Starting a Pharmaceutical Company in Nigeria

According to the law in Nigeria, the Companies and Allied Matters Act 2020 and the pharmacy Council of Nigeria have paved the way for incorporating a pharmaceutical company. As a result, this encourages everyone with their field of specialization to own a pharmaceutical company and also invest in it.

Note that one of the fastest-growing and most lucrative industries in Nigeria is the pharmaceutical industry. The registration of pharmaceutical companies in Nigeria is carried out and supervised by The Pharmacy Council of Nigeria (PCN) a statutory organ of the Federal Government of Nigeria, set up pursuant to decree 91 of 1992

What is a pharmaceutical Company?

A pharmaceutical company produces the likes of markets and acts as a medical drug distributor to patients to cure, vaccinate, or even alleviate their symptoms. So if you plan to establish a pharmaceutical company in Nigeria, this article is for you.

Based on how this article is detailed, you will learn how to set up a pharmaceutical company, the kinds of persons that are eligible to set up pharmaceutical companies, the registration requirements, and also the stated procedures to be followed to obtain the license to set up and run the business.

However, the Pharmacy Council of Nigeria (PCN) serves as a self-regulatory organization that plays a crucial role in regulating, licensing, operations, and monitoring pharmaceutical businesses in Nigeria.

Procedure to Register a Pharmaceutical company in Nigeria

The first thing about registering a pharmaceutical company is that it can either be registered as a private limited company or a public limited company. However, the preferred choice made by most medical experts is to register as a private limited company.

Additionally, the categories of pharmaceutical companies that can be registered in Nigeria are three. They include; pharmaceutical retail, wholesale, and manufacturing.

Requirements for Registration

Pharmaceutical Retail Company

What a retail pharmaceutical company does is sell drugs to people. They are usually known as a pharmacy, chemists, or drugstores. For a retail, pharmaceutical company to function, it must be fully owned by a registered pharmacist or must be in partnership with other registered pharmacists.

A wholesale pharmaceutical company

The job of this kind of company is to import and distribute drugs, poisons, and devices. For this kind of company to operate, it requires at least one registered pharmacist on the Board of Directors of the Company. However, the transactions of the business must be executed under the direct personal control and management of a Superintendent Pharmacist.

A pharmaceutical manufacturing company

The pharmaceutical manufacturing industry works on the manufacturing of drugs. To register this kind of business, there must also be at least one registered pharmacist on the Board of Directors of the company. Additionally, the business operation must be done under a Superintendent pharmacist’s direct personal control and management.

Step 1: Company Registration

As mentioned before, most medical personnel prefer to register as a private limited company. Therefore, it is advisable also to do so. The reason why a private limited company is the most preferred choice for a business start-up is that there is ease of registration when it comes to costs and requirements. As for share capital, there is no specific threshold amount. Nevertheless, the company can also be registered with one million share capital.

2. Application for Inspection of Premises

Registering your pharmaceutical company will be one of many things you should do. You also have to take some necessary steps to obtain the business license, which comes after the scrutinization and approval of the business premises to be used.

In Essence, the pharmaceutical inspectors from the PCN would inspect your business premises for the purpose of ensuring that your business operation is in compliance with the provision of the regulation. This will be done before your pharmaceutical business will finally commence.

When it comes to the law, there are some ethics to follow, and the law on the inspection of the premises of pharmaceutical companies must be followed. The following guideline will be stated below.

The pharmaceutical premises must be located in specific locations like; motor parks and environments where commercial activities and enterprises are rapidly growing.

It must be outside a marketplace where the likes of kiosks and roadside retail are present.

All pharmaceutical premises should be at most three within a shopping mall, and there must be enough space between both businesses.

Pharmaceutical businesses should be at most two hundred meters away from each other.

The pharmaceutical business should be moved to another location if it is surrounded by a growing market close to it.

Required Details to Register a Pharmaceutical Retail, Wholesale, or Distribution Company

Note that all applications for the registration of new pharmaceutical retail or any other related business should be submitted to the Registrar of the Council through the Director of Pharmaceutical Services of the state of operation. Below are the following documents to be submitted as application documents.

