Most Nigerian companies use a cell phone, with a subscription to one of the opera- Cost: NGN 312,000 (NGN 260,000 planning fee [NGN 100,000 per floor; NGN 20,000 tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be per room] + NGN 50,000 fencing fee + NGN 2,000 processing fee) connected at any time before and during the construction. Comments: In order to obtain a planning permission, BuildCo must submit a duly completed application form to the Kaduna State Urban Planning and Development Procedure 8. Apply to the Power Holding Company of Nigeria Authority (KSUPDA), along with the following documents: (PHCN) for a permanent electricity connection a. Proof of ownership (such as a certificate of occupancy); Time: 1 day b. Survey plan (attached to the certificate of occupancy); Cost: NGN 52,500 (3 phase pre-paid meter) c. Three sets of drawings duly signed by a registered architect, including: Comments: BuildCo applies to PHCN by submitting a form and the relevant com- t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- pany documents. On the application form, BuildCo must indicate its consumption age system, construction details, doors and windows schedules); capacity as well as the meter (3 phase pre-paid) required. An inspection is then t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO conducted. beams, columns, staircases, etc.); t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  lighting point layout, schedule of fittings and fixtures); LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 115 t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 9. Receive an inspection during construction from the disposal layout, schedule of sanitary fittings); Architects Registration Council (ARCON) d. Environmental impact assessment report; Time: 1 day e. Site analysis report; Cost: No cost f. Three-year tax clearance certificate; Comments: During the construction, the Architects Registration Council (ARCON) g. Certificate of structural stability duly signed by an engineer. conducts an inspection to ensure that the project is duly supervised by professionals The documents are reviewed by architectural, engineering and planning depart- (architects and engineers) registered with ARCON. ments of the KSUPDA. An on-site inspection will follow. Once the building approval has been granted, two copies of the drawing are given back to BuildCo to be kept Procedure 10. Receive an inspection from the Fire Service on-site. BuildCo may need to present the stamped copies of its building plans when Department inspections occur during construction. Time: 1 day Procedure 3. Receive a pre-approval inspection from the Kaduna Cost: No cost State Urban Planning and Development Authority Comments: By Law, BuildCo is required to go to the fire service office to ask for a fire Time: 1 day inspection. A fire team accompanies BuildCo back to the site to inspect it, in order to ensure that the construction has proper fire exits, sprinkler, fire alarms, etc. Cost: No cost Comments: After BuildCo's application has been reviewed, the Kaduna State Plan- Procedure 11. Pay the fire report fees and obtain the fire report ning and Development Authority conducts an on-site inspection to verify that the from the Fire Service Department plot reflects the details provided in the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback Time: 7 days details, adjoining land and power and water connections are described. The report is Cost: NGN 16,000 (flat fee) then attached to the documents and drawings BuildCo submitted for approval, and Comments: After the fire inspection, BuildCo pays the fire deparment and obtains forwarded to the Kaduna State Planning and Development Authority for final review its fire report. In recent years, the fire service has advertised the importance of this and approval. procedure and encouraged compliance. Procedure 4. Obtain a planning permission from the Kaduna Procedure 12*. Obtain a permanent phone connection State Urban Planning and Development Authority Time: 1 day Time: 60 days Cost: NGN 25,000 (wireless land line) Cost: No cost Comments: Nigerian Telecommunications Limited (NITEL), the public company Comments: After the inspection and the payments have been completed, the Kadu- historically in charge of providing phone landlines in Nigeria, is no longer function- na Urban Planning Development Authority examines the documents submitted and ing. Most Nigerian companies use a cell phone, with a subscription to one of the issues BuildCo a planning permission. This procedure can take from 2 to 6 months, operators available in the country (MTN, ZAIN, GLO or ETISALAT). In Kaduna, Nigerian depending on the amount of follow-up conducted by BuildCo. companies also have the option of using a fixed wireless phone (MULTILINKS), at a higher cost (NGN 25,000). The phone line can be connected at any time before and Procedure 5. Dig a borehole to obtain water during the construction. Time: 7 days Procedure 13. Apply to the Power Holding Company of Nigeria Cost: NGN 500,000 (PHCN) for a permanent electricity connection Comments: The public water supply system is very unreliable. It is common practice for construction companies to hire the services of a private borehole company to drill Time: 1 day and install a borehole of commercial capacity. Cost: NGN 52,500 (3 phase pre-paid meter) Comments: BuildCo applies for a permanent electricity connection by submitting Procedure 6. Receive an inspection during construction from the a form and the relevant company documents to PHCN. On the application form, Kaduna State Urban Planning and Development Authority BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- Time: 1 day paid) required. An inspection is then conducted. Payment for the meter is made in cash at the PHCN office. Cost: No cost Comments: Although the National Building code lists a precise inspection schedule, Procedure 14. Receive an inspection from PHCN and pay the inspections in Kaduna do not follow any particular order. During construction, a electricity fees at the bank team of inspectors from the Kaduna State Urban Planning and Development Author- ity (KASUPDA) – usually composed of a town planner, an architect and an engineer Time: 1 day – randomly visits the site to ensure that the construction company has a building Cost: No cost permit, that the project is duly supervised, and that the construction follows the Comments: The PHCN business unit sends out a team to inspect the building. In specifications mentioned in the building plan previously provided by BuildCo. Con- practice this is usually done on the same day the application is made. struction work does not stop during the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before con- Procedure 15. Obtain a permanent electricity connection from struction proceeds further. In practice, during construction, 3 inspections occur. PHCN Time: 26 days Procedure 7. Receive an inspection during construction from the Kaduna State Urban Planning and Development Authority Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN con- Time: 1 day nects BuildCo's warehouse to electricity. Even though the actual connection can be Cost: No cost made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can Comments: Same as above. take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- ed consumption monthly fee to PHCN. Except for the application and the inspection, Procedure 8. Receive an inspection during construction from the all other electricity related processes are handled by a contractor licensed by LECAN Kaduna State Urban Planning and Development Authority (Licensed Electrical Contractors of Nigeria). Time: 1 day Cost: No cost *This procedure can be completed simultaneously with previous procedures. Comments: Same as above. 116 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Procedure 5. Receive an inspection during construction from the KANO, Kano Kano Urban Planning and Development Authority Procedures to build a warehouse Time: 1 day Warehouse value: US$ 443,000 = NGN 59,003,170 Cost: No cost Data as of: January 2010 Comments: Although the National Building code lists a precise inspection schedule, inspections in Kano do not follow any particular order. The Kano Urban Planning and Procedure 1. Apply for a building plan approval at the Kano development Authority does not have enough staff to do all the inspections required Urban Planning and Development Authority by the building code. During construction, a team of inspectors from the Kano Urban Time: 1 day Planning and Development Authority randomly visits the site to ensure that the Cost: No cost construction company has a building permit, that the project is duly supervised, and that the construction follows the specifications mentioned in the building plan pre- Comments: In order to obtain a building plan approval, BuildCo must submit a duly viously provided by BuildCo. Construction work does not stop during the inspection. completed application form to the Kano Urban Planning and Development Author- In practice, 2 inspections occur during construction. ity, along with the following documents: a. Proof of ownership (such as a certificate of occupancy); Procedure 6. Receive an inspection during construction from the b. Survey plan (attached to the certificate of occupancy); Kano Urban Planning and Development Authority c. Drawings duly signed by a registered architect, including: Time: 1 day t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Cost: No cost age system, construction details, doors and windows schedules); Comments: Same as above. t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Procedure 7. Obtain a certificate of occupation from the Kano t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Urban Planning and Development Authority lighting point layout, schedule of fittings and fixtures); Time: 2 days t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Cost: No cost disposal layout, schedule of sanitary fittings); Comments: BuildCo's architect sends a letter to the Kano Urban Planning and De- d. environmental impact assessment report. velopment Authority informing it that the construction is completed. The Authority The documents are reviewed by the Kano Urban Planning and Development Author- subsequently issues BuildCo a certificate of occupation. ity. An assessment of the fees is given to BuildCo, to be paid at a designated bank. An on-site inspection will follow. Procedure 8*. Obtain a permanent phone connection Procedure 2. Pay the building plan approval fees at a designated Time: 1 day bank Cost: NGN 6,000 (handset + connection) Time: 1 day Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. Cost: NGN 48,784 (NGN 50 per square meter for the first floor + NGN 25 per square Most Nigerian companies use a cell phone, with a subscription to one of the opera- meter for the second floor) tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Comments: BuildCo is given a payment order to be submitted to and paid at a des- connected at any time before and during the construction. ignated bank. After payment, BuildCo is given a teller, or a bank receipt, to be sub- mitted back to the Kano Urban and Planning Development Authority. The authority Procedure 9. Apply to the Power Holding Company of Nigeria opens a file for BuildCo, and the documents are submitted to the deputy director, (PHCN) for a permanent electricity connection then forwarded to the inspection officers, who conduct an inspection on-site. Time: 1 day Procedure 3. Receive a pre-approval inspection from the Kano Cost: NGN 52,500 (3 phase pre-paid meter) Urban Planning and Development Authority Comments: BuildCo applies to PHCN by submitting a form and the relevant com- Time: 1 day pany documents. On the application form, BuildCo must indicate its consumption capacity as well as the meter (3 phase pre-paid) required. An inspection is then con- Cost: No cost ducted. In Kano, PHCN deals with applicants only through PHCN registered contrac- Comments: After BuildCo's application has been reviewed, the Kano Urban Plan- tors, which adds to the cost of the procedure. ning and Development Authority conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for Procedure 10. Receive an inspection from PHCN and pay the the proposed project. The inspectors draft a report in which the plot, roads, setback electricity fees at the bank details, adjoining land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted for approval, and Time: 1 day forwarded to the Kano Urban Planning and Development Authority for final review Cost: No cost and approval. Comments: The PHCN business unit sends out a team to inspect the building. In practice this is usually done on the same day the application is made. Procedure 4. Obtain a building plan approval from the Kano Urban Planning and Development Authority Procedure 11. Obtain a permanent electricity connection from Time: 14 days PHCN Cost: No cost Time: 19 days Comments: After the inspection and the payments have been completed, the docu- Cost: NGN 15,000 (contractor fees) ments submitted for approval – along with the inspection report and the 3 remain- Comments: Once the inspection and the payment have been completed, PHCN ing copies of the plan – are given to the Kano Urban Planning and Development connects BuildCo's warehouse to electricity. Even though the actual connection can Authority (KUPDA) for final approval. The documents and plans are scrutinized and be made in 7 days, due to supply problems of 3 phase pre-paid meters, it can take countersigned by a government architect, structural engineer and electrical engi- longer for the actual meter to arrive. In the meantime, BuildCo pays an estimated neer, before being submitted to the director. The director attaches a letter to the file consumption monthly fee to PHCN. Except for the application and the inspection, before sending it to the managing director, who endorses the application, while the all other electricity related processes are handled by a contractor licensed by LECAN director signs the drawings and issue the approval letter. If granted, KUPDA issues (Licensed Electrical Contractors of Nigeria). BuildCo a building plan approval authorizing the construction of the warehouse to proceed, as well as a plaque showing the file number and expiration date of the ap- proval (3 years). A statutory limit reduced the time taken to complete this procedure to 14 days (10 working days). LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 117 Procedure 12. Apply for water connection at the Kano State Procedure 3. Receive a pre-approval inspection from the Katsina Water Board and pay the fees Urban Planning Development Authority Time: 1 day Time: 1 day Cost: NGN 24,000 Cost: No cost Comments: In order to obtain a water connection, BuildCo needs to submit a simple Comments: After BuildCo's application has been reviewed, the Katsina Urban Plan- application to the Kano State Water Board, which has offices throughout the city. ning Development Authority conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the Procedure 13. Receive inspection by the Kano State Water Board proposed project. The inspectors draft a report in which the plot, roads, setback Time: 1 day details, adjoining land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted for approval, and Cost: No cost forwarded to the Katsina Urban Planning Development Authority for final review Comments: After the application has been submitted, a team of inspectors from the and approval. water board office visits the site to ascertain what needs to be done. Procedure 4. Obtain a building permit from the Katsina Urban Procedure 14*. Obtain water connection Planning Development Authority Time: 30 days Time: 14 days Cost: No cost Cost: No cost Comments: Usually, the building is connected to water supply within a month. Comments: After the inspection and the payments have been completed, the Kat- sina Urban Planning Development Authority (KUPDA) examines the documents sub- *This procedure can be completed simultaneously with previous procedures. mitted and issues BuildCo a building permit. If KUPDA officers are not overworked, the process can take place in one week. If the office is overworked, it can take up to three or four weeks. DEALING WITH CONSTRUCTION PERMITS KATSINA, Katsina Procedure 5. Dig a borehole to obtain water Procedures to build a warehouse Time: 7 days Warehouse value: US$ 443,000 = NGN 59,003,170 Cost: NGN 500,000 Data as of: January 2010 Comments: In Katsina, the public water system supplies works only in some parts of the city. Where the water supply system is not in place, people drill boreholes. In Procedure 1. Obtain an environmental impact assessment report Katsina city and the surrounding areas, clean and pure drinking water can be found from a registered town planner 30 meters deep (first water table). There is a second water table about 100 meters Time: 5 days deep. However, the soil between the two tables is very hard, and reaching the sec- Cost: NGN 65,000 (town planner fee) ond table requires special drilling equipment, hence pushing the cost to around NGN 1,400,000. Comments: BuildCo hires a registered town planner to analyze the site and draft an environmental impact assessment (EIA) report. The EIA report lists the potential Procedure 6*. Receive an inspection at the sub-structure level by impact of the project on the environment, such as the noise, traffic and increase in human density issues that might arise as a result of the development. In order to draft the development control inspectors of Katsina Urban Planning the report, the town planner first verifies the site plan (attached to the certificate of Development Authority occupancy) as well as the preliminary drawings prepared by BuildCo's architects and Time: 1 day engineers. The fee charged by the town planner is decided at the state level by the Cost: No cost local Town Planning Association. The cost provided here is an estimate. Architects and Comments: In Katsina, an important inspection takes place at the sub-structure developers who have a long working experience with Katsina Urban Planning Devel- level, after the setting out and before the completion of the foundations of the opment Authority (KUPDA) will not be asked to produce an EIA report when applying building. The purpose of the inspection is to control whether the foundations com- for the building permit for the proposed project. However, if the developer or the ar- ply with what is presented in the building plans. If any discrepancy is found between chitect are not from Katsina and KUPDA officials do not know him professionally, they the construction and the plan, BuildCo is notified on the spot, and asked to take will be asked to produce an EIA report. Usually, no inspection is required. action before a specified deadline. If BuildCo does not the comply, the building may be marked for demolition. As a group of inspectors patrols each area of the town on Procedure 2. Apply for a building permit at the Katsina Urban a daily basis, BuildCo does not need to notify the inspectors that the construction Planning Development Authority has started. Time: 1 day Cost: NGN 50,000 (NGN 35,000 lower floor + NGN 15,000 upper floor) Procedure 7. Receive an inspection during construction from the Comments: In order to obtain a building permit, BuildCo must submit a duly com- Katsina Urban Planning Development Authority pleted application form to the Katsina Urban Planning Development Authority Time: 1 day (KUPDA), along with the following documents: Cost: No cost a. Proof of ownership (such as a certificate of occupancy); Comments: Although the National Building code lists a precise inspection schedule, b. Survey plan (attached to the certificate of occupancy); inspections in Katsina do not follow any particular order. During construction, after c. Four sets of drawings duly signed by a registered architect, including: the sub-structure inspection a team of inspectors from the Katsina Urban Planning Development Authority randomly visits the site to ensure that the construction t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- company has a building permit, that the project is duly supervised, and that the age system, construction details, doors and windows schedules); construction follows the specifications mentioned in the building plan previously t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO provided by BuildCo. Construction work does not stop during the inspection. If a beams, columns, staircases, etc.); problem is identified, the inspection teams issues a stop order requesting the issue t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  to be resolved before construction proceeds further. If the issue remains unresolved, lighting point layout, schedule of fittings and fixtures); the building is marked for demolition. In practice, 4 inspections are conducted dur- t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM ing construction. disposal layout, schedule of sanitary fittings); d. Environmental impact assessment report; Procedure 8. Receive an inspection during construction from the e. Three-year tax clearance certificate; Katsina Urban Planning Development Authority f. Receipt of payment of the fees. Time: 1 day The documents are reviewed by officers at KUPDA, who assess the fees to be paid. Cost: No cost An on-site inspection will follow. Once the building approval has been granted, two Comments: Same as above. copies of the drawing are given back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies of its building plans when inspections occur. 118 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Procedure 9. Receive an inspection during construction from the Katsina Urban Planning Development Authority KEBBI, Birnin Kebbi Time: 1 day Procedures to build a warehouse Cost: No cost Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: Same as above. Data as of: January 2010 Procedure 10. Receive an inspection during construction from Procedure 1. Obtain an environmental impact assessment the Katsina Urban Planning Development Authority report from an environmental consultant of the Kebbi State Environmental Protection Agency Time: 1 day Time: 6 days Cost: No cost Cost: NGN 30,000 (environmental consultant fee) Comments: Same as above. Comments: BuildCo hires an environmental consultant to analyze the site and draft Procedure 11. Request and receive a fire inspection from the an environmental impact assessment (EIA) report. The EIA report lists the potential impact of the project on the environment, such as the noise, traffic and increase in Katsina Fire Service Department human density issues that might arise as a result of the development. In order to Time: 1 day draft the report, the environmental consultant first verifies the site plan (attached to Cost: No cost the certificate of occupancy) as well as the preliminary drawings prepared by Build- Comments: Once the firefighting equipment has been installed, BuildCo needs to Co's architects and engineers, before conducting an on-site inspection. If deemed notify the fire deparment, which comes for an inspection. This requirement, stated necessary, he may conduct interviews with relevant stakeholders living in the area. in the New Building Code, is enforced in Katsina. Officers from the Katsina fire depar- After the inspection, the environmental consultant drafts the EIA report, and gives 3 ment conduct an on-site inspection to make sure that the building abides by fire copies to Buildco, and retains one copy for himself. safety standards. Procedure 2. Apply for a planning approval at the Kebbi Urban Procedure 12. Obtain a fire certificate from the Katsina Fire Development Authority Service Department Time: 1 day Time: 13 days Cost: NGN 100,000 (planning approval fee) Cost: No cost Comments: In order to obtain a planning approval, BuildCo must submit a duly Comments: After the inspection and the payment have been completed, the fire completed application form to the Kebbi Urban Development Authority (KUDA), deparment issues BuildCo a fire certificate. along with the following documents: a. Proof of ownership (such as a certificate of occupancy); Procedure 13*. Obtain a permanent phone connection b. Survey plan (attached to the certificate of occupancy); Time: 1 day c. Four sets of drawings duly signed by a registered architect, including: Cost: NGN 6,000 (handset + connection) t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Comments: Nigerian Telecommunications Limited (NITEL), the public company his- age system, construction details, doors and windows schedules); torically in charge of providing phone landlines in Nigeria, is no longer functioning. t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Most Nigerian companies use a cell phone, with a subscription to one of the opera- beams, columns, staircases, etc.); tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  connected at any time before and during the construction. lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 14. Apply to the Power Holding Company of Nigeria disposal layout, schedule of sanitary fittings); (PHCN) for a permanent electricity connection d. environmental impact assessment report. Time: 1 day The documents are reviewed by officers at KUDA. An on-site inspection will follow. Cost: NGN 52,500 (3 phase pre-paid meter) Once the building approval has been granted, two copies of the drawing are given Comments: BuildCo applies for a permanent electricity connection by submitting back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies a form and the relevant company documents to PHCN. On the application form, of its building plans when inspections occur during construction. BuildCo must indicate its consumption capacity as well as the type of meter (3 phase pre-paid) required. Procedure 3. Receive a pre-approval inspection from the Kebbi Urban Development Authority Procedure 15. Receive an inspection from PHCN and pay the Time: 1 day electricity fees at the bank Cost: No cost Time: 1 day Comments: After BuildCo's application has been reviewed, the Kebbi Urban Devel- Cost: No cost opment Authority conducts an on-site inspection to verify that the plot reflects the Comments: The PHCN business unit sends out a team to inspect the building. In details provided in the drawings and that the land is suitable for the proposed proj- practice this is usually done on the same day the application is made. After the in- ect. The inspectors draft a report in which the plot, roads, setback details, adjoining spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at land and power and water connections are described. The report is then attached to a designated bank. the documents and drawings BuildCo submitted for approval, and forwarded to the Kebbi Urban Development Authority for final review and approval. Procedure 16. Obtain a permanent electricity connection from PHCN Procedure 4. Obtain a planning approval from the Kebbi Urban Time: 22 days Development Authority Cost: No cost Time: 20 days Comments: Once the inspection and the payment have been completed, PHCN con- Cost: No cost nects BuildCo's warehouse to electricity. Even though the actual connection can be Comments: After the inspection and the payments have been completed, the Ke- made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can bbi Urban Development Authority examines the documents submitted and issues take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- BuildCo a planning approval. ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Procedure 5. Dig a borehole to obtain water (Licensed Electrical Contractors of Nigeria). Time: 7 days Cost: NGN 500,000 *This procedure can be completed simultaneously with previous procedures. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 119 Comments: The public water supply system being very unreliable, the common Procedure 13. Obtain a permanent electricity connection from practice is for construction companies to hire the services of a private borehole company to drill and install a borehole of commercial capacity. In Kebbi, BuildCo has PHCN a choice of either engaging a private contractor or the water board to dig the bore- Time: 26 days hole. The water board is generally cheaper, but can be considerably slower. Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN con- Procedure 6. Receive an inspection at setting out level by the nects BuildCo's warehouse to electricity. Even though the actual connection can be Kebbi Urban Development Authority made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can Time: 1 day take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Cost: No cost ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Comments: Once the setting out is complete, BuildCo's architect must notify the (Licensed Electrical Contractors of Nigeria). Kebbi Urban Planning Authority. A team of inspectors visits the construction-site to ensure that the project is duly supervised and that the construction follows the spec- ifications mentioned in the building plan previously provided by BuildCo. Construc- *This procedure can be completed simultaneously with previous procedures. tion work does not stop during the inspection. During construction, the Kebbi Urban Development Authority carries on average four inspections during construction – DEALING WITH CONSTRUCTION PERMITS one at the setting out stage and 3 random inspections at the superstructure stage. KOGI, Lokoja Procedure 7. Receive an inspection during construction by the Procedures to build a warehouse Kebbi Urban Development Authority Warehouse value: US$ 443,000 = NGN 59,003,170 Time: 1 day Data as of: January 2010 Cost: No cost Procedure 1. Obtain an environmental impact assessment report Comments: Although the National Building code lists a precise inspection schedule, from a registered town planner inspections in Birnin Kebbi do not follow any particular order. During construction, a team of inspectors from the Kebbi Urban Development Authority – usually com- Time: 10 days posed of a town planner, an environment specialist and an engineer – randomly Cost: NGN 45,000 (town planner fees) visits the site to ensure that the construction company has a building permit, that Comments: BuildCo hires a registered town planner to analyze the site and draft an the project is duly supervised, and that the construction follows the specifications environmental impact assessment (EIA) report. The EIA report lists the potential im- mentioned in the building plan previously provided by BuildCo. Construction work pact of the project on the environment, such as the noise, traffic and increase in hu- does not stop during the inspection. During construction, the Kebbi Urban Develop- man density issues that might arise as a result of the development. In order to draft ment Authority carries on average four inspections during construction – one at the the report, the town planner first verifies the site plan (attached to the certificate of setting out stage and 3 random inspections at the superstructure stage. occupancy) as well as the preliminary drawings prepared by BuildCo's architects and engineers, before conducting an on-site inspection. If deemed necessary, he may Procedure 8. Receive an inspection during construction by the conduct interviews with relevant stakeholders living in the area. Kebbi Urban Development Authority Time: 1 day Procedure 2. Apply for a development permit at the Kogi State Cost: No cost Town Planning and Development Board Comments: Same as above. Time: 1 day Cost: No cost Procedure 9. Receive an inspection during construction by the Comments: In order to obtain a development permit, BuildCo must submit a duly Kebbi Urban Development Authority completed application form to the Kogi State Town Planning and Development Time: 1 day Board, along with the following documents: Cost: No cost a. Proof of ownership (such as a certificate of occupancy); Comments: Same as above. b. Survey plan (attached to the certificate of occupancy); c. Four sets of drawings duly signed by a registered architect, including: Procedure 10*. Obtain a permanent phone connection t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Time: 1 day age system, construction details, doors and windows schedules); Cost: NGN 6,000 (handset + connection) t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Most Nigerian companies use a cell phone, with a subscription to one of the opera- lighting point layout, schedule of fittings and fixtures); tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM connected at any time before and during the construction. disposal layout, schedule of sanitary fittings); d. Environmental impact assessment report; Procedure 11. Apply to the Power Holding Company of Nigeria e. Three-year tax clearance certificate. (PHCN) for a permanent electricity connection The documents are reviewed by officers at the Kogi State Town Planning and De- Time: 1 day velopment Board, who within one week determine the applicable registration fee. Cost: NGN 52,500 (3 phase pre-paid meter) An on-site inspection will follow. Once the building approval has been granted, two Comments: BuildCo applies for a permanent electricity connection by submitting copies of the drawing are given back to BuildCo to be kept on-site. BuildCo may need a form and the relevant company documents to PHCN. On the application form, to present the stamped copies of its building plans when inspections occur during BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- construction. paid) required. An inspection is then conducted. Payment for the meter is made in cash at the PHCN office. Procedure 3. Pay the development permit fees at a designated bank Procedure 12. Receive an inspection from PHCN and pay the Time: 1 day electricity fees at the bank Cost: NGN 73,509 (NGN 35,531 approval fee + NGN 21,319 processing fee [60% of Time: 1 day approval fee] + NGN 1,000 registration fee + NGN 5,000 inspection fee + 10,659 Cost: No cost post-approval fee [30% of approval fee]) Comments: The PHCN business unit sends out a team to inspect the building. In Comments: BuildCo is given a payment order to be submitted to and paid at a des- practice this is usually done on the same day the application is made. ignated bank. After payment, BuildCo is given a teller – or bank receipt – to be sub- mitted back to the Kogi State Town Planning and Development Board. 120 DOING BUSINESS IN NIGERIA 2010 Procedure 4. Register the building plans at the Kogi State Town Procedure 10. Apply to the Power Holding Company of Nigeria Planning and Development Board and receive a site inspection (PHCN) for a permanent electricity connection Time: 1 day Time: 1 day Cost: No cost Cost: NGN 31,500 (3 phase credit meter) Comments: After BuildCo's application has been reviewed and the fees deposited, Comments: BuildCo applies for a permanent electricity connection by submitting the Kogi State Town Planning and Development Board conducts an on-site inspec- a form and the relevant company documents to PHCN. On the application form, tion to verify that the plot reflects the details provided in the drawings and that the BuildCo must indicate its consumption capacity as well as the meter (3 phase credit) land is suitable for the proposed project. The inspectors draft a report in which the required. An inspection is then conducted. Payment for the meter is made in cash at plot, roads, setback details, adjoining land and power and water connections are de- the PHCN office. PHCN has not yet started introducing 3 phase pre-paid meters in scribed. The report is then attached to the documents and drawings BuildCo submit- Lokoja. At the moment, new connections are supplied with a credit meter. ted for approval, and forwarded to the Kogi State Town Planning and Development Board for final review and approval. Procedure 11. Receive an inspection from PHCN and pay the electricity fees at the bank Procedure 5. Obtain a development permit from the Kogi State Time: 1 day Town Planning and Development Board Cost: No cost Time: 25 days Comments: The PHCN business unit sends out a team to inspect the building. In Cost: No cost practice this is usually done on the same day the application is made. After the in- Comments: After the inspection and the payments have been completed, the Kogi spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at State Town Planning and Development Board examines the documents submitted a designated bank. and issues BuildCo a building permit, along with 3 signed copies of the plan. BuildCo must keep one copy on the construction-site, to be presented when inspectors from Procedure 12. Obtain a permanent electricity connection from the Kogi State Town Planning and Development Board come during construction for PHCN inspection. Time: 25 days Procedure 6. Dig a borehole to obtain water Cost: No cost Time: 10 days Comments: Once the inspection and the payment have been completed, PHCN con- nects BuildCo's warehouse to electricity. After the application, the credit meter takes Cost: NGN 500,000 up to a month to arrive. If the company needs to be connected to electricity before Comments: The public water supply system being very unreliable, the common that, PHCN charges flat rates. Except for the application and the inspection, all other practice is for construction companies to hire the services of a private borehole com- electricity related processes are handled by a contractor licensed by LECAN (Licensed pany to drill and install a borehole of commercial capacity. Water in Lokoja can be Electrical Contractors of Nigeria). found at a depth of 50 meters. Considering the assumptions of the case study, the costs for sinking a borehole in Lokoja is as follows: *This procedure can be completed simultaneously with previous procedures. a. Geophysics test: NGN 30,000; b. Drilling cost: NGN 10,000 per meter. DEALING WITH CONSTRUCTION PERMITS The overall price may vary depending upon the quality of the materials used. KWARA, Ilorin Procedure 7. Receive an inspection at setting out level from the Procedures to build a warehouse Kogi State Town Planning and Development Board Warehouse value: US$ 443,000 = NGN 59,003,170 Time: 1 day Data as of: January 2010 Cost: No cost Procedure 1. Apply for a building permit at the Kwara Town Comments: Once the setting out is complete, BuildCo's architect must notify the Planning and Development Authority Kogi State Town Planning and Development Board which then sends a team of inspectors to the construction-site to conduct an inspection. The purpose of the Time: 1 day inspection is to ensure that the related stage has been completed successfully, that Cost: No cost the project is duly supervised, and that the construction follows the specifications Comments: In order to obtain a building permit, BuildCo must submit a duly com- mentioned in the building plan previously provided by BuildCo. Construction work pleted application form to the Kwara Town Planning and Development Authority, does not stop during the inspection. along with the following documents: a. Proof of ownership (such as a certificate of occupancy); Procedure 8. Receive an inspection at foundation level from the b. Survey plan (attached to the certificate of occupancy); Kogi State Town Planning and Development Board c. Five sets of drawings duly signed by a registered architect, including: Time: 1 day t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Cost: No cost age system, construction details, doors and windows schedules); Comments: Once the foundation is complete, BuildCo's architect must notify the t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Kogi State Town Planning and Development Board which then sends a team of beams, columns, staircases, etc.); inspectors to the construction-site to conduct an inspection. The purpose of the inspection is to ensure that the related stage has been completed successfully, that t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  the project is duly supervised, and that the construction follows the specifications lighting point layout, schedule of fittings and fixtures); mentioned in the building plan previously provided by BuildCo. Construction work t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM does not stop during the inspection. disposal layout, waste disposal layout, schedule of sanitary fittings). Once the payment has been completed, the documents are reviewed by officials of Procedure 9*. Obtain a permanent phone connection the Kwara Town Planning and Development Authority. An on-site inspection will fol- Time: 1 day low within 2 days of submitting the application. Usually, the architects and engineers are required to also sign an undertaking of supervision, which removes the need for Cost: NGN 6,000 (handset + connection) the Kwara Town Planning and Development Authority to conduct any inspection Comments: Nigerian Telecommunications Limited (NITEL), the public company his- during construction. Once the building approval has been granted, two copies of the torically in charge of providing phone landlines in Nigeria, is no longer functioning. drawing are given back to BuildCo to be kept on-site. BuildCo may need to present Most Nigerian companies use a cell phone, with a subscription to one of the opera- the stamped copies of its building plans when inspections occur during construc- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be tion. connected at any time before and during the construction. