Starting an export business is one of the most profitable business decisions you can make in Nigeria. There are more-than-countable products or commodities that sell for cheap in Nigeria, but go for much higher prices in other countries; where they are even in far higher demand than they are in Nigeria. This leaves huge profit opportunities for those who have the required know-how and can afford the cost of starting an export business in the country.
Though the export business in Nigeria is highly lucrative, it has its own fair share of challenges. And one of the biggest challenges Nigerian exporters face is; not fully knowing the rules and regulations binding the business in Nigeria as well as the legal requirements for starting and running the business. This alone has landed many exporters in serious legal troubles.
To avoid having legal issues as an exporter, you need to know the legal requirements that you must meet before starting out in the Nigerian export industry. Here are 10 of the most important ones:
Top 10 Legal Requirements for an Export Business in Nigeria
1. A unique Business Name
One of the first steps you must take when starting out as an exporter in Nigeria is to register the name of your export business with the Corporate Affairs Commissions. This will add your business to the list of businesses officially recognized by the government.
And it’s enough to ensure that someone else does not use your business name for their own business. You must bear in mind, however, that you will not be allowed to register a business name that conflicts with that of another company that is already registered and in existence.
2. A minimum of two directors and two shareholders
If you are starting your export business as a company (limited or unlimited) rather than a sole proprietorship or partnership, then you must have a minimum of two directors and two shareholders (maximum of 50) at every time. However, this requirement will not apply to you if you will be running your export business all alone (sole proprietorship) or would be involved with a business partner (partnership).
3. A registered office
As with other businesses, every export business in Nigeria must have a registered office, or at least an ‘office address’. So, the government is interested more in you having an address for your business than having an office structure. This explains why a home address would suffice if you are starting small. Whether it’s a ‘home’ or a real office, the most important thing is that it must have an address.
4. Registration with the NEXP
The Nigerian Customs Service rules that anyone willing to engage in export business must register with the Nigerian Export Promotion Council. This Council was created to enhance and encourage exportation of commodities other than oil with the ultimate aim of generating national revenue through alternative means.
Registering with the Nigerian Export Promotion Council is now easier than ever. Just visit the Council’s website (www.nepc.gov.ng) and click the ‘Register here’ link on the right sidebar. You will be shown the full details of the procedure and requirements.
5. Registration of Form NXP
The Nigerian Customs Service also requires that Nigerian exporters complete and register Form NXP with authorized dealers (commercial or merchant banks) of their choice. Your chosen authorized dealer will be in charge of handling your funds and transactions, as you will be required to set up and maintain a Domiciliary Account with them, to which your payments will be deposited.
6. Special licenses and permits
As with any other business, starting an export business in Nigeria requires obtaining licenses and permits that indicate the government’s approval of your business. There are licenses and permits for doing business in Nigeria. And there are some specifically for operating an export business.
To figure out what licenses and permits you must obtain, you need to conduct extensive research or contact a seasoned business lawyer who has deep knowledge of the Nigerian business environment, more especially of the export business in Nigeria. Never downplay any license or permit that you are required to obtain. Failure to comply might cause you huge problems and losses in the future.
7. Licenses from target foreign country
Virtually all countries require that businesses planning to sell their product or commodities to their citizens must obtain certain licenses and certifications. So, you will need to find out more about the requirements for any country you want to sell your products in.
However, you must bear in mind that obtaining some of these licenses require inspection of the products you intend to sell in the target foreign country. And you will be granted permission to sell them only if they meet certain standards as set by the government of that country.
8. Certificate of incorporation (for companies registered as corporations)
9. Tax certificates
10. Insurance covers