An application letter (the company’s letter headed paper) to the recipient

A Duly completed form which includes (PCN’s Application Form for the Registration of Premises)
A photocopy of the Annual License must be provided

A bank draft that contains the prescribed inspection and registration fees, which is payable to the council

Copy of a letter of resignation from previous employment (if necessary)

Letter of acceptance of resignation (if necessary)

Letter of Appointment in the new premises (where applicable)

There must be a legal agreement between the Superintendent Pharmacist and his employer.

Must provide the company’s certificate of Incorporation (this involves evidence of registration of the business name, which is acceptable as regards Pharmacist-owned retail premises)

Must provide a certified copy of the company’s Articles and Memorandum of Association

Certified copy of Particulars of the company’s Directors as issued by the Corporate Affairs Commission.
A copy of the NYSC Discharge or Exemption Certificate (if necessary)

Must provide a letter of undertaking signed by the Managing Director of the company that all pharmaceutical businesses would be under the direct, personal, control and management of the Superintendent of the Pharmacist
A pharmacist Inter-state Movement form (if necessary)

Evidence of a pharmacist on the Board of Directors and the current Annual License of the pharmaceutical Director

Additional requirements for the registration of pharmaceutical manufacturing premises

The likes of the pharmaceutical retail, wholesale, distribution, and importation have the same process as a pharmaceutical manufacturing company. It is, therefore important to note that as far as a pharmaceutical company is concerned, there are certain procedures to follow during the course of registration. Below are the requirements every pharmaceutical manufacturing company is expected to make available to the council.

Accurate product lists to be manufactured.;

An Organogram;

List of staff qualifications and duties;

Factory layout;

Production flow-chart;

Equipment list in the production and quality control departments;

Water source and water treatment facilities;

Accurate list of sources of suppliers of raw materials;

Standard Operating procedures.

Standard cleaning procedures (this involves the procedures and payment of the inspection fee as regards to bank draft of N130,000, which is payable to the Pharmacists Council of Nigeria.

Conclusion

Pharmaceutical businesses are so important since they provide more than potential cures and lifesaving treatments. In addition to this, they also make way for fulfilling jobs in the pharmaceutical industry, thereby fuelling the global economy.

For Pharmaceutical Company Setup, Feel Free to contact us

Tolulope Oguntade 
Regville Associates
compliance@regville.com
08065111667

STEPS TO SETTING UP A PEER-TO-PEER CRYPTOCURRENCY PLATFORM SUCH AS BINANCE AND REMITANO IN NIGERIA

Peer-2-Peer Cryptocurrency platform over time has appeared to be a safe, green, fewer liabilities branch of Cryptocurrency that one can venture into.

Here are simple steps to take to set up such an outfit in Nigeria.

COMPANY REGISTRATION: CAC is the body saddled with the responsibility of registration of Companies in Nigeria. It is advisable to be creative in the usage of the word “Cryptocurrency” in drafting the objects of the Memorandum and Articles of Association, words such as fintech support services are advisable. The Government is still passive and skeptical about Cryptocurrency.

INTELLECTUAL PROPERTY PROTECTION: The digital space is an open playbook. It is advisable to protect your Intellectual Property such as names and logos. Intellectual Property theft and infringement are common in the digital space. IP Property protection cannot be overemphasized to avoid brand identity theft or scam. It is advisable to copyright your source codes also.

APPLICATION DEVELOPMENT: Having put the necessary legal structures in place, Application Development is the next step. It is important to have in place a Service Agreement which stipulates the expected time of delivery, the deliverables, the return of login details and passwords, the protection of confidential information and other essential clauses. Integrating a two-factor authentication feature, users verification, escrow feature, etc is important. Understudying your industry leaders’ apps such as Binance is not bad.