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 121 Procedure 2. Receive a pre-approval inspection from the Kwara Procedure 10. Obtain a permanent phone connection Town Planning Authority Time: 1 day Time: 1 day Cost: NGN 22,500 (wireless land line) Cost: No cost Comments: Nigerian Telecommunications Limited (NITEL), the public company Comments: After BuildCo's application has been reviewed, the Kwara Town Planning historically in charge of providing phone landlines in Nigeria, is no longer function- Authority conducts an on-site inspection to verify that the plot reflects the details ing. Most Nigerian companies use a cell phone, with a subscription to one of the provided in the drawings and that the land is suitable for the proposed project. The operators available in the country (MTN, ZAIN, GLO or ETISALAT). In Ilorin, Nigerian inspectors draft a report in which the plot, roads, setback details, adjoining land and companies also have the option of using a fixed wireless phone (MULTILINKS), at a power and water connections are described. The report is then attached to the docu- higher cost (NGN 20,000 to NGN 25,000). The phone line can be connected at any ments and drawings BuildCo submitted for approval, and forwarded to the Kwara time before and during the construction. Town Planning Authority for final review and approval. Procedure 11. Apply to the Power Holding Company of Nigeria Procedure 3. Obtain a building permit from the Kwara Town (PHCN) for a permanent electricity connection Planning Authority Time: 1 day Time: 14 days Cost: NGN 52,500 (3 phase pre-paid meter) Cost: NGN 125,000 (NGN 25,000 application fee + NGN 25,000 inspection fee + NGN Comments: BuildCo applies for a permanent electricity connection by submitting 75,000 assessment fee) a form and the relevant company documents to PHCN. On the application form, Comments: After the inspection and the payments have been completed, the Kwara BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- Town Planning Authority examines the documents submitted and issues BuildCo a paid) required. An inspection is then conducted. Payment for the meter is made at a building permit. designated bank. Procedure 4. Pay the development levy to the local government Procedure 12. Receive an inspection from PHCN and pay the Time: 1 day electricity fees at the bank Cost: NGN 15,000 (fixed fee) Time: 1 day Comments: Before construction begins, BuildCo goes to the local government office Cost: No cost to pay a development levy, and obtains a receipt. Comments: The PHCN business unit sends out a team to inspect the building. In practice this is usually done on the same day the application is made. After the in- Procedure 5. Dig a borehole to obtain water spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at a Time: 7 days designated bank. BuildCo must then submit the receipt of the payment to the local PHCN for the electricity connection to proceed. Cost: NGN 500,000 Comments: The public water supply system is very unreliable. It is common practice Procedure 13. Obtain a permanent electricity connection from for construction companies to hire the services of a private borehole company to drill PHCN and install a borehole of commercial capacity. Time: 21 days Procedure 6. Receive an inspection during construction from the Cost: NGN 17,500 (contractor fees) Kwara Town Planning Authority Comments: Once the inspection and the payment have been completed, PHCN con- Time: 1 day nects BuildCo's warehouse to electricity. Even though the actual connection can be made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can Cost: No cost take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Comments: Although the National Building code lists a precise inspection schedule, ed consumption monthly fee to PHCN. Except for the application and the inspection, inspections in Ilorin do not follow any particular order. During construction, a team all other electricity related processes are handled by a contractor licensed by LECAN of inspectors from the Kwara Town Planning Authority randomly visits the site to (Licensed Electrical Contractors of Nigeria). ensure that the construction company has a building permit, that the project is duly supervised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop dur- *This procedure can be completed simultaneously with previous procedures. ing the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before construction proceeds further. In practice, DEALING WITH CONSTRUCTION PERMITS during construction, 2 to 3 inspections occur. LAGOS, Lagos Procedure 7. Receive an inspection during construction from the Procedures to build a warehouse Kwara Town Planning Authority Warehouse value: US$ 443,000 = NGN 59,003,170 Time: 1 day Data as of: January 2010 Cost: No cost Procedure 1. Obtain environmental impact assessment report Comments: Same as above. Time: 7 days Cost: NGN 35,000 Procedure 8. Receive an inspection during construction from the Kwara Town Planning Authority Comments: It usually takes 4 days for the town planner to issue the environmental impact assessment Report. The fee varies between NGN 20,000 and NGN 50,000. Time: 1 day Cost: No cost Procedure 2. Obtain development permit from the District Office Comments: Same as above. Time: 42 days Cost: NGN 494,216 Procedure 9. Receive an inspection during construction from the Comments: The development permit authorizes construction and is valid for 2 Architects Registration Council (ARCON) years. Several documents are required to obtain this permit, including all the docu- Time: 1 day ments, clearances, and approvals required or obtained in the previous procedures Cost: No cost Legally, a pre-approval inspection is required. Other inspections include one by the Comments: During the construction, the Architects Registration Council (ARCON) Environmental Protection Agency, and another structural inspection carried out by conducts an inspection to ensure that the project is duly supervised by professionals the Local Planning Authority during construction. In practice however, none of these (architects and engineers) registered with ARCON. inspections usually takes place. 122 DOING BUSINESS IN NIGERIA 2010 Procedure 3. Pay Development Levy to the Local Planning Procedure 15*. Apply for electricity connection Authority Time: 1 day Time: 1 day Cost: No cost Cost: NGN 49,422 Comments: To obtain an electricity connection, BuildCo needs to file the appropri- Comments: The Local Planning Authority (LPA) charges a contribution levy (10% of ate forms at the branch offices of the Power Holding Company of Nigeria, PHCN the building permit cost) for the preparation and production of development plans, (previously NEPA), and make a payment of NGN 40,000. The PHCN will then install an such as local, district, subject, and action plans; development guides; office mainte- electric power meter at the premises. The premises are then connected to the power nance; procurement and maintenance of vehicles; office equipment; and similar issues. network. Procedure 4. Pay Spatial Enhancement Contribution to the Lagos Procedure 16*. Receive inspection by electrical provider State urban and Regional Planning Board in bank draft Time: 1 day Time: 1 day Cost: No cost Cost: NGN 95,000 Procedure 17*. Obtain electricity connection Procedure 5. Obtain certificate of structural stability of Time: 270 days foundation from an accredited construction testing company Cost: NGN 50,000 Time: 2 days Cost: NGN 5,000 Procedure 18*. Dig Borehole to obtain water Time: 7 days Procedure 6. Obtain certificate of structural stability (first Cost: NGN 138,000 (NGN 15,000 equipment rental + NGN 20,000 steel casing + pouring of concrete) NGN 10,000 transportation + NGN 5,000 riser pipe + NGN 3,000 safety pipe + NGN Time: 2 days 7,000 renting pumping machine (NGN 1,000 per day) + NGN 3,000 chemicals + NGN 60,000 labor + NGN 15,000 geophysics test) Cost: NGN 5,000 Procedure 7. Obtain certificate of structural stability (second *This procedure can be completed simultaneously with previous procedures. pouring of concrete) Time: 2 days DEALING WITH CONSTRUCTION PERMITS Cost: NGN 5,000 NASARAWA, Lafia Procedures to build a warehouse Procedure 8. Obtain certificate of structural stability (third Warehouse value: US$ 443,000 = NGN 59,003,170 pouring of concrete) Data as of: January 2010 Time: 2 days Cost: NGN 5,000 Procedure 1. Obtain an environmental impact assessment report and a site analysis report from a registered town planner Procedure 9. Receive inspection during construction from State Time: 7 days Government Task Force reporting to the Commissioners for Land Cost: NGN 140,000 (NGN 75,000 the environmental impact assessment report + and Urban Development NGN 65,000 site analysis report) Time: 1 day Comments: BuildCo hires a registered town planner to analyze the site and draft an Cost: No cost environmental impact assessment (EIA) report. The EIA report lists the potential im- pact of the project on the environment, such as the noise, traffic and increase in hu- Procedure 10. Receive inspection during construction from Local man density issues that might arise as a result of the development. In order to draft Monitoring Team reporting to the District Office the report, the town planner first verifies the site plan (attached to the certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's architects Time: 1 day and engineers, before conducting an on-site inspection. If deemed necessary, he Cost: No cost may conduct interviews with relevant stakeholders living in the area. The same town planner also prepares a site analysis report (SAR), which details the location, acces- Procedure 11. Receive inspection during construction from Zonal sibility and topography of the site, as well as the proximity of the site to essential Monitoring Team services: electricity source, water source, hospital, commercial area, airport, etc. After Time: 1 day the inspection, the town planner drafts the EIA report and SAR, and gives 2 copies of Cost: No cost each report to Buildco, and retains one copy for himself. Procedure 12. Request and receive inspection by fire deparment Procedure 2. Apply for a building plan approval at the Nasarawa State Urban Development Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: This certificate is to be obtained at the local planning authority before the building can be used. It is within the discretion of the authority to conduct an Comments: In order to obtain a building plan approval, BuildCo must submit a duly on-site inspection before issuing the certificate. However, such an inspection, nor- completed application form to the Nasarawa State Urban Development Board, along mally about 45 minutes, is very rarely performed. with the following documents: a. Proof of ownership (such as a certificate of occupancy); Procedure 13. Obtain Certificate of Completion and fitness for b. Survey plan (attached to the certificate of occupancy); habitation for Habitation c. Four sets of drawings duly signed by a registered architect, including: Time: 14 days t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Cost: No cost age system, construction details, doors and windows schedules); t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Procedure 14. Obtain fixed phone line beams, columns, staircases, etc.); Time: 21 days t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Cost: NGN 15,750 lighting point layout, schedule of fittings and fixtures); Comments: The estimated completion time is 21 days for a cable terrestrial line. It t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM would be possible to obtain a wireless line in 2–3 days. disposal layout, schedule of sanitary fittings); LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 123 d. Environmental impact assessment report; Procedure 9. Receive an inspection during construction from the e. Site analysis report; Nasarawa State Urban Development Board f. Three-year tax clearance certificate. Time: 1 day The documents are submitted to the open plan registry of the Nasarawa Urban Cost: No cost Development Board and vetted by the Building, Environmental, Engineering and Planning departments. An on-site inspection will follow. Once the building approval Comments: Same as above. has been granted, two copies of the drawing are given back to BuildCo to be kept on-site. BuildCo may need to present the stamped copies of its building plans when Procedure 10. Receive an inspection during construction from inspections occur during construction. the Nasarawa State Urban Development Board Time: 1 day Procedure 3. Pay the building plan approval fees at a designated Cost: No cost bank Comments: Same as above. Time: 1 day Cost: NGN 93,500 (NGN 500 registration fee + NGN 1,000 building handbook fee + Procedure 11. Request and receive a final inspection from the NGN 7,000 fence fee + NGN 5,000 inspection fee + NGN 30,000 building permit fee + Nasarawa State Urban Development Board NGN 50,000 development levy) Time: 1 day Comments: BuildCo is given a payment order to be submitted to and paid at a des- Cost: No cost ignated bank. After payment, BuildCo is given a teller – or bank receipt – to be sub- Comments: After construction is complete, BuildCo notifies the Nasarawa State Ur- mitted back to the Nasarawa State Urban Development Board. ban Development Board. A final inspection ensues. During the final inspection, the Nasarawa State Urban Development Board ensures that BuildCo's warehouse abides Procedure 4. Receive a pre-approval inspection from the by the details provided in the drawings and by the safety/construction standards Nasarawa State Urban Development Board described in the law. Time: 1 day Cost: No cost Procedure 12. Obtain a certificate of completion from the Comments: After BuildCo's application has been reviewed, inspectors from the Nasarawa State Urban Development Board Nasarawa State Urban Development Board – typically a town planner, a builder, an Time: 14 days environmentalist and an engineer – conduct an on-site inspection to verify that the Cost: No cost plot reflects the details provided in the drawings and that the land is suitable for Comments: After the final inspection, the Nasarawa State Urban Development the proposed project. The inspectors draft a report in which the plot, roads, setback Board issues BuildCo a certificate of completion attesting that the construction has details, adjoining land and power and water connections are described. The report been carried out according to the building plans submitted, and that BuildCo can is then attached to the documents and drawings BuildCo submitted for approval, now occupy the building. and forwarded to the Nasarawa State Urban Development Board for final review and approval. Procedure 13*. Obtain a permanent phone connection Procedure 5. Obtain a building plan approval from the Nasarawa Time: 1 day State Urban Development Board Cost: NGN 6,000 (handset + connection) Time: 14 days Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Cost: No cost torically in charge of providing phone landlines in Nigeria, is no longer functioning. Most Nigerian companies use a cell phone, with a subscription to one of the opera- Comments: After the inspection and the payments have been completed, the Na- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be sarawa State Urban Development Board examines the documents submitted and connected at any time before and during the construction. issues BuildCo a building permit. Procedure 14. Apply to the Power Holding Company of Nigeria Procedure 6. Dig a borehole to obtain water (PHCN) for a permanent electricity connection and pay the fees Time: 7 days Time: 1 day Cost: NGN 500,000 Cost: NGN 52,500 (3 phase pre-paid meter) Comments: The public water supply system is very unreliable. It is common practice Comments: BuildCo applies to PHCN by submitting a form and the relevant com- for construction companies to hire the services of a private borehole company to drill pany documents. On the application form, BuildCo must indicate its consumption and install a borehole of commercial capacity. capacity as well as the meter (3 phase pre-paid) required. An inspection is then conducted. Procedure 7. Receive an inspection during construction from the Nasarawa State Urban Development Board Procedure 15. Receive an inspection from PHCN and pay the Time: 1 day electricity fees at the bank Cost: No cost Time: 1 day Comments: Although the National Building code lists a precise inspection schedule, Cost: No cost inspections in Lafia do not follow any particular order. During construction, a team Comments: The PHCN business unit sends out a team to inspect the building. of inspectors from the Nasarawa State Urban Development Board randomly visits the site, usually once at the substructure stage and three times at the superstruc- ture stage, to ensure that the construction company has a building permit, that the Procedure 16. Obtain a permanent electricity connection from project is duly supervised, and that the construction follows the specifications men- PHCN tioned in the building plan previously provided by BuildCo. Construction work does Time: 34 days not stop during the inspection. Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN Procedure 8. Receive an inspection during construction from the connects BuildCo's warehouse to electricity. Even though the actual connection can Nasarawa State Urban Development Board be made in 14 days, due to supply problems of 3 phase pre-paid meters, it can take Time: 1 day longer for the actual meter to arrive. In the meantime, BuildCo pays an estimated Cost: No cost consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Comments: Same as above. (Licensed Electrical Contractors of Nigeria). *This procedure can be completed simultaneously with previous procedures. 124 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Procedure 5. Dig a borehole to obtain water NIGER, Minna Time: 7 days Procedures to build a warehouse Cost: NGN 500,000 Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: The public water supply system is very unreliable. It is common practice Data as of: January 2010 for construction companies to hire the services of a private borehole company to drill and install a borehole of commercial capacity. Procedure 1. Obtain an environmental impact assessment report from a registered town planner Procedure 6. Receive an inspection during construction from the Time: 5 days Niger State Urban Development Board Cost: NGN 20,000 (town planner fee) Time: 1 day Comments: BuildCo hires a registered town planner to analyze the site and draft an Cost: No cost environmental impact assessment (EIA) report. The EIA report lists the potential im- Comments: Although the National Building code lists a precise inspection schedule, pact of the project on the environment, such as the noise, traffic and increase in hu- inspections in Minna do not follow any particular order. During construction, a team man density issues that might arise as a result of the development. In order to draft of inspectors from the Niger State Urban Development Board randomly visits the site the report, the town planner first verifies the site plan (attached to the certificate of to ensure that the construction company has a building permit, that the project is occupancy) as well as the preliminary drawings prepared by BuildCo's architects and duly supervised, and that the construction follows the specifications mentioned in engineers, before conducting an on-site inspection. If deemed necessary, he may the building plan previously provided by BuildCo. Construction work does not stop conduct interviews with relevant stakeholders living in the area. After the inspection, during the inspection. In practice, during construction, only 1 inspection occurs. the town planner drafts the EIA report, and gives 3 copies to Buildco, and retains one copy for himself. Procedure 7. Receive a certificate from the Fire Service Department Procedure 2. Apply for a development permit at the Niger State Urban Development Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: By law, BuildCo is required to go to the Fire Service office to ask for a fire inspection. A fire team accompanies BuildCo back to the site to inspect it, in order to Comments: In order to obtain a development permit, BuildCo must submit a duly ensure that the construction has proper fire exits, sprinkler, fire alarms, etc. However, completed application form to the Niger State Urban Development Board, along in practice this procedure is not enforced, and rarely happens. with the following documents: a. Proof of ownership (such as a certificate of occupancy); Procedure 8. Obtain a certificate of completion and fitness b. Survey plan (attached to the certificate of occupancy); for habitation for habitation from the Niger State Urban c. Four sets of drawings duly signed by a registered architect, including: Development Board t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Time: 7 days age system, construction details, doors and windows schedules); Cost: No cost t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Comments: By law, BuildCo must apply to the Niger State Urban Development beams, columns, staircases, etc.); Board office for a certificate of completion, which would be issued after a final in- t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  spection of the site. In practice, however, this procedure is neither adhered to nor lighting point layout, schedule of fittings and fixtures); enforced. t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); Procedure 9*. Obtain a permanent phone connection d. Environmental impact assessment report; Time: 1 day e. Three-year tax clearance certificate. Cost: NGN 6,000 (handset + connection) The documents are collected by the registry of the Urban Development Board and Comments: Nigerian Telecommunications Limited (NITEL), the public company his- sent to the Development Control Department for review by town planners, archi- torically in charge of providing phone landlines in Nigeria, is no longer functioning. tects, surveyors and engineers. An inspection will follow. Once the building approval Most Nigerian companies use a cell phone, with a subscription to one of the opera- has been granted, two copies of the drawing are given back to BuildCo to be kept tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be on-site. BuildCo may need to present the stamped copies of its building plans when connected at any time before and during the construction. inspections occur during construction. Procedure 10. Apply to the Power Holding Company of Nigeria Procedure 3. Receive a pre-approval inspection from the Niger (PHCN) for a permanent electricity connection State Urban Development Board Time: 1 day Time: 1 day Cost: NGN 52,500 (3 phase pre-paid meter) Cost: No cost Comments: BuildCo applies for a permanent electricity connection by submitting Comments: After BuildCo's application has been reviewed, the Niger State Urban a form and the relevant company documents to PHCN via an electrical engineer. On Development Board conducts an on-site inspection to verify that the plot reflects the the application form, BuildCo must indicate its consumption capacity as well as the details provided in the drawings and that the land is suitable for the proposed proj- meter (3 phase pre-paid) required. An inspection is then conducted. Payment for the ect. The inspectors draft a report in which the plot, roads, setback details, adjoining meter is made at a designated bank. land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted for approval, and forwarded to the Procedure 11. Receive an inspection from PHCN and pay the Niger State Urban Development Board for final review and approval. electricity fees at the bank Time: 1 day Procedure 4. Obtain a development permit from the Niger State Cost: No cost Urban Development Board Comments: The PHCN business unit sends out a team to inspect the building. In Time: 21 days practice this is usually done on the same day the application is made. After the in- Cost: NGN 325,000 (NGN 5,000 registration fee + NGN 60,000 inspection fee + NGN spection, BuildCo is given a bill to pay for the meter, which BuildCo must present at 200 per square meter for development fee) a designated bank. Comments: After the inspection and the payments have been completed, the De- velopment Board grants BuildCo a development permit. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 125 Procedure 12. Obtain a permanent electricity connection from Procedure 5. Pay the development permit fees at a designated bank PHCN Time: 1 day Time: 20 days Cost: NGN 225,209 (NGN 195,090 assessment fee [NGN 50 per cubic meter] + NGN Cost: No cost 5,000 registration fee + NGN 4,645 fencing fee [NGN 5 per square meter] + NGN Comments: Once the inspection and the payment have been completed, PHCN con- 20,474 administrative charge [10% of previous fees]) nects BuildCo's warehouse to electricity. Even though the actual connection can be Comments: BuildCo is given a payment order to be submitted to and paid at a des- made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can ignated bank. After payment, BuildCo is given a teller credit – or bank receipt – to be take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- submitted back to the Urban and Physical Planning Board. ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Procedure 6. Receive a pre-approval inspection from the Urban (Licensed Electrical Contractors of Nigeria). and Physical Planning Board Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: No cost Comments: After BuildCo's application has been reviewed, the urban and Physical DEALING WITH CONSTRUCTION PERMITS Planning Board conducts an on-site inspection to verify that the plot reflects the de- OGUN, Abeokuta tails provided in the drawings and that the land is suitable for the proposed project. Procedures to build a warehouse The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The report is then attached to the Warehouse value: US$ 443,000 = NGN 59,003,170 documents and drawings BuildCo submitted for approval, and forwarded to the Ur- Data as of: January 2010 ban and Physical Planning Board for final review and approval. Procedure 1. Obtain an environmental impact assessment report Procedure 7. Obtain a development permit from the Urban and from a registered town planner Physical Planning Board Time: 14 days Time: 14 days Cost: NGN 50,000 (town planner fees) Cost: No cost Comments: BuildCo hires a registered town planner to analyze the site and draft an Comments: After the inspection and the payments have been completed, the Urban environmental impact assessment (EIA) report. The EIA report lists the potential im- and Physical planning board examines BuildCo's application along with the report pact of the project on the environment, such as the noise, traffic and increase in hu- drafted by the inspectors. If deemed satisfactory, the Urban and Physical Planning man density issues that might arise as a result of the development. In order to draft Board issues BuildCo a building permit, along with 2 stamped copies of the build- the report, the town planner first verifies the site plan (attached to the certificate of ing plans, an approval number to be displayed on the construction-site, and a set of occupancy) as well as the preliminary drawings prepared by BuildCo's architects and forms to be submitted when applying for the certificate of completion and fitness engineers, before conducting an on-site inspection. If deemed necessary, he may for habitation. conduct interviews with relevant stakeholders living in the area. After the inspection, the town planner drafts the EIA report, and gives 3 copies to Buildco, and retains one copy for himself. Procedure 8. Dig a borehole to obtain water Time: 16 days Procedure 2. Obtain a land use clearance from the Bureau of Cost: NGN 500,000 Urban and Regional Planning Comments: The public water supply system is very unreliable. It is common practice Time: 14 days for construction companies to hire the services of a private borehole company to drill Cost: NGN 50,000 and install a borehole of commercial capacity. Comments: Before applying for a development permit, BuildCo must obtain a land Procedure 9. Pay a compensation to the natives use clearance from the Bureau of Urban and Regional Planning in order to certify that the building will respects the zoning requirements of the area. When applying Time: 1 day for a land use clearance, BuildCo must submit: Cost: NGN 200,000 a. Application form, duly filled, providing basic information about the building; Comments: With the Land Use Act of 1978, the government appropriated land on b. Copy of the certificate of occupancy; which local tribes lived. Since then, in Abeokuta, construction companies wishing to develop a project must pay compensation to those natives, and hire some of them as c. Survey Plan (attached to the Certificate of Occupancy); masons or security guards on the site. Cost varies on a case by case basis, and highly d. Receipt of the payment of the Land Use Clearance fee; depends on the negotiation skills of the construction company. e. Receipt testifying that the Development Levy was paid (payment completed when BuildCo originally bought the land); Procedure 10*. Receive an inspection at setting out level from f. Architectural drawings; the Urban and Physical Planning Board g. environmental impact assessment report; Time: 2 days h. Three-year Tax clearance certificate, issued each year by the Federal Inland Service Cost: No cost when the company pays taxes. Comments: Within 7 days from the issuance of the development permit approval, BuildCo must inform the Urban and Physical Planning of the date when the con- Procedure 3. Swear deposition on the application form before struction is planned to start. Prior to the inspection, BuildCo must display a board the Commission for Oaths outside the site displaying the development permit number, a brief description of Time: 1 day the project, the contact details of the owner and professionals involved in the project Cost: NGN 200 and the risk insurance number. During construction, inspectors are likely to inspect the site one or two times. As such, a copy of the approved plan must be kept on-site. Comments: BuildCo has to swear deposition on the application forms before the Commissioner of Oaths, in order to attest the authenticity of its ownership of the Procedure 11. Receive an inspection during construction from property in question. the Urban and Physical Planning Board Procedure 4. Apply for a development permit at the Urban and Time: 1 day Physical Planning Board Cost: No cost Time: 1 day Comments: Although the National Building code lists a precise inspection schedule, Cost: No cost inspections in Abeokuta do not follow any particular order. During construction, a team of inspectors from the Urban and Physical Planning Board – usually composed Comments: BuildCo is required to pay a land use clearance fee at a designated bank of a town planner, an architect and an engineer credit – randomly visits the site to prior to applying for a land use clearance at the Bureau of Urban and Regional Plan- ensure that the construction company has a building permit, that the project is duly ning. After the payment has been completed, BuildCo is given a receipt. 126 DOING BUSINESS IN NIGERIA 2010 supervised, and that the construction follows the specifications mentioned in the DEALING WITH CONSTRUCTION PERMITS building plan previously provided by BuildCo. Construction work does not stop dur- ONDO, Akure ing the inspection. In practice, during construction, two inspections occur. Procedures to build a warehouse Procedure 12. Receive an inspection during construction from Warehouse value: US$ 443,000 = NGN 59,003,170 the Urban and Physical Planning Board Data as of: January 2010 Time: 1 day Procedure 1. Apply for a preliminary approval of the building Cost: No cost plan at the Town Planning Office authority of the Ministry of Comments: Same as above. Physical Planning and Urban Development Time: 1 day Procedure 13. Request and receive a final inspection from the Cost: No cost Urban and Physical Planning Board Comments: Before applying for the development permit approval, BuildCo must Time: 1 day obtain a pre-approval from the Town Planning office, which verifies that the project Cost: No cost respects the city's zoning plans. In order to obtain such approval, BuildCo must sub- Comments: When the construction is complete, BuildCo must apply to the Urban mit the following documents: and Physical Planning Board for a certificate of completion and fitness for habita- a. Application form; tion. A simple written notification suffices. BuildCo notifies the Urban and Physical b. Preliminary drawings or sketches of the building prepared by an architect; Planning Board that the construction is completed. A final inspection ensues, during which the Urban and Physical Planning Board ensures that BuildCo's warehouse c. Copy of the certificate of occupancy with the attached Survey Plan. abide by the details provided in the drawings and by the safety and construction standards described in the law. Procedure 2. Receive a preliminary inspection by the Town Planning Office authority of the Ministry of Physical Planning Procedure 14. Obtain a certificate of completion and fitness for and Urban Development habitation for habitation from the Urban and Physical Planning Time: 1 day Board Cost: No cost Time: 7 days Comments: Inspectors from the Town Planning office inspect the plot before the Cost: No cost preliminary approval is issued. Comments: After the final inspection, the Urban and Physical Planning Board issues BuildCo a certificate of completion attesting that the construction has been carried Procedure 3. Obtain a preliminary approval of the building out according to the building plans submitted, and that BuildCo can now occupy the plan from the Town Planning Office authority of the Ministry of building. Physical Planning and Urban Development Time: 4 days Procedure 15. Obtain a permanent phone connection Cost: No cost Time: 1 day Comments: After the inspection, the Town Planning Office issues BuildCo a prelimi- Cost: NGN 6,000 (handset + connection) nary approval of the building plan. Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. Procedure 4. Obtain an environmental impact assessment report Most Nigerian companies use a cell phone, with a subscription to one of the opera- from a registered town planner tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Time: 10 days connected at any time before and during the construction. Cost: NGN 55,000 (town planner fees) Procedure 16. Apply to the Power Holding Company of Nigeria Comments: BuildCo hires a registered town planner to analyze the site and draft an (PHCN) for a permanent electricity connection and pay the fees environmental impact assessment (EIA) report. The EIA report lists the potential im- pact of the project on the environment, such as the noise, traffic and increase in hu- Time: 1 day man density issues that might arise as a result of the development. In order to draft Cost: NGN 67,500 (NGN 52,500 3 phase pre-paid meter + NGN 15,000 application fee) the report, the town planner first verifies the site plan (attached to the certificate of Comments: BuildCo applies for a permanent electricity connection by submitting occupancy) as well as the preliminary drawings prepared by BuildCo's architects and a form and the relevant company documents to PHCN. On the application form, engineers, before conducting an on-site inspection. If deemed necessary, he may BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- conduct interviews with relevant stakeholders living in the area. paid) required. An inspection is then conducted. Payment for the meter is made in cash at the PHCN office. Procedure 5. Apply for a development permit at the Town Planning Office authority of the Ministry of Physical Planning Procedure 17. Receive an inspection from PHCN and pay the and Urban Development electricity fees at the bank Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: In order to obtain a development permit, BuildCo must submit a duly Comments: The PHCN business unit sends out a team to inspect the building. In completed application form to the Town Planning Office, along with the following practice this is usually done on the same day the application is made. documents: a. Proof of ownership (such as a certificate of occupancy); Procedure 18. Obtain a permanent electricity connection from PHCN b. Survey plan (attached to the certificate of occupancy); Time: 24 days c. Six sets of drawings duly signed by a registered architect, including: Cost: NGN 5,000 (contractor fees) t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Comments: Once the inspection and the payment have been completed, PHCN con- age system, construction details, doors and windows schedules); nects BuildCo's warehouse to electricity. Even though the actual connection can be t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can beams, columns, staircases, etc.); take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- ed consumption monthly fee to PHCN. Except for the application and the inspection, t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  all other electricity related processes are handled by a contractor licensed by LECAN lighting point layout, schedule of fittings and fixtures); (Licensed Electrical Contractors of Nigeria). t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); *This procedure can be completed simultaneously with previous procedures. d. environmental impact assessment report. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 127 The documents are reviewed by officers at the Town Planning Office, who assess Procedure 11. Receive an inspection during construction from the fees to be paid and issue BuildCo a payment order to be presented at the bank. An on-site inspection will follow. Once the building approval has been granted, two the Town Planning Office of the Ministry of Physical Planning and copies of the drawing are given back to BuildCo to be kept on-site. BuildCo may need Urban Development to present the stamped copies of its building plans when inspections occur during Time: 1 day construction. Cost: No cost Comments: Same as above. Procedure 6. Pay the development permit fees at a designated bank Procedure 12. Submit the completion drawings to the Town Time: 1 day Planning Office of the Ministry of Physical Planning and Urban Cost: NGN 43,941 (NGN 32,190 assessment fee + NGN 2,325 development fee [NGN Development 2.5 per square meter of the plot] + NGN 1,100 fixed charge + NGN 2,000 application Time: 1 day + NGN 1,000 registration of the EIA + NGN 2,325 allocation charge [NGN 2.5 per Cost: No cost square meter of the plot] + NGN 3,000 land use charge) Comments: The certificate of completion and fitness for habitation for habitation is Comments: BuildCo is given a payment order to be submitted to and paid at a not yet mandatory in Ondo. However, when the construction is complete, the archi- designated bank. After payment, BuildCo is given a teller – or bank receipt – to be tect submits a copy of the "as built drawings" – drawings that show the building as submitted back to the Town Planning Office. "in reality" – to the Town Planning Office. Procedure 7. Receive a pre-approval inspection from the Town Procedure 13. Receive a final inspection from the Town Planning Office of the Ministry of Physical Planning and Urban Planning Office of the Ministry of Physical Planning and Urban Development Development and obtain stamped "as built" plans Time: 1 day Time: 6 days Cost: No cost Cost: No cost Comments: After BuildCo's application has been reviewed, the Ministry of Physical Comments: BuildCo notifies the Town Planning Office that the construction is com- Planning and Development conducts an on-site inspection to verify that the plot pleted. A final inspection ensues, during which the Town Planning Office ensures reflects the details provided in the drawings and that the land is suitable for the that BuildCo's warehouse abide by the details provided in the drawings and by the proposed project. The inspectors draft a report in which the plot, roads, setback safety and construction standards described in the law. details, adjoining land and power and water connections are described. The report is then attached to the documents and drawings BuildCo submitted for approval, and forwarded to the Ministry of Physical Planning and Development for final review and Procedure 14*. Obtain a permanent phone connection approval. Time: 1 day Cost: NGN 6,000 (handset + connection) Procedure 8. Obtain a development permit from the Town Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Planning Office of the Ministry of Physical Planning and Urban torically in charge of providing phone landlines in Nigeria, is no longer functioning. Development Most Nigerian companies use a cell phone, with a subscription to one of the opera- Time: 14 days tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be connected at any time before and during the construction. Cost: No cost Comments: After the inspection and the payments have been completed, the Procedure 15. Apply to the Power Holding Company of Nigeria Ministry of Physical Planning and Urban Development (MPPUD) marks the plan (PHCN) for a permanent electricity connection and pay the fees with a stamp of approval, before sending it to the Town Planning Office. Along with two copies of the stamped drawings, BuildCo receives a registration number to be Time: 1 day displayed on the construction-site. The Town Planning Office keeps 2 copies of the Cost: NGN 52,500 (3 phase pre-paid meter) building plans and sends 2 copies to the central archives of the Ministry of Physical Comments: BuildCo applies for a permanent electricity connection by submitting Planning and Urban Development. a form and the relevant company documents to PHCN. On the application form, BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- Procedure 9. Dig a borehole to obtain water paid) required. An inspection is then conducted. The payment for the meter is carried Time: 10 days out through a bank draft to PHCN. Cost: NGN 500,000 Procedure 16. Receive an inspection from PHCN and pay the Comments: The public water supply system is very unreliable. It is common practice for construction companies to hire the services of a private borehole company to drill electricity fees at the bank and install a borehole of commercial capacity. Time: 1 day Cost: No cost Procedure 10. Receive an inspection during construction from Comments: The PHCN business unit sends out a team to inspect the building. In the Town Planning Office of the Ministry of Physical Planning and practice this is usually done on the same day the application is made. Urban Development Time: 1 day Procedure 17. Obtain a permanent electricity connection from Cost: No cost PHCN Comments: Although the National Building code lists a precise inspection schedule, Time: 17 days inspections in Akure do not follow any particular order. During construction, a team Cost: NGN 5,000 (connection cost) of inspectors from the Town Planning Office – usually composed of a town planner, Comments: Once the inspection and the payment have been completed, PHCN con- an architect and an engineer – randomly visits the site to ensure that the construc- nects BuildCo's warehouse to electricity. Even though the actual connection can be tion company has a building permit, that the project is duly supervised, and that the made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can construction follows the specifications mentioned in the building plan previously take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- provided by BuildCo. Construction work does not stop during the inspection. In prac- ed consumption monthly fee to PHCN. Except for the application and the inspection, tice, during construction, two inspections occur. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). *This procedure can be completed simultaneously with previous procedures. 128 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Comments: After the inspection and the payments have been completed, the docu- OSUN, Osogbo ments submitted for approval – along with the inspection report – are reviewed by the Osun State Capital Territory Development Authority for final approval. If granted, Procedures to build a warehouse BuildCo is issued a development permit. Warehouse value: US$ 443,000 = NGN 59,003,170 Data as of: January 2010 Procedure 6. Dig a borehole to obtain water Time: 5 days Procedure 1. Obtain an environmental impact assessment report from a registered town planner Cost: NGN 200,000 Comments: The public water supply system is very unreliable. It is common practice Time: 14 days for construction companies to hire the services of a private borehole company to drill Cost: NGN 35,000 (town planner fees) and install a borehole of commercial capacity. Comments: BuildCo hires a registered town planner to analyze the site and draft an environmental impact assessment (EIA) report. The EIA report lists the potential im- Procedure 7. Receive an inspection during construction from the pact of the project on the environment, such as the noise, traffic and increase in hu- Osun State Capital Territory Development Authority man density issues that might arise as a result of the development. In order to draft Time: 1 day the report, the town planner first verifies the survey plan (attached to the certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's architects Cost: No cost and engineers, before conducting an on-site inspection. If deemed necessary, he Comments: Although the National Building code lists a precise inspection schedule, may conduct interviews with relevant stakeholders living in the area. After the in- inspections in Oshogbo do not follow any particular order. During construction, a spection, the town planner drafts the EIA report. team of inspectors from the Osun State Capital Territory Development Authority randomly visits the site to ensure that the construction company has a building Procedure 2. Apply for a building permit at the Osun State permit, that the project is duly supervised, and that the construction follows the Capital Territory Development Authority specifications mentioned in the building plan previously provided by BuildCo. Con- struction work does not stop during the inspection. In practice, four inspections are Time: 1 day conducted during construction. Cost: No cost Comments: In order to obtain a building permit, BuildCo must submit a duly com- Procedure 8. Receive an inspection during construction from the pleted application form to the Osun State Capital territory Development Authority Osun State Capital Territory Development Authority along with the following documents: Time: 1 day a. Proof of ownership (such as a certificate of occupancy); Cost: No cost b. Survey plan (attached to the certificate of occupancy); Comments: Same as above. c. Drawings duly signed by a registered architect, including: t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Procedure 9. Receive an inspection during construction from the age system, construction details, doors and windows schedules); Osun State Capital Territory Development Authority t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Time: 1 day beams, columns, staircases, etc.); Cost: No cost t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Comments: Same as above. lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 10. Receive an inspection during construction from disposal layout, schedule of sanitary fittings); the Osun State Capital Territory Development Authority d. Environmental impact assessment report; Time: 1 day e. Three-year tax clearance certificate. Cost: No cost The documents are reviewed by the Osun State Capital territory Development Au- Comments: Same as above. thority. An on-site inspection will follow. Procedure 3. Receive a pre-approval inspection from the Osun Procedure 11*. Obtain a permanent phone connection State Capital Territory Development Authority Time: 1 day Time: 1 day Cost: NGN 6,000 (handset + connection) Cost: No cost Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. Comments: After BuildCo's application has been reviewed, inspectors from the Osun Most Nigerian companies use a cell phone, with a subscription to one of the opera- State Capital Territory Development Authority conduct an on-site inspection to verify tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be that the plot reflects the details provided in the drawings and that the land is suit- connected at any time before and during the construction. able for the proposed project. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The Procedure 12. Apply to the Power Holding Company of Nigeria report is then attached to the documents and drawings BuildCo submitted for ap- proval, and forwarded to the Osun State Capital Territory Development Authority for (PHCN) for a permanent electricity connection and pay the fees final review and approval. Time: 1 day Cost: NGN 52,500 (3 phase pre-paid meter) Procedure 4. Pay the building permit fees at a designated bank Comments: BuildCo applies to PHCN by submitting a form and the relevant com- Time: 1 day pany documents. On the application form, BuildCo must indicate its consumption Cost: NGN 137,810 (NGN 130,060 approval fee + NGN 2,500 registration fee + NGN capacity as well as the meter (3 phase pre-paid) required. An inspection is then 2,250 development fee + NGN 2,000 affidavit fee + NGN 1,000) conducted. Comments: BuildCo is given a payment order to be submitted to and paid at a des- ignated bank. After payment, BuildCo is given a teller – or bank receipt – to be sub- Procedure 13. Receive an inspection from PHCN and pay the mitted back to the Osun State Capital Territory Development Authority. electricity fees at the bank Time: 1 day Procedure 5. Obtain a building permit from the Osun State Cost: No cost Capital Territory Development Authority Comments: The PHCN business unit sends out a team to inspect the building. Time: 21 days Cost: No cost LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 129 Procedure 14. Obtain a permanent electricity connection from Procedure 4. Obtain a planning approval from the Ibadan Local PHCN Government Time: 34 days Time: 50 days Cost: No cost Cost: No cost Comments: Once the inspection and the payment have been completed, PHCN con- Comments: After all payments have been completed, the documents are reviewed nects BuildCo's warehouse to electricity. Even though the actual connection can be by the planning, architectural and engineering sections of the Ibadan Local Govern- made in 1 day, due to supply problems of 3 phase pre-paid meters, it can take longer ment, and BuildCo is issued a planning approval. Not all local governments in Ibadan for the actual meter to arrive. In the meantime, BuildCo pays an estimated consump- have an architectural section, which may cause delays. In Ibadan, it is common prac- tion monthly fee to PHCN. Except for the application and the inspection, all other tice for Buildco to hire an agent, either well connected with or working at the local electricity related processes are handled by a contractor licensed by LECAN (Licensed government, that makes sure that the application is processed quickly. Without the Electrical Contractors of Nigeria). help of this agent, it takes 8 weeks on average to obtain the planning approval. *This procedure can be completed simultaneously with previous procedures. Procedure 5. Dig a borehole to obtain water Time: 14 days DEALING WITH CONSTRUCTION PERMITS Cost: NGN 500,000 OYO, Ibadan Comments: The public water supply system is very unreliable. It is common practice for construction companies to hire the services of a private borehole company to drill Procedures to build a warehouse and install a borehole of commercial capacity. Warehouse value: US$ 443,000 = NGN 59,003,170 Data as of: January 2010 Procedure 6. Receive an inspection during construction from the Ibadan Local Government Procedure 1. Obtain an environmental impact assessment report Time: 1 day from a registered town planner Cost: No cost Time: 14 days Comments: Although the National Building code lists a precise inspection schedule, Cost: NGN 100,000 inspections in Ibadan do not follow any particular order. During construction, a team Comments: BuildCo hires a registered town planner to analyze the site and draft an of inspectors from the Ibadan Local Government randomly visits the site to ensure environmental impact assessment (EIA) report. The EIA report lists the potential im- that the construction company has a building permit, that the project is duly super- pact of the project on the environment, such as the noise, traffic and increase in hu- vised, and that the construction follows the specifications mentioned in the building man density issues that might arise as a result of the development. In order to draft plan previously provided by BuildCo. Construction work does not stop during the the report, the town planner first verifies the site plan (attached to the certificate of inspection. In practice, three inspections are conducted during construction. occupancy) as well as the preliminary drawings prepared by BuildCo's architects and engineers, before conducting an on-site inspection. If deemed necessary, he may Procedure 7. Receive an inspection during construction from the conduct interviews with relevant stakeholders living in the area. After the inspection, Ibadan Local Government the town planner drafts the EIA report. Time: 1 day Procedure 2. Apply for a planning approval at the Ibadan Local Cost: No cost Government Comments: Same as above. Time: 1 day Procedure 8. Receive an inspection during construction from the Cost: No cost Ibadan Local Government Comments: In Ibadan, application for planning approval must be submitted to the Time: 1 day local government of the area under whose jurisdiction the warehouse is located. In order to obtain a planning approval, BuildCo must submit a duly completed applica- Cost: No cost tion form to the Ibadan Local Government, along with the following documents: Comments: Same as above. a. Proof of ownership (such as a certificate of occupancy); b. Survey plan (attached to the certificate of occupancy); Procedure 9*. Obtain a permanent phone connection c. Five sets of drawings duly signed by a registered architect, including: Time: 1 day t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Cost: NGN 6,000 (handset + connection) age system, construction details, doors and windows schedules); Comments: Nigerian Telecommunications Limited (NITEL), the public company his- t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO torically in charge of providing phone landlines in Nigeria, is no longer functioning. beams, columns, staircases, etc.); Most Nigerian companies use a cell phone, with a subscription to one of the opera- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  connected at any time before and during the construction. lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 10. Apply to the Power Holding Company of Nigeria disposal layout, schedule of sanitary fittings); (PHCN) for a permanent electricity connection d. environmental impact assessment report. Time: 1 day The documents are reviewed by the Ibadan Local Government. In a matter of hours, Cost: NGN 52,500 (3 phase pre-paid meter) BuildCo is notified of the fees to be paid at a designated bank. No on-site inspection ensues in practice. Once the building approval has been granted, two copies of the Comments: BuildCo applies for a permanent electricity connection by submitting drawing are given back to BuildCo to be kept on-site. BuildCo may need to present a form and the relevant company documents to PHCN. On the application form, the stamped copies of its building plans when inspections occur during construction. BuildCo must indicate its consumption capacity as well as the meter (3 phase pre- paid) required. An inspection is then conducted. Payment for the meter is made at a Procedure 3. Pay the planning approval fees at a designated designated bank. bank Procedure 11. Receive an inspection from PHCN and pay the Time: 1 day electricity fees at the bank Cost: NGN 147,515 (NGN 5,000 fencing permit + NGN10,000 registration fee + NGN Time: 1 day 32,515 [Land area x NGN 25] + NGN 100,000 administrative charges) Cost: No cost Comments: BuildCo is given a payment order to be submitted to and paid at a designated bank. After payment, BuildCo is given a teller – or bank receipt – to be Comments: The PHCN business unit sends out a team to inspect the building. After submitted back to the Ibadan Local Government, which then registers the plans and the inspection, BuildCo is given a bill to pay for the meter, which BuildCo must pres- gives BuildCo a registration number. ent at a designated bank. BuildCo must then submit the receipt of the payment to the local PHCN for the electricity connection to proceed. 130 DOING BUSINESS IN NIGERIA 2010 Procedure 12. Obtain a permanent electricity connection from Procedure 3. Pay the building plan approval fees at a designated PHCN bank Time: 51 days Time: 1 day Cost: NGN 10,000 (contractor fees) Cost: NGN 205,000 (NGN 175,000 development permit + NGN 30,000 inspection fee Comments: Once the inspection and the payment have been completed, PHCN [NGN 10,000 per inspection]) connects BuildCo's warehouse to electricity. Even though the actual connection can Comments: BuildCo is given a payment order to be submitted to and paid at a be made in 10 to 14 days, due to supply problems of 3 phase pre-paid meters, it can designated bank. After payment, BuildCo is given a teller – or bank receipt – to be take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- submitted back to the Jos Metropolitan Development Authority. ed consumption monthly fee to PHCN. Except for the application and the inspection, all other electricity related processes are handled by a contractor licensed by LECAN Procedure 4. Receive a pre-approval inspection from the Jos (Licensed Electrical Contractors of Nigeria). Metropolitan Development Board Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: No cost Comments: After BuildCo's application has been reviewed, the Jos Metropolitan DEALING WITH CONSTRUCTION PERMITS Development Board conducts an on-site inspection to verify that the plot reflects the PLATEAU, Jos details provided in the drawings and that the land is suitable for the proposed proj- ect. The inspectors draft a report in which the plot, roads, setback details, adjoining Procedures to build a warehouse land and power and water connections are described. The report is then attached to Warehouse value: US$ 443,000 = NGN 59,003,170 the documents and drawings BuildCo submitted for approval, and forwarded to the Data as of: January 2010 Jos Metropolitan Development Board for final review and approval. Procedure 1. Obtain an environmental impact assessment report Procedure 5. Obtain a building plan approval from the Jos from a registered town planner Metropolitan Development Board Time: 8 days Time: 25 days Cost: NGN 70,000 Cost: No cost Comments: BuildCo hires a registered town planner to analyze the site and draft an Comments: After the inspection and the payments have been completed, the direc- environmental impact assessment (EIA) report. The EIA report lists the potential im- tor of development at the Jos Metropolitan Development Board reviews the inspec- pact of the project on the environment, such as the noise, traffic and increase in hu- tion report and BuildCo's documents before giving his final approval. If granted, man density issues that might arise as a result of the development. In order to draft BuildCo is given a building plan approval, along with an approval number to be dis- the report, the town planner first verifies the survey plan (attached to the certificate played outside the construction-site. Currently, as a new state government has been of occupancy) as well as the preliminary drawings prepared by BuildCo's architects constituted, there is an embargo on development permits at the Jos Metropolitan and engineers, before conducting an on-site inspection. If deemed necessary, he Development Authority, which requires BuildCo to obtain a special authorization to may conduct interviews with relevant stakeholders living in the area. After the in- obtain his permit. This may cause some delays. spection, the town planner drafts the EIA report. BuildCo has the choice between hiring a professional from the Jos Metropolitan Development Board or hire a private Procedure 6. Dig a borehole to obtain water professional. Time: 7 days Procedure 2. Apply for a building plan approval at the Jos Cost: NGN 500,000 (NGN 300,000 equipment rental + NGN 20,000 steel casing + Metropolitan Development Board NGN 20,000 riser pipe + NGN 20,000 safety pipe + NGN 50,000 submersible pump + NGN 100,000 labor cost + NGN 30,000 geophysics tests) Time: 1 day Comments: The public water supply system is very unreliable. It is common practice Cost: No cost for construction companies to hire the services of a private borehole company to drill Comments: In order to obtain a building permit, BuildCo must submit a duly com- and install a borehole of commercial capacity. pleted application form to the Jos Metropolitan Development Board, along with the following documents: Procedure 7. Receive an inspection during construction from the a. Proof of ownership (such as a certificate of occupancy); Jos Metropolitan Development Board b. Survey plan (attached to the certificate of occupancy); Time: 1 day c. Five sets of drawings duly signed by a registered architect, including: Cost: No cost t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Comments: Although the National Building code lists a precise inspection schedule, age system, construction details, doors and windows schedules); inspections in Jos do not follow any particular order. During construction, a team of t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO inspectors from the Jos Metropolitan Development Board randomly visits the site to beams, columns, staircases, etc.); ensure that the construction company has a building permit, that the project is duly t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  supervised, and that the construction follows the specifications mentioned in the lighting point layout, schedule of fittings and fixtures); building plan previously provided by BuildCo. Construction work does not stop dur- ing the inspection. In practice, three inspections are conducted during construction. t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); Procedure 8. Receive an inspection during construction from the d. Environmental impact assessment report; Jos Metropolitan Development Board e. Receipt of payment of education tax; Time: 1 day f. Three-year tax clearance certificate. Cost: No cost The same day the documents are submitted, the Jos Metropolitan Development Comments: Same as above. Board tells BuildCo what fees need to be paid, and gives BuildCo and intimation of payment, which can be paid either at the accounts department of the Develop- Procedure 9. Receive an inspection during construction from the ment Board or at a designated bank. After submission, the five sets of drawings are forwarded to the various departments in charge of vetting them. First it goes to the Jos Metropolitan Development Board planning office which assesses the location plan, then to the architect office which Time: 1 day checks the architectural drawings, then to the health office which verifies the facili- Cost: No cost ties, ventilation and other health related specification. An on-site inspection ensues. Comments: Same as above. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 131 DEALING WITH CONSTRUCTION PERMITS Procedure 10. Request and receive a final inspection from the Jos Metropolitan Development Board RIVERS, Port Harcourt Time: 1 day Procedures to build a warehouse Cost: No cost Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: After construction is complete, BuildCo applies to the Jos Metropolitan Data as of: January 2010 Development Board for a certificate of completion. A final inspection ensues, during which the Jos Metropolitan Development Board ensures that BuildCo's warehouse Procedure 1. Obtain an environmental impact assessment report abides by the details provided in the drawings and by the safety/construction stan- from an environment specialist dards described in the law. Time: 14 days Cost: NGN 35,000 Procedure 11. Obtain a certificate of completion from the Jos Comments: BuildCo hires an environment specialist to analyze the site and draft Metropolitan Development Board an environmental impact assessment (EIA) report. The EIA report lists the potential Time: 14 days impact of the project on the environment, such as the noise, traffic and increase in Cost: No cost human density issues that might arise as a result of the development. In order to draft the report, the environment specialist first verifies the site plan (attached to the Comments: After the final inspection, the Jos Metropolitan Development Board certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's issues BuildCo a certificate of completion attesting that the construction has been architects and engineers, before conducting an on-site inspection. If deemed neces- carried out according to the building plans submitted, and that BuildCo can now oc- sary, he may conduct interviews with relevant stakeholders living in the area. After cupy the building. the inspection, the town planner drafts the EIA report, and gives 3 copies to Buildco, and retains one copy for himself. Procedure 12*. Obtain a permanent phone connection Time: 1 day Procedure 2. Apply for a building plan approval at the Ministry of Cost: NGN 6,000 (handset + connection) Urban Development Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Time: 1 day torically in charge of providing phone landlines in Nigeria, is no longer functioning. Cost: No cost Most Nigerian companies use a cell phone, with a subscription to one of the opera- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Comments: In order to obtain a building plan approval, BuildCo must submit a duly connected at any time before and during the construction. completed application form to the Ministry of Urban Development, along with the following documents: Procedure 13. Apply to the Power Holding Company of Nigeria a. Proof of ownership (such as a certificate of occupancy); (PHCN) for a permanent electricity connection and pay the fees b. Survey plan (attached to the certificate of occupancy); Time: 1 day c. Drawings duly signed by a registered architect, including: Cost: NGN 52,500 (3 phase pre-paid meter) t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Comments: BuildCo applies to PHCN by submitting a form and the relevant com- age system, construction details, doors and windows schedules); pany documents. On the application form, BuildCo must indicate its consumption t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO capacity as well as the meter (3 phase pre-paid) required. An inspection is then con- beams, columns, staircases, etc.); ducted. In Jos, PHCN deals with applicants only through PHCN registered contrac- t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  tors, which adds to the cost of the procedure. lighting point layout, schedule of fittings and fixtures); t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Procedure 14. Receive an inspection from PHCN and pay the disposal layout, schedule of sanitary fittings); electricity fees at the bank d. Three-year tax clearance certificate. Time: 1 day The documents are reviewed by officers at the Ministry of Urban Development. An Cost: No cost on-site inspection will follow. Comments: The PHCN business unit sends out a team to inspect the building. In practice this is usually done on the same day the application is made. Procedure 3. Receive a pre-approval inspection from the Ministry of Urban Development Procedure 15. Obtain a permanent electricity connection from Time: 1 day PHCN Cost: No cost Time: 21 days Comments: After BuildCo's application has been reviewed, the Ministry of Urban Cost: NGN 20,000 (contractor's fees) Development conducts an on-site inspection to verify that the plot reflects the de- Comments: Once the inspection and the payment have been completed, PHCN tails provided in the drawings and that the land is suitable for the proposed project. connects BuildCo's warehouse to electricity. Even though the actual connection can The inspectors draft a report in which the plot, roads, setback details, adjoining land be made in 14 days, due to supply problems of 3 phase pre-paid meters, it can take and power and water connections are described. The report is then attached to the longer for the actual meter to arrive. In the meantime, BuildCo pays an estimated documents and drawings BuildCo submitted for approval, and forwarded to the Min- consumption monthly fee to PHCN. Except for the application and the inspection, istry of Urban Development for final review and approval. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Procedure 4. Pay the building plan approval fees at a designated bank *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: NGN 300,000 Comments: BuildCo is given a payment order to be submitted to and paid at a designated bank. After payment, BuildCo is given a teller – or bank receipt – to be submitted back to the Ministry of Urban Development. Procedure 5. Obtain a building plan approval from the Ministry of Urban Development Time: 60 days Cost: No cost Comments: After the inspection and the payments have been completed, the docu- ments – along with the inspection report – are submitted to the Commissioner of the Ministry of Urban Development for final approval. 132 DOING BUSINESS IN NIGERIA 2010 DEALING WITH CONSTRUCTION PERMITS Procedure 6. Dig a borehole to obtain water Time: 7 days SOKOTO, Sokoto Cost: NGN 250,000 Procedures to build a warehouse Comments: The public water supply system is very unreliable. It is common practice Warehouse value: US$ 443,000 = NGN 59,003,170 for construction companies to hire the services of a private borehole company to drill Data as of: January 2010 and install a borehole of commercial capacity. Procedure 1. Apply for a development permit at the Sokoto Procedure 7. Receive an inspection at setting out level from the Urban and Regional Planning Board Ministry of Urban Development Time: 1 day Time: 1 day Cost: NGN 110,000 Cost: No cost Comments: In order to obtain a development permit, BuildCo must submit a duly Comments: Once the construction reaches the setting out stage, BuildCo's architect completed application form to the Sokoto Urban and Regional Planning Board, must notify the Ministry of Urban Development which then sends a team of inspec- along with the following documents: tors – an architect, an engineer and a town planner – to the construction-site to a. Proof of ownership (such as a certificate of occupancy); conduct an inspection. The purpose of the inspection is to ensure that the related b. Survey plan (attached to the certificate of occupancy); stage has been completed successfully, that the project is duly supervised, and that c. Four sets of drawings duly signed by a registered architect, including: the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. By law, t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- four inspections are required: at the setting out, foundation, superstructure and roof age system, construction details, doors and windows schedules); level. But in practice, only one is conducted. t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Procedure 8*. Obtain a permanent phone connection t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Time: 1 day lighting point layout, schedule of fittings and fixtures); Cost: NGN 6,000 (handset + connection) t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, waste disposal layout, schedule of sanitary fittings). Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. The documents are reviewed by officers at the Sokoto Urban and Regional Planning Most Nigerian companies use a cell phone, with a subscription to one of the opera- Board. An on-site inspection will follow. Once the building approval has been grant- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be ed, two copies of the drawing are given back to BuildCo to be kept on-site. BuildCo connected at any time before and during the construction. may need to present the stamped copies of its building plans when inspections oc- cur during construction. Procedure 9. Apply to the Power Holding Company of Nigeria (PHCN) for a permanent electricity connection Procedure 2. Receive a pre-approval inspection from the Sokoto Urban and Regional Planning Board Time: 1 day Time: 1 day Cost: NGN 52,500 (3 phase pre-paid meter) Cost: No cost Comments: BuildCo applies for a permanent electricity connection by submitting a form and the relevant company documents to PHCN. On the application form, Build- Comments: After BuildCo's application has been reviewed, the Sokoto Urban and Co must indicate its consumption capacity as well as the meter (3 phase pre-paid) Regional Planning Board conducts an on-site inspection to verify that the plot required. An inspection is then conducted. Payment for the meter is made through reflects the details provided in the drawings and that the land is suitable for the bank draft to PHCN. proposed project. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The report is Procedure 10. Receive an inspection from PHCN and pay the then attached to the documents and drawings BuildCo submitted for approval, and forwarded to the Sokoto Urban and Regional Planning Board for final review and electricity fees at the bank approval. Time: 1 day Cost: No cost Procedure 3. Obtain a development permit from the Sokoto Comments: The PHCN business unit sends out a team to inspect the building. In Urban and Regional Planning Board practice this is usually done on the same day the application is made. Time: 21 days Cost: No cost Procedure 11. Obtain a permanent electricity connection from Comments: After the inspection and the payments have been completed, the Soko- PHCN to Urban and Regional Planning Board examines the documents submitted and is- Time: 60 days sues BuildCo a planning approval. This procedure can take from 4 weeks to 3 months, Cost: NGN 20,000 (contractor fees) depending on the amount of follow-up conducted by BuildCo. Comments: Once the inspection and the payment have been completed, PHCN con- nects BuildCo's warehouse to electricity. Even though the actual connection can be Procedure 4. Receive an inspection during construction by the made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can Sokoto Urban and Regional Planning Board take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- Time: 1 day ed consumption monthly fee to PHCN. Except for the application and the inspection, Cost: No cost all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Comments: Although the National Building code lists a precise inspection schedule, inspections in Sokoto do not follow any particular order. During construction, a team of inspectors from the Sokoto Urban and Regional Planning Board randomly visits *This procedure can be completed simultaneously with previous procedures. the site to ensure that the construction company has a building permit, that the project is duly supervised, and that the construction follows the specifications men- tioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. In practice, three inspections are conducted during construction. Procedure 5. Receive an inspection during construction by the Sokoto Urban and Regional Planning Board Time: 1 day Cost: No cost Comments: Same as above. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 133 DEALING WITH CONSTRUCTION PERMITS Procedure 6. Receive an inspection during construction by the Sokoto Urban and Regional Planning Board TARABA, Jalingo Time: 1 day Procedures to build a warehouse Cost: No cost Warehouse value: US$ 443,000 = NGN 59,003,170 Comments: Same as above. Data as of: January 2010 Procedure 7*. Obtain a permanent phone connection Procedure 1. Obtain an environmental impact assessment report from a registered town planner Time: 1 day Time: 7 days Cost: NGN 6,000 (handset + connection) Cost: NGN 75,000 (town planner fees) Comments: Nigerian Telecommunications Limited (NITEL), the public company his- torically in charge of providing phone landlines in Nigeria, is no longer functioning. Comments: BuildCo hires a registered town planner to analyze the site and draft an Most Nigerian companies use a cell phone, with a subscription to one of the opera- environmental impact assessment (EIA) report. The EIA report lists the potential im- tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be pact of the project on the environment, such as the noise, traffic and increase in hu- connected at any time before and during the construction. man density issues that might arise as a result of the development. In order to draft the report, the town planner first verifies the site plan (attached to the certificate of Procedure 8. Apply to the Power Holding Company of Nigeria occupancy) as well as the preliminary drawings prepared by BuildCo's architects and engineers, before conducting an on-site inspection. If deemed necessary, he may (PHCN) for a permanent electricity connection and pay the fees conduct interviews with relevant stakeholders living in the area. After the inspection, Time: 1 day the town planner drafts the EIA report, and gives 2 copies to Buildco, and retains one Cost: NGN 52,500 (3 phase pre-paid meter) copy for himself. Comments: BuildCo applies to PHCN by submitting a form and the relevant com- pany documents. On the application form, BuildCo must indicate its consumption Procedure 2. Obtain a site analysis report from a registered town capacity as well as the meter (3 phase pre-paid) required. An inspection is then con- planner ducted. Payment for the meter is made in cash at the PHCN office. Time: 7 days Cost: NGN 20,000 (town planner fees) Procedure 9. Receive an inspection from PHCN and pay the Comments: BuildCo hires a registered town planner to analyze the site and draft a electricity fees at the bank site analysis report (SAR), which details the location, accessibility and topography Time: 1 day of the site, as well as the proximity of the site to essential services: electricity source, Cost: No cost water source, hospital, commercial area, airport, etc. In Taraba, the report is required Comments: The PHCN business unit sends out a team to inspect the building. In of all heavy constructions, including warehouses. The town planner typically carries practice this is usually done on the same day the application is made. out an inspection of the site, drafts the report, and give two copies to BuildCo. Procedure 10. Obtain a permanent electricity connection from Procedure 3. Obtain a fire safety report from the Fire Service PHCN Department Time: 34 days Time: 5 days Cost: No cost Cost: NGN 10,000 Comments: Once the inspection and the payment have been completed, PHCN con- Comments: BuildCo submits the structural plans of the building to the Fire Service nects BuildCo's warehouse to electricity. Even though the actual connection can be Department for examination. Based on its assessment of the drawings, the Fire Ser- made in a matter of days, due to supply problems of 3 phase pre-paid meters, it can vice Departments drafts a report, in which it details the possible fire hazards caused take longer for the actual meter to arrive. In the meantime, BuildCo pays an estimat- by the projects, as well as the necessary fire precautions and escape provisions to be ed consumption monthly fee to PHCN. Except for the application and the inspection, taken by BuildCo. Two copies of the report are given to BuildCo. all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Procedure 4. Apply for a building plan approval at the Town Planning Department of the Ministry of Environment and Urban Procedure 11. Apply for water connection and pay the fees Development Time: 1 day Time: 1 day Cost: NGN 70,000 Cost: No cost Comments: In order to obtain a water connection, BuildCo needs to submit a simple Comments: In order to obtain a building plan approval, BuildCo must submit a duly application to the Sokoto Water Corporation. completed application form to the Town Planning Department of the Ministry of En- vironment and Urban Development, along with the following documents: Procedure 12. Receive inspection by water provider a. Proof of ownership (such as a certificate of occupancy); Time: 1 day b. Survey plan (attached to the certificate of occupancy); Cost: No cost c. Five sets of drawings duly signed by a registered architect, including: Comments: After the application has been submitted, a team of inspectors from the t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Sokoto Water Corporation visits the site to ascertain what needs to be done. age system, construction details, doors and windows schedules); t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO Procedure 13*. Obtain water connection beams, columns, staircases, etc.); Time: 3 days t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Cost: No cost lighting point layout, schedule of fittings and fixtures); Comments: Usually, the building is connected in a matter of days. t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM disposal layout, schedule of sanitary fittings); *This procedure can be completed simultaneously with previous procedures. d. Environmental impact assessment report; e. Site analysis report; f. Three-year tax clearance certificate; g. Fire safety report. 134 DOING BUSINESS IN NIGERIA 2010 The documents are reviewed by Town Planning Department. An on-site inspection Procedure 11. Receive an inspection during construction from will follow. Specific information. Once the building approval has been granted, two copies of the drawing are given back to BuildCo to be kept on-site. BuildCo may need the Town Planning Department of the Ministry of Environment to present the stamped copies of its building plans when inspections occur during and Urban Development construction. Time: 1 day Cost: No cost Procedure 5. Receive a pre-approval inspection from the Town Comments: Same as above. Planning Department of the Ministry of Environment and Urban Development Procedure 12*. Obtain a permanent phone connection Time: 1 day Time: 1 day Cost: No cost Cost: NGN 6,000 (handset + connection) Comments: After BuildCo's application has been reviewed, the Town Planning Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Department of the Ministry of Environment and Urban Development conducts an torically in charge of providing phone landlines in Nigeria, is no longer functioning. on-site inspection to verify that the plot reflects the details provided in the drawings Most Nigerian companies use a cell phone, with a subscription to one of the opera- and that the land is suitable for the proposed project. The inspectors draft a report tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be in which the plot, roads, setback details, adjoining land and power and water con- connected at any time before and during the construction. nections are described. While the Town Planning Department conducts the building plan approval inspection, an officer from the Fire Service Department is invited to Procedure 13. Apply to the Power Holding Company of Nigeria conduct an inspection and perform a verification exercise. If deemed satisfactory, (PHCN) for a permanent electricity connection a stamp of approval is applied on the fire safety report. The inspection and safety reports are then attached to the documents and drawings BuildCo submitted for Time: 1 day approval, and forwarded to the Town Planning Department for final review and ap- Cost: NGN 52,500 (3 phase pre-paid meter) proval. Comments: BuildCo applies for a permanent electricity connection by submitting a form and the relevant company documents to PHCN. On the application form, Build- Procedure 6. Obtain a building plan approval from the Town Co must indicate its consumption capacity as well as the meter (3 phase pre-paid) Planning Department of the Ministry of Environment and Urban required. An inspection is then conducted. Payment for the meter is made through a Development bank draft to PHCN. Time: 21 days Procedure 14. Receive an inspection from PHCN and pay the Cost: NGN 55,000 (NGN 30,000 town planning fee + NGN 20,000 administration fee electricity fees at the bank + NGN 5,000 health fee) Time: 1 day Comments: After the inspection and the payments have been completed, the documents are vetted by a Town Planning Officer, then forwarded to the approving Cost: No cost officer for final approval. If granted, the Town Planning Department issues BuildCo a Comments: The PHCN business unit sends out a team to inspect the building. building plan approval in the form of an official letter and two stamped copies of the building plans initially submitted. Procedure 15. Obtain a permanent electricity connection from PHCN Procedure 7. Dig a borehole to obtain water Time: 21 days Time: 14 days Cost: No cost Cost: NGN 500,000 Comments: Once the inspection and the payment have been completed, PHCN con- Comments: The public water supply system is very unreliable. It is common practice nects BuildCo's warehouse to electricity. There is no meter supply problem in Taraba. for construction companies to hire the services of a private borehole company to drill Meter connection can be completed in 21 days. Except for the application and the and install a borehole of commercial capacity. inspection, all other electricity related processes are handled by a contractor licensed by LECAN (Licensed Electrical Contractors of Nigeria). Procedure 8. Receive an inspection during construction from the Town Planning Department of the Ministry of Environment and *This procedure can be completed simultaneously with previous procedures. Urban Development Time: 1 day DEALING WITH CONSTRUCTION PERMITS Cost: No cost YOBE, Damaturu Comments: Although the National Building code lists a precise inspection schedule, inspections in Taraba do not follow any particular order. During construction, a team Procedures to build a warehouse of inspectors from the Urban Development Board randomly visits the site to ensure Warehouse value: US$ 443,000 = NGN 59,003,170 that the construction company has a building permit, that the project is duly super- Data as of: January 2010 vised, and that the construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the Procedure 1. Obtain an environmental impact assessment report inspection. from a registered town planner Time: 18 days Procedure 9. Receive an inspection during construction from the Cost: NGN 43,000 (based on the value of the project: 0.3% of the first NGN 2 million Town Planning Department of the Ministry of Environment and + 0.2% of the next NGN 3 million + 0.1% of the next NGN 15 million + 0.05% of the Urban Development next NGN 30 million + 0.02% of the next NGN 50 million) Time: 1 day Comments: BuildCo hires a registered town planner to analyze the site and draft an Cost: No cost environmental impact assessment (EIA) report. The EIA report lists the potential im- Comments: Same as above. pact of the project on the environment, such as the noise, traffic and increase in hu- man density issues that might arise as a result of the development. In order to draft Procedure 10. Receive an inspection during construction from the report, the town planner first verifies the site plan (attached to the certificate of occupancy) as well as the preliminary drawings prepared by BuildCo's architects and the Town Planning Department of the Ministry of Environment engineers, before conducting an on-site inspection. If deemed necessary, he may and Urban Development conduct interviews with relevant stakeholders living in the area. After the inspection, Time: 1 day the town planner drafts the EIA report, and gives 3 copies to Buildco, and retains one Cost: No cost copy for himself. Comments: Same as above. LIST OF PROCE %63&4t DEALING WITH CONSTRUCTION PERMITS 135 Procedure 2*. Obtain a fire safety report from the Fire Service inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The report is then attached to the docu- Department ments and drawings BuildCo submitted for approval, and forwarded to the Yobe Time: 4 days State Ministry of Housing for final review and approval. Cost: NGN 5,000 Comments: Officials of the Fire Service Department examine the drawings and Procedure 8. Pay the building permit fees at a designated bank make recommendations regarding which fire equipment should be installed, and Time: 1 day how the building should be built to minimize risks of fire. The report includes speci- Cost: NGN 130,090 (NGN 100 per square meter commercial properties) fications, accessibility to the site, location of the nearest source of water, location of Comments: BuildCo is given a payment order to be submitted to and paid at a fire hydrants and circuit breakers, power distribution board, electrical fittings, as well designated bank. After payment, BuildCo is given a teller – or bank receipt – to be as types and size of electrical cables. Two copies of the report are given to BuildCo. submitted back to the Yobe State Ministry of Housing. Procedure 3. Apply for a site plan approval at the Yobe State Procedure 9. Obtain a building permit from the Yobe State Ministry of Land and Survey Ministry of Housing Time: 1 day Time: 4 days Cost: No cost Cost: No cost Comments: In order to obtain a site plan approval, BuildCo must submit a duly com- Comments: After the inspection and the payments have been completed, the State pleted application form to the Director of Planning Development Control at the Yobe Ministry of Land and Survey examines the documents submitted and issues BuildCo State Ministry of Land and Survey, along with the following documents: a building permit. a. Proof of ownership (such as a certificate of occupancy); b. Survey plan (attached to the certificate of occupancy); Procedure 10. Dig a borehole to obtain water c. Drawings duly signed by a registered architect, including: Time: 14 days t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- Cost: NGN 500,000 age system, construction details, doors and windows schedules); Comments: The public water supply system is very unreliable. It is common practice t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO for construction companies to hire the services of a private borehole company to drill beams, columns, staircases, etc.); and install a borehole of commercial capacity. t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  lighting point layout, schedule of fittings and fixtures); Procedure 11. Receive an inspection at setting out level from the t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Yobe State Ministry of Lands and Survey disposal layout, schedule of sanitary fittings); Time: 1 day d. Environmental impact assessment report; Cost: No cost e. Site analysis report; Comments: Once the setting out is complete, BuildCo's architect must notify the f. Three-year tax clearance certificate; Yobe State Ministry of Housing. A team of inspectors (an architect, a structural en- g. Fire safety report; gineer, a mechanical engineer and, at the initial stage, a town planner) visits the construction-site to ensure that the project is duly supervised and that the construc- h. Certificate of structural stability signed by a registered engineer; tion follows the specifications mentioned in the building plan previously provided i. Receipt of payment of the development levy; by BuildCo. Construction work does not stop during the inspection. If a problem is The documents are reviewed by officers at the Yobe State Ministry of Land and Sur- identified, the inspection teams issues a stop order requesting the issue to be re- vey. An on-site inspection will follow. solved before construction proceeds further. If there is no problem, the inspecting team signs the log kept on-site by the supervising architect. After each inspection, Procedure 4. Receive a pre-approval inspection from the Yobe an approval is issued in writing authorizing the construction to proceed. State Ministry of Land and Survey Time: 1 day Procedure 12. Receive an inspection at foundation level from the Yobe State Ministry of Lands and Survey Cost: No cost Time: 1 day Comments: After BuildCo's application has been reviewed, the Yobe State Ministry of Land and Survey conducts an on-site inspection to verify that the plot reflects Cost: No cost the details provided in the drawings and that the land is suitable for the proposed Comments: Once the foundation is complete, BuildCo's architect must notify the project. Yobe State Ministry of Housing. A team of inspectors (an architect, a structural en- gineer, a mechanical engineer and, at the initial stage, a town planner) visits the Procedure 5. Obtain the site plan approval from the Yobe State construction-site to ensure that the project is duly supervised and that the construc- Ministry of Land and Survey tion follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. If a problem is Time: 3 days identified, the inspection teams issues a stop order requesting the issue to be re- Cost: No cost solved before construction proceeds further. If there is no problem, the inspecting Comments: Following the inspection, the Yobe State Ministry of Land and Survey team signs the log kept on-site by the supervising architect. After each inspection, examines the documents submitted and issues BuildCo a site plan approval. an approval is issued in writing authorizing the construction to proceed. Procedure 6. Apply for a building permit at the Yobe State Procedure 13. Receive an inspection at first floor level from the Ministry of Housing Yobe State Ministry of Lands and Survey Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: In order to obtain a building permit, BuildCo must resubmit for approval Comments: Once the first floor is complete, BuildCo's architect must notify the Yobe all aforementioned documents to the Chief Architect. An inspection will follow. State Ministry of Housing. A team of inspectors (an architect, a structural engineer, a mechanical engineer and, at the initial stage, a town planner) visits the construction- Procedure 7. Receive a pre-approval inspection from the Yobe site to ensure that the project is duly supervised and that the construction follows State Ministry of Housing the specifications mentioned in the building plan previously provided by BuildCo. Time: 1 day Construction work does not stop during the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be resolved before Cost: No cost construction proceeds further. If there is no problem, the inspecting team signs the Comments: After BuildCo's application has been reviewed, the Yobe State Ministry log kept on-site by the supervising architect. After each inspection, an approval is is- of Housing conducts an on-site inspection to verify that the plot reflects the details sued in writing authorizing the construction to proceed. provided in the drawings and that the land is suitable for the proposed project. The 136 DOING BUSINESS IN NIGERIA 2010 Procedure 14. Receive an inspection at second floor level from Procedure 2. Apply for a building permit at the Zamfara State the Yobe State Ministry of Lands and Survey Urban and Regional Planning Board Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: Once the second floor is complete, BuildCo's architect must notify Comments: In order to obtain a building permit, BuildCo must submit a duly com- the Yobe State Ministry of Housing. A team of inspectors (an architect, a structural pleted application form to the Zamfara State Urban and Regional Planning Board, engineer, a mechanical engineer and, at the initial stage, a town planner) visits the along with the following documents: construction-site to ensure that the project is duly supervised and that the construc- a. Proof of ownership (such as a certificate of occupancy); tion follows the specifications mentioned in the building plan previously provided b. Survey plan (attached to the certificate of occupancy); by BuildCo. Construction work does not stop during the inspection. If a problem is identified, the inspection teams issues a stop order requesting the issue to be re- c. Drawings duly signed by a registered architect, including: solved before construction proceeds further. If there is no problem, the inspecting t "SDIJUFDUVSBMEFTJHOT TJUFQMBO øPPSQMBOT FMFWBUJPOT TFDUJPOT TUPSNESBJO- team signs the log kept on-site by the supervising architect. After each inspection, age system, construction details, doors and windows schedules); an approval is issued in writing authorizing the construction to proceed. t 4USVDUVSBMEFTJHOT EFTJHODBMDVMBUJPOT GPVOEBUJPOMBZPVU TUSVDUVSBMEFUBJMTPO beams, columns, staircases, etc.); Procedure 15*. Obtain a permanent phone connection t &MFDUSJDBMEFTJHOT MJHIUJOHBOEQPXFSMPBEDBMDVMBUJPO QPXFSQPJOUMBZPVU  Time: 1 day lighting point layout, schedule of fittings and fixtures); Cost: NGN 6,000 (handset + connection) t .FDIBOJDBMFOHJOFFSJOHEFTJHOT MPBEDBMDVMBUJPOT XBTUFEJTQPTBMMBZPVU TPJM Comments: Nigerian Telecommunications Limited (NITEL), the public company his- disposal layout, schedule of sanitary fittings); torically in charge of providing phone landlines in Nigeria, is no longer functioning. d. Fire safety report. Most Nigerian companies use a cell phone, with a subscription to one of the opera- The documents are reviewed by officers at the Zamfara State Urban and Regional tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be Planning Board. An on-site inspection will follow. connected at any time before and during the construction. Procedure 3. Receive a pre-approval inspection from the Zamfara Procedure 16. Apply to the Power Holding Company of Nigeria State Urban and Regional Planning Board (PHCN) for a permanent electricity connection and pay the fees Time: 1 day Time: 1 day Cost: No cost Cost: NGN 31,500 (3 phase credit meter) Comments: After BuildCo's application has been reviewed, the Zamfara State Ur- Comments: BuildCo applies for a permanent electricity connection by submitting ban and Regional Planning Board conducts an on-site inspection to verify that the a form and the relevant company documents to PHCN. On the application form, plot reflects the details provided in the drawings and that the land is suitable for BuildCo must indicate its consumption capacity as well as the meter (credit 3 phase) the proposed project. The inspectors draft a report in which the plot, roads, setback required. An inspection is then conducted. Payment for the meter is made in cash at details, adjoining land and power and water connections are described. The report is the PHCN office. then attached to the documents and drawings BuildCo submitted for approval, and forwarded to the Zamfara State Urban and Regional Planning Board for final review Procedure 17. Receive an inspection from PHCN and pay the and approval. electricity fees at the bank Time: 1 day Procedure 4. Pay the building permit fees at a designated bank Cost: No cost Time: 1 day Comments: The PHCN business unit sends out a team to inspect the building. In Cost: NGN 70,000 practice this is usually done on the same day the application is made. Comments: BuildCo is given a payment order to be submitted to and paid at a des- ignated bank. After payment, BuildCo is given a teller – or bank receipt – to be sub- Procedure 18. Obtain a permanent electricity connection from mitted back to the Zamfara State Urban and Regional Planning Board. PHCN Time: 14 days Procedure 5. Obtain a building permit from the Zamfara State Cost: NGN 20,000 (contractor fees) Urban and Regional Planning Board Comments: Once the inspection and the payment have been completed, PHCN Time: 5 days connects BuildCo's warehouse to electricity. Only post-paid 3 phase credit meter are Cost: No cost available in Damaturu, and take 14 days to arrive. Except for the application and the Comments: After the inspection and the payments have been completed, BuildCo's inspection, all other electricity related processes are handled by a contractor licensed application – along with the inspection report – is forwarded to the Director General by LECAN (Licensed Electrical Contractors of Nigeria). of Town Planning who issues the final approval. The building permit is valid for 2 years. *This procedure can be completed simultaneously with previous procedures. Procedure 6. Dig a borehole to obtain water DEALING WITH CONSTRUCTION PERMITS Time: 5 days Cost: NGN 1,500,000 ZAMFARA, Gusau Comments: The public water supply system being very unreliable, the common Procedures to build a warehouse practice is for construction companies to hire the services of a private borehole com- Warehouse value: US$ 443,000 = NGN 59,003,170 pany to drill and install a borehole of commercial capacity. Zamfara is located on a Data as of: January 2010 rocky terrain, which increases the price of drilling a borehole in the area. Procedure 1. Obtain a fire safety report from the Fire Service Procedure 7. Receive an inspection at setting out level from the Department Yobe State Ministry of Lands and Survey Time: 7 days Time: 1 day Cost: No cost Cost: No cost Comments: Officials of the Fire Service Department examine the drawings and Comments: Once the setting out is complete, BuildCo's architect must notify the make recommendations regarding which fire equipment should be installed, and Zamfara State Urban and Regional Planning Board. A team of inspectors (an archi- how the building should be built to minimize risks of fire. The report includes speci- tect, a structural engineer, a mechanical engineer and, at the initial stage, a town fications, accessibility to the site, location of the nearest source of water, location of planner) visits the construction-site to ensure that the project is duly supervised and fire hydrants and circuit breakers, power distribution board, electrical fittings, as well that the construction follows the specifications mentioned in the building plan pre- as types and size of electrical cables. Two copies of the report are given to BuildCo. viously provided by BuildCo. Construction work does not stop during the inspection. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 137 If a problem is identified, the inspection teams issues a stop order requesting the Procedure 13. Receive an inspection from PHCN and pay the issue to be resolved before construction proceeds further. If there is no problem, the inspecting team signs the diary kept on-site by the supervising architect. After each electricity fees at the bank inspection, an approval is issued in writing authorizing the construction to proceed. Time: 1 day Cost: No cost Procedure 8. Receive an inspection at foundation level from the Comments: The PHCN business unit sends out a team to inspect the building. In Yobe State Ministry of Lands and Survey practice this is usually done on the same day the application is made. Time: 1 day Cost: No cost Procedure 14. Obtain a permanent electricity connection from Comments: Once the foundation is complete, BuildCo's architect must notify the PHCN Zamfara State Urban and Regional Planning Board. A team of inspectors (an archi- Time: 30 days tect, a structural engineer, a mechanical engineer and, at the initial stage, a town Cost: NGN 20,000 (contractor fees) planner) visits the construction-site to ensure that the project is duly supervised and Comments: Once the inspection and the payment have been completed, PHCN that the construction follows the specifications mentioned in the building plan pre- connects BuildCo's warehouse to electricity. Only post-paid 3 phase credit meter are viously provided by BuildCo. Construction work does not stop during the inspection. available in Zamfara. It takes 30 days to obtain a meter. Except for the application If a problem is identified, the inspection teams issues a stop order requesting the and the inspection, all other electricity related processes are handled by a contractor issue to be resolved before construction proceeds further. If there is no problem, the licensed by LECAN (Licensed Electrical Contractors of Nigeria). inspecting team signs the diary kept on-site by the supervising architect. After each inspection, an approval is issued in writing authorizing the construction to proceed. *This procedure can be completed simultaneously with previous procedures. Procedure 9. Receive an inspection at first floor level from the Yobe State Ministry of Lands and Survey Time: 1 day LIST OF PROCEDURES Cost: No cost Registering property Comments: Once the first floor is complete, BuildCo's architect must notify the Zam- fara State Urban and Regional Planning Board. A team of inspectors (an architect, a structural engineer, a mechanical engineer and, at the initial stage, a town planner) visits the construction-site to ensure that the project is duly supervised and that the ABIA, Aba construction follows the specifications mentioned in the building plan previously provided by BuildCo. Construction work does not stop during the inspection. If a Property value: USD 58,050 = NGN 7,731,680 problem is identified, the inspection teams issues a stop order requesting the is- Data as of: January 2010 sue to be resolved before construction proceeds further. If there is no problem, the inspecting team signs the diary kept on-site by the supervising architect. After each Procedure: 1. Pay search fee at a designated bank inspection, an approval is issued in writing authorizing the construction to proceed. Time: 1 day Cost: NGN 1,500 (fixed search fee) Procedure 10. Receive an inspection at second floor level from Comments: Before the search can be conducted, the applicant is required to pay the Yobe State Ministry of Lands and Survey the search fee at a designated bank and obtain proof of payment. Time: 1 day Cost: No cost Procedure: 2. Conduct search of property files at Land Registry Comments: Once the second floor is complete, BuildCo's architect must notify the Time: 1 day Zamfara State Urban and Regional Planning Board. A team of inspectors (an archi- Cost: NGN 10,000 (legal fee) tect, a structural engineer, a mechanical engineer and, at the initial stage, a town Comments: A lawyer is required to conduct the property search on behalf of the planner) visits the construction-site to ensure that the project is duly supervised and applicant. Lawyer's fees are charged based on the Scale of Fees for Conveyancing that the construction follows the specifications mentioned in the building plan pre- Matters [Legal Practitioners (Remuneration for Legal Documentation and other Land viously provided by BuildCo. Construction work does not stop during the inspection. Matters) Order 1991]. In practice, lawyers usually charge NGN 10,000 as legal fees If a problem is identified, the inspection teams issues a stop order requesting the for conducting the search of property files. The lawyer makes a formal application to issue to be resolved before construction proceeds further. If there is no problem, the the Ministry of Lands, Survey and Urban Planning, and attaches the receipt of pay- inspecting team signs the diary kept on-site by the supervising architect. After each ment of search fee. It takes 1 day to perform the search as the deeds Office is now inspection, an approval is issued in writing authorizing the construction to proceed. computerized. Procedure 11*. Obtain a permanent phone connection Procedure: 3. Execute deed of assignment Time: 1 day Time: 1 day Cost: NGN 6,000 (handset + connection) Cost: NGN 773,168 (10% of the property value) Comments: Nigerian Telecommunications Limited (NITEL), the public company his- Comments: Lawyers are required by law to prepare the deed of assignment to be torically in charge of providing phone landlines in Nigeria, is no longer functioning. executed by the parties. Generally, lawyers charge 10% of the value of consideration, Most Nigerian companies use a cell phone, with a subscription to one of the opera- which is negotiable. The fee covers both the preparation of the deed of assignment tors available in the country (MTN, ZAIN, GLO or ETISALAT). The phone line can be and the registration of title. connected at any time before and during the construction. Procedure: 4. Submit application for Governor's consent to the Procedure 12. Apply to the Power Holding Company of Nigeria assignment to Lands Registry (PHCN) for a permanent electricity connection and pay the fees Time: 1 day Time: 1 day Cost: No cost Cost: NGN 31,500 (3 phase credit meter) Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised Comments: BuildCo applies for a permanent electricity connection by submitting in the territory of each state in the federation became vested in the Governor of a form and the relevant company documents to PHCN. On the application form, the state, whose prior consent is mandatory for the legal validity of any transfers or BuildCo must indicate its consumption capacity as well as the meter (3 phase credit) alienation of interest in landed property. In Abia State, the authority to grant con- required. An inspection is then conducted. Payment for the meter is made in cash at sent has not been delegated, and the Governor himself approves the applications. the PHCN office. The application consists of a formal letter addressed to the Director of Lands, Minis- try of Lands, Survey and Urban Planning, and the following documents: a. Four (4) copies of the deed of assignment for which consent is sought; b. Current tax clearance certificate. 138 DOING BUSINESS IN NIGERIA 2010 REGISTERING PROPERTY Procedure: 5. Receive inspection and valuation of property from Zonal Lands Department ADAMAWA, Yola Time: 14 days Property value: USD 58,050 = NGN 7,731,680 Cost: No cost Data as of: January 2010 Comments: Inspection and valuation of the property is conducted by the valuation Procedure: 1. Pay search fee at a designated bank unit of the Zonal Lands Department. The purpose of the valuation is to determine the market value of the property, based on which the consent fee is calculated. The Time: 1 day valuation is usually conducted within 14 days of the application for consent. Cost: NGN 2,500 (NGN 2,500 search fee) Comments: Before the search can be performed the applicant has to pay the search Procedure: 6. Obtain a report from the property valuation and fee at a designated bank. pick up payment orders from Lands Registry Time: 10 days Procedure: 2. Conduct search on property files at Lands Registry Cost: No cost Time: 5 days Comments: It takes 10 days for the authorities to prepare the valuation report and Cost: NGN 386,584 (5% of the property value for legal fees) calculate the fees. In December 2009 the Executive Council of Abia State Govern- Comments: The application letter to conduct the search is accompanied by a sworn ment passed a resolution to increase administrative fees by 25% across the board. declaration of the status of the party and purpose of search. A lawyer is required to perform the registration of property. Legal fees are charged based on the Scale of Procedure: 7. Pay fees at a designated bank Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Docu- Time: 1 day mentation and Other Land Matters) Order 1991]. In Adamawa state the average legal fees are 5% of the value of consideration. The fees include all the steps required until Cost: NGN 30,200 (NGN 1,250 inspection fee + NGN 12,500 consent fee + NGN 6,250 the new title is registered under the buyer’s name. registration fee + NGN 10,200 revalidaton and administrative fee) Comments: Applicant makes the payment at a designated bank and picks up a pay- Procedure: 3. Pay fee for application form at a designated bank ment receipt. Time: 1 day Procedure: 8. Assessment and payment of capital gains tax at Cost: NGN 5,500 Board of Internal Revenue Comments: The amount is fixed by the Ministry of Lands and Survey as standard fee Time: 4 days regardless of property value. Cost: NGN 386,584 (5% of the property value) Procedure: 4. Obtain Application Land Form 13A Comments: Capital gains tax is calculated at 5% of the value of property and paid at Time: 1 day the Board of Internal Revenue. Cost: No cost Procedure: 9*. Assessment of deed of assignment at Stamp Duty Comments: Land Application Form 13 A is obtained from the Ministry of Lands and Office Survey, Yola after a payment of NGN 5,500 application fee at a designated bank. Time: 1 day Procedure: 5. Execute deed of assignment and Land Form 13A Cost: No cost Time: 1 day Comments: The applicant presents the deed of assignment to the Stamp Duty Of- fice for assessment. Cost: No cost Comments: The seller and buyer complete and sign Land Form 13A and five (5) cop- Procedure: 10. Pay stamp duty at a designated bank ies of the deed of assignment Time: 5 days Procedure: 6. Assessment of the deed of assignment at the Lands Cost: NGN 231,950 (3% of the property value) Registry Comments: The applicant must go to a designated bank and pay the stamp duty. Time: 1 day Payment is made by bank draft payable to a designated bank. It takes about 5 days for the Stamp Duty Office to receive confirmation of payment. Cost: No cost Comments: The deed is presented by the buyer’s lawyer to the Land Registry for as- Procedure: 11. Stamping the deed of assignment at Stamp Duty sessment of property value to determine fees. Office Time: 1 day Procedure: 7. Submit application for Governor's consent to the assignment at Ministry of Lands Cost: No cost Time: 1 day Comments: After payment of the stamp duty, the deed is presented for stamping. Stamping only takes place after the Stamp Duty Office receives confirmation of pay- Cost: No cost ment. Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each state in the federation became vested in the Governor of that state, whose prior Procedure: 12. Submit payment receipts to Lands Registry and consent is mandatory for the legal validity of any transfers or alienation of interest in obtain Governor's consent landed property. The applicant is required to submit the following documents: Time: 60 days a. Signed deed of assignment; Cost: No cost b. Tax clearance certificates; Comments: The applicant submits the receipts for payment of fees to the Ministry c. Property title document; of Lands, Survey and Urban Planning. After reviewing the documents, the Director d. Copy of the building plan. makes a recommendation to the Commissioner of Lands. The Commissioner, if satis- fied, endorses the documents and sends them to the Governor for final consent. Procedure: 8. Pay administrative, consent, and registration fees at a designated bank Procedure: 13. Registration of deed at Lands Registry Time: 1 day Time: 7 days Cost: NGN 314,767 (NGN 500 administrative fee + NGN 5,000 consent fee + 4% of Cost: No cost the property value registration fee) Comments: After obtaining the Governor's consent, the buyer’s lawyer has the deed Comments: The administrative and consent fees are fixed at NGN 500 and NGN filed at the Land Registry. Evidence of payment of registration fee is required. 5,000 respectively, regardless of the value of property. Registration fee is calculated as 4% of the value of property. *This procedure can be completed simultaneously with previous procedures. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 139 Procedure: 9. Submit evidence of payment of fees to Director of Procedure: 3. Submit application for Governor's consent to the Lands Service and obtain Governor's consent assignment to Ministry of Lands Time: 75 days Time: 1 day Cost: No cost Cost: No cost Comments: The receipts obtained previously are to be submitted to the office of Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- the Director for Land Services. The Land Services department then continues with tion became vested in the Governor of the state, whose prior consent is mandatory several internal procedures to finalize Governor’s consent. This takes between 61-90 for the legal validity of any transfers or alienation of interest in landed property. The days to complete. Governor of Akwa Ibom state delegates his power of consent to the Commissioner, Ministry of Lands and Town Planning. No consent form is required. The applicant ap- Procedure: 10. Assessment of the deed of assignment at Stamp plies by furnishing a letter of assignment from the seller (indicating that he has duly Duty Office assigned the property). In addition the applicant submits the following documents: Time: 1 day a. Four (4) copies of the deed of assignment; Cost: No cost b. Photocopy of certificate of occupancy; Comments: The Stamp Duty Office typically uses the value of the property indicat- c. Past 3 years tax clearance certificate of buyer; ed by the Lands Registry in their assessment, so basically this is a formality and one d. Evidence of payment of up-to-date ground rent. picks up the demand notice for payment at the same time. Procedure: 4*. Pay application and registration fee at Ministry of Procedure: 11. Pay stamp duty at a designated bank Lands Time: 1 day Time: 1 day Cost: NGN 231,950 (3% of the property value) Cost: NGN 4,500 (NGN 2,000 application fee + NGN 2,500 registration fee ) Comments: The applicant or the lawyer must go to a designated bank to pay the Comments: At the time of submission of application the applicant has to pay the stamp duty. Payment is by bank draft payable to any of the designated receiving application fee and registration fee to a cash officer at the Ministry of Lands and banks. Town Planning. Procedure: 12. Stamping of the deed of assignment at Stamp Procedure: 5. Receive inspection and evaluation from the Duty Office Ministry of Lands and Town Planning Time: 1 day Time: 7 days Cost: No cost Cost: No cost Comments: The deed is presented by buyer’s lawyer for stamping at the Stamp Comments: An inspection of the property is conducted by officers of the Ministry Duty Office (agency of Inland Revenue Services). of Lands and Town Planning, who prepare a report of the inspection for the Director. The Director then makes an assessment of the property to determine the current Procedure: 13. Registration of deed at Lands Registry open market value. The current open market value is used to calculate the consent Time: 30 days fee. Cost: No cost Procedure: 6. Obtain payment order from Ministry of Lands Comments: After submitting evidence of payment of registration fee, the buyer’s lawyer then follows up for the deed to be filed to the Lands Registry. Time: 1 day Cost: No cost REGISTERING PROPERTY Comments: The applicant goes back to the Ministry of Lands and Town Planning within 7 days of submitting the application to be informed of the applicable fees. AKWA IBOM, Uyo Property value: USD 58,050 = NGN 7,731,680 Procedure: 7. Pay consent fee at a designated bank Data as of: January 2010 Time: 1 day Cost: NGN 193,292 (2.5% of the current open market value of the property) Procedure: 1. Conduct search on property files at Lands Registry Comments: Consent fee is assessed at 2.5% of the current open market value of Time: 1 day the property as determined by the Ministry of Lands and Town Planning. Payment is Cost: NGN 6,000 (NGN 1,000 search fee + NGN 5,000 legal fee) made at a designated bank and teller receipt is issued. Comments: Applicant applies by furnishing the particulars of the property in question to the Land Registry. An applicant can individually request a search, but Procedure: 8. Submit receipts to Ministry of Lands and obtain it is common practice for a lawyer to act on behalf of the applicant for a fee of NGN Governor's consent 5,000. The essence of the search is to reveal whether the property is encumbered. Time: 31 days The search fee of NGN 1,000 is paid at a cash office at the Ministry of Lands. If the results of the search are satisfactory, the lawyer proceeds to prepare the deed of as- Cost: No cost signment. Comments: The receipt for the payment of consent fee is submitted to the Ministry of Lands and Town Planning. The applicant's file then moves up the office desks from Procedure: 2. Execute deed of assignment Director to Permanent Secretary to Commissioner for approval. It usually takes the Time: 2 days Commissioner 30 days to give consent. Cost: NGN 773,168 (10% of the property value) Procedure: 9. Assessment of the deed of assignment at Stamp Comments: Lawyers are required by law to prepare the deed of assignment to be Duty Office executed by the parties. Legal fees are charged based on the Scale of Fees for Con- veyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and Time: 1 day Other Land Matters) Order 1991]. The stipulated fee comes out to 10% of the value Cost: No cost of consideration, but in practice most lawyers negotiate outside the provisions of Comments: After the Commissioner gives consent, the applicant takes the deed of the law. The legal fees cover the preparation of deed of assignment and subsequent assignment to the Stamp Duty Office for assessment. The Stamp Duty Office calcu- registration of the title. lates the fee using the value of the property indicated in the deed. The applicant is required to pay stamp duty within 90 day of execution of the deed, otherwise a pen- alty will be incurred. 140 DOING BUSINESS IN NIGERIA 2010 Procedure: 10. Pay of stamp duty at a designated bank Procedure: 5. Receive an inspection and valuation of property Time: 1 day from the Ministry of Lands Cost: NGN 231,950 (3% of the property value) Time: 5 days Comments: The applicant pays stamp duty at a designated bank. After payment a Cost: No cost teller receipt is issued. Stamp duty in Akwa Ibom is calculated at 3% of value of Comments: A valuation officer from the Ministry of Lands inspects the property and the property as indicated in the deed. prepares a valuation report. The purpose of valuation is to determine the capital val- ue of the property, based on which the consent fee will be assessed. Since the pay- Procedure: 11. Stamping of deed of assignment at Stamp Duty ment of a valuation fee was dropped, the valuation is usually completed in 5 days. Office Time: 1 day Procedure: 6. Pick up payment orders from Ministry of Lands Cost: No cost Time: 1 day Comments: After payment of the stamp duty at the bank, the deed is presented for Cost: No cost stamping at the Stamp Duty Office. Evidence of payment must be shown. Comments: Following the valuation of property, the applicant goes back to the Ministry to pick up payment orders for all administrative fees. Procedure: 12. Registration of deed at Lands Registry Time: 7 days Procedure: 7. Pay fees at a designated bank Cost: No cost Time: 1 day Comments: After payment of the stamp duty the applicant then follows up for the Cost: NGN 174,634 (NGN 5,000 inspection fee + NGN 10,000 computerization fee + deed to be registered in the Lands Registry, to make it a perfected legal document. NGN 5,000 registration fee + 2% of the property value consent fee) The registration fee must have already been paid in Procedure 4. Comments: The applicant makes the payment at a designated bank and picks up a payment receipt. *This procedure can be completed simultaneously with previous procedures. Procedure: 8. Assessment of capital gains tax by INOCK Time: 1 day REGISTERING PROPERTY Cost: No cost ANAMBRA, Onitsha Comments: The state government contracted INOCK consultants, private consul- tants, to assess and oversee the collection of capital gains tax. In Anambra, capital Property value: USD 58,050 = NGN 7,731,680 gains tax is calculated at 10% of the profit made in the transaction. Data as of: January 2010 Procedure: 9. Submit the deed of assignment for assessment at Procedure: 1. Pay search fee at a designated bank Stamp Duty Office Time: 1 day Time: 1 day Cost: NGN 1,000 (standard search fee) Cost: No cost Comments: Before the search can be conducted, the applicant is required to pay the search fee at a designated bank and obtain proof of payment. The search fee was Comments: The applicant presents the deed of assignment to the Stamp Duty Of- originally NGN 5,000, but was reduced to NGN 1,000 in 2007. fice for assessment. Procedure: 2. Conduct a search of property title at Lands Registry Procedure: 10. Pay stamp duty and capital gains tax at a designated bank Time: 1 day Time: 3 days Cost: NGN 10,000 (legal fee for search) Cost: NGN 231,950 (3% of the property value stamp duty; capital gains tax is also Comments: The essence of conducting the search is to determine whether there paid, but not included in the calculation) any encumbrances on the property. A lawyer is required to conduct the property search on behalf of the applicant. Lawyer's fees are charged based on the Scale of Comments: The applicant must go to a designated bank and pay the stamp duty. Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Docu- Payment is by bank draft payable to a designated bank. It takes about 3 days for the mentation and other Land Matters) Order 1991]. In practice, lawyers usually charge Stamp Duty Office to receive confirmation of payment. NGN10,000 for conducting the search. Procedure: 11. Stamping the deed of assignment at Stamp Duty Procedure: 3. Prepare and execute of deed of assignment Office Time: 1 day Time: 1 day Cost: NGN 773,168 (10% of the property value) Cost: No cost Comments: Lawyers are required by law to prepare the deed of assignment to be Comments: After payment of the stamp duty, the deed is presented for stamping. executed by the parties. Generally, lawyers charge 10% of the value of consideration, Stamping takes place only after the Stamp Duty Office receives confirmation of which is negotiable. The fee covers both the preparation of the deed of assignment payment. and subsequent registration of title. Procedure: 12. Submit receipts of payment of fees to Ministry of Procedure: 4. Submit application for Governor's consent to the Lands and obtain Governor's consent to the assignment assignment to Ministry of Lands and Survey Time: 181 days Time: 1 day Cost: No cost Cost: No cost Comments: The applicant submits the receipt for payment of fees to the Ministry Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised of Lands, Survey and Urban Planning. After reviewing the documents, the Director in the territory of each state in the federation became vested in the Governor of makes a recommendation to the Commissioner of Lands. The Commissioner, if satis- the state, whose prior consent is mandatory for the legal validity of any transfers or fied, endorses the documents and sends them to the Governor for final consent. alienation of interest in landed property. In Anambra, the authority to grant consent is not delegated to the Commissioner of Lands and the Governor personally ap- Procedure: 13. Registration of deed at Lands Registry proves each transfer. Applicant makes a formal application, which is addressed to Time: 14 days the Governor. The applicant must attach four (4) copies of the deed of assignment to Cost: No cost which consent is sought and tax clearance certificate. Comments: After obtaining the Governor's consent, the buyer's lawyer follows up for the deed to be filed at the Land Registry. Evidence of payment of registration fee is required. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 141 REGISTERING PROPERTY Procedure: 8. Pay stamp duty at a designated bank BAUCHI, Bauchi Time: 1 day Property value: USD 58,050 = NGN 7,731,680 Cost: NGN 231,950 (3% of the property value) Data as of: January 2010 Comments: The applicant or the lawyer must go to a designated bank to pay stamp duty. Payment is by bank draft payable to any of the designated receiving banks. Procedure: 1. Conduct search of property title at the Ministry of Lands and Survey Procedure: 9. Stamping of the deed of assignment at Stamp Duty Time: 3 days Office Cost: NGN 389,084 (NGN 2,500 search fee + 5% of the property value legal fees) Time: 1 day Comments: The lawyer representing the buyer submits an application to the Lands Cost: No cost Registry requesting to search the property title. The fee is paid to the Revenue Sec- Comments: The deed is presented by buyer's lawyer for stamping at Stamp Duty tion of the Ministry, located in the same building. Legal fees are charged based Office. on the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and other Land Matters) Order 1991]. Generally, lawyers charge 5% of the value of consideration, but do negotiate fees outside the provisions Procedure: 10. Registration of deed at Lands Registry of the law. The fees cover the search, the preparation of deed of assignment and Time: 1 day registration of title. Cost: No cost Comments: After paying the registration fee, and stamping the deed of assignment, Procedure: 2. Execute deed of assignment the buyer’s lawyer then follows up for the deed to be filed to the Lands Registry. Time: 1 day Cost: No cost REGISTERING PROPERTY Comments: Seller and buyer sign the deed of assignment prepared by a lawyer. BAYELSA, Yenagoa Procedure: 3. Submit application for Governor's consent to the Property value: USD 58,050 = NGN 7,731,680 assignment at Ministry of Lands Data as of: January 2010 Time: 1 day Procedure: 1. Conduct search on property files at Lands Registry Cost: No cost Time: 1 day Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised Cost: NGN 10,000 (NGN 10,000 legal fee for search) in territory of each state in the federation became vested in the Governor of that Comments: Applicant applies by furnishing the particulars of the property in ques- state, whose prior consent is mandatory for the legal validity of any transfers or tion to the Land Registry. An applicant can individually request for a search, but it is alienation of interest in landed property. In Bauchi, the authority to grant consent common practice for a lawyer to act on behalf of the applicant for a fee. The essence has been delegated to the Commissioner, Ministry of Lands and Survey. The applica- of the search is to reveal whether the property is encumbered. There is actually no tion should be accompanies by a photocopy of the title document and proof of pay- specified amount for search fee. The lawyer usually charges NGN 10,000 as legal ment of ground rates. fees. If search is satisfactory the lawyer proceeds to prepare the deed of assignment. Procedure: 4. Receive a valuation inspection from the Ministry of Procedure: 2. Execute deed of assignment Lands Time: 2 days Time: 7 days Cost: NGN 773,168 (10% of the property value legal fee) Cost: No cost Comments: Lawyers are required by law to prepare the deed of assignment to be Comments: An inspection of the property is conducted to ensure that the im- executed by the parties. Legal fees are charged based on the scale of fees for Con- provements to the land have been done according to the specifications made by veyancing Matters (Legal Practitioners (Remuneration for Legal Documentation and the Ministry of Lands and to determine the value of the property for the purpose of Other Land Matters) Order 1991). The stipulated fee comes out to 10% of the value calculating fees. of consideration, but in practice most lawyers negotiate outside the provisions of the law. The legal fees cover the preparation of deed of assignment and subsequent Procedure: 5. Obtain letter of consent from the Governor registration of the title. Time: 60 days Cost: No cost Procedure: 3. Pay consent application form fee at a designated bank Comments: The applicant receives a letter of consent allowing him/her 4 months Time: 1 day for payment of the fees and registration Cost: NGN 5,000 (consent application form fee) Comments: Before obtaining the consent application form, the applicant has to pay Procedure: 6. Pay consent and registration fees at a designated NGN 5,000 at designated bank. Upon payment, a teller receipt is issued to the appli- bank cant. This receipt is taken back to the Ministry to obtain the consent form. Time: 1 day Cost: NGN 234,450 (3% of the property value registration fee + NGN 2,500 consent fee) Procedure: 4. Obtain consent application form from Capital City Comments: The applicant or the lawyer must go to a designated bank to pay the Development Authority registration and consent fees. Time: 1 day Cost: No cost Procedure: 7. Submit the deed of assignment for assessment at Comments: Applicant takes the receipt to the Lands Department, Capital City De- Stamp Duty Office velopment Authority to obtain and fill out the consent form. Time: 1 day Cost: No cost Procedure: 5. Submit application for Governor's consent to the Comments: The deed is presented by buyer's lawyer for assessment of stamp duty assignment to Capital City Development Authority at Stamp Duty Office (agency of Federal Inland Revenue Services). The Stamp Duty Time: 1 day Office typically uses the value of the property as indicated by the Lands in their Cost: No cost assessment to calculate fees, and the applicant picks up the demand notice for Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- payment at the same time. In January 2007 a Stamp Duty Office was established in tion became vested in the Governor of the state, whose prior consent is mandatory Bauchi, greatly facilitating this procedure. Previously, applicants had to travel to Ka- for the legal validity of any transfers or alienation of interest in landed property. The duna or Abuja to carry out stamping. Governor of Bayelsa state delegates his power of consent to the Executive Secretary, Capital City Development Authority (CCDA). The documents submitted include: 142 DOING BUSINESS IN NIGERIA 2010 a. Completed consent application form; REGISTERING PROPERTY b. Three copies of the deed of assignment; BENUE, Makurdi c. Photocopy of title document; Property value: USD 58,050 = NGN 7,731,680 d. Current tax clearance certificate of buyer; Data as of: January 2010 e. Evidence of payment of up-to-date ground rent. Procedure: 1. Conduct search on property files at Lands Registry Procedure: 6. Receive inspection and evaluation from the Lands Time: 1 day Department, CCDA Cost: NGN 2,000 Time: 1 day Comments: The applicant goes to the Lands Registry and collects a form from the Cost: No cost Land deeds Officer, which is then filled out. The payment is made at the cash office. Comments: An inspection of the property is conducted by officers of the Lands The form is then stamped to confirm payment and a receipt is issued, after which the Department, CCDA, who prepares a report of the inspection to the Director, Lands applicant is given access to conduct the search. The applicant can ask for the registry Department, CCDA. The Director then makes an assessment of the property to de- files to conduct the search him/herself or ask for the assistance of the ministry staff. termine the current market value. The current market value is used to calculate the consent fee. Procedure: 2*. Obtain Land Form from Lands Registry Time: 1 day Procedure: 7. Obtain payment order from CCDA Cost: NGN 1,000 Time: 7 days Comments: The applicant goes to the Lands Registry, makes the required payment Cost: No cost and collects a Land Form. The form will be completed and submitted later as part of Comments: Applicant goes to the Lands Department, CCDA within 7 days of sub- the application for the Governor's consent to the transaction. mitting application to be informed of the applicable fees. Procedure: 3. Execute deed of assignment Procedure: 8. Pay fees at a designated bank Time: 1 day Time: 1 day Cost: NGN 154,634 (2% of the property value) Cost: NGN 164,634 (2% of current market value of the property consent fee + NGN Comments: Lawyers are required by law to prepare the deed of assignment to be 5,000 registration fee + NGN 5,000 execution fee) executed by the parties. Legal fees are charged based on the Scale of Fees for Con- Comments: Consent fee is assessed at 2% of the current market value of the prop- veyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and erty as determined by the Lands Department. Payment is made at a designated bank Other Land Matters) Order 1991]. According to this scale of fees the fee should be and teller receipt is issued. 