POLICIES: Policies are the legal framework of the Company, it is advisable to put in place stringent follow-through policies such as Know Your Customer, Suspicious Activity Policy, Privacy Policy, Reporting Policy etc

REGULATORY AND COMPLIANCE: At the moment the Government is not all that settled with Cryptocurrency, a little misdemeanour can trigger the force of hell out. The need to engage a Compliance and Regulatory Firm cannot be overemphasized. To advise on compliance and regulatory statutes and their respective bodies including the Nigerian Financial Intelligence Unit (the NFIU), the Special Control Unit on Money-laundering (SCUML), the National Information Technology Development Agency (NITDA), the Securities and Exchange Commission (SEC), the Federal Inland Revenue Service (FIRS), State Inland Revenue Service etc.

For Company Formation and Set Up, Regulatory and Compliance Matters, feel free to contact us:

Regville Associates
compliance@regville.com
08065111667

REQUIREMENTS FOR THE GRANT OF BUSINESS PERMIT AND EXPATRIATE QUOTA IN NIGERIA

Business Permit, Expatriate Quota and other services

INTRODUCTION

The Citizenship and Business Department has responsibility for administering and enforcing the provisions of the Immigration Act, 2015 related to the establishment of business in Nigeria and the employment of expatriates. In other words, the Department is entrusted principally with the following responsibilities;

Issuance of Business Permit and expatriate Quota positions
- Monitoring the execution of the quota positions granted in order to ensure the effective transfer of technology to Nigerians and eventual indigenization of the positions occupied by the Expatriates.

All applications by Companies for Business Permit and Expatriate Quota should be accompanied by the following documents:

BUSINESS PERMIT

For only Joint Venture and Wholly Foreign Owned Companies.

NOTE: For Business Permit, the Authorized share capital must not be less than 100 million in respect of each Company.

Certificate of Incorporation;
Memorandum and Article of Association;
Feasibility Report (should be certified or registered with Corporate Affairs Commission (CAC).
Corporate Affairs Commission’s CAC Form C02 & C07 OR CAC 2.2, CAC 2.3 & CAC 2.5 OR CAC 1.1
Joint Venture Agreement for partnership venture between Nigerian and Foreigners (original to be presented for sighting).
Company’s Current Tax Clearance Certificate (Original to be presented for sighting).
Lease Agreement for C of O for operating premises (original to be presented for sighting).

GRANT OF EXPATRIATE QUOTA ONLY

Certificate of Incorporation.
Memorandum and Article of Association.
Feasibility Report (should be certified or registered with Corporate Affairs Commission (CAC).
Corporate Affairs Commission’s CAC Form C02 & C07 OR CAC 2.2, CAC 2.3 & CAC 2.5 OR CAC 1.1
Upload CAC Memorandum for Guidance Of Applicants (FOR NGOs, Religion Bodies, Educational Bodies e.t.c)
Joint Venture Agreement for Partnership Venture between Nigerian and Foreigners (original to be presented for sighting).
Company’s Current Tax Clearance Certificate (Original to be presented for sighting).
Lease Agreement for C of O for Operating Premises (original to be presented for sighting).
Evidence of Imported Machinery such as; Form M, Pro Forma invoice, Shipping Documents and Clean Certificate of Inspection issued by Government appointed Pre-Shipment Inspection Agents.
License / Permit / Certificate from relevant Government Agencies / Department / Ministries for the Operation or Execution of Project if Company is Engaged in oil Services, health care services, fishing, mining, constructions (Work Registration Board), etc. (original to be presented for sighting).
Evidence of work at hand, its duration and value attached to the contract(s) if the Company is engaged in building, Civil Engineering, Construction, etc. (original to be presented for sighting).
Proposed Annual Salaries to be paid to the Expatriates to be recruited indicating Designation, Names, Jobs Description and Qualifications (CV and copies of credentials of Expatriates to be attached).