10% of the consideration, but in practice it is negotiated and is normally about 2% of the consideration. The legal fees cover the preparation of the deed of assignment and subsequent procedures that require the involvement of a lawyer. Procedure: 9. Submit receipts and Obtain Governor's consent from CCDA Procedure: 4. Assessment of deed of assignment at Lands Time: 61 days Registry Cost: No cost Time: 7 days Comments: The receipt for the payment of consent fee is submitted to the Lands Cost: NGN 5,000 Department, CCDA. The applicant's file then moves up to the desk of the Executive Secretary for approval. It usually takes the Secretary 60 days to give consent. Comments: The applicant pays the NGN 5,000 fee at the Lands Registry and pres- ents the deed of assignment together with the following documents: Procedure: 10. Assessment of the deed of assignment at Stamp a. Tax clearance for the past 3 years; Duty Office b. 3 passport-size photographs; Time: 1 day c. Application Land Form filled and signed by the seller or his attorney requesting Cost: No cost the Governor's consent. Comments: After the Executive Secretary has given his consent, the applicant takes The Lands Registry will then send two officers to carry out two separate evaluations. the deed of assignment to the Stamp Duty Office for assessment. The Stamp Duty After the evaluation, if the Lands Registry accepts the value stated in the deed the Office calculates the fee using the value of the property indicated in the deed. payment is 3%, but if they go with their own assessed value the payment is 1%. In practice they usually go with the applicant's valuation. Procedure: 11. Pay stamp duty at a designated bank Procedure: 5*. Receive site evaluation visit by Lands Registry Time: 1 day officials Cost: NGN 154,634 (2% of the property value) Time: 7 days Comments: The applicant pays the stamp duty at a designated bank. After payment Cost: No cost a teller receipt is issued. Stamp duty in Bayelsa is calculated at 2% of value of the property indicated in the deed. Comments: The site evaluations are carried out by officials of the Lands Registry and involve officers visiting the site. They entail two visits by different officers in or- Procedure: 12. Stamping of the deed at Stamp Duty Office der to obtain as precise a valuation as possible. In practice though, these visits rarely happen and the Lands Registry usually relies on the applicant's valuation for assess- Time: 1 day ment purposes. Cost: No cost Comments: After payment of the stamp duty at the bank, the deeds are presented Procedure: 6*. Obtain Governor's consent to the assignment for stamping at the Stamp Duty Office. The applicant has to present receipt of pay- Time: 90 days ment of stamp duty. Cost: No cost Procedure: 13. Registration of the deed of assignment at Lands Comments: The application for consent is made when the deed is submitted for assessment. It can take up to 90 days from the date of application to receive the con- Registry sent. If there is any indebtedness for ground rent on the property the due must be Time: 5 days paid at the Lands Registry, but if there is no outstanding ground rent there is no cost Cost: No cost associated with this procedure. Comments: After the stamping of the deed, the applicant follows up for the deed to be registered in the Lands Registry to make it a perfected legal document. Registra- tion only takes place after confirmation that stamp duty has been paid. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 143 Procedure: 7. Pay registration fee at the Lands Registry Procedure: 5. Pay stamp duty at Borno State Board of Inland Time: 1 day Revenue Cost: NGN 231,950 (3% of the property value) Time: 1 day Comments: The payment of 3% of the value of the property is for the registration Cost: NGN 231,950 (3% of the property value) fee, and it is the only fee required. Payment is made at the cash office of the Lands Comments: Stamp Duty is assessed by the Lands Registry, but paid to the Board of Registry and a receipt is issued. Once the payment is made the applicant's file is Internal Revenue. endorsed. Procedure: 6. Stamping the deed of assignment at Lands Registry Procedure: 8. Pay stamp duty and stamping the deed of Time: 1 day assignment at Federal Inland Revenue Service Cost: No cost Time: 1 day Comments: After stamp duty is paid and confirmation of payment is presented, the Cost: NGN 231,950 (3% of the property value) deed is stamped. Comments: The applicant goes to the Federal Inland Revenue in Makurdi, where the assessment and payment are made and the deed is stamped. Procedure: 7. Obtain Governor's consent to the assignment Time: 2 days Procedure: 9. Registration of deed at Lands Registry Cost: No cost Time: 1 day Comments: After the applicant makes all the payments and submits the necessary Cost: No cost documents, the Lands Registry initiates an internal processes leading to the issuance Comments: The applicant presents the stamped deed of assignment for registra- of consent. Since the task is delegated to the Commissioner of Lands, it takes two tion. days for consent to be issued. *This procedure can be completed simultaneously with previous procedures. Procedure: 8. Registration of deed at Lands Registry Time: 5 days REGISTERING PROPERTY Cost: No cost BORNO, Maiduguri Comments: Upon obtaining consent and payment of stamp duty and registration fee, the deed is presented to the Land Registry for registration. Tax clearance certifi- Property value: USD 58,050 = NGN 7,731,680 cate of the seller is required. Data as of: January 2010 REGISTERING PROPERTY Procedure: 1. Conduct search of property title at Ministry of Lands and Survey CROSS RIVER, Calabar Time: 1 day Property value: USD 58,050 = NGN 7,731,680 Cost: NGN 468,901 (NGN 5,000 search fee + 6% of the property value legal fee) Data as of: January 2010 Comments: The application letter to conduct the search prepared by a lawyer is ac- Procedure: 1. Pay search fee at a designated bank companied by a sworn declaration of the status of the party and purpose of search. A lawyer is required to perform the registration of property. Payment of search fees Time: 1 day is made in cash at the Lands Registry. Legal fees are based on the Scale of Fees for Cost: NGN 1,000 (search fee) Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation Comments: Before the search on the property title can be performed, the applicant and Other Land Matters) Order 1991]. In Borno the legal fees are usually around 6% pays the search fee at a bank. of the value of property. The fees include all the steps required until the new title is registered under the buyer’s name. Procedure: 2. Conduct search on property files at Land Registry Time: 7 days Procedure: 2. Execute deed of assignment Cost: NGN 773,168 (10% of the property value legal fees) Time: 2 days Comments: As a result of a Government drive that encourages people to register Cost: No cost (paid in Procedure 1) their property which has increased the volume of search requests, it now takes 7 Comments: The lawyer of either party prepares the deed, which is then vetted by days to perform the search. In Cross River it is a practice for lawyers to conduct title the lawyer of the other party. Both parties then sign the deed. searches and property registrations. According to the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and Other Land Procedure: 3. Assessment of the deed of assignment at Land Matters) Order 1991] the legal fee should be 7.5% of property value, if lawyer acts on Registry behalf of the buyer, and 5% on behalf of the seller. However, in Cross River, the mini- Time: 1 day mum standard fixed fee is 10% of property value, whether acting on behalf of the seller of buyer, value notwithstanding. The fees include all the steps required until Cost: No cost the new title is registered under the buyer's name. Comments: The deed is presented by the buyer’s lawyer to the Land Registry for as- sessment of property value to determine registration fee and stamp duty. Procedure: 3. Submit an application letter to the Director of Lands Procedure: 4. Submit application for Governor's consent and pay consent and registration fees at Lands Registry Time: 1 day Cost: No cost Time: 1 day Comments: The buyer/seller’s lawyer submits a letter to the Director of Lands, Cost: NGN 391,584 (NGN 5,000 consent fee + 5% of the property value registration indicating that a transaction is about to take place between the buyer and seller in fee) respect to a plot located within the state. The letter includes the names of seller and Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each buyer, location of the property, purchase price and request an assessment of due state in the federation became vested in the Governor of that state, whose prior fees. consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In Borno the Governor has delegated the authority to give consent Procedure: 4. Execute deed of assignment to the Commissioner of Lands and Survey. The applicant is required to submit a letter of application for consent, the executed deed, and pay the consent and registration Time: 1 day fees. Cost: No cost Comments: The seller and buyer sign four copies of the deed of assignment. 144 DOING BUSINESS IN NIGERIA 2010 Procedure: 5. Assessment of the deed of assignment at the Procedure: 13. Registration of deed of assignment at Lands Stamp Duty Office, Federal inland Revenue Service Registry Time: 1 day Time: 3 days Cost: NGN 5,000 (transportation cost to Port Harcourt or Aba) Cost: No cost Comments: The deed is presented by buyer's lawyer for assessment of property Comments: After paying the registration fee, the buyer's lawyer then follows up for value to determine stamp duty to the Stamp Duty Office (agency of Inland Revenue the deed to be filed to the Lands Registry. The receipt and paying in slips evidencing Services). There is no Stamp Duty Office in Cross River state as of yet, so travel to payment are given to the cashier at the Land Registry, who in turn issues a receipt. either Port Harcourt in Rivers state or Aba in Abia state is necessary. The following With proof of payment a lands officer is assigned to enter the deed into the Land procedures (5 and 6) are also conducted there. Typically lawyers would stay in Port Registry records. Harcourt or Aba for 2-3 days until the stamping is completed. REGISTERING PROPERTY Procedure: 6. Pay stamp duty at a designated bank DELTA, Warri Time: 5 days Cost: NGN 231,950 (3% of the property value) Property value: USD 58,050 = NGN 7,731,680 Data as of: January 2010 Comments: The applicant or lawyer must go to a designated bank to pay the stamp duty. Payment is by bank draft payable to any designated receiving banks. It takes a Procedure: 1. Pay search fee at a designated bank few days for the Stamp Duty Office to receive the confirmation of payment. Time: 1 day Procedure: 7. Stamping of the deed of assignment at Stamp Duty Cost: NGN 2,000 Office Comments: Before the search on the property title can be performed, the applicant Time: 1 day pays the search fee at a bank. Cost: No cost Procedure: 2. Conduct search on property files at Land Registry Comments: The applicant or lawyer presents proof of payment of stamp duty to the Time: 1 day Stamp Duty Office and submits the deed for stamping. Cost: NGN 386,584 (5% of the property value legal fees) Procedure: 8. Assessment of the deed of assignment at Lands Comments: The application letter to conduct the search is accompanied by a sworn Registry declaration of the status of the party and purpose of search. A lawyer is required to perform the registration of property. Legal fees are charged based on the Scale of Time: 7 days Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Docu- Cost: No cost mentation and Other Land Matters) Order 1991]. This is a sliding scale, and averages Comments: Following the stamping, the applicant submits the deed of assignment out at about 5% of the consideration. The fees include all the steps required until the to the Ministry of Lands for assessment of fees. new title is registered under the buyer’s name. Procedure: 9. Pick up demand notices for payment of fees from Procedure: 3. Obtain Application Land Form 1C from Ministry of Ministry of Lands Lands Time: 1 day Time: 1 day Cost: No cost Cost: NGN 1,500 Comments: The applicant collects demand orders for payment of application fee, Comments: Form 1C is the application form to request later the Governor’s consent consent fee and capital gains tax. Capital gains tax is calculated at 10% of the profit to the transaction (required by Nigerian law). It can be paid either at a designated made in the transaction. branch or to the bank’s officer at the Lands Department. Procedure: 10. Pay fees at a designated bank Procedure: 4. Execute deed of assignment and Land Form 1C Time: 2 days Time: 1 day Cost: NGN 150,975 (NGN 1,000 for application fee + 1.5% of the property value for Cost: No cost (Paid in Procedure 2) consent fee + NGN 1,000 registration fee +NGN 30,000 approval fee + NGN 3,000 Comments: The seller and buyer complete and sign Land Form 1C and five (5) cop- lodgment fee; capital gains tax is also paid, but not included in the calculation) ies of the deed of assignment. Comments: Payment is by bank draft to any of the designated receiving banks. It takes a couple of days for the Land Registry to receive confirmation of payment. Procedure: 5. Assessment of the deed of assignment at Lands Registry Procedure: 11. Submit the receipt of payment of fees to Ministry Time: 1 day of Lands Cost: No cost Time: 1 day Comments: The deed is presented by the buyer’s lawyer to the Land Registry for as- Cost: No cost sessment of property value to determine registration fees, and consent fees. Comments: The receipts obtained in Procedure 9, together with the paying-in slip to the designated bank, are to be submitted to the cashier at the Lands Registry who Procedure: 6. Obtain certified true copy (CTC) of title document issues another receipt. from Lands Registry Time: 2 days Procedure: 12. Submit an application and obtain Governor's consent for property transfer Cost: NGN 6,000 Comments: The seller issues a letter of authority to the Director of Land Services of Time: 39 days the Lands Registry, authorizing the lawyer to apply for and obtain CTC of title docu- Cost: No cost ment, required for Governor’s consent. Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised in territory of each state became vested in the Governor of that state, whose prior consent is mandatory for the legal transfer or alienation of interest in landed property. In Cross River, the issuance of consent has been delegated to the Commissioner for Lands, which sped up the process. The documents to be submitted include: a. Four copies of the deed on which consent is sought; b. Evidence of payment of the consent fee, stamp duty, and capital gains tax; c. Evidence of payment of land use charge. It takes about a month to obtain consent. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 145 REGISTERING PROPERTY Procedure: 7. Submit application for Governor's consent to the assignment to Ministry of Lands EBONYI, Abakaliki Time: 1 day Property value: USD 58,050 = NGN 7,731,680 Cost: No cost Data as of: January 2010 Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Procedure: 1. Pay search fee at a designated bank state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in Time: 1 day landed property. In Delta State the power to grant consent has been delegated to Cost: NGN 2,000 the Commissioner for Lands. The documents to be submitted include: Comments: Before the search is performed, the applicant or his lawyer should pay a. Application form; the search fee at a bank and submit proof of payment when requesting the search. b. Deed of assignment; c. Tax clearance of assigning company; Procedure: 2. Conduct search on property files at Land Registry d. Certified true copy of the title document; Time: 2 days e. Evidence of paid ground rate up to date. Cost: NGN 10,000 (legal fees) Comments: A lawyer is required to conduct the search on behalf of the applicant at Procedure: 8. Pay prescribed fees at a designated bank the Lands Registry. Lawyers usually charge NGN 10,000 as legal fees for conducting the search. Time: 1 day Cost: NGN 1,164,752 (15% of the property value capital (consent) fee + NGN 5,000 Procedure: 3. Execute deed of assignment registration fee) Time: 5 days Comments: Applicant or lawyer pay prescribed fees at a designated bank and ob- tain receipts. Cost: NGN 773,168 (10% of the property value) Comments: Lawyers are required by law to prepare the deed of assignment to Procedure: 9. Submit the receipt of payment of fees to the office be executed by the parties. Legal fees are charged based on the Scale of Fees for of the Director of Land Services and obtain Governor's consent Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and other Land Matters) Order 1991]. Generally, lawyers charge 10% of the value of Time: 61 days consideration, but do negotiate fees outside the provisions of the law. The fees cover Cost: No cost both preparation of deed of assignment and registration of title. Comments: The receipts obtained previously are to be submitted to the office of the Director for Land Services. The Land Services department then continues with Procedure: 4. Submit application for Governor's consent to the several internal procedures to finalize Governor’s consent. The practice is for the assignment to Ministry of Lands and Survey buyer’s lawyer to follow up on the application to ensure that it receives the required Time: 1 day attention. It takes one day to submit the receipts and 60 days to obtain consent. Cost: No cost Procedure: 10. Assessment of the deed of assignment at the Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised Inland Revenue Service in territory of each state in the federation became vested in the Governor of the state, whose prior consent is mandatory for the legal validity of any transfers or Time: 1 day alienation of interest in landed property. In Ebonyi, the authority to grant consent is Cost: No cost delegated to the Commissioner of Lands. Applicant makes a formal application ad- Comments: The deed is presented for assessment of stamp duty and capital gains dressed to the Commissioner of Lands. Also submitted with the application are four tax. The FIRS typically uses the figure as indicated by the Lands Registry in their as- (4) copies of the deed of assignment to which consent is sought and tax clearance sessment for calculating the fees, so basically this is a formality and one picks up the certificate. demand notice for payment at the same time Procedure: 5. Receive inspection and valuation of the property Procedure: 11. Pay capital gains tax and stamp duty at a by the Ministry of Lands designated bank Time: 4 days Time: 1 day Cost: No cost Cost: NGN 425,242 (3% of the property value stamp duty + 2.5% of the property Comments: Inspection and valuation are conducted by the valuation unit of the value capital gains tax) Ministry of Lands. Based on the valuation the capital value of the property is deter- Comments: The applicant or the lawyer must go to a designated bank to pay the mined. The consent fee is calculated using the capital value. This procedure is stamp duty. Payment is by bank draft payable to any of the designated receiving completed within 4 days (1 day for the inspection, 3 days for the valuation). banks. Procedure: 6. Pick up payment order from Ministry of Lands Procedure: 12. Stamping of deed of assignment at Stamp Duty Time: 1 day Office Cost: No cost Time: 1 day Comments: The applicant goes back to the Ministry of Lands, Survey and Housing Cost: No cost to be informed of the valuation and pick up payment order. Comments: The deed is presented by buyer’s lawyer for stamping at the Stamp Duty Office (agency of Inland Revenue Services). Procedure: 7. Pay fees at Ministry of Lands Time: 1 day Procedure: 13. Registration of deed at Lands Registry Cost: NGN 163,634 (NGN 3,000 registration fee + NGN 3,000 inspection fee + 2% of Time: 3 days the capital value consent fee + NGN 3,000 preparation fee) Cost: No cost Comments: The applicant pays the fees at the cash office, Accounts Department, Comments: After paying the registration fee, the buyer’s lawyer then follows up for Ministry of Land, Survey and Housing.After the payment a treasury receipt is issued. the deed to be filed to the Lands Registry. The receipt and paying-in slips evidencing payment are given to the cashier at the Lands Registry, who in turn issues a receipt. Procedure: 8. Assessment of deed of assignment at Federal Board A lands officer is then assigned to enter the deed into the Registry records. of Internal Revenue Time: 1 day Cost: No cost Comments: The applicant takes the deed of assignment to the Federal Board of Internal Revenue for assessment. Duties on transfer of property between companies are subject to federal tax, not state. 146 DOING BUSINESS IN NIGERIA 2010 Procedure: 9. Pay stamp duty at a designated bank Procedure: 5. Submit application for Governor's consent to the Time: 4 days assignment to Ministry of Lands Cost: NGN 154,634 (2% of the property value) Time: 1 day Comments: The applicant or lawyer pays the stamp duty at the Stamp Duty Office Cost: No cost at the Ministry of Finance. Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- tion became vested in the Governor of the state, whose prior consent is mandatory Procedure: 10. Stamping of the deed of assignment at Stamp for the legal validity of any transfers or alienation of interest in landed property. The Duty Office present Governor does not delegate his power of consent, thus it takes longer to Time: 3 days complete this procedure.The documents submitted include: Cost: No cost a. Completed consent application form; Comments: After payment of the stamp duty, the deed is presented by applicant's b. Three copies of the deed of assignment; lawyer for stamping. c. Photocopy of title document; d. Current tax clearance certificate of the buyer; Procedure: 11. Submit payment receipts to Ministry of Lands and e. Evidence of the payment of up to date ground rent. obtain Governor's consent After the submission of all the above documents, the Ministry appoints an indepen- Time: 61 days dent valuer to give an open market value of the property. It is the responsibility of Cost: No cost the applicant to pay for the services of the independent valuer. Assessment of appli- Comments: Receipts for fees paid are submitted to the Director of Land.The Direc- cable fees is carried out on the property relying on the valuation report. No physical tor, after going through the documents, makes a recommendation to the Commis- inspection is required. sioner of Lands. If the Commissioner is satisfied, he endorses his consent on behalf of the Governor. It takes 1 day to submit the receipts and 60 days to obtain consent. Procedure: 6. Pay for valuation report from independent valuer Time: 1 day Procedure: 12. Registration of deed at Lands Registry Cost: NGN 20,000 Time: 7 days Comments: Applicant pays for the services of the independent valuer appointed by Cost: No cost the Ministry of Land and Survey. Comments: After the Commissioner gives consent, the applicant's lawyer follows up for the deed to be filed at the Land Registry. Procedure: 7. Obtain payment order from the Ministry of Lands and Housing REGISTERING PROPERTY Time: 5 days EDO, Benin City Cost: No cost Comments: Applicant goes to the Ministry of Lands and Survey within 5 days of Property value: USD 58,050 = NGN 7,731,680 submitting the application to be informed of the applicable fees. Data as of: January 2010 Procedure: 8. Pay consent fee at a designated bank Procedure: 1. Conduct search on property files at Lands Registry Time: 1 day Time: 1 day Cost: NGN 618,534 (8% of the open market value of the property) Cost: NGN 12,000 (NGN 2,000 search fee + NGN 10,000 legal fee for search) Comments: Consent fee is assessed at 8% of the open market value of the property. Comments: An application letter is addressed to the Lands Registry. The applica- The open market value is the estimated value of the property as determined by the tion letter must contain the registration particulars of the land in question. A lawyer Ministry of Lands and Survey through the independent valuer. Payment is made at a is required to perform the registration of property. The essence of the search is to designated bank and teller receipt is issued. make sure the land is free from encumbrance.If satisfactory, the lawyer proceeds to prepare the deed of assignment. Procedure: 9. Submit receipt of payment to Ministry of Lands and Procedure: 2. Execute deed of assignment obtain Governor's consent Time: 2 days Time: 46 days Cost: NGN 773,168 (10% of the property value legal fees) Cost: No cost Comments: Lawyers are required by law to prepare the deed of assignment to be Comments: The receipt for the payment of consent fee is submitted to the Ministry executed by the parties. Legal fees are charged based on the Scale of Fees for Con- of Lands and Survey. The applicant's file then moves up the office desks till it gets to veyancing Matters (Legal Practitioners (Remuneration for Legal Documentation and the Governor for approval. It usually takes the Governor 45 days to give consent. Other Land Matters) Order 1991). The stipulated fee comes out to 10% of the value of consideration, but in practice most lawyers negotiate outside the provisions of Procedure: 10. Receive payment order for capital gains tax and the law. The legal fees cover the preparation of deed of assignment and subsequent stamp duty from Board of Internal Revenue registration of the title. Time: 1 day Cost: No cost Procedure: 3. Pay consent application form fee at designated Comments: After the Governor gives consent, the applicant's file is forwarded to bank the Board of Internal Revenue office for assessment of capital gains tax and stamp Time: 1 day duty. In Edo State, capital gains tax is calculated at 5% of the value of property and Cost: NGN 5,000 (consent application form fee) stamp duty is calculated at 4% of the value of the property. Comments: Before obtaining the consent application form the applicant has to pay NGN 5,000 at a designated bank. Upon payment, a teller receipt is issued to the ap- Procedure: 11. Obtain bank draft for payment of capital gains tax plicant. and stamp duty from a designated bank Time: 1 day Procedure: 4. Obtain consent application form from Ministry of Cost: NGN 210 (bank fee) Lands Comments: Applicant has to obtain bank draft from a private bank for a fee of NGN Time: 1 day 210. Cost: No cost Comments: Applicant takes the teller receipt to the Ministry of Lands and Housing to obtain consent form and fills it out. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 147 Procedure: 12. Pay capital gains tax and stamp duty at Accounts Procedure: 5. Execute deed of assignment and consent Office of Board of Internal Revenue application form Time: 1 day Time: 1 day Cost: NGN 695,851 (5% of the property value capital gains tax + 4% of the property Cost: NGN 773,168 (10% of the property value) value stamp duty) Comments: The seller and buyer complete and sign the consent application form Comments: The applicant or the lawyer must go to a designated bank to pay the and four (4) copies of the deed of assignment. Lawyers typically charge 10% of the stamp duty and capital gains tax. Payment is by bank draft payable to any of the value of consideration as legal fees for preparing the deed and its subsequent regis- designated receiving banks. tration. In practice however, the fees are negotiable. Procedure: 13. Stamping of the deed of assignment at Stamp Procedure: 6. Submit application for Governor's consent to the Duty Office assignment at Ministry of Lands Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: After payment of the stamp duty, the deed is presented for stamping at Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- the Stamp Duty Office. tion became vested in the Governor of the state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In Procedure: 14. Pay registration fee at a designated bank Ekiti, the Governor for ease of administration delegates his power of consent to the Time: 1 day Commissioner, Ministry of Lands and Housing.The documents required include: Cost: NGN 5,000 a. Completed consent application form; Comments: Payment of registration fee is made at a designated bank and teller b. Four copies of the deed of assignment; receipt is issued. c. Copy of the approved building plan; d. Copy of the title document of the seller; Procedure: 15. Registration of deed at Lands Registry e. Current tax clearance certificate of the seller and buyer; Time: 5 days f. For limited liability companies, the Internal Revenue Certificate of PAYE for their Cost: No cost staff. Comments: After payment of the registration fee, the buyer's lawyer then follows After the submission of all the above documents a file is opened and the processing up for the deed to be registered in the Lands Registry, to make it a perfected legal of the file starts. document. Registration only takes place after confirmation that capital gains tax and stamp duty have been paid. Procedure: 7. Receive inspection and evaluation from Ministry of Lands and Housing REGISTERING PROPERTY Time: 7 days EKITI, Ado-Ekiti Cost: No cost Property value: USD 58,050 = NGN 7,731,680 Comments: An inspection of the property will be conducted by an officer, who pre- Data as of: January 2010 pares an evaluation report to the Ministry of Lands and Housing.An ascribed value is then given to the property, on the basis of which the consent fee is calculated. Procedure: 1. Pay search fee at a designated bank Time: 1 day Procedure: 8. Pick up payment order from Ministry of Lands and Housing Cost: NGN 10,000 (NGN 10,000 search fee) Time: 1 day Comments: A search fee must be paid in advance at a designated bank. Cost: No cost Procedure: 2. Conduct search on property files at Lands Registry Comments: The applicant or lawyer has to pick up a payment order from the Minis- Time: 2 days try that specifies the amount that has to be paid as consent fee. Cost: NGN 10,000 (NGN 10,000 legal fee for search) Procedure: 9. Pay consent fee at a designated bank Comments: An application letter is addressed to the Lands Registry. The applica- Time: 1 day tion letter must contain the registration particulars of the land in question. A lawyer is required to perform the registration of property. Legal fees are regulated by the Cost: NGN 1,159,752 (15% of the property value) Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Comments: Consent fee is calculated at 15% of the value of the property as as- Documentation and Other Land Matters) Order 1991]. In practice, lawyers negotiate signed after the inspection. Payment is made at a designated bank, after which a their legal fees outside the provisions of the law. receipt is obtained. Procedure: 3. Pay consent application form fee at a designated Procedure: 10. Submit receipt of payment of consent fee to Lands bank Registry Time: 1 day Time: 31 days Cost: NGN 1,000 (NGN 1,000 consent application form fee) Cost: No cost Comments: Before obtaining the consent application form, the applicant has to pay Comments: The receipt of payment of consent fee is presented to the Lands Regis- the consent form fee at a designated bank. A receipt will be issued to the applicant. try as evidence of payment, and a copy is kept in the applicant's file.The Lands Regis- try then continues with several internal procedures to finalize Governor's consent. It Procedure: 4. Obtain consent application form from Lands usually takes the Commissioner at the Ministry of Lands and Housing about 30 days Registry to give consent. Time: 1 day Procedure: 11. Assessment of the deed of assignment at Stamp Cost: No cost Duty Office Comments: After the payment of the consent application form fee the receipt is Time: 1 day taken to the Lands Registry to obtain consent form. Cost: No cost Comments: After the Commissioner signs off on the transfer of property, the ap- plicant takes the deed of assignment to the Stamp Duty Office for assessment. The Stamp Duty Office typically uses the value of property indicated by the Lands Regis- try to assess stamp duty. 148 DOING BUSINESS IN NIGERIA 2010 Procedure: 12. Pay stamp duty at a designated bank Procedure: 5. Receive a valuation inspection from an officer of Time: 2 days the Ministry of Lands Cost: NGN 231,950 (3% of the property value) Time: 7 days Comments: The buyer's lawyer must go to a designated bank to pay the stamp duty. Cost: No cost After payment, a receipt is issued. It takes 2 days for the payment to go through. Comments: A valuation officer from the Ministry of Lands inspects the property and prepares a valuation report. The purpose of the valuation is to determine the market Procedure: 13. Stamping of the deed of assignment at Stamp value of the property, based on which the consent fee will be assessed. Duty Office Time: 1 day Procedure: 6. Pick up a demand order for payment of fees from Cost: No cost Lands Registry Comments: After payment of the stamp duty, the deeds are presented by the buy- Time: 1 day er's lawyer for stamping at the Stamp Duty Office. Stamping takes place only after Cost: No cost the Registry receives confirmation of payment. Comments: Following the valuation of the property, the applicant picks up the or- der for payment of all administrative fees. Procedure: 14. Pay registration fee at a designated bank Time: 1 day Procedure: 7. Pay fees at designated banks Cost: NGN 1,000 Time: 1 day Comments: Payment is made at a designated bank and a receipt is issued. Cost: NGN 129,317 (NGN 20,000 for registration + 30,000 for inspection + 2,000 for computer levy + 1% of the property value for consent) Procedure: 15. Registration of deed at Lands Registry Comments: The fees were increased in 2008. Time: 7 days Cost: No cost Procedure: 8. Assessment of stamp duty and capital gains tax at Federal Inland Revenue Service Comments: After payment of the registration fee, buyer's lawyer then has the deed registered in the Lands Registry to make it a perfected legal document. Time: 1 day Cost: No cost REGISTERING PROPERTY Comments: The deed is presented by buyer's lawyer for assessment of stamp duty and capital gains tax at the Federal Inland Revenue Service. The Federal Inland Rev- ENUGU, Enugu enue Service uses the value of property indicated by the Lands Registry in their valu- Property value: USD 58,050 = NGN 7,731,680 ation, so the demand notice for payment can be picked up at the same time. Capital Data as of: January 2010 gains tax is calculated as 10% of the gain. The federal Capital Gains Tax Act was not enforced in Enugu till June 2008. Procedure: 1. Pay search fee at a designated bank Time: 1 day Procedure: 9. Pay stamp duty and capital gains tax at a Cost: NGN 5,000 designated bank Comments: A search fee must be paid in advance at a designated bank. The search Time: 3 days fee was increased in 2008 from NGN 500 to NGN 5,000. Cost: NGN 154,634 (2% of the property value stamp duty; capital gains tax is also paid, but not included in the calculation) Procedure: 2. Conduct a search of property title at Lands Registry Comments: The buyer or the lawyer must go to a designated bank to pay the stamp Time: 1 day duty. Payment is by bank draft payable at any of the designated receiving banks. It Cost: No cost takes a few days for the Stamp Duty Office to receive the confirmation of payment. Ad valorem stamp duties for property assignment between companies are 2% and Comments: The purpose of the search is to determine whether the property is clean are federal taxes. from encumbrances. The applicant should submit a request for search, which should contain: name of property owner, location of property, purpose of the search, prop- Procedure: 10. Stamping of the deed of assignment at Stamp erty file number. Duty Office Procedure: 3. Execute deed of assignment Time: 1 day Time: 1 day Cost: No cost Cost: NGN 579,876 (7.5% of the property value legal fee) Comments: The deed is presented by buyer's lawyer for stamping at the Stamp Duty Office. Comments: The seller and buyer sign the deed of assignment. Legal fees are charged based on the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and other Land Matters) Order 1991]. The Procedure: 11. Submit receipts of payment of fees and obtain fee is negotiable and the average is around 7.5% of the consideration. This fee covers Governor's consent to assignment all the steps required until the new title is registered under the buyer's name. Time: 30 days Cost: No cost Procedure: 4. Submit application for Governor's consent to the Comments: Since the power to grant consent has been delegated to the Commis- assignment at Ministry of Lands sioner of Lands, the time it takes to receive consent has been reduced by 30 days. Time: 1 day Cost: No cost Procedure: 12. Registration of deed at Lands Registry Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- Time: 25 days tion became vested in the Governor of the state, whose prior consent is mandatory Cost: No cost for the legal validity of any transfers or alienation of interest in landed property. The Comments: After consent is granted, the buyer's lawyer submits the deed and the Governor for ease of administration delegates his power of consent to the Commis- receipt of payment of registration fee to be filed at the Lands Registry. sioner of Lands and Survey. The application for consent is in the form of a letter to which the deed of assignment is attached. The letter is addressed to the Commis- sioner of Lands and Housing. The application should be accompanied by the follow- ing documents: a. Tax clearance for both companies; b. Articles of incorporation for both companies; c. Evidence of ground rate paid up to date. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 149 REGISTERING PROPERTY Procedure: 7. Pay fees at a designated bank FEDERAL CAPITAL TERRITORY, Abuja Time: 1 day Property value: USD 58,050 = NGN 7,731,680 Cost: NGN 678,534 (NGN 55,000 consent fee + NGN 5,000 processing fee + 1.5% of Data as of: January 2010 the property value registration fee + 1.5% of the property value stamp duty + 5% of the property value capital gains tax) Procedure: 1. Pay search fee at a designated bank Comments: Consent fee was increased from NGN 10,000 to NGN 55,000 in August Time: 1 day 2009. Cost: NGN 20,000 Comments: The search fee was increased from NGN 10,000 to NGN 20,000 in Au- Procedure: 8. Submit proof of payment to AGIS and receive a gust 2009. payment receipt Time: 1 day Procedure: 2. Conduct search of property files at AGIS (Abuja Cost: No cost Geographic Information System) Comments: Proof of payment of fees is submitted to AGIS and the application is Time: 1 day forwarded to the Minister. Cost: NGN 309,267 (4% of the property value legal fee) Comments: The lawyer representing the parties fills out and submits a letter, which Procedure: 9. Obtain an official letter from the Minister granting states the purpose of the search. The search request has to be accompanies by the final consent proof of payment of search fee and photocopy of the title document. The land officer Time: 20 days conducts the search, but the file itself is not available for the lawyer to review. The Cost: No cost search was computerized in 2007. The official Scale of Fees for Conveyancing Mat- ters [Legal Practitioners (Remuneration for Legal Documentation and Other Land Comments: After the payment receipts have been submitted, AGIS submits the Matters) Order 1991] prescribes legal fees as follows: NGN 7,500-10,000 + 7.5% of deed of assignment for stamping at the Stamp Duty desk, after which the title is values above NGN 20,000 if acting for the buyer (5% of values above NGN 20,000 if conferred and the stamped documents are released to the applicant. In Abuja there acting for the seller), but in practice, due to high competition amongst lawyers, the is a Stamp Duty Desk within AGIS, manned by staff of the Inland Revenue Service, to fees charged in Abuja are typically lower than those prescribed, and range between speed up the property registration process. 3-5% of property value. These fees include all the steps required until the new title is registered under the buyer's name. Procedure: 10. Registration of deed at AGIS Time: 3 days Procedure: 3. Execute deed of assignment Cost: No cost Time: 1 day Comments: The buyer’s lawyer submits the deed to be filed to the Lands Registry. Cost: No cost Comments: Seller and buyer sign four copies of the deed of assignment. Only the *This procedure can be completed simultaneously with previous procedures. seller is required to sign the application for consent. REGISTERING PROPERTY Procedure: 4. Submit application for Minister’s consent to the assignment at AGIS GOMBE, Gombe Time: 22 days Property value: USD 58,050 = NGN 7,731,680 Cost: No cost Data as of: January 2010 Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised Procedure: 1. Conduct search of property title at Ministry of in the territory of each state in the federation became vested in the Governor of Lands and Survey that state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In Abuja, the ownership of land is vested Time: 1 day in the President of the Republic, and has been delegated to the Minister for Federal Cost: NGN 750 (search fee) Capital Territory of Abuja. The required documents include: Comments: A verbal application is made and the applicant presents photocopy a. Application letter prepared by the lawyer; of the Certificate of Occupancy, pays the NGN 750 search fee and makes the search b. Copy of the deed for which the consent is being sought; there and then. c. Proof of settlement of outstanding ground rates; Procedure: 2. Execute deed of assignment d. Tax clearance certificate; Time: 1 day e. Letter of clearance of the title holder and the Board’s resolution in case of a corpo- rate body; Cost: NGN 80,000 (legal fee) f. Memorandum and articles of association. Comments: The parties execute or sign 3 copies of the deed of assignment. Legal fees are charged based on the Scale of Fees for Conveyancing Matters [Legal Prac- Procedure: 5*. Inspection and assessment of the property value titioners (Remuneration for Legal Documentation and other Land Matters) Order 1991]. Generally, lawyers charge 5% of the value of consideration, but this can be by AGIS negotiated down to an average of NGN 80,000. Time: 4 days Cost: No cost Procedure: 3. Submit application for Governor's consent and pay Comments: A valuation officer from AGIS inspects the property and prepares a consent processing fee at Ministry of Lands valuation report. The purpose of the valuation is to determine the market value of Time: 1 day the property, based on which registration and stamp duty will be assessed. Cost: NGN 3,000 (consent processing fee) Procedure: 6. Pick up the letter of conditional consent and Comments: For the purpose of obtaining consent to the assignment, the Governor has delegated his power to the Commissioner of Lands. The procedure takes 5 days demand notices for fee payments from AGIS to complete. The documents required are: Time: 1 day a. Written application for consent to the Honorable Commissioner; Cost: No cost b. Three copies of the deed of assignment duly executed; Comments: About 10 days after the valuation report is compiled, the Minister c. Report of the government valuer who valued the property and recommendations grants consent contingent on the payment of prescribed fees. The letter of consent of the Land Officer; will specify the assessed value of the property and will list all the fees. The letter al- lows the applicant 4 months for payment of the fees. d. Evidence of payment of NGN 3,000 consent processing fee; e. Proof of being up-to-date in payment of ground rent. 150 DOING BUSINESS IN NIGERIA 2010 Submitting the application takes 1 day and processing leading to approval by the Procedure: 3. Execute deed of assignment Commissioner takes 4 days after all the documents have been submitted and pay- ments have been made. Time: 5 days Cost: NGN 773,168 (10% of the property value legal fees) Procedure: 4. Receive valuation report from Lands Officer or Comments: Lawyers are required by law to prepare the deed of assignment to government valuer be executed by the parties. The parties are required to complete and sign 5 copies Time: 2 days of the deed of assignment. Legal fees are charged based on the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation Cost: No cost and other Land Matters) Order 1991]. In practice, lawyers charge 10% of the value of Comments: A land's officer or government valuer visit the property to ascertain its consideration. This fee covers all steps required until the deed is registered under the market value, then prepare a report and makes recommendations for the consider- new owner's name. ation and approval of the Honorable Commissioner. Procedure: 4. Submit application for Governor's consent at Procedure: 5. Assessment and payment of registration fee at Ministry of Lands Lands Registry Time: 1 day Time: 5 days Cost: No cost Cost: NGN 193,292 (2.5% of the property value) Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Comments: The applicant submits three copies of the executed deed for assess- state of the federation became vested in the Governor of that state, whose prior ment of registration fees. Registration fee is assessed at 2.5% of the value of the consent is mandatory for the legal validity of any transfers or alienation of interest in property as determined by the valuer. This procedure can be performed in a day. landed property. A formal application is made by the applicant to the Governor's of- However, in practice, delays occur due to the frequent absence of relevant officials fice. The applicant must submit the following documents: and due to this the procedure might take up to 5 days to complete. The fee is paid at a. Application letter; the Lands Registry. b. Copy of the existing title and certificate of occupancy; Procedure: 6. Assessment of deed of assignment at Stamp c. Four copies of the deed of assignment; Duty Office, payment of stamp duty and stamping the deed of d. Current tax clearances of the seller and buyer; assignment e. Certificate of incorporation for both companies. Time: 1 day Cost: NGN 231,950 (3% of the property value) Procedure: 5. Receive inspection and valuation of property Comments: These 3 activities are carried out in the same organization - the Fed- Time: 7 days eral Inland Revenue Service. The applicant pays the stamp duty and gets the deed Cost: No cost stamped on the spot. Comments: After the application for consent is received, the valuation unit from the Ministry of Lands inspects the property and prepares a valuation report. The purpose Procedure: 7. Submit receipts of payment of fees to Ministry of of the valuation is to determine the capital value of the property, based on which the Lands and obtain Governor's consent consent fee will be assessed. The valuation can be completed in 7 days. Time: 4 days Cost: No cost Procedure: 6. Obtain property valuation and pay assessed fees at Ministry of Lands Comments: After all the fees have been paid, consent is issued within 4 days. Time: 2 days Procedure: 8. Registration of deed at Lands Registry Cost: NGN 625,876 (NGN 6,000 site inspection fee + NGN 5,000 registration fee + Time: 1 day NGN 5,000 preparation fee + NGN 5,000 approval fee + NGN 5,000 application fee + 7.5% of the property value consent fee) Cost: NGN 200 (registration fee) Comments: The applicant goes back to the Ministry of Lands, Survey and Urban Comments: A fee of NGN 200 is paid to register the deed of assignment. A copy of Planning to be informed of the results of the valuation and pick up the payment or- the deed is retained by the Lands Officer in the Land's Registry der. The applicant can pay the assessed fees on the spot at a bank branch located on the premises of the Ministry. REGISTERING PROPERTY IMO, Owerri Procedure: 7. Pay stamp duty and stamping of the deed of assessment at Stamp Duty Office Property value: USD 58,050 = NGN 7,731,680 Time: 1 day Data as of: January 2010 Cost: NGN 231,950 (3% of the property value) Procedure: 1. Pay search fee at Ministry of Finance Comments: The applicant takes the deed of assignment to the Stamp Duty Of- Time: 1 day fice for assessment, then pays the stamp duty at the cash office. The deed is then Cost: NGN 5,000 (search fee) stamped. This procedure can be completed in 1 day. Comments: The applicant or lawyer pays the search fee at the Ministry of Finance Procedure: 8. Submit receipts of payment of fees to Ministry of and picks up a receipt. Lands and obtain Governor's consent Procedure: 2. Conduct a search of property files at Land Registry Time: 120 days Time: 3 days Cost: No cost Cost: NGN 10,000 (legal fee for search) Comments: The applicant submits the receipts for the payment of fees to the Minis- try of Lands, Survey and Urban Planning. After reviewing the file, the Director makes Comments: A lawyer makes a formal application for search on behalf of the ap- a recommendation to the Commissioner of Lands. If the Commissioner is satisfied, he plicant, attaching receipt of payment of the search fee. Lawyers usually charge NGN endorses the documents and sends it to the Governor for final consent. 10,000 as legal fee for performing this procedure. Procedure: 9. Registration of deed at Lands Registry Time: 7 days Cost: No cost Comments: After the Governor's consent is granted, the deed is filed at the Land Registry. The applicant is required to show evidence of payment of registration fee. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 151 REGISTERING PROPERTY Procedure: 8. Pay stamp duty at a designated bank JIGAWA, Dutse Time: 2 days Property value: USD 58,050 = NGN 7,731,680 Cost: NGN 154,634 (2% of the property value) Data as of: January 2010 Comments: The applicant or his lawyer pays the stamp duty at a designated bank. Procedure: 1. Conduct search on property files at Lands Registry Procedure: 9. Stamping the deed of assignment at Stamp Duty Time: 3 days Office Cost: NGN 391,584 (NGN 5,000 search fee + 5% of the property value legal fees) Time: 1 day Comments: The usual practice is for a lawyer to be retained for the entire process of Cost: No cost registering property starting from the search. The lawyer goes to the Lands Registry and pays the prescribed search fees in cash at the Registry and is issued with a re- Comments: The deed is presented by buyer’s lawyer for stamping at the Stamp ceipt. Once the fees have been paid the search is carried out. Legal fees are charged Duty Office (agency of Inland Revenue Services). based on the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remunera- tion for Legal Documentation and other Land Matters) Order 1991]. In practice, how- Procedure: 10. Obtain bank draft for registration fee from a ever, the fees are negotiated and it Jigawa they average 5% of the value of property. designated bank The fee usually covers all steps required till the deed is registered under the new Time: 1 day owner's name. Cost: NGN 200 (cost of bank draft) Comments: The applicant obtains a bank manager's check for payment. Procedure: 2. Execute deed of assignment Time: 1 day Procedure: 11. Registration of deed at Lands Registry Cost: No cost (paid in Procedure 1) Time: 1 day Comments: Seller and buyer sign the deed of assignment prepared by a lawyer. Cost: NGN 309,267 (4% of the property value registration fee) Comments: The lawyer is required to submit the bank draft for the registration fee Procedure: 3. Obtain application form for Governor's consent (issued in favour of the Ministry of Lands) to the cashier at the Ministry. After paying from Lands Registry the registration fee, the buyer’s lawyer then follows up for the deed to be filed in the Time: 1 day Lands Registry. Cost: NGN 2,200 Comments: The lawyer goes to the Land Registry and obtains a form for Governor’s REGISTERING PROPERTY consent. The consent form costs NGN 2, 200 and payment is made in cash at the KADUNA, Kaduna Land Registry. Property value: USD 58,050 = NGN 7,731,680 Procedure: 4. Fill out and submit application for Governor's Data as of: January 2010 consent Procedure: 1. Conduct search on property files at Lands Registry Time: 1 day Time: 2 days Cost: No cost Cost: NGN 584,876 (NGN 5,000 search fee + 7.5% of the property value legal fees) Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each state in the federation became vested in the Governor of that state, whose prior Comments: A lawyer representing the parties fills out and submits a letter, which consent is mandatory for the legal validity of any transfers or alienation of interest states the purpose of the search, the name of owner and certificate of occupancy in landed property. In Jigawa the power to grant consent has been delegated to the number. The Ministry replies confirming the authenticity and status of the title, and Commissioner for Lands. Documents that should be submitted together with the ap- the existence of encumbrances, if any. The search fee is paid at the Lands Registry. A plication form for consent include: lawyer is required by law to perform the registration of property. Legal fees should be charged based on the Scale of Fees for Conveyancing Matters [Legal Practitioners a. Tax clearance certificate for both seller and buyer's companies for the past 3 years; (Remuneration for Legal Documentation and Other Land Matters) Order 1991], but b. Evidence of payment of all outstanding ground rent; in practice fees are negotiable. In Kaduna, lawyers typically charge around 5% of the c. Photocopy of the title document, articles, memorandum of association and incor- value of consideration. The fees will include all the steps required until the new title poration documents of buyer's company. is registered under the buyer's name. Procedure: 5. Receive site inspection from Ministry of Lands Procedure: 2. Obtain application for consent form (Land Form 6) Time: 2 days from Ministry of Lands Cost: No cost Time: 1 day Comments: As part of the process of assessing the application for consent a valuer Cost: NGN 3,500 (application for consent form fee) from the land registry is required to visit the site and prepare a valuation report. Comments: The application form is a standardized form that can be obtained from Based on the assessed value of the property all applicable fees will be calculated. the Account Section at the Lands Registry. Form Land 6 is the application form to The usual practice is for the lawyer to pay unofficial fees to transport the valuer to request later the Governor's consent to the transaction (required by Nigerian law). the site and to actively follow up on the process until the report is prepared and sub- The fees for the form vary depending on the location of property: NGN 3,500 in light mitted. industrial areas and NGN 5,000 in heavy industrial areas. Fee is payable on the spot. Procedure: 6. Collect provisional letter of approval/consent and Procedure: 3. Execute deed of assignment payment orders from Lands Registry Time: 1 day Time: 14 days Cost: No cost Cost: No cost Comments: Seller and buyer sign four copies of the deed of assignment and the ap- Comments: The letter usually states that the Governor's consent is conditional upon plication for consent. the payment of the registration fee and stamp duty. Procedure: 4. Submit application for consent form (Land Form 6) Procedure: 7. Assessment of the deed of assignment at Stamp and deed of assignment at Ministry of Lands Duty Office Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised Comments: The Stamp Duty Office typically uses the figure as indicated by the in the territory of each state is vested in the Governor of that state, whose prior Lands Registry in their assessment of the value of the property, so basically this is a consent is mandatory for the legal validity of any transfers or alienation of interest in formality and one picks up the demand notice for payment at the same time. landed property. The following documents should be submitted to apply for consent to the assignment: 152 DOING BUSINESS IN NIGERIA 2010 a. Completed application form; REGISTERING PROPERTY b. Three copies of the deed of assignment; KANO, Kano c. Current tax clearance for both the assignor and assignee; Property value: USD 58,050 = NGN 7,731,680 d. Evidence of payment of ground rates; Data as of: January 2010 e. Copy of business certificate and of memorandum and articles of association. Procedure: 1. Conduct search on property files at Lands Registry Procedure: 5. Receive an inspection of the property from Ministry at the Ministry of Lands and Physical Planning of Lands Time: 7 days Time: 32 days Cost: NGN 291,938 (NGN 2,000 search fee + 3.75% of the property value legal fees) Cost: No cost Comments: The lawyer representing the parties fills out and submits a letter, which Comments: There is no standard method of accessing property value in Kaduna. states the purpose of the search. The search fee is paid in cash at the Ministry. Le- Upon submission of the application for consent, the Valuation Section of the Lands gal fees are charged based on the Scale of Fees for Conveyancing Matters [Legal Registry inspects and values the property to determine its value. The valuation in- Practitioners (Remuneration for Legal Documentation and Other Land Matters) variably involves an inspection of the property. Upon completion of inspection, a Order 1991]. This is a sliding scale based on slices of the consideration involved, and valuation report is issued, based on which registration fee is assessed. Waiting time averages out at about 7.5% of the consideration. In practice, due to competition for an inspection is about 1 month and preparation of the valuation report takes 2 amongst lawyers, the fees charged for property assignment in Kano are lower than days. those prescribed and amount to approximately 3.75% of property value. The fees will include all the steps required until the new title is registered under the buyer's name. Procedure: 6. Pick up letter of conveyance and demand notices for payment of fees from Ministry of Lands Procedure: 2. Obtain Application for Consent form from Ministry of Lands Time: 1 day Time: 1 day Cost: No cost Cost: NGN 300 Comments: Following the valuation of the property, the registration fee is assessed, the application for consent processed, and the applicant picks up the letter of con- Comments: The form can be obtained from the Account Section of the Lands Ser- veyance and the payment orders. The letter of conveyance is a letter informing the vices Department. The fee is paid in cash on the spot. This is the application form to applicant that his application has been approved subject to payment of fees. request later the Governor's consent to the transaction (required by Nigerian law). Procedure: 7. Pay prescribed fees at a designated bank Procedure: 3. Execute deed of assignment and Application for Time: 1 day Consent form Cost: NGN 231,950 (3% of the property value registration fee) Time: 1 day Comments: The applicant or the lawyer proceeds to the designated bank to pay the Cost: No cost (paid in Procedure 1) registration fee. Comments: Seller and buyer sign four (4) copies of the deed of assignment and the Application for Consent from. Procedure: 8. Assessment of deed of assignment at Stamp Duty Office Procedure: 4. Submit application for Governor's consent to the Time: 1 day assignment to Ministry of Lands Cost: No cost Time: 14 days Comments: The Stamp Duty Office typically uses the figure indicated by the Lands Cost: NGN 3,000 (processing fee) Registry in their assessment to calculate the stamp duty, so one picks up the demand Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised notice for payment at the same time. in territory of each state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers or Procedure: 9. Pay stamp duty at a designated bank alienation of interest in landed property. In Kano, the authority to grant the consent has been delegated by the Governor to the Commissioner for Lands, who delegated Time: 2 days it further to the Permanent Secretary for Lands. This, combined with other land Cost: NGN 231,950 (3% of the property value) transaction reforms that Kano started implementing in June 2009, decreased the Comments: The applicant or the lawyer must go to a designated bank to pay the time needed to obtain the Governor's consent from 20 days to 14 days. In order to stamp duty. Payment is by bank draft payable to any of the designated receiving obtain such consent, the following documents must be submitted: banks. It takes several days for the payment to go through. a. Copy of the deed of which consent is sought. b. Proof of settlement of outstanding ground rates; Procedure: 10. Stamping of the deed of assignment at Board of c. Letter of clearance of the title holder and board’s resolution in case of a corporate Inland Revenue body; Time: 1 day d. Three years tax clearance certificates of the seller and buyer; Cost: No cost e. Registration particulars and articles of association of the company. Comments: The deed is presented by buyer's lawyer for stamping at Stamp Duty Office. Stamping takes place only after Stamp Duty Office receives confirmation of Procedure: 5*. Receive inspection of the property from Ministry receipt of payment. of Lands Procedure: 11. Submit payment receipts to Ministry of Lands and Time: 3 days obtain Governor's consent Cost: No cost Time: 77 days Comments: There is no standard method of accessing property value in Kano. The valuation includes a physical inspection of the property to assess its market value. Cost: No cost Upon completion of valuation, a valuation report is issued, based on which registra- Comments: After submitting proof that all fees have been paid, the applicant is is- tion fees are assessed. The inspection takes 1 day and preparation of valuation report sued final consent from the Governor. takes 2 days. Procedure: 12. Registration of deed at Lands Registry Procedure: 6. Collect letter of consent and notice of demand of Time: 10 days fees from Ministry of Lands Cost: No cost Time: 1 day Comments: Upon submission of proof of payment of all applicable fees, a lands of- Cost: No cost ficer is assigned to enter the deed into the Land Registry records. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 153 Comments: The applicant receives a letter of consent, which is conditional on pay- Procedure: 3. Obtain application Land Form 1C from Lands ment of the prescribed fees. The registration must be conducted within 3 months since the consent has been granted. Registry Time: 1 day Procedure: 7. Pay prescribed fees at bank on premises of Ministry Cost: NGN 500 of Lands Comments: One can obtain the application from the Lands Registry. Form 1C is the Time: 1 day application form to request later the Governor’s consent to the transaction (required Cost: NGN 386,584 (5% of the property value registration fee) by Nigerian law). Comments: The buyer or the lawyer pays the prescribed fees at the bank on the Procedure: 4. Fill out and submit application for Governor's premises of the Accounts section at the Ministry. consent Procedure: 8. Assessment of deed of assignment at the Stamp Time: 1 day Duty Office, Federal Board of Inland Revenue Cost: No cost Time: 1 day Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Cost: No cost state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest Comments: The deed is presented by buyer's lawyer for assessment of stamp duty in landed property. In Katsina the power to grant consent has been delegated to at Stamp Duty Office. The Stamp Duty Office typically uses the figure as indicated by the Commissioner for Lands. The applicant/title holder signs the application form the Lands Registry in their assessment of the fees, so basically this is a formality and personally. The application will not be processed if his signature does not correspond one picks up the demand notice for payment at the same time. to that in the land file. The following documents should be submitted with the ap- plication for consent: Procedure: 9. Pay stamp duty at a designated bank a. Proof of settlement of outstanding ground rent; Time: 3 days b. Photocopy of title document; Cost: NGN 154,634 (2% of the property value) c. Three years tax clearance certificates of the seller and buyer’s companies; Comments: The applicant or the lawyer goes to a designated bank to pay the stamp d. Registration particulars and articles of association and incorporation of the buy- duty. Payment is by bank draft payable to any of the designated receiving banks. It er’s company. takes several days for the Stamp Duty Office to receive the confirmation of payment. Ad valorem stamp duties for property assignment between companies are 2%. The rates are set by Joint Tax Board, Harmonization of Stamp Duty Rates and Items, as Procedure: 5. Receive site inspection from Ministry of Lands published on 1st July 2002. Time: 2 days Cost: No cost Procedure: 10. Stamping the deed of assignment at Stamp Duty Comments: Inspection is performed to assess the value of the property based on Office which fees will be calculated. Time: 1 day Cost: No cost Procedure: 6. Obtain Governor's conditional approval/consent Comments: The deed is presented by buyer's lawyer for stamping at Stamp Duty Time: 21 days Office. Cost: No cost Comments: The applicant or his lawyer collects a letter granting the Governor's Procedure: 11. Registration of deed at Lands Registry consent conditional on the payment of the registration fee and stamp duty. Time: 1 day Cost: No cost Procedure: 7. Assessment of the deed of assignment at Stamp Comments: Buyer's lawyer submits payment receipts to the Schedule Officer at Duty Office Lands Registry, who in turn enters the deed into the Lands Registry records. Time: 1 day Cost: No cost *This procedure can be completed simultaneously with previous procedures. Comments: The Stamp Duty Office typically uses the figure as indicated by the Lands Registry in their assessment of fees, so basically this is a formality and one picks up the demand notice for payment at the same time. REGISTERING PROPERTY KATSINA, Katsina Procedure: 8. Pay stamp duty at a designated bank Property value: USD 58,050 = NGN 7,731,680 Time: 1 day Data as of: January 2010 Cost: NGN 231,950 (3% of the property value) Comments: Since this is a federal level tax, the applicant or his lawyer pay the Procedure: 1. Conduct search on property files at Lands Registry stamp duty at a designated bank instead of the Stamp Duty Office. Time: 2 days Cost: NGN 1,000 Procedure: 9. Stamping of the deed of assignment at Stamp Duty Comments: The lawyer representing the applicant usually submits a letter to the Office Director of Lands, attaching a photocopy of the title documents and receipt of pay- Time: 1 day ment of search fee. The search fee can be paid to the cashier at the Lands Registry. Cost: No cost Procedure: 2. Execute deed of assignment Comments: The deed is presented by buyer’s lawyer for stamping at the Stamp Duty Office (agency of Inland Revenue Services). Time: 1 day Cost: NGN 386,584 (5% of the property value legal fee) Procedure: 10. Obtain bank manager's check for payment of Comments: Seller and buyer sign the deed of assignment prepared by a lawyer. registration fee from a designated bank Legal fees are charged based on the Scale of Fees for Conveyancing Matters [Legal Time: 1 day Practitioners (Remuneration for Legal Documentation and other Land Matters) Order Cost: NGN 232,200 (3% of the property value + NGN 250 bank manager's check fee) 1991]. In practice, however, the fees are negotiated and in Katsina they average 5% of the value of property. The fee usually covers all steps required till the deed is regis- Comments: The applicant obtains a bank manager's check that would be submitted tered under the new owner's name. to the cashier at the Ministry of Lands. 154 DOING BUSINESS IN NIGERIA 2010 Procedure: 11. Registration of deed and payment of registration Procedure: 6. Assessment of the deed of assignment at Stamp fee at Lands Registry Duty Office Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: The registration fee is usually paid by submission of a bank manager’s Comments: Once the Governor's consent is granted, a letter of conveyance is issued check (issued in favor of the Ministry of Lands) to the cashier at the Ministry. After and the applicant is instructed to present this letter and the deed of assignment at paying the registration fee, the buyer’s lawyer then follows up for the deed to be the Stamp Duty office for assessment of duties and stamping. filed to the Lands Registry. Procedure: 7. Pay stamp duty at a designated bank REGISTERING PROPERTY Time: 1 day KEBBI, Birnin Kebbi Cost: NGN 231,950 (3% of the property value) Property value: USD 58,050 = NGN 7,731,680 Comments: After the deed of assignment is assessed, the applicant is required to go to a designated bank to pay the stamp duty. Payment is by bank draft at any of the Data as of: January 2010 designated receiving banks. Procedure: 1. Conduct search of property files at Land Registry Procedure: 8. Stamping of the deed of assignment at Stamp Duty Time: 1 day Office Cost: NGN 200 (search fee) Time: 2 days Comments: The applicant is required to make a written application to the Lands Registry and pay the standard search fee, after which the search can be conducted. Cost: No cost The purpose of the search is to determine whether there are any encumbrances as- Comments: The deed is presented by buyer's lawyer for stamping at the Stamp sociated with the property. There is no requirement for this procedure to be carried Duty Office. Stamping takes place only after the Stamp Duty Office receives confir- out by a lawyer. mation of payment from the designated bank. Procedure: 2. Execute deed of assignment Procedure: 9. Registration of deed at Lands Registry Time: 1 day Time: 1 day Cost: NGN 541,218 (7% of the property value legal fee) Cost: No cost Comments: Legal fees are determined on the basis of the Official Scale of Fees for Comments: A copy of the stamped deed of assignment is returned to the Ministry Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation of Lands and Housing and is then registered. and Other Land Matters) Order 1991]. The practice, however, is for the lawyer and cli- ent to negotiate a single fee for the whole process. This fee is usually between 4% to REGISTERING PROPERTY 10% of the value of the property. The fee includes all the steps required until the new title is registered under the buyer's name. KOGI, Lokoja Property value: USD 58,050 = NGN 7,731,680 Procedure: 3. Submit application for Governor’s consent to the Data as of: January 2010 assignment to Ministry of Lands Time: 1 day Procedure: 1. Pay search fee at a designated bank Cost: NGN 200 (processing fee) Time: 1 day Comments: Once the search is completed and the deed of assignment has been Cost: NGN 2,500 executed, the applicant is required to make a written application to the Governor Comments: Before the search of property files can be performed, the applicant through the Commissioner for Lands and Housing for the Governor's consent to the must pay the search fee at a designated bank. assignment. The application is accompanied by a copy of the certificate of occupancy and deed of assignment, and a NGN 200 processing fee, which is paid in cash at the Procedure: 2. Conduct search of property files at Lands Registry ministry. The ministry then conducts a search of their records to ensure that there Time: 2 days is no outstanding ground rent on the property before passing the documents on to Cost: No cost their Valuation Department to evaluate the property and determine registration fees due. The evaluation process involves a visit to the property by the Ministry's evalua- Comments: The applicant is required to go to the Ministry of Environment and tion team. Once the value has been determined, the applicant will be required to pay Physical Development with a bank teller for NGN 2,500, having paid the amount into 2% of the determined value as registration fee. Once this payment is made in cash at one of the designated banks. There is no requirement for sworn declaration of the the Ministry of Lands, the application is forwarded to the Governor for his approval. status of the property or purpose of the search, but the applicant will be required to The process of obtaining Governor's consent can take anything from 6 months to 1 state in the search form the transferor's name, property file number, and plot num- year, depending on the Governor's schedule. ber. If a lawyer is retained for the search, which is not compulsory, but common prac- tice, the fees for the lawyer would range from 5% to 10% of the consideration. Procedure: 4. Receive inspection from Ministry of Lands Procedure: 3. Obtain a valuation report from an independent Time: 7 days valuer Cost: No cost Time: 2 days Comments: The on-site visit to the property is usually conducted within a week of Cost: NGN 50,000 the application being submitted, however, it is necessary for the applicant to follow up with the Ministry of Lands to ensure that the visit and valuation are done quickly. Comments: The applicant is required to obtain a valuation report for the property from a certified valuer. Procedure: 5. Pay registration fee at Ministry of Lands and obtain Governor's consent Procedure: 4. Execute deed of assignment Time: 180 days Time: 1 day Cost: NGN 154,634 (2% of the property value) Cost: NGN 386,584 (5% of the property value) Comments: The registration fee is paid in cash at the Ministry of Lands and Housing Comments: The seller and buyer, along with their respective witnesses, sign the and a receipt is issued. Once payment is received by the ministry the application is deed of assignment prepared by a lawyer. Legal fees are charged based on the Scale then forwarded to the Governor for his approval. of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Docu- mentation and other Land Matters) Order 1991]. Generally, lawyers charge 5% of the value of consideration, but do negotiate fees outside the provisions of the law. The fee includes all the steps required until the new title is registered under the buyer's name. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 155 Procedure: 5. Submit application for Governor's consent to Procedure: 2. Obtain Land Application Form from Ministry of Ministry of Environment and Physical Planning Lands Time: 24 days Time: 1 day Cost: No cost Cost: NGN 5,000 Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Comments: The applicant pays the application fee and picks up the application state in the federation became vested in the Governor of that state, whose prior form. consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In Lokoja, the power to grant consent is delegated to the Honor- Procedure: 3. Execute deed of assignment able Commissioner for Environment and Physical Development, and as a result the Time: 1 day applicant is required to obtain and fill out a consent form and make an application to the Honorable Commissioner asking for the Governor's approval to the transfer of Cost: No cost (paid in Procedure 1) property. The seller is required to provide a valuation report from a certified valuer, Comments: The deed is executed privately by seller and buyer and application based on which the consent fee will be determined. The seller would be required to forms are signed in triplicate by both parties. pay all outstanding bills on the property, including ground rents, and to pay the con- sent fee of 4% of the value of the property. The consent fee together with the appli- Procedure: 4. Submit application for Governor’s consent to the cation form and consent form are paid at a designated bank and a teller is presented assignment to Ministry of Lands as proof at the Ministry. It takes an average of 24 days to receive the consent. Time: 1 day Cost: No cost Procedure: 6*. Pay fees at a designated bank Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Time: 1 day state in the federation became vested in the Governor of that state, whose prior Cost: NGN 312,767 (4% of the property value consent fee + NGN 2,000 application consent is mandatory for the legal validity of any transfers or alienation of interest form fee + NGN 1,500 consent form fee) in landed property. Incomplete applications are not accepted. New procedures and Comments: The applicant pays the fees at a bank and submits proof of payment to documentation requirements have been widely published. Obtaining the Governor’s the Ministry of Environment & Physical Development. consent requires the submission of the following documents: a. Covering letter with address and telephone number of applicant; Procedure: 7. Assessment and stamping of deed of assignment at b. Current tax clearance certificates of seller and buyer and, for limited liability com- Board of Inland Revenue panies, the Internal Revenue Certificate of PAYE for its staff; Time: 1 day c. Four copies of the deed of which consent is sought; Cost: NGN 231,950 (3% of the property value stamp duty) d. Evidence of payment of consent, administrative and registration fees; Comments: The applicant is required to go to the Board of Internal Revenue (BIR) e. Where the property is covered by a state leasehold or certificate of occupancy, and pay the stamp duty in cash or present evidence of payment in designated bank evidence of payment of ground rent up to date. depending on the amount. After the payment is made, the duly executed deed of It takes 1 day to submit the documents and 60 days to receive consent. assignment is presented at BIR for stamping. The fee is fixed at 3% of the value of the property. The Federal Inland Revenue Service handles the stamping of the deed of Procedure: 5. Receive site inspection from Ministry of Lands assignment of corporate bodies. The exercise takes 1 day. Time: 3 days Procedure: 8. Pay registration fees at a designated bank Cost: No cost Time: 1 day Comments: Inspection is performed to assess the value of the property based on Cost: NGN 231,950 (3% of the property value registration fee) which fees will be calculated. Comments: The registration fee is paid at a designated bank. Procedure: 6. Pay fees and obtain Governor's consent at Ministry Procedure: 9. Registration of deed at Lands Registry of Lands Time: 62 days Time: 1 day Cost: NGN 595,339 (5% of the property value consent/approval fee + 2% of the Cost: No cost property value registration fee + 10% of all charges administrative fee) Comments: The applicant is required to submit proof of payment of registration fee Comments: The consent, registration, and administrative fees are paid at a cost to the Ministry of Environment & Physical Development. Once the deed has been point located within the Ministry. It takes 2 days to pay the fees and 60 days to ob- approved and duly stamped, it is expected to be submitted for registration within 4 tain Governor's consent to the assignment. months. Non compliance attracts a flat penalty of NGN 5,000. Procedure: 7. Assessment of deed of assignment, payment of *This procedure can be completed simultaneously with previous procedures. stamp duty and stamping of deed at Stamp Duty Office Time: 6 days REGISTERING PROPERTY Cost: NGN 236,950 (3% of the property value stamp duty + NGN 5,000 transporta- KWARA, Ilorin tion expenses) Property value: USD 58,050 = NGN 7,731,680 Comments: The assessment, payment and stamping of the deed of assignment can Data as of: January 2010 be done in the same office. However, since there is no Stamp Duty Office in Ilorin, ap- plicants have to travel to Ibadan or Abuja to have the deed stamped. Procedure: 1. Conduct search on property files at Lands Registry Time: 1 day Procedure: 8. Registration of deed at Lands Registry Cost: NGN 775,668 (NGN 2,500 search fee + 10% of the property value legal fees) Time: 3 days Comments: A lawyer representing the applicant fills out and submits application Cost: No cost to the Director of Lands. The lawyer is usually required to bring a letter of author- Comments: After paying the registration fee, the buyer’s lawyer then follows up for ity from the landowner. A lawyer is generally used to perform the registration of the deed to be filed to the Lands Registry. The receipt and paying-in slips evidencing property. Legal fees are charged based on the Scale of Fees for Conveyancing Mat- payment are given to the cashier at the Lands Registry, who in turn issues a receipt. ters [Legal Practitioners (Remuneration for Legal Documentation and Other Land With proof of payment, a lands officer is assigned to enter the deed into the Registry Matters) Order 1991]. This is a sliding scale, and averages out at about 10% of the records. consideration. The fees include all the steps required until the new title is registered under the buyer’s name. The search fee was increased from NGN 500 to NGN 2,500 effective March 1, 2009. The fee is payable at cost points located within the Ministry of Lands premises. 156 DOING BUSINESS IN NIGERIA 2010 REGISTERING PROPERTY Procedure: 7. Submit application for Governor’s consent to the LAGOS, Lagos assignment to Directorate of Land Services Property value: USD 58,050 = NGN 7,731,680 Time: 1 day Data as of: January 2010 Cost: No cost Procedure: 1. Conduct a property title search at Lands Registry Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each state in the federation became vested in the Governor of that state, who’s prior Time: 1 day consent is mandatory for the legal validity of any transfers or alienation of interest Cost: NGN 590,686 NGN 3,750 (search at Registry) + Legal fees as follows: NGN in landed property. In August 2005, the Governor’s consent procedure underwent 7,500–10,000 + 7.5% of values above NGN 20,000 if acting for the buyer (5% of val- major reform, with the aim that consent should be granted within 30 days following ues above NGN 20,000 if acting for the seller) submission of a duly completed application. Incomplete applications are not ac- Comments: The application letter to conduct the search is accompanied by a sworn cepted. New procedures and documentation requirements have been widely declaration of the status of the party and purpose of search. A lawyer is generally published. Obtaining the Governor’s consent require the following documenta- used to perform the registration of property. Legal fees are charged based on the tion: covering letter with address and telephone numbers; completed form 1C; Certi- Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal fied True Copy (CTC) of title document of assignor; current tax clearance certificates Documentation and Other Land Matters) Order 1991]. This is a sliding scale, and av- of the assignor and assignee; for limited liability companies, the internal revenue cer- erages out at about 7.5% of the consideration. The fees include all the steps required tificate of PAYE for its staff and current tax clearance certificate for the directors; four until the new title is registered under the buyer’s name. The primary objective at this (4) copies of the deed of which consent is sought should be attached; copy of the stage is to ascertain that the vendor has a good root of title. A good root of title in survey plan, as approved by the Town Planning Authority and a picture of the build- this context means the following: that the vendor is the rightful owner of the land, ing; evidence of payment for charting fee, endorsement fee, Form 1C (admin fees), that the land is free from any encumbrance or pending litigation, that the land is consent fee, stamp duty, capital gains tax and registration fee; evidence of payment not the subject of any Government acquisition, that the land is not subject to any of of land use charge; where the property is covered by a state leasehold or certificate the overriding interests in land (e.g. short leases, easements, licenses, road or right of occupancy, evidence of payment of ground rent, up to date. of way). Procedure: 8. Obtain notice of stamp duty, registration fees, Procedure: 2. Obtain application Land Form 1C from Lands consent fees, neighborhood improvement charge from Land Registry Registry Time: 1 day Time: 7 days Cost: No cost Cost: No cost Comments: One can obtain the application from the consent section of Lands Ser- Comments: After investigation and assessment of the true value of the property, the vices Department. Form 1C is the application form to request later the Governor’s applicant will be informed of the amount for the registration fee, the consent fee, consent to the transaction required by Nigerian law. The Form 1C must be dated and stamp duty, capital gains tax, which should be paid at the designated bank. signed by the parties to the transaction and sworn to before a magistrate or notary public. Procedure: 9. Pay stamp duty, registration fees, consent fees, neighborhood improvement charge at a designated bank Procedure: 3. Obtain Certified True Copy (CTC) of title document Time: 1 day from Lands Registry Cost: NGN 1,005,118 8% Consent Fee + 3% of the property value registration fee + Time: 2 days 2% of the property value stamp duty (Capital gains tax of 2% is also paid, but are not Cost: NGN 5,625 included in the calculation). Comments: The assignor (seller)/assignee (buyer) issues a letter of authority to Comments: The applicant pays the remaining fees at the designated bank by the Registrar of Titles, authorizing the lawyer to apply for and obtain CTC of title means of certified checks: 8% consent fee + 3% of property value for the registra- document, required for Governor’s Consent. It takes a minimum of 2 days to obtain tion fee + 2% of property value for the stamp duty (capital gains tax of 2% is also certified copies of title documents as the lawyer should also present an affidavit to paid). Receipts are provided to the applicant, who will make copies of those receipts that effect. before submitting to the Land Registry. If land directly allocated to the seller by the government is resold within 10 years Procedure: 4. Obtain a survey plan from Town Planning Authority of its initial allocation, then a penalty consent fee of 16% of the value is charged (to Time: 1 day deter land speculation). Cost: No cost Procedure: 10. Submit receipts of payment of registration fees, Comments: Parties obtain a copy of the survey plan as approved by the Town Plan- ning Authority, which is required for the Governor’s consent. consent fees, neighborhood improvement charge, stamp duty to Lands Registry Procedure: 5. Execute deed of assignment and Land Form 1C Time: 61 days Time: 1 day Cost: No cost Cost: No cost Comments: The receipts obtained from the bank are submitted as proof of pay- Comments: The assignor and assignee complete and sign Land Form 1C and four ment to the Land Registry. These receipts are internally forwarded to the Account (4) copies of the deed of assignment. Department for reconciliation. The lawyer retains copies of the deposit/payment slip is retained for his records. The Land Registry manually confirms these payments to the relevant departments. Once payment is confirmed by the Accounts Department, Procedure: 6. Pay charting fee, administrative fees, endorsement the Land Services Department sends the file directly to the office of the Honorable fee at a designated bank Attorney General of the State. Time: 1 day Cost: NGN 12,000 Charting Fees (NGN 7500) + Administrative fees (NGN 3000) and Procedure: 11. Obtain file from Land Services Department Endorsement Fees (NGN 1500) Time: 1 day Capital gains tax of 2% is also paid, but are not included in the calculation Cost: No cost Comments: A charting fee of NGN 7,500 and administrative fees of NGN 3,000 and Comments: The applicant will make follow-up calls or visit personally the Land Reg- the endorsement fee of NGN 1,500 are paid to the designated banks. A receipt is istry to follow-up on the progress of the file. The Honorable Attorney General grants issued, together with the paying-in slip to the designated bank. A bank draft made consent on behalf of the Governor by signing on the deed of transfer. The lawyer will payable to Lagos State Government. This procedure is required for Governor’s con- then transmit this file to the Stamp Duty Office for stamping. sent. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 157 Procedure: 12. Stamping of deed of assignment at Stamp Duty Procedure: 7. Submit application for Governor's consent to the Office assignment to Ministry of Lands and Survey Time: 1 day Time: 91 days Cost: No cost Cost: No cost Comments: The deed is presented by assignor’s lawyer for stamping at the Stamp Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Duty Office (agency of Inland Revenue Services). state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in Procedure: 13. Registration of deed at Lands Registry landed property. The application for consent should be accompanied by the follow- Time: 3 days ing documents: Cost: No cost a. Proof of payment of the required fees; Comments: The lawyer will then follow up on the deed to be filed to the Lands Reg- b. Three year tax clearance for the seller and buyer’s companies; istry. The receipt and paying-in slips evidencing payment are given to the cashier at c. Four bound copies of the executed deed of assignment. the Lands Registry. It takes 1 day to submit the documentation and 90 days to obtain consent. With proof of payment, a lands officer is assigned to enter the deed into the Registry records. Procedure: 8. Assessment of deed of assignment at Stamp Duty Office REGISTERING PROPERTY Time: 1 day NASARAWA, Lafia Cost: No cost Property value: USD 58,050 = NGN 7,731,680 Comments: The applicant takes the deed to the Stamp Duty Office to have it as- sessed. Data as of: January 2010 Procedure: 1. Conduct search on property files at Lands Registry Procedure: 9. Pay stamp duty at a designated bank Time: 1 day Time: 1 day Cost: NGN 500 Cost: NGN 48,000 (NGN 7,500 for every million NGN of the property value and NGN 750 for every additional NGN 100,000 of the property value) Comments: The applicant writes an application letter addressed to the Commis- sioner for Lands requesting permission to conduct a search, and submits the letters Comments: The applicant pays the assessed stamp duty at one of the designated with proof of payment of the NGN 500 application fee. The fee is paid at the Ministry banks. of Lands. Once approval is granted the property files are released to the applicant to conduct the search. Procedure: 10. Stamping of the deed of assignment at Stamp Duty Office Procedure: 2. Execute deed of assignment Time: 1 day Time: 1 day Cost: No cost Cost: NGN 773,168 (10% of the property value) Comments: Once the required duties have been paid, the applicant goes to the Comments: The seller and buyer sign the deed of assignment prepared by a lawyer. Stamp Duty Office with receipt of payment for the deed to be stamped. Legal fees are charged based on the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and other Land Matters) Order Procedure: 11. Registering the deed of assignment at Lands 1991]. In Nasarawa state, legal fees for registering property average 10% of the value Registry of the property. The fees include all the steps required until the new title is registered Time: 1 day under the buyer’s name. Cost: No cost Procedure: 3. Assessment of deed of assignment at Land Registry Comments: After the deed has been stamped, it is taken to the Lands Registry for registration. Time: 1 day Cost: No cost REGISTERING PROPERTY Comments: The deed is submitted to the Lands Registry for assessment of registra- tion and consent fees. NIGER, Minna Property value: USD 58,050 = NGN 7,731,680 Procedure: 4. Receive site inspection from Ministry of Lands Data as of: January 2010 Time: 1 day Cost: No cost Procedure: 1. Conduct search on property files at Lands Registry Comments: The site is inspected by Ministry of Lands officials to determine the Time: 1 day value of the property based on which the fees will be calculated. Cost: NGN 500 (search fee) Comments: The applicant visits the Land Registry with a letter applying to conduct Procedure: 5. Pay consent fee, site inspection fee and registration a search on whether the property has any encumbrances. Once fees have been paid fee at a designated bank at the office, the search is conducted. Time: 1 day Procedure: 2. Obtain Land Application Form from Lands Registry Cost: NGN 234,050 (NGN 2,000 consent fee + NGN 100 site inspection fee + 3% of the property value registration fee) Time: 1 day Comments: Consent, site inspection and registration fees are paid at a designated Cost: No cost bank. Comments: The applicant must collect a form, which is called a Land Application Form, from the Land Registry, fill it in and attach passport photograph and declara- Procedure: 6. Obtain certified true copy (CTC) of title document tion of age or birth certificate. The declaration of age or birth certificate is required from Ministry of Lands because applicants must be over 18 years to apply. Time: 2 days Cost: NGN 3,000 Comments: The applicant is required to make a written application to the Ministry, attach the deed, and make payment in cash at the Ministry of Lands. 158 DOING BUSINESS IN NIGERIA 2010 Procedure: 3. Execute deed of assignment and Land Application Procedure: 10. Stamping of the deed of assignment at Stamp Form Duty Office Time: 1 day Time: 4 days Cost: NGN 773,168 (10% of the property value for legal fees) Cost: NGN 5,000 (cost of transportation to Abuja or Kaduna) Comments: Lawyers are required by law to prepare the deed of assignment to be Comments: The applicant is required to present the bank draft, which is confirmed executed by the parties. Legal fees are charged based on the scale of fees for Con- with the issuing bank before the process can continue (this usually takes a couple of veyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and days), and three copies of the deed of assignment. Other Land Matters) Order 1991]. The average lawyer's fee in Niger state is 10% of the value of the consideration. The legal fees cover the preparation of the deed of as- Procedure: 11. Registration of deed at Lands Registry signment and subsequent procedures that require the involvement of a lawyer. Time: 1 day Cost: No cost (paid in Procedure 7) Procedure: 4. Obtain evaluation report from professional valuer Comments: The applicant goes to the Lands Registry and presents the stamped Time: 1 day deed of assignment for registration. Cost: NGN 20,000 Comments: The applicant is required to obtain an evaluation report from a regis- *This procedure can be completed simultaneously with previous procedures. tered professional valuer and then submit this report to the Land Registry. The report can cost anything between NGN 20,000 and NGN 50,000, based on negotiation with the professional valuer. The evaluation report is usually based on the information REGISTERING PROPERTY supplied by the applicant, including location, size of property, number of floors, etc. OGUN, Abeokuta Property value: USD 58,050 = NGN 7,731,680 Procedure: 5. Assessment of deed of assignment at Lands Data as of: January 2010 Registry Procedure: 1. Pay search fee at a designated bank Time: 1 day Time: 1 day Cost: No cost Cost: NGN 2,000 Comments: The Lands Registry uses the evaluation report by the professional Comments: Before the search on property title can be conducted, the applicant valuer for assessment of fees. must pay the search fee at a designated bank. Procedure: 6*. Pay administrative, registration and consent fees Procedure: 2. Conduct a search of the property title at the Ogun at a designated bank State Bureau of Lands and Survey Time: 1 day Time: 2 days Cost: NGN 157,634 (NGN 3,000 for consent form + 1% of the property value for reg- Cost: NGN 386,584 (5% of the property value) istration + 1% of the property value for approval/consent) Comments: The application letter for conducting the search is accompanied by a Comments: The applicant makes the payment at a designated bank and then pres- sworn declaration of the status of the party and the purpose of the search. A lawyer is ents the proof of payment of registration fee upon registering the deed of assign- usually hired to perform the registration of the property. The Scale of Fees for Convey- ment (Procedure 12). ancing Matters [Legal Practitioners (Remuneration for Legal Documentation and Other Land Matters) Order 1991] prescribes the following fees for property conveyancing: Procedure: 7. Submit application for Governor's consent at Lands NGN 7,500-10,000+7.5% of values above NGN 20,000 if acting for the buyer (5% of Registry values above NGN 20,000 if acting for the seller). In practice in Ogun the legal fees are Time: 61 days negotiated between the parties and average around 5% of the property value. This fee Cost: No cost will cover all the steps required till the new title is registered under the buyer's name. Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each state in the federation became vested in the Governor of that state, whose prior Procedure: 3*. Obtain consent form (land form) from Bureau of consent is mandatory for the legal validity of any transfers or alienation of interest in Lands landed property. The applicant goes to the Lands Registry and obtains, fills out and Time: 1 day submits the consent form together with the following documents: Cost: NGN 7,000 (NGN 2,000 for consent form + NGN 5,000 administrative fee) a. Proof of payment of fees; Comments: The consent form can be obtained from the Bureau of Lands and Survey. b. Three copies of the deed of assignment; c. Valuation report; Procedure: 4*. Obtain a certified true copy (CTC) of title d. Proof of payment of ground rent and tax clearance (where applicable). document from Bureau of Lands The minimum time required for this procedure is 60 days. In practice it can take up Time: 2 days to 3 years. Cost: NGN 2,500 (NGN 500 per page) Comments: The seller sends a letter of authority to the Director of Land Services at Procedure: 8. Assessment of deed of assignment at the Stamp the Lands Registry, authorizing the lawyer to apply for and obtain CTC of title docu- Duty Office ment. This document is required for obtaining the Governor's consent. The charge is Time: 8 days NGN 500 per page. Cost: NGN 5,000 (cost of transportation to Abuja or Kaduna) Procedure: 5. Execute the deed of assignment and consent form Comments: Applicants have to travel to Kaduna or Abuja for this procedure as it cannot be done in Minna. Time: 1 day Cost: No cost (paid in Procedure 2) Procedure: 9. Pay stamp duty at a designated bank Comments: Seller and buyer complete and sign the consent form and six copies of Time: 6 days the deed of assignment. Cost: NGN 231,950 (3% of the property value) Procedure: 6. Pay advance fees at a designated bank Comments: The applicant has to make the required payment at any of the desig- nated banks and collect a bank draft in favor of the Stamp Duty Office. Time: 1 day Cost: NGN 618,534 (8% of the property value consent fee ) Comments: The actual consent fee is 8%, but the applicant initially pays 10'% of the value of the property as a deposit fee for consent, as it is assumed that the value of property listed in the deed is lower than the market value of the property. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 159 Procedure: 7. Submit an application for Governor's consent at Procedure: 14. Pay registration fee at a designated bank Attorney General's office Time: 1 day Time: 1 day Cost: NGN 5,000 Cost: No cost Comments: After the consent has been granted, the buyer or lawyer pays the regis- Comments: By virtue of the Land Use Act promulgated in 1978, all land that com- tration fee at a designated bank. prises the territory of each state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers Procedure: 15. Registration of deed of assignment at Lands or alienation of interest in land property. In Ogun the authority to grant consent Registry has been delegated by the Governor to the Attorney General and Commissioner for Time: 7 days Justice. In order to obtain the Governor’s consent, the applicant must submit the fol- lowing documents: Cost: No cost a. Application form; Comments: After paying the registration fee, the buyer's lawyer follows up for the deed to be filed at the Lands Registry. b. Certified True Copy (CTC) of title document; c. Government receipt of up-to-date payment of ground rents; *This procedure can be completed simultaneously with previous procedures. d. Seller’s three years tax clearance certificate; e. Government receipt of payment of current tenement rate (if the land is developed); REGISTERING PROPERTY f. Ogun state development levy receipts for the last 4 years; ONDO, Akure g. Six copies of the deed of assignment; h. Valuation report; Property value: USD 58,050 = NGN 7,731,680 Data as of: January 2010 i. Evidence of remittance of current PAYE of their employees to Ogun state. Procedure: 1. Conduct search on property files at Lands Registry Procedure: 8. Receive a valuation inspection of the property from Time: 1 day Ministry of Lands Cost: NGN 6,000 (NGN 1,000 search fee + NGN 5,000 legal fee) Time: 21 days Comments: An application letter is addressed to the Lands Registry. The application Cost: No cost letter must contain the registration particulars of the land in question. The essence Comments: After the advance fees have been paid, an officer from the Lands Regis- of the search is to make sure the land is free from encumbrance. The NGN 5,000 legal try will be assigned to conduct a physical inspection of the property, based on which fee only covers the search of property title. a valuation report is prepared. Procedure: 2. Execute deed of assignment Procedure: 9. Assessment of the deed of assignment at the Board Time: 7 days of Internal Revenue Service Cost: NGN 773,168 (10% of the property value) Time: 1 day Comments: Lawyers are required by law to prepare the deed of assignment to be Cost: No cost executed by the parties. Legal fees are charged based on the scale of fees for Con- Comments: The deed is presented by the buyer's lawyer for the assessment of veyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and stamp duty and capital gains tax at the Stamp Duty Office/Inland Revenue Service. Other Land Matters) Order 1991]. The stipulated fee is 10% of the value of consider- ation, but in practice most lawyers negotiate outside the provisions of the law. The Procedure: 10. Pay the stamp duty and capital gains tax at a legal fees cover the preparation of deed of assignment and subsequent registration designated bank of the title. Time: 1 day Procedure: 3*. Pay consent application form fee at a designated Cost: NGN 231,950 (3% of the property value stamp duty; capital gains tax is also paid, but not included in the calculation) bank Comments: The buyer or the lawyer must go to a designated bank to pay the stamp Time: 1 day duty and capital gains tax. Payment is by bank draft payable to any of the designated Cost: NGN 1,000 receiving banks. Capital gains tax is calculated at 10% of all chargeable gains. Comments: Before obtaining the consent application form, the applicant has to pay the consent form fee at a designated bank. A receipt will be issued to the applicant. Procedure: 11. Stamp the deed of assignment at Stamp Duty Office Procedure: 4. Obtain consent application form from Ministry of Time: 1 day Lands Cost: No cost Time: 1 day Comments: The deed is presented by the buyer's lawyer for stamping at the Stamp Cost: No cost Duty Office. Comments: The receipt for the payment of the consent application form fee is taken to the Ministry of Lands and Housing to obtain consent form. Procedure: 12. Submit payment slips at the Lands Registry and obtain certificate of confirmation of payment by the Revenue Procedure: 5. Obtain valuation report from a registered estate Desk valuer Time: 1 day Time: 7 days Cost: No cost Cost: NGN 40,000 (fixed fee) Comments: Due to the ongoing reform program "Ogun State pay direct" receipts Comments: A registered estate valuer is contracted to carry out a valuation of the and confirmations are now generated immediately. property. The valuation report is required to be submitted with the application for Governor's consent. Procedure: 13. Receive Governor's consent Time: 60 days Procedure: 6. Submit application for Governor's consent to the Cost: No cost assignment at Ministry of Lands Comments: After all payments have been cleared, the Bureau of Lands and Survey Time: 1 day sends the files to the Office of the Attorney General and Commission for Justice, Cost: No cost where the consent is prepared and signed, and then forwarded back to the Bureau of Lands and Survey. 160 DOING BUSINESS IN NIGERIA 2010 Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- Procedure: 13. Pay stamp duty at a designated bank tion became vested in the Governor of the state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. For Time: 1 day ease of administration the Governor delegates his power of consent to the Commis- Cost: NGN 231,950 (3% of the property value) sioner, Ministry of Lands and Survey. In order to obtain the Governor’s consent, the Comments: The applicant pays the stamp duty at a designated bank, and is issued a applicant must submit the following documents: teller receipt. Ad valorem stamp duties in Ondo are calculated at 3%. a. Consent application form; b. Photocopy of the title document; Procedure: 14. Stamping of the deed of assignment at Stamp c. Evidence of payment of the development levy; Duty Office d. Copy of the deed of assignment; Time: 1 day e. Valuation report; Cost: No cost f. Current tax clearance certificate of seller and buyer’s companies. Comments: After payment of the stamp duty, the deed is presented by the buyer's lawyer for stamping at the Stamp Duty Office. After the submission of all the above documents, an assessment is carried out on the property relying on the valuation report. The betterment value is arrived at after the assessment. The betterment value is the estimated value of the property as de- Procedure: 15. Pay registration fee at a designated bank termined by the Ministry of Lands and Housing. This is used to calculate the consent Time: 1 day fee. No physical inspection is required. Cost: NGN 500 Comments: Payment of registration fee is made at a designated bank and a receipt Procedure: 7. Obtain payment order from the Ministry of Lands is issued. and Housing Time: 2 days Procedure: 16. Registration of deed at Lands Registry Cost: No cost Time: 5 days Comments: Applicant goes to the Ministry of Lands and Housing two days after Cost: No cost submitting the application to be informed of the result of the assessment and the Comments: After payment of the registration fee, the buyer's lawyer follows up for assessed amount to be paid. the deed to be registered in the Lands Registry, to make it a perfected legal docu- ment. Registration only takes place after confirmation that capital gains tax and Procedure: 8. Pay consent fee at a designated bank stamp duty have been paid. Time: 1 day Cost: NGN 773,168 (10% of the betterment value of property) *This procedure can be completed simultaneously with previous procedures. Comments: Consent fee is assessed at 10% of the betterment value of the property, which is the estimated value of the property as determined by the Ministry of Lands REGISTERING PROPERTY and Housing. Payment is made at a designated bank and receipt is issued. OSUN, Osogbo Procedure: 9. Submit receipt of payment of consent fee to the Property value: USD 58,050 = NGN 7,731,680 Lands Registry and obtain Governor's consent Data as of: January 2010 Time: 31 days Procedure: 1. Conduct search on property files at Lands Registry Cost: No cost Time: 7 days Comments: The receipt for the payment of consent fee is submitted to the Ministry of Lands and Housing. Several internal procedures follow to finalize the Governor's Cost: NGN 15,000 (NGN 5,000 search fee + NGN 10,000 legal fee) consent. It usually takes the Commissioner, Ministry of Lands and Housing 30 days Comments: An application letter is addressed to the Permanent Secretary, Ministry to issue consent. of Lands and Physical Planning. The application letter must contain the registration particulars of the land in question. A lawyer is required to perform the registration of Procedure: 10. Assessment of capital gains tax at Board of property. Legal fees are regulated by the Scale of Fees for Conveyancing Matters [Le- Internal Revenue gal Practitioners (Remuneration for Legal Documentation and Other Land Matters) Order 1991]. In practice, lawyers negotiate their legal fees outside the provisions of Time: 1 day the law. The NGN 10,000 in legal fees covers only the search. Cost: No cost Comments: After the Commissioner signs off on the transaction, the applicant takes Procedure: 2. Pay consent application form fee at a designated the deed of assignment to the Board of Internal Revenue Service for assessment of bank capital gains tax. In Ondo, capital gains tax is calculated at 10% of the value of the Time: 1 day property. Cost: NGN 1,500 Procedure: 11. Pay capital gains tax at a designated bank Comments: The applicant makes a payment of NGN 1,500 for the application form at designated bank, and obtains a receipt. Time: 1 day Cost: NGN 773,168 (10% of the property value) Procedure: 3. Obtain consent application form from Lands Comments: The applicant must pay at a designated bank the amount equivalent to Registry 10% of the value of the property. After the payment, a receipt is issued. Time: 1 day Procedure: 12. Assessment of the deed of assignment at Stamp Cost: No cost Duty Office Comments: After payment of the application form fee, the applicant takes the re- ceipt obtained in the previous procedure to the Lands Registry to obtain the consent Time: 1 day application form. Cost: No cost Comments: The applicant takes the deed of assignment to the Stamp Duty Office Procedure: 4. Execute deed of assignment and consent for assessment. The Stamp Duty Office typically uses the figure indicated by the Min- application form istry of Lands and Housing in their assessment. Time: 1 day Cost: NGN 773,168 (10% of the property value) Comments: The seller and buyer complete and sign the consent application form and four (4) copies of the deed of assignment. Lawyers typically charge 10% of the value of consideration as legal fees for preparing the deed and its subsequent registration. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 161 Procedure: 5. Submit application for Governor's consent to the Comments: The buyer's lawyer must go to a designated bank to pay the stamp duty and capital gains tax. After payment a receipt is issued. It takes 2 days for the pay- assignment at Ministry of Lands ment to go through. Time: 1 day Cost: No cost Procedure: 12. Stamping of the deed of assignment at Stamp Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- Duty Office tion became vested in the Governor of the state, whose prior consent is mandatory Time: 1 day for the legal validity of any transfers or alienation of interest in landed property. In Cost: No cost Osun, the Governor for ease of administration delegates his power of consent to the Commissioner, Ministry of Lands and Physical Planning. In order to obtain the Gover- Comments: After payment of the stamp duty, the deed is presented by the buyer's nor’s consent, the applicant must submit the following documents: lawyer for stamping at the Stamp Duty Office. Stamping takes place only after the confirmation of payment is received. a. Consent application form; b. Photocopy of the title document; Procedure: 13. Pay registration fee at a designated bank c. Four copies of the deed of assignment; Time: 1 day d. Current tax clearance certificate of seller and buyer’s companies; Cost: NGN 2,500 e. Photographs of the property. Comments: Payment is made at a designated bank and receipt is issued. After the submission of all the above documents a file is opened and the processing of the file starts. Procedure: 14. Registration of deed at Lands Registry Time: 7 days Procedure: 6. Receive inspection and evaluation from Ministry of Cost: No cost Lands and Physical Planning Comments: After payment of the registration fee, the buyer's lawyer then follows Time: 7 days up for the deed to be registered in the Lands Registry to make it a perfected legal Cost: No cost document. Comments: An inspection of the property will be conducted by a scheduled officer, who prepares a report of the inspection for the Director, Ministry of Lands and Physi- REGISTERING PROPERTY cal Planning. The Director then makes an evaluation of the property and approves a sum as the capital value. The capital value is the estimated value of the property on OYO, Ibadan the basis of which the consent fee is calculated. Property value: USD 58,050 = NGN 7,731,680 Data as of: January 2010 Procedure: 7. Pick up a payment order from Ministry of Lands and Physical Planning Procedure: 1. Pay search fee at a bank Time: 1 day Time: 1 day Cost: No cost Cost: NGN 4,500 (NGN 1,500 per hour) Comments: Letter conveying approval of consent fee payable is usually written to Comments: Before performing the search, the lawyer representing the buyer is the applicant and may be collected by the seller or his lawyer. required to pay the search fee at a designated bank. The search fee is NHN 1,500 per hour. It takes an average of 3 hours to perform a search. Procedure: 8. Pay consent fee at a designated bank Time: 1 day Procedure: 2. Conduct search of property files at the Lands Cost: NGN 773,168 (10% of the assessed capital value) Registry Comments: Consent fee is calculated at 10% of the capital value as assessed by the Time: 1 day Director at the Ministry of Lands and Physical Planning. Payment is made at a desig- Cost: NGN 10,000 (legal fee) nated bank, after which a receipt is obtained. Comments: An application letter is addressed to the Lands Registry. The application letter must contain the registration particulars of the land in question. The applica- Procedure: 9. Submit receipt of payment of consent fee to the tion letter to conduct the search is accompanied by a sworn declaration of the status Lands Registry and obtain Governor's consent of the party and purpose of search. A lawyer is required to perform the search to Time: 61 days determine whether the property is free from encumbrances. Lawyers in Oyo usually charge about NGN 10,000 as a fee to conduct the search. The practice is that the Cost: No cost legal fees for the search are charged separate from the fees for preparation of deed Comments: The receipt for payment of consent fee is presented to the Lands Regis- and subsequent procedures because sometimes the search reveals that the property try as evidence of payment, and a copy is kept in the applicant's file. The Lands Reg- is not unencumbered in which case the parties do not proceed with the transfer of istry then continues with several internal procedures to finalize Governor's consent. deed and the lawyer's services are no longer necessary. It usually takes the Commissioner for Lands and Physical Planning about 60 days to give consent. Procedure: 3. Execute deed of assignment Time: 7 days Procedure: 10. Assessment of the deed of assignment for stamp Cost: NGN 773,168 (10% of the property value) duty and capital gains tax at Board of Internal Revenue Comments: Lawyers are required by law to prepare the deed of assignment to be Time: 1 day executed by the parties. Legal fees are charged based on the scale of fees for Con- Cost: No cost veyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and Comments: After the Commissioner signs off on the transfer of property, the ap- Other Land Matters) Order 1991]. The average lawyer's fee in Oyo is 10% of the value plicant then takes the deed of assignment to the Board of Internal Revenue for of the consideration. The legal fees cover the preparation of the deed of assignment assessment of stamp duty and capital gains tax. The Board of Internal Revenue typi- and subsequent procedures that require the involvement of a lawyer. cally uses the capital value as indicated by the Lands Registry to assess fees. In Osun, capital gains tax is calculated at 10% of the gain defined as the difference between Procedure: 4. Pay consent application form fee, special levy on the current value of the property and the value when the seller originally obtained tax clearance, and inspection fee at a designated bank the property, minus any improvement costs. Time: 1 day Procedure: 11. Pay stamp duty and capital gains tax at a Cost: NGN 16,500 (NGN 5,000 consent application form fee + NGN 10,000 special levy on tax clearance + NGN 1,500 inspection fee) designated bank Comments: Before obtaining the consent application form, the applicant has to pay Time: 2 days the above-mentioned fees at a designated bank. A teller receipt will be issued to the Cost: NGN 154,634 (2% of the property value stamp duty; capital gains tax is also applicant. paid, but not included in the calculation) 162 DOING BUSINESS IN NIGERIA 2010 Procedure: 5. Obtain consent application form from Lands to the officer of the Board of Internal Revenue Service who is stationed at the Lands Registry for assessment of capital gains tax. In Oyo, capital gains tax is calculated at Registry 10% of the gain defined as the difference between the current value of the property Time: 1 day and the value when the seller originally obtained the property, minus any improve- Cost: No cost ment costs. The assessment takes 1 day. Comments: After the payment of consent application form fee and other fees, the teller receipt obtained is taken to the Lands Registry to obtain consent form. This Procedure: 12. Pay capital gains tax at a designated bank form acts as an application for the Governor's consent. Time: 1 day Cost: No cost (capital gains tax is paid, but not included in the calculation) Procedure: 6. Obtain valuation report from estate valuer Comments: The applicant must pays the capital gains tax calculated at 10% of the Time: 5 days gain, defined as the difference between the current value of the property and the Cost: NGN 30,000 value when the seller originally obtained the property, minus any improvement Comments: Applicant must obtain an external valuation report of the property costs, at a designated bank. After payment, a receipt is issued. from a qualified estate valuer. The valuation report is required for assessment of the property before Governor's consent is given. It usually takes 5 days to obtain. Procedure: 13. Assessment of the deed of assignment at the Stamp Duty Office Procedure: 7. Submit application for Governor's consent to the Time: 1 day assignment to Ministry of Lands and Survey Cost: No cost Time: 1 day Comments: Stamp duty on transfer of property between two limited liability com- Cost: No cost panies in Oyo is 3% of the value of the property and is paid to the federal govern- Comments: By virtue of the Land Use Act 1978, all land in each state in the federa- ment rather than the state. The Stamp Duty Office usually uses the figure indicated tion became vested in the Governor of the state, whose prior consent is mandatory by the Ministry of Lands and Survey in their assessment of the value of the property. for the legal validity of any transfers or alienation of interest in landed property. The Governor for ease of administration delegates his power of consent to the Commis- Procedure: 14. Pay stamp duty at a designated bank sioner and Permanent Secretary of the Ministry of Lands and Survey. In order to ob- Time: 1 day tain the Governor’s consent, the applicant must submit the following documents: Cost: NGN 231,950 (3% of the property value) a. Consent application form; Comments: The applicant pays the stamp duty at a designated bank. After pay- b. Photocopy of the title document; ment, the applicant is issued a receipt. c. Evidence of payment of fees; d. Undated draft of the deed of assignment; Procedure: 15. Stamping of the deed of assignment at Stamp e. External valuation report of the property; Duty Office f. Tax clearance certificates of seller and buyer’s companies for the past three years; Time: 1 day g. Photographs of the property; Cost: No cost h. Seal and articles of association of seller’s and buyer’s companies. Comments: The deed is presented by buyer's lawyer for stamping at the Stamp Duty Office. After the submission of all the above documents a file is opened and processing starts. Procedure: 16. Pay registration fee at a designated bank Procedure: 8. Receive inspection and evaluation from the Time: 1 day Ministry of Lands and Survey Cost: NGN 15,000 (fixed fee) Time: 3 days Comments: Payment of registration fee is made at a designated bank and a receipt is issued. Cost: No cost (paid in Procedure 4) Comments: An inspection of the property is conducted by officers of the Ministry Procedure: 17. Registration of deed at Lands Registry of Lands and Survey, who prepare a report of the inspection. The report is used to estimate the value of the property. This estimated value is used to calculate the con- Time: 7 days sent fee. Cost: No cost Comments: After payment of the registration fee, the buyer's lawyer follows up for Procedure: 9. Pick up payment order from Ministry of Lands and the deed to be registered in the Lands Registry to make it a perfected legal docu- Survey ment. Registration only takes place after confirmation that capital gains tax and Time: 1 day stamp duty have been paid. Cost: No cost REGISTERING PROPERTY Comments: The applicant has to pick up a payment order at the Lands Registry specifying the amount that needs to be paid as consent fee. PLATEAU, Jos Property value: USD 58,050 = NGN 7,731,680 Procedure: 10. Pay consent fee at a designated bank Data as of: January 2010 Time: 1 day Cost: NGN 773,168 (10% of the property value) Procedure: 1. Conduct a search of property files at Lands Registry Comments: In Oyo, consent fees are assessed at 10% of the estimated value of the Time: 3 days property as determined by the Ministry of Lands and Survey. Payment is made at a Cost: NGN 582,876 (NGN 3,000 search fee + 7.5% of the property value legal fees) designated bank and a receipt is issued. Comments: The applicant or lawyer goes to the Land Registry, pays the search fees and fills out a search form, after which the search is conducted. The involvement of Procedure: 11. Submit receipt of payment of consent fee to the a lawyer is not required by law, but is a practice in Jos. Legal fees are charged based Lands Registry and assessment of capital gains tax on the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration Time: 31 days for Legal Documentation and Other Land Matters) Order 1991]. In practice, though, legal fees are negotiable and in Plateau they average 7.5% of the consideration. The Cost: No cost fees include all the steps required until the new title is registered under the buyer’s Comments: The receipt for payment of consent fee is presented to the Lands Regis- name. try as evidence of payment. The Lands Registry then continues with several internal procedures to finalize Governor's consent. It usually takes the Commissioner or the Permanent Secretary 30 days to give consent. After the Commissioner or Permanent Secretary signs off on the transfer of property, the deed of assignment is passed on LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 163 REGISTERING PROPERTY Procedure: 2. Execute deed of assignment Time: 1 day RIVERS, Port Harcourt Cost: No cost Property value: USD 58,050 = NGN 7,731,680 Comments: The seller, buyer and their witnesses duly execute the deed of assign- Data as of: January 2010 ment. Procedure: 1. Pay search fee at a designated bank Procedure: 3. Assessment of deed of assignment at Lands Time: 1 day Registry Cost: NGN 500 Time: 1 day Comments: The applicant will present the title document of the property to the Cost: No cost Lands Registry and obtain an application form for search. The applicant then pro- ceeds to the bank to pay the search fee of NGN 500. The invoice is then attached to Comments: The applicant or lawyer presents the executed deed of assignment at the application form and returned to the Registry along with the title documents of the Lands Registry for assessment of registration fees. the property for the search to be performed. Procedure: 4. Receive inspection of property Procedure: 2. Conduct search on property files at Lands Registry Time: 5 days Time: 2 days Cost: No cost Cost: No cost Comments: An inspection of the property will be conducted by an officer, who pre- Comments: The applicant brings proof f payment to the Lands Registry and ex- pares an evaluation report to the Ministry of Lands and Housing. An ascribed value is ecutes the search. then given to the property, on the basis of which fees are calculated. Procedure: 3. Execute deed of assignment Procedure: 5. Submit application for Governor's consent to the Time: 1 day assignment and pay fees at Ministry of Lands Cost: NGN 773,168 (10% of the property value) Time: 50 days Comments: The deed of assignment is executed by the seller and buyer after the Cost: NGN 232,950 (NGN 1,000 consent application fee + 3% of the property value buyer's lawyer confirms the seller's root of title at the deed Registry. registration fee) Comments: The applicant or lawyer acting for the applicant makes an application Procedure: 4. Attestation of the deed at the Magistrate Court for Governor's consent. In Plateau this task is delegated to the Honorable Commis- Registry sioner for Lands, Survey and Town Planning. The applicant is required to make all necessary payments at the Lands Registry, the proof of which is included in Time: 1 day the application. Documents required to be submitted with the application are the Cost: NGN 500 following: Comments: The lawyer that drafted the deed takes it to the magistrate court where a. Four copies of the deed of assignment; ‘it is attested to’ (notarized). This is done at the Magistrate Courts Registry. The at- b. Tax clearance certificates for both seller and buyers’ companies for the past three testation is done on the face of the document. Although there is not legal backing years; for this procedure, it has become a common practice. This is essentially a confidence building measure between the lawyer and the client. c. Evidence of payment of ground rent; d. Evidence of payment of the required fees. Procedure: 5. Assessment of deed of assignment at Land Registry All payments are made at the Ministry. Time: 2 days Cost: No cost Procedure: 6. Assessment of deed of assignment at Inland Revenue Service Comments: The deed is submitted for assessment to determine the value of the property and calculate the applicable fees based on that value. The assessment Time: 1 day includes an on-site inspection of the property. Cost: No cost Comments: The applicant or lawyer presents the deed of assignment to the Inland Procedure: 6. Receive site inspection from Ministry of Lands Revenue Service for assessment of capital gains and stamp duty. Time: 1 day Cost: No cost Procedure: 7. Pay capital gains tax and stamp duty at a Comments: Ministry valuers inspect the property to determine its market value. designated bank Based on that value fees are calculated and communicated to the applicant. Time: 1 day Cost: NGN 541,218 (5% of the property value capital gains tax + 2% of the property Procedure: 7. Pay consent and other fees at a designated bank value stamp duty) Time: 1 day Comments: The applicant or lawyer goes to the designated bank to make the pay- Cost: NGN 785,168 (NGN 5,000 for Governor's consent application + NGN 2,000 for ment into the Federal Inland Revenue Board account and collects the receipt as execution + NGN 5,000 for registration + 10% of the property value consent fee) proof of payment. Comments: The listed fees are paid and a receipt is issued together with the paying slip of the designated bank. Procedure: 8. Stamping of deed of assignment at Stamp Duty Office Procedure: 8. Assessment of deed of assignment for stamp duty Time: 1 day and capital gains tax at the Federal Inland Revenue Service Cost: No cost Time: 1 day Comments: The applicant or lawyer goes back to Stamp Duty Office with proof of Cost: No cost payment of fees to have the deed stamped. Comments: The Stamp Duty Office typically uses the figure indicated by the Lands Registry in their assessment of the value of the property, so basically this is a formal- Procedure: 9. Registration of deed at Lands Registry ity and one picks up the demand notice for the payment at the same time. Time: 3 days Stamp duty is calculated at 3% of the value of the property, while capital gains tax is Cost: No cost 10% of the profit made in the transaction. Comments: The applicant or lawyer goes to Lands Registry with stamped deed for registration. The deed is registered only after the Ministry cross-checks files to con- firm that all payments have been made. 164 DOING BUSINESS IN NIGERIA 2010 Procedure: 9. Pay stamp duty and capital gains tax at a Procedure: 3. Submit application for Governor’s consent to the designated bank assignment to Ministry of Lands Time: 2 days Time: 1 day Cost: NGN 231,950 (3% of the property value stamp duty; capital gains tax is also Cost: No cost paid, but not included in the calculation) Comments: By virtue of the Land Use Act 1978, all land comprised in the territory Comments: The applicant or the lawyer goes to the private bank to pay the stamp of each state in the federation is vested in the Governor of that state, whose prior duty and is given a computer receipt, which is taken to the Stamp Duty Office for consent is mandatory for the legal validity of any transfers or alienation of interest in submission and stamping of the deed. landed property. In Sokoto, the consent has not been delegated and the Governor himself signs all the applications. The applicant is required to fill in and submit a con- Procedure: 10. Stamping of deed of assignment at Stamp Duty sent form accompanied by a photocopy of the tile document and proof of payment Office of ground rates. Time: 1 day Procedure: 4. Receive a valuation inspection from Ministry of Cost: No cost Lands Comments: The deed is presented by buyer's lawyer for stamping at the Stamp Time: 14 days Duty Office (agency of the Inland Revenue Services). Cost: No cost Procedure: 11. Submit application for Governor's consent to the Comments: An inspection of the property is conducted to valuate the property and assignment to Ministry of Lands ensure that the improvements to the land have been done according to the specifi- cations made by the Ministry of Lands. All fees will be calculated based on the value Time: 1 day of the property established during the inspection. Cost: No cost Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Procedure: 5. Pay consent fee at a designated bank state in the federation became vested in the Governor of that state, whose prior Time: 1 day consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In Rivers State, the power to grant consent is delegated to the Cost: NGN 154,634 (2% of the property value) Attorney General (Commissioner of Justice). In order to obtain the consent, the ap- Comments: The Ministry does not issue an official report on the assessed value of plicant must submit the following documents: the property. In practice, the applicant would be in contact with the ministry officials a. Consent application form; either by phone or visits to follow up on the evaluation process and the assessed value would be communicated to the applicant in writing during these follow ups. b. Copy of the deed of assignment; Based on the assessed value of property, a 2% consent fee is calculated and paid to c. Evidence of payment of the stamp duty (shown on the face of the document); a designated bank. d. Tax clearance certificates of seller and buyer’s companies for the past three years; e. Passport size photographs of applicants. Procedure: 6. Submit proof of payment of fees to Ministry of Lands Procedure: 12. Obtain Governor's consent Time: 1 day Time: 180 days Cost: No cost Cost: No cost Comments: Upon payment of the fees, the application for consent is lodged. The Comments: The Permanent Secretary at the Ministry of Land will ascertain that all applicant submits the application form earlier in the process, but it is only lodged documents, payments, etc. are in order, and pass on the file to the Attorney General with the Governor for granting consent after the payment of the consent fee is con- (Commissioner for Justice) for issuance of consent. firmed. Procedure: 13. Registration of deed of assignment at Lands Procedure: 7. Obtain letter of consent from the Governor Registry Time: 60 days Time: 7 days Cost: No cost Cost: No cost Comments: The applicant receives a letter of consent allowing 30 days for the pay- Comments: There is a ‘property card’ for all properties in Rivers State. The name of ment of additional fees and registration. Following requests from the Nigerian Bar the current owner of the property and the history of ownership of the property is Association (NBA) and other stakeholders in the state to speed up the process of documented on the card. A copy of the deed of assignment is kept at the Registry. granting consent, the Governor, while refusing to delegate the signing of Governor's consent, agreed to speed up the process and has since pursued a policy of ensuring that consent is granted within 30 days. In reality, however, it usually takes 60 days to REGISTERING PROPERTY obtain consent. SOKOTO, Sokoto Property value: USD 58,050 = NGN 7,731,680 Procedure: 8. Submit the deed of assignment for assessment at Data as of: January 2010 the Stamp Duty Office of the Federal Inland Revenue Service Time: 1 day Procedure: 1. Conduct a search of property title at the Ministry of Cost: No cost Lands, Housing, and Surveys Comments: The deed is presented for assessment at the Stamp Duty Office. Time: 1 day Cost: NGN 387,084 (NGN 500 search fee + 5% of the property value legal fees) Procedure: 9. Pay stamp duty at a designated bank Comments: A lawyer is required to perform the search of property title in Sokoto. Time: 1 day The lawyer goes to the Ministry, pays the NGN 500 search fee in cash on the spot, Cost: NGN 231,950 (3% of the property value) and a search is conducted. The specified legal fee of 5% of property value covers the Comments: Payment is by bank draft payable to any of the designated receiving search of property title and preparation of deed of assignment by a lawyer. banks. Procedure: 2. Execute deed of assignment Procedure: 10. Stamping of the deed of assignment at Stamp Time: 1 day Duty Office Cost: No cost (fee paid in previous procedure) Time: 2 days Comments: Seller and buyer sign deed of assignment. Cost: No cost Comments: The deed is presented for stamping at the Stamp Duty Office. Stamp- ing takes place only after the Stamp Duty Office receives confirmation of receipt of payment from the designated bank. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 165 Procedure: 11. Pay registration fee at a designated bank Procedure: 7. Pay consent and registration fee at Bureau of Lands Time: 1 day Time: 1 day Cost: NGN 386,584 (5% of the property value) Cost: NGN 10,000 (NGN 5,000 consent fee + NGN 5,000 registration fee) Comments: The applicant is required to pay the registration fee, which is 5% of the Comments: In Taraba only a registration and consent fee are levied on the transfer value of property, at a designated bank. of property. The payment is made directly to the Lands Registry, which issues re- ceipts. Procedure: 12. Registration of deed at Lands Registry Time: 2 days Procedure: 8. Obtain Governor's consent to the assignment Cost: No cost Time: 6 days Comments: After paying the registration fee, the applicant follows up for the deed Cost: No cost at be filed at the Lands Registry. Comments: After the payments of the required fees at the Land Registry, the Regis- try will continue with several internal procedures and will finally communicate to the REGISTERING PROPERTY applicant when consent is approved. TARABA, Jalingo Procedure: 9. Assessment of the deed of assignment at Stamp Property value: USD 58,050 = NGN 7,731,680 Duty Office Data as of: January 2010 Time: 1 day Cost: No cost Procedure: 1. Conduct search of property title at Lands Registry Comments: The Stamp Duty Office typically uses the figure indicated by the Lands Time: 1 day Registry in their assessment, so basically this is a formality and one picks up the de- Cost: NGN 387,584 (NGN 1,000 search fee + 5% of the property value legal fees) mand notice for payment at the same time. Comments: The application letter to conduct the search is accompanied by a sworn declaration of the status of the party and purpose of search. A lawyer is required to Procedure: 10. Pay stamp duty at a designated bank perform the registration of property. Legal fees are charged based on the Scale of Time: 1 day Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Docu- mentation and Other Land Matters) Order 1991]. The average fee charged in Taraba Cost: NGN 231,950 (3% of the property value) is 5% of the consideration. This fee includes all the steps required until the new title Comments: The applicant or the lawyer must go to a designated bank to pay the is registered under the buyer’s name. stamp duty. Payment is by bank draft payable to any of the designated receiving banks. Procedure: 2. Obtain Land Application Form 1 from Bureau of Lands Procedure: 11. Stamping of the deed of assignment at Stamp Time: 1 day Duty Office Cost: NGN 250 Time: 1 day Comments: One can obtain the application from the consent section of the Lands Cost: No cost Registry. Form 1C is the application form to later request the Governor’s consent to Comments: The deed is presented by buyer’s lawyer for stamping at the Stamp the transaction required by Nigerian law. The fee can be paid at the Lands Registry. Duty Office (agency of Inland Revenue Services). Procedure: 3. Execute deed of assignment and Land Application Procedure: 12. Registration of deed at Lands Registry Form 1 Time: 5 days Time: 1 day Cost: No cost Cost: No cost (paid in Procedure 1) Comments: After obtaining consent, the buyer’s lawyer follows up for the deed to Comments: The seller and seller complete Land Form 1 and sign four copies of the be filed at the Lands Registry. The receipt and paying-in slips evidencing payment of deed of assignment. the registration fees are given to the cashier at the Lands Registry, who in turn issues a receipt. After this receipt is obtained, a lands officer is assigned to enter the deed of Procedure: 4. Assessment of the deed of assignment at Bureau of assignment into the registry records. Lands REGISTERING PROPERTY Time: 1 day Cost: No cost YOBE, Damaturu Comments: The deed is presented by the buyer’s lawyer to the Land Registry for as- Property value: USD 58,050 = NGN 7,731,680 sessment of property value to determine registration and consent fees. Data as of: January 2010 Procedure: 5. Obtain certified true copy (CTC) of title document Procedure: 1. Conduct search of property title at Ministry of from Bureau of Lands Lands and Survey Time: 2 days Time: 1 day Cost: NGN 5,000 Cost: NGN 12,000 (NGN 2,000 search fee + NGN 10,000 legal fee) Comments: In Taraba, the seller, the buyer or their lawyer can apply to the Perma- Comments: An application letter is submitted to the Lands Registry, which gives nent Secretary at the Bureau for Lands and Survey for the certified true copy of title details of the purpose of the search and the parties involved. The NGN 2,000 search documents. fee is paid in cash to the Ministry of Land. Legal fees are usually negotiated and aver- age at about NGN 10,000. The fees include all the steps required until the new title is Procedure: 6. Submit application for Governor's consent at registered under the buyer’s name. Bureau of Lands Procedure: 2. Execute deed of assignment Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each state in the federation became vested in the Governor of that state, whose prior Comments: Any of the lawyers representing the parties will prepare the deed of as- consent is mandatory for the legal validity of any transfers or alienation of interest signment. This is vetted by the other party's lawyer and the seller and buyer sign it. in landed property. In Taraba, the power to grant consent has been delegated to the Permanent Secretary at the Ministry of Lands and Surveys, which speeds up the procedure. 166 DOING BUSINESS IN NIGERIA 2010 REGISTERING PROPERTY Procedure: 3. Submit application for Governor's consent Time: 7 days ZAMFARA, Gusau Cost: NGN 2,000 Property value: USD 58,050 = NGN 7,731,680 Comments: By virtue of the Land Use Act, promulgated in 1978, all land in each Data as of: January 2010 state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in Procedure: 1. Conduct a search on property files at Lands landed property. The consent fee of NGN 2, 000 is paid in cash at the Land Registry. Registry Once submitted, the deed is assessed to determine the value of the property and cal- Time: 1 day culate applicable fees. There is no physical inspection of property. Cost: NGN 309,467 (NGN 200 search fee + 4% of the property value legal fee) Comments: Once payment of the required search fee has been made in cash at the Procedure: 4. Pay registration fee at Lands Registry office, a search can be conducted. Legal fees are charged based on the Scale of Fees Time: 1 day for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documenta- Cost: NGN 154,634 (2% of the property value) tion and other Land Matters) Order 1991]. However, in Zamfara, lawyers negoti- Comments: Payment of registration fees is made at the Land Registry. ate fees outside the provisions of the law and generally charge 5% of the value of consideration. The fee includes all the steps required until the new title is registered under the buyer's name. Procedure: 5. Submit receipts of payment of registration fee to Director of Land Services Procedure: 2. Obtain application Land Form C from Lands Time: 1 day Registry Cost: No cost Time: 1 day Comments: In order to make sure that the application is processed in a reasonable Cost: NGN 3,000 amount of time, it is common practice for the applicant to submit the receipt of pay- ment of the registration fee to the Director of Land Services personally instead of Comments: The applicant is required to obtain the application form from the Lands relying on internal procedures. Registry, fill it out, and submit it with the evidence of payment of relevant fees and documents when submitting the application for Governor's consent to the assign- ment. The fee is paid in cash at the Lands Registry. Procedure: 6. Assessment of stamp duty at Federal Inland Revenue Service Procedure: 3. Execute deed of assignment and Land Form C Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: The deed is assessed at the Federal Inland Revenue Service to deter- Comments: The seller and buyer sign the deed in the presence of two witnesses. mine stamp duty. They then fill out the necessary forms to be submitted to the Lands Registry. Procedure: 7. Pay stamp duty at a designated bank Procedure: 4. Assessment of deed of assignment at Lands Time: 1 day Registry Cost: NGN 231,950 (3% of the property value) Time: 1 day Comments: A receipt is issued upon payment of the stamp duty, which is then pre- Cost: No cost sented to the Lands Registry. Comments: The executed deed is presented at the Lands Registry for assessment of the value of the property and calculation of registration fees. The registration fee is Procedure: 8. Submit receipts of payment of stamp duty to 2% of the value of the property. Director of Land Services and obtain Governor's consent Time: 60 days Procedure: 5. Receive a valuation inspection from Ministry of Cost: No cost Lands Comments: The receipt for payment of stamp duty is presented to the Lands Reg- Time: 3 days istry after which the deed of assignment is stamped. The file and all the receipts of Cost: No cost paid fees are then forwarded to the Commissioner of Lands who issues the consent. Although the power to grant consent has been delegated to the Commissioner of Comments: The Lands Registry, as part of the assessment, sends out a valuation of- Lands, the Governor sometimes personally issues the consent. ficer to inspect the property for the purpose of assessing its value. Procedure: 9. Registration of deed at Lands Registry Procedure: 6. Obtain bank draft for registration fee and capital gains tax from a designated bank Time: 7 days Time: 1 day Cost: No cost Cost: NGN 400 (NGN 200 per draft) Comments: The deed is entered into the Registry's records. Comments: The lawyer is required to obtain a bank draft for the registration fee made out in favor of the Board of Internal Revenue. The Board of Internal Revenue (BIR) is the state’s revenue collection body and it is distinct from the Federal Inland Revenue Service, where stamp duty is paid. The BIR maintain a desk/office within the Ministry of Lands to collect revenue payments on behalf of the state. Procedure: 7. Pay registration fee and consent fee at Revenue Office attached to the Ministry of Lands Time: 1 day Cost: NGN 157,634 (2% of the property value registration fee + NGN 3,000 consent fee; capital gains tax is also paid, but not included in the calculation) Comments: The lawyer submits the bank drafts for the registration fee and capital gains tax to the Revenue Officer at the Revenue Office, which is attached to the Ministry of Lands. The lawyer is also required to pay a NGN 3, 000 consent fee in cash at the same office. Once these payments are made the deed is stamped as proof of payment. LIST LIST OFOF t REGISTERING PROCE %63&4t PROCEDURES STARTING APROPERT Y BUSINESS 167 Procedure: 8. Assessment of the deed at the Stamp Duty Office, payment of fees, and stamping of deed Time: 1 day Cost: NGN 154,634 (2% of the property value) Comments: The applicant is required to go to the Stamp Duty Office where the deed of assignment is assessed, after which the applicant is required to pay the as- sessed stamp duty at the office in cash, then the deed is stamped and a receipt is is- sued. Ad valorem stamp duty for property assignment between companies is 2%. Procedure: 9. Submit application for Governor's consent to assignment to Lands Registry Time: 21 days Cost: No cost Comments: By virtue of the Land Use Act, promulgated in 1978, all land comprised in territory of each state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In Zamfara, the authority to grant consent has been delegated to the Commissioner, Ministry of Lands. In order to obtain the consent, the applicant must submit the following documents: a. Consent application form; b. Copy of the deed of assignment; c. Evidence of payment of the stamp duty and registration fee; d. Tax clearance certificate of seller and buyer’s companies for the past three years; e. Copy of the certificate of association, memorandum and articles of association of seller and buyer’s companies. The actual submission takes one day, but it takes about 3 weeks to obtain the Gov- ernor's consent. Procedure: 10. Registration of deed at Lands Registry Time: 1 day Cost: No cost Comments: Once all prescribed fees have been paid, the deed will be registered in the Lands Registry. Acknowledgments Doing Business in Nigeria 2010 was pre- Special thanks go to M. A. Alao, pared by a team led by Catherine Masinde, Director, Aliyu Ismaila, Director, Uzor Luis Aldo Sanchez-Ortega, and Madalina Okoye, Deputy Director, Tunde Alabi, Contact details for local partners Papahagi. The team comprised Teymour and Edi Namiji Akubo from the Ministry Abdel-Aziz, Karen Sarah Cuttaree, Dijana of Finance of Nigeria; Onno Ruhl, World are available on the Despodova-Pajkovski, Ngozi Njemanze, Bank Country Director; Solomon Quay- Subnational Doing Business website at Brice Richard, and Alessio Zanelli and nor, IFC Country Manager; and David http://subnational.doingbusiness.org colleagues from the World Bank Nigeria Bridgman, Manager, World Bank Invest- office, especially Joseph Akpokodje, Phil ment Climate Team for Africa, for their Chigbo-Ugochukwu, Steven Dimitriyev, support of and leadership on the project. Dr. Eric Eboh, Obinali Egele, Nnanyelugo This project is the result of collabora- Ezejiofor, Ali Garba, Chima Ndugbu, and tion between the World Bank Investment Chukwuemeka Ugochukwu. The report Climate Team for Africa, the subnational was prepared under the general direction Doing Business team, and the UK De- of Mierta Capaul. partment for International Development Jack Allen, Reginald Chijioke (DFID). The Government of Germany, Nworka, Chika Ozo Chime, Claudia through the Gesellschaft für Technische Contreras, Desmond Dodd, Chidozie P. Zusammenarbeit (GTZ), and the Govern- Eneh, Iva Hamel, Niyi Ladoja, Osongo ment of Switzerland, through the State Lenga, Trimor Mici, Aisha Mujaddai, Secretariat for Economic Affairs (SECO), Lilian Oyama, Jamile Ramadan, Maria have also contributed to the project. Camila Roberts, Pilar Sanchez-Bella, and More than 480 lawyers, architects, Nadine Shamounki-Ghannam, Obadiah and public officials contributed to Doing Tohomdet, Lydia Waribo provided as- Business in Nigeria 2010. The team ex- sistance at various stages of the proj- tends special thanks to the Nigerian Bar ect. Adebayo Akindeinde, Igor Artemiev, Association (NBA), especially Ikeazor Dobromir Christow, Nouma T. Dione, Akaraiwe and Muritala Abdulrasheed for Penelope Fidas, Jana Malinska, Thomas organizing data collection at the national Moullier, Kristtian Rada, and Justin Yap level. Valuable feedback and assistance provided peer-review comments. Valu- was received from various architects from able assistance was received from the the Nigerian Institute of Architects (NIA), Doing Business team, especially Karim especially Eric Chukwuka and Akubue Belayachi, Frederic Bustelo, Marie-Lily Jideofor. The team extends its special grat- Delion, Alejandro Espinosa-Wang, Fred- itude to all the private professionals, and eric Meunier, and Yara Salem. national and state government officials The report website (http://www. who participated in the project and who doingbusiness.org/Nigeria) was devel- made valuable comments during the con- oped by Graeme Littler, Felipe Iturralde, sultation and data-review period. Their Hashim Zia, and Preeti Endlaw. The re- names are listed in the following pages. port was edited by Grace Morsberger and designed by G. Quinn Information Design. ACKNOWLEDGMENTS 169 P U B L IC OF F I C IA L S A B IA , A BA DE LTA , WA R R I E N U G U, E N U G U Alfred Okeke Chief Investment Officer, Nigeria Chinedu Brown Abidemirita Ekpemina Jude Akubuilo Investment Promotion Commission Permanent Secretary, Ministry of Assistant Chief Legal Officer, Special Adviser, Diasporan Finance Ministry of Justice Nigerians Uzor Okoye Deputy Director, IERD, Federal Agu Ojukwu Toritseju Megbuluba Florence Alio Ministry of Finance Special Adviser, Economic Affairs Principal Legal Officer, Ministry Permanent Secretary, Ministry of of Justice Finance Amos Y. Sakaba A DA M AWA , YOL A Director, Nigeria Investment Charles Nenyiabai Albert Edoga Promotion Commission H. D. Muhammad Special Adviser, Commissioner for Commissioner, Ministry of Lands Ministry of Justice Finance Office and Housing A. B. Shehu Deputy Director, Federal Ministry P. S. Okogba G. O. Enih of Finance A K WA I B OM , U YO Permanent Secretary, Ministry of Director (Industries), Ministry of Commerce and Industry Commerce and Industry Laraba Shuaibu Kufre Bassey Ibokette Deputy Director, Corporate Head (Revenue Protection A. A. Omoniyi Vivian Eze Affairs Commission Service), Bureau of Internal Director (Commerce), Ministry of Commissioner, Ministry of Finance Revenue Commerce and Industry U. T. Usoro Julius Ngwu Chief Accountant, Federal Ed Macauley Austin I Akpotu Director (Town Planning), Ministry of Justice Chief Registrar, Ministry of Director, Ministry of Commerce Ministry of Lands and Housing Justice (Akwa Ibom) and Industry Hajja Gana Wakil Edward Ogbodo Deputy Director, Nigeria Inyang Udo Ministry of Lands and Housing E B ON Y I , A BA KA L I K I Investment Promotion Commission Assistant Director, Ministry of Finance Nwonji Cajetan C. A. Onaga M. U. Wambai Head (Account Production), Solicitor General (Permanent Deputy Director, Corporate Ime Umofiah Secretary), Ministry of Justice Affairs Commission Ministry of Commerce Ministry of Justice J. Chukwu F C T, A BU JA G OM B E , G OM B E A NA M B R A , ON I T SHA Commissioner, Ministry of Commerce A. O. Adakanye Muhammad Issa Eze Echesi Chief Planning Officer, National Ministry of Justice Commissioner, Ministry of Finance Jossy Eze Planning Commission Attorney General /Commisioner, Talatu Peter Dan Ezeanwu Ministry of Justice A. O. Akingbala Ministry of Justice Director, Ministry of Commerce, Chief Planning Officer, National Industry & Tourism Chris Okereke Planning Commission Haruna Yelma Commissioner Ministry of Justice A. I. Nnalue Edi Namiji Akubo Permanent Secretary, Ministry of Reginald C. Onwe Federal Ministry of Finance I M O, OW E R R I Commerce, Industry & Tourism Commissioner, Ministry of Finance Tunde Alabi E. C. Aguta B. C. Nwobu E D O, B E N I N C I T Y Federal Ministry of Finance Director (Legal Drafting), Ministry of Finance Sera Adetugboboh Ibrahim Aliyu Ministry of Justice C. D. C. Okonkwo Commissioner, Ministry of Abuja Investment Company Oby Amadiobi Ministry of Finance Commerce R. K. Attahiru Director (Commerce), Ministry of Ben Orakwe Patrick Agbolahor Deputy Director, Federal Ministry Commerce Deputy Director, Ministry of Director (Industries), Ministry of of Commerce Chuck Chukwuemeka Commerce, Industry & Tourism Commerce J. C. W. Balami Special Adviser, Economic Affairs BAU C H I , BAU C H I Joseph Obaseki General Manager, Finance, Power E. U. G. Eche Permanent Secretary, Ministry of Holding Company Of Nigeria Director, Office of the Attorney Mohamed Tela Lamaide Commerce General A. A. Bello Honorable Commissioner, Ministry of Budget and Economic Planning Goodwill Omoregie Federal Ministry of Finance R. N. Ibe Director (Commerce), Ministry of Ministry of Planning and Samaila A. Lamzani Commerce M. A. C. Dike Director, Tax Policy, Federal Economic Development Deputy Director, Ministry of Budget and Economic Planning EKITI, ADO-EKITI Inland Revenue Service B. E. Ogwunga H. M. Ibrahim Director (Deeds Registry), BAY E L S A , Y E NAG OA Ayodele Adeyanju Ministry of Lands and Housing Senior Manager, Tax, Federal Commissioner, Ministry of Inland Revenue Service Robert J. Lokoson Commerce Geff Ojinika Director, Ministry of Commerce Godfrey Ike Commissioner, Ministry of O. S. Adunmo Commerce and Industry Assistant Director, Corporate Deputy Director (Statistics), Affairs Commission Water Corporation Elsie Tagbo R.B.K Okafor B E N U E , M A K U R DI Aliyu Ismaila Legal Officer, Imo State House of I. O. Ajayi Assembly Comfort M. Chaha Director, IERD, Federal Ministry Director (Research & Stats), of Finance Ministry of Justice Ministry of Finance Ray Ucheoma Akybo Ebi Namiji Head (Enforcement), Ministry of B OR NO, M A I DU G U R I E. A. Aribisale Lands and Housing Assistant Director, Federal Deputy Director, Ministry of Ministry of Finance Hadiza Magaji Lands and Housing Ministry of Justice Evelyn Nwachukwu S. B. J. Bamise Chief Commercial Officer, Federal Ministry of Justice Ministry of Commerce C RO S S R I V E R , C A L A BA R Osegbohun Fabian Ogbu Edward Clay-Onah Deputy Director, Ministry of Federal Ministry of Finance Manager, Investment Promotion Lands and Housing Esien Ukorebi A. A. Ogunmefun Executive Chairman, Internal Assistant Director, Federal Revenue Service Ministry of Finance 170 DOING BUSINESS IN NIGERIA 2010 P U B L IC OF F IC IA L S J IG AWA , DU T SE Abdullahi H. Kwaru KO G I , L OKOJA N I G E R , M I N NA Ministry of Commerce A. M. Abubakar A. A. Abubakar Hassan Abdullahi Deputy Chief Registrar, Ministry Amina Maude Commissioner, Ministry of Honorable Commissioner, Ministry of Justice Chief Trade Officer, Ministry of Commerce of Investment, Commerce and Commerce Cooperatives Musa M. Imam Musa I. Ahmadu Director, Ministry of Justice Bala A. Mohd Secretary to State Governor, Kogi Amina Abdulrahman Head, Corporate Affairs State Government House Director General, Niger State Alh. Garba Isa Commission Government House Executive Secretary, Jigawa Urban Aaron Baba Development Board Y. Mustapha Special Adviser, Kogi State Abubakar Chika Adamu Federal Inland Revenue Service Government House Director General, Governor Salisu Yusuf Isah Office, Niger State Directorate Director, Ministry of Lands & Imam Mustapha S. A. Olorunfemi for Poverty Eradication Housing Ministry of Justice Commissioner, Ministry of Finance A S Bello Adamu Turaki Muhammed A. Mustapha K WA R A , I L OR I N Commissioner, Ministry of Ministry of Justice Legal Adviser, Ministry of Investment, Commerce and Commerce Kamaldeen Ajibade Cooperatives Ahmed Gambo Saleh Special Assistant to Executive Office of the Chief Justice of Kabir Sulaiman Governor (Legal Matters), Kwara Hosea A Bulus Nigeria Chief Commerce Officer, Ministry Government House Ministry of Investment, Commerce of Commerce and Cooperatives M. N. Sani Bayo Ishola Director, Registry Shuaibu Sule Honorable Commissioner, Ministry Rilwanu A Ibrahim Ministry of Justice of Land and Housing Ministry of Investment, Commerce Nuhu Tafida Ministry of Justice Adamu Sule and Cooperatives M. O. Lawal Commerce Officer, Ministry of Director, Ministry of Finance Balikisu Labaran Kago Alhassan Turaki Commerce Director, Ministry of Commerce Ministry of Justice Auwalu Shehu Umar L AG O S , L AG O S Muazu B Mohammed K A D U NA , K A D U NA Deputy Director, Ministry of S. O. Aina Commissioner, Ministry of Finance Commerce Agnes Auta Ministry of Finance Abdullah Suleiman Suhailu A. Usman Ministry of Commerce and Ben Akabueze Director General, Niger State Industry Chief Planning Officer, Ministry Investment Promotion Agency of Commerce Commissioner for Finance, Shehu M Bambate Ministry of Economic Planning Muhammed Yau and Budget O G U N , A B E OK U TA Ministry of Finance Deputy Director, Development J. O. Omojokun Abiodun Misiliu Adelowo K A N O, K A N O Lagos State Government Senior Town Planning Officer, K AT SI NA , K AT SI NA Bureau of Urban and Physical Jamilu S Adamu E. O. Oyegoke Sirajo Aminu Planning Ministry of Commerce Director (Economic Planning), Personal Assistant, Office of the Ministry of Economic Planning Stephen Adewole Jamil Sarki Adamu Governor and Budget General Manager, Urban & Abdulrahman Ahmed Adamu B. Ibrahim Lawal Pedro San Regional Planning Chief Officer Commissioner, Ministry of Finance Solicitor General, Lagos State Sonia Akinbiyi Bashir Balarabe Murtala Aliyu Kankia Government Deputy Chief Registrar, Ogun Trade Officer, Ministry of Ministry of Justice O. F. Soyemi State Judiciary Commerce Sani Yahaya Wurma Ministry of Budget and Economic I. A. Akogun Uba Bashir Ministry of Justice Planning Bureau of Lands & Survey Desk Officer, Ministry of Adeleke Ateyola Commerce KEBBI, BIRNIN KEBBI NAS A R AWA , L A F IA Director, Ministry of Finance Ibrahim Garba Halima Aliyu Emmanuel Bako Orija Ayorinde Commerce Officer, Ministry of Ministry of Justice Honorable Commissioner, Ministry of Planning Ministry of Finance Commerce Muhammed Audie E. O. Bamgboye Jamilu Hamza Muamu Adamu Gosifo Ministry of Justice Bureau of Budget & Management Chief Officer Director, State Planning Abubakar Umar Bagudu Commission Olaniyan Bolaji Usman Haura Ministry of Justice Bureau of Urban & Physical Ministry of Lands and Physical Fatima A. Iyumoga Bashiru Bakuwai Nasarawa Investment and Planning Planning Head of Department, Deed’s Registry Property Development Company Adeboyejo Fatai Abubakar Ibrahim Bureau of Lands & Survey Deputy Director, Ministry of Kudirat Diri Isa Y. Nayawo Lands and Physical Planning Ministry of Justice Nasarawa State Planning James Oladele Commission Director of Development Control, Sarki Ibrahim Naziru Lukman D.C. Rikko Urban and Regional Planning Chief Trade Officer, Ministry of Zonal Head, Corporate Affairs Board Commerce Commission Ministry of Justice Abigail Waya Lanre Saka Ibrahim Sani Kalil Bandi Mohammed Ministry of Justice Ministry of Finance Director, Urban Development Ministry of Finance Authority Abubakar M Zauro Wole Sanni Economic Adviser, Office of the Mohammed Y. Kilishi Director (Collection) Inland Governor Trade Officer, Ministry of Revenue, Board of Inland Revenue Commerce J. O. Shotombo Permanent Secretary, Ministry of Mustapha Isa R. Kira Commerce Corporate Affairs Commission Kehinde Sogunle Commissioner, Ministry of Finance ACKNOWLEDGMENTS 171 P U B L IC OF F I C IA L S Kayode Sunmola Oladotun Omokemi Director General, Governor’s Director, Housing Board Office, Bureau of Management and Budget Olubunmi O Oni Director, Ministry of Commerce ON D O, A K U R E P L AT E AU, JO S Ayo Ige Deputy Director, Ministry of Dmudu G. Gashi Physical Planning and Urban Director, State Government Of Development Plateau Afolabi Ojo Jimoh Helen Miner Ministry of Finance Special Adviser, Office of Chief Economic Advisor O SU N , O S O G B O Davou Yakubu K. M. Akano State Planning Commission Ministry of Justice R I V E R S , P ORT A. A. Akin Taro HA RC OU RT Ministry of Finance Noble Egbe S. A. Badimu Personal Assistant, Ministry of Ministry of Commerce and Justice Industry G. E. Ogundu Ojo Moses Director, Ministry of Commerce Commissioner, Ministry of Finance Apollos D. Opi O. Obisakin Director, Ministry of Commerce Ministry of Justice and Industry M. A. Ojo Ministry of Justice S OKOTO, S OKOTO Adesiyan Joshua Lema Sambo-Wali Ministry of Finance Ministry of Justice Taiwo Oyelade TA R A BA , JA L I NG O Town Planner, Local Government Town Planning Office (Olorunda) Benjamin Abwage Ministry of Justice Kola Oyewale Assistant Town Planner, Local Emmanuel Gowon Government Town Planning Office Ministry of Justice (Osogbo) Esther Tata Ayomide Seriki Ministry of Justice Commissioner, Ministry of Commerce and Industry Z A M FA R A , G U S AU O. S. Yemi Junaidu Abubakar Ministry of Commerce and Ministry of Justice Industry Mukhtari Garba OYO, I BA DA N Director, Ministry of Commerce S. O. Adetunji Sani Nassarawa Urban & Regional Planning Ministry of Justice O. A. Adeyemi G E SE L L S C HA F T Chief Town Planning Officer, FÜR TECHNISCHE Urban & Regional Planning Z U S A M M E NA R B E I T Olutoyin Akanmu (GTZ) Permanent Secretary, Ministry of Finance Abdullah Jibrin Jalo Adebola Akinlolu Margaret Joshua Planning Commission Andre’ Roenne Makinde Akinola Sina Uti Assistant Director, U K DE PA RT M E N T K. K. Awokunle F OR I N T E R NAT I ONA L Commissioner (Stamp Duty) DE V E L OP M E N T ( DF I D ) S. O. A. Ayandele Director (Taxes) Gillian Rogers Alhaji Madehin Deed Registrar, Ministry of Lands and Housing James Oladele Director of Development Control, Oyo State Urban and Regional Planning Board 172 DOING BUSINESS IN NIGERIA 2010 P R I VAT E P ROF E S SI ONA L S Stephen Abar Mba Aja Danjuma Ayeye Ekanem Ekanem Stephen Abar & Co. Am Shelter Tropics Ekanem Ekanem & Co. Olusola Ayodele Muritala Abdulrasheed Esther Ajaero-Anyigor Manufacturers Association of B. I. Ekeke Nigerian Bar Association Ebonyi Investment and Property Nigeria Ekeke Ekeke & Co. Ltd Bamidele Abina E. C. Azubuke Ama Elekwa Dele Abina & Co. Umar S. B. Ajanaku A. H. Usman & Co. Yusuf O. Ali & Co. Casmir Elele Dafe Abobo Safiyan Baba C. C. Elele & Associates Dafe Abobo & Co. Mike Aja-Nwachukwu Vice President, Manufacturers Association of Nigeria Steve Emelieze Harold Aboloje Ganny Ajape Renaissance Practitioners H. A. Aboloje & Associates Ganny Ajape & Co. Azubike Bakare John Enabalulu A. Y. Abubakar Segun Ajayi-Kadir Linda Bala J. O. Elenbalulu Al-Mustapha & Co. Manufacturers Association of Linda Bala & Co Nigeria Marc Enamhe Mustapha Abubakar Olu Bamisaiye Marc Enamhe & Chambers Abubakar Mustapha & Associates Frank Ajero Mohammed Garba Bawa Okwudili Enekwe Asema Achado Julius Ajibare Kanu B. Okpalaeke & Co. Archtick Consultants Andrew Bekederemo Mohammed Akanbi A. A. Bekederemo Binanu Esthon Gbemiga Adaramola University of Ilorin, Faculty of V. H. Bamaiyi & Associates Law Adbulganiyu Bello Mutui Adebayo Abdulganiyu Bello & Co. Otu Etukudoh University of Ilorin, Faculty of Ikeazor Akaraiwe Herbert O. Eya Law Nigerian Bar Association Ayo Bello Mogboh, Offiah and Co. Adewuyi Adebola Olubanji Akinleye M. B. Bello PCB Associates Joseph Eze Bola Adewuyi & Co. Olu Akinleye & Co. Eze Eze & Co. Rasheed Adegbenro Olufemi Akintomiwa Collins Boleigha Collins Boleigha & Associates Bamidele Falako Manufacturers Association of Olufemi Akintomiwa & Co. Nigeria Job Jack Bot Aliu Fatai Thomas Akintubuwa Toyin Adegoke Akintubuwa & Associates Plateau Chamber of Commerce Ijebu Chamber Of Commerce O. Adejumo David Akomolade Oshoma Brai Yomi Festus A. O. Musa & Co. Swift Presentations Limited Account Officer, Asaba Chamber A. S. Akpala of Commerce J. Adekoyejo A. S. Akpala & Co. Tonye Braide Tokunbo Fowode Wale Adelowo Ekanem Akpan E. C. Chia E. N. Chia & Co. Sani H. Garin Gabbas M. A. Adeniyi David Alewu S. H. Garin Garbas & Co. M. G. Chinweokwu Federal Psychiatric Hospital E. O. Gbanigo Olusegun Aderibigbe Calabar G. I. Chionye Aderibigbe & Aderibigbe G. I. Chionye & Co. Jim Gotom Abdulwasi’u Alfa Benson Aderoshin A. A. Alfa & Co. Eric Chukwuka Gantang Solicitors Benson Aderoshin & Co. Nigerian Institute of Architects Abubakar Yusuf Gumel Abdul Aliyu Gbadebo Adesina Adalchi Chambers Caleb Dajan A. Y. Gumel & Co. G. A. Adesina & Co. Maksat Chambers A. A. Gusau Otonye Tome Amachree Michael Adetola Amachree & Amachree Umar Riskuwa Dakingari Moh’d Adamu Gusau Afribank Nigeria Nasiru Ibrahim & Associates Joseph Amajuoyi Mode Gwandu Kunle Adetowubo Okorougo Chambers Alfred Damun Kunle Adetowubo & Co. MOW&T, Joy Amene Godiya Chambers J. I. Adeyanju A. Hakeem Usman Destiny Chambers Ahmed Danbaba A. H. Usman & Co. Ayo Ogundana & Co. Maidangana Chambers Junaidu Aminu Zanna Hamza Kunle Adeyemi Aminu & Co. Basheer Danbazau Adeyemi, Oyeniyi & Co. M. A. Bulama & Co. Tocsin Anibaba Kano Chamber Of Commerce, A. O. Adigun Industry, Mines and Agriculture Chellom Hannatu Fate Foundation Plateau Chamber of Commerce Honesty Chamber Victor Daudu Tagbo Anieto Aduke Harcourt Biola Adimula DSU Associates Oraegbunam Anieto and Co. Biola Adimula & Co. Nze Dike Titus Hyundu Emeka Anosike Imbwaseh, Kenon, Hyundu & Elachi Agada Emeka Anosike and Co. C. N. Ebiringa Greenfield Chambers Associates Akubue Jideofor Anselm Ephraim Edem Shina Ibiyemi I. M. Agigi Nigerian Institute of Architects Lekan Edunjobi Legal Aid Council of Nigeria - Parks Agoni Victor Okechukwu Anyanwu Kwara State Manufacturers Association of Victor Aguku V.O Anyanwu & Co. Nigeria Abdul Ibrahim V. C. Aguku & Co. John Arhor Oja Egbai A. A. Ibrahim & Co. Edward Aigbangbee G. Ashkeni Wisdom Chambers Huwaila Ibrahim Aigbangbee Law Firm Innocent Orji Egwu Ganny Ajape & Co. Ibrahim Atanda Jonathan Ainerua Innocent O. Egwu and Co. Sani Khalil Ibrahim Toye Coker Chambers Jonathan Ainerua & Co. KASEPPA, Kano ACKNOWLEDGMENTS 173 P R I VAT E P ROF E S SI ONA L S J. A. Idachaba Ezennaya Mark Anthony Okah O. J. Otitoola Arkigram Associates A. Okah and Co. Norris Ifinedo Omolade Owoseni Afribank Nigeria Rita Marley Alilibo Charles Okolo Akure Chamber of Commerce, The Guardian Industry, Mines and Agriculture Theophilus T. Igba S. G. Matankari A. A. Ijihor & Co. P. E. Okonma Wale Oyejula L. Mgbale Vicepresident, Asaba Chamber of Adam Smith Joseph Iku Commerce Anthony Mogboh Jnr. Ayodele Oyelowo Anthony Iroagalachi Mogboh & Co. D. U. Okorowo Iroagalachi & Co. D.U. Okorowo and Co. O. Maku Rahman A. Mohammed Abeokuta Chamber Of Commerce C. C. Irorakpor Ferdinand Okotete Irorakpor & Co Haruna Mshelia S. A. Raine Haruna Mshelia & Co. Ferdinand Okotete & Co. Razaq Isenalumhe Reuben Okoya Ibrahim Safiyanu R.O. Isenalumhe & Co. Usman Muhammed Nassarawa Chamber of Commerce, Festus Okoye Industry, Mines And Agriculture A. Ishole David Muo Akika, Okoye & Mann Kwara Chamber of Commerce Idio Joseph Nabuya Adamu Salihu Belma Okpokiri Chamber of Commerce, Industry, David Iweta Plateau Chamber of Commerce Dennis Okwakpam Mines And Agriuclture President, Chamber of Commerce A. Natsa & Industry V. F. Olaifa Leah Samson Iwo Ndukwe K. Magaji & Associates Kanayo Iwuchukwu Akure Chamber of Commerce, Space design Partnership Industry, Mines and Agriculture Executive Secretary, Asafa Sanusi Manufacturers Association of Awa Nkoli Oluwole Olukunle A. O. Sanusi & Co. Nigeria Nkoli I. Obi & Co. J. O. Olukunle & Co. Christopher Shaki M. A. Jajere A. G. E. Nwachukwu Philip Olusola John Shallangwa Idris Jalo A. G. E. Nwachukwu and Co. God’s Foundation Chambers I. T. El-Sudi & Associates Nzube Nwankwo Habib Suhail Tajudeen Olutope Executive Secretary, Lex Rehoboth Associates Rex Advocatus Tayo Jegede Manufacturers Association of Tayo Jegede & Co. Uche Nwigwe Anu Olutowose Nigeria (Man Kaduna) Andrew Audu Jibrin Uche Nwigwe & Co. Manufacturers Association of Musa Sulaiman Andrew Jibrin & Co. Chidi Nworka Nigeria Summit Chambers Nuraini Jimoh Chidi B. Nworka and Associates B. A. Oluwadiya Usman Sule Nuraini Jimoh Chambers Emeka Obegolu M. E. Omatsone Sumfah Consults Lawrence John Greenfield Chambers Utimits & Mira Associates Ololade Suleiman Care Chambers Afam Obi E. I. Omokaye Adamu Tahir A. Kamasco Afam Obi And Co. Acroplan Consultants Afam Obiago Jonathan G. Taidi Mustapha Kankia Ayuba Omokhuwa Century Chambers President, Asaba Chamber of A. O. Giwa & Associates Yusuf Zubair Kazaure Commerce M. T. Tsuwa Femi Omole M. A. Tsuwa & Associates Muheeb Komolafe Emmanuel Obile M. I. Komolafe & Co. Obile & Co. Bamidele Omotoso Augusta Uche K-Chuku Edeji Obinna Bamidele Omotoso & Co. Apple Solicitors Yop L. Kwa-Gbadamosi Plateau Investment and Property Kabiru Yallilu & Co. Ebiyerin Omukoro Paschal Uche Onuorah Development, Ltd Jacob Ochidi E. G. Omukoro & Co P.U.P Onuorah & Co. Francis Kwede J. E. Ochidi & Co. Adetunji Onabawo Usen Udoh F. M. Kwede & Co. K. Odeyemi Adetunji Onabawo & Co. Tony Ukam Luqman Laoye Adedeji Onisomi Wisdom Chambers E. O. Odo Luqman Laoye & Co. Akure Chamber of Commerce, Ever Odo & Co. Industry, Mines and Agriculture Obriks Uloho Bello Lateef Ukari Oduma Obriks Uloho & Co. Water Corporation Kennedy Onwusi Ukari Oduma & Associates Sani Umar Ibrahim Lawal Shedrack Onwusonya Manufacturers Association of Richard Ogbechie Olujimi & Akeredolu ArcShades Associates Nigeria Metuuselah & Associates Gabriel Lelekumo O. J. Onyeamah M. J. Umaru Kayode Ogundana Warri Chamber of Commerce Olukayode Ogundana & Co. Steve Onyechi Ononye M. J. Umar & Co. A. Liadi Luke Ogundele Onyechi Ononye & Co. A. Wanigi Declan Obioma Madu L. O. Ogundele & Co. Victoria Onyeonoro Yakubu Yenusa Declan O. Madu and Co. Chairman Obafunso Ogunkeye Emeka Nwangwu and Associates L. M. Yusuf Dennis Maduechesi Ogunkeye & Ogunkeye A. Opaluwa D.U Maduechesi & Co. M. B. Yusuf Michael Ogunrayewa William Opara Patrick L. Mafuih Osuoha, Opara & Co. Donatus V. Zuanah Kayode Ogunti D. V. Zuanah & Co. Plateau Chamber of Commerce Ekeke Ekeke & co Oluwasegun A. Osidipe Bode Makinde Manufacturers Association of Ben Oji Nigeria Bode Makinde & Co. Ben Oji & Associates Investment Climate Advisory Services of the World Bank Group THE WORLD BANK HT TP://SUBNATIONAL.DOINGBUSINESS.ORG