RENEWAL OF EXPATRIATE QUOTA

Corporate Tax Clearance Certificate (original to be presented for sighting).
Current Tax Clearance Certificate of the Expatriates (original to be presented for sighting).
Expatriate Quota Returns for the three months preceding the date of approval;
Detailed Training Program for Nigerians.
List of Nigerians understudying Expatriates on prescribed format showing Date Employed, Qualification, etc.
List of Nigerian Senior/Management Staff showing names Designations, Qualifications, Salaries Per Annum.
Current Audited Accounts and
Annual Income Tax Clearance Certificate of the Expatriate staff (original to be presented for sighting).

ADDITIONAL EXPATRIATE QUOTA

Corporate Tax Clearance Certificate (original to be presented for sighting).
Current Tax Clearance Certificate of the Expatriates (original to be presented for sighting).
Expatriate Quota Returns for the three months preceding the Date of Approval.
Detailed Training Program for Nigerians.
List of Nigerians understudying Expatriate on prescribed format showing Date Employed, Qualification, etc.
List of Nigerian Senior/Management Staff showing names Designations, Qualifications, Salaries Per Annum.
Certified Current Audited Accounts.
Annual income tax Clearance Certificate of the Expatriate staff (original to be presented for sighting).
Evidence of Acquired Machinery or Expansion if Company is engaged in manufacturing in Form C of Inspection (CCI) issued by Government appointed Pre-Shipment Inspection Agents.
Evidence of new contract if Company is engaged in Construction/Engineering and Oil (original to be presented for sighting) see b (ii) for guidance and
Evidence of acquired farm/factory if Company is engaged in agro-allied business (original to be presented for sighting).

RESTORATION OF QUOTA

In applying for Restoration, there must be reasons and proof for the reactivation and revitalizing the company i.e. Previously Depressed Economy, increased demand for the Company’s Product / Services and Acquisition of New Machinery i.e. Clean Certificate of Inspection (CCI) issued by Government appointed Pre-shipment Inspection AGENTS

RE-DESIGNATION OF QUOTA

In cases where a Company has difficulty in filling or owing to Exigency of Operations, it is at liberty to apply for the Re-Designation of the affected position and this will be considered, purely on its own merit.

PERMANENT UNTIL REVIEWED QUOTA – (PUR)

The main reason for the granting of a PUR Quota slot for which a Certificate would be issued is to enable the Foreign Subscriber(s) adequately protect their interest and to give them a sense of greater commitment. The criteria and documents required for PUR are:

NOTE: OTHER FACTORS THAT WOULD ALSO BE CONSIDERED WHEN CONSIDERING PUR REQUEST INCLUDE:

The minimum Share Capital should be N100 Million.
Appreciable net profit of which not less than N2 million has been paid as Corporate Tax (original to be presented for sighting).
Certificate and Detailed Audited Account.
Certificate of Incorporation.
Monthly Returns of Expatriate Quota.
Company Organization Structure Address Icon.
Individual Income Tax Clearance Certificate of the Expatriates (original to be presented for sighting).
Political /policy direction of Government.
Company’s area of Business to fall within the priority sectors of the economy.
Evidence that PUR would Guarantee Technology Transfer and
Company should have large Quota Portfolio and Corresponding shareholding as an added qualification.

QUOTA FOR INDIGENOUS COMPANY (FULLY OWNED BY NIGERIANS)

Certificate of Incorporation.
Memorandum and Article of Association.
Feasibility Report (should be certified or registered with Corporate Affairs Commission (CAC).
Corporate Affairs Commission’s Form CAC 2.3& 2.5 or CAC C02 & C07.
Company’s Current Tax Clearance Certificate (Original to be presented for sighting).
Lease Agreement for C of O for Operating Premises (original to be presented for sighting.
Evidence of Imported Machinery, such as, Form M, Pro forma invoice, shipping documents and Clean Certificate of Inspection issued by Government appointed Pre-Shipment Inspection Agents.
License / Permit / Certificate from relevant Government Agencies / Department / Ministries for the operation or execution of project if Company is engaged in Oil Services, Health Care Services, Fishing, Mining, Constructions (Work Registration Board), etc (original to be presented for sighting) and
Evidence of work at hand, its duration and value attached to the contract(s) if the Company is engaged in Building, Civil engineering, construction, etc (original to be presented for sighting); proposed annual salaries to be paid to the expatriates to be recruited indicating designation, names, jobs description and qualifications (CV and copies of credentials of expatriates to be attached).

AMENDMENT OF BUSINESS PERMIT

NOTE: Board Resolution should indicate the names of Directors present at the meeting and must be fully signed by the Chairman and Company Secretary.

Board Resolution on the changes in either the composition of the Board of directors, Location of Business or line of activities duly registered with the Corporate Affairs Commission;
Extract of Minutes of Board of Directors Meeting showing decision was taken and attendance.
Evidence of Resignation / Appointment of Directors (old & new) where applicable; and
Company Current Tax Clearance Certificate (original to be presented for sighting).

For Business Permit, Expatriate Quota and other allied services, feel free to contact us

Tolulope Oguntade 
Regville Associates
compliance@regville.com
08065111667

FIRS TAX CLEARANCE CERTIFICATE IN ONE CLICK: FIVE TAKE-HOME POINTS

INTRODUCTION

January 2nd 2023, The Federal Inland Revenue Service via its social media platforms gave Business Owners a beautiful Happy New Year Gift: Get Your Tax Clearance Certificate In One Click. Waoo! what a relief, what a joy to business owners. Industry experts showered praises on the Revenue Service, they said it is a giant boost to the Nation’s Ease of Doing Business.

We compiled Five (5) Take Homes from this development

1. NO LIABILITY FROM PRECEDING YEARS: Only Companies with no liabilities including already due VAT will have access to download the Tax Clearance Certificate.

2. PREVIOUS ACCOUNTS/STATEMENT OF AFFAIRS: Preceding Years’ Audited Financial Statement or Statement of Account must have been filed.

3. TAXPROMAX REGISTRATION: If you have not completed your TaxProMax Registration, then you can’t have access to the platform. Issuance of Tax Identification Number (which recently comes with CAC Registration) doesn’t imply the Company is registered on TaxProMax.

4. BUSINESS NAMES: It is worth noting that Business Names can’t apply for or be issued Tax Clearance certificates rather the State issued Tax Clearance Certificate/Document will suffice as the Business Name Tax Clearance.

5. DECEMBER 31ST 2023 EXPIRATION: Unlike the Temporary TCC rolled out some years back which covered only 6 months, this is a full-year tax clearance certificate bearing December 31^st 2023 as its expiration date.

CONCLUSION:

This is a beautiful development and we appreciate the management of FIRS for this lofty stride, reducing the bottleneck process of getting TCC from tax offices.

We also want to draw the attention of the Revenue Service to the other missing information on the TCC. A careful look at the downloaded Tax Clearance Certificate as of the 3rd of January, 2023 shows that information for some assessment years is missing. We are sure the Revenue Service has duly noted the anomaly and will rectify same as soon as possible.

For Tax, Tax Clearance Certificates and other Compliance Matters

Tolulope Oguntade
Regville Associates
compliance@regville.com
08065111667

SETTING UP A PAYMENT SERVICE BANK IN NIGERIA

BACKGROUND STATISTICS

36% of Nigerian adults are unbanked. CBN aims for 95% financial inclusion by 2024. 92% of the nation’s adult male population have mobile phones while 88% of the adult female population have mobile phones.

RATIONALE

CBN aims “To enhance financial inclusion in rural areas by increasing access to deposit products and payment/remittance services to small businesses, low-income households and other entities through high-volume low-value transactions in a secured technology-driven environment.”

PSBs IN NIGERIA

As at the time of writing this article, there are five (5) PSBs in Nigeria namely 9 PSB (a subsidiary of 9Mobile), Hope PSB (A Subsidiary of Unified Payments) , Money Master PSB (A Subsidiary of Globacom), Momo PSB (A Subsidiary of MTN Nigeria), SmartCash PSB (A subsidiary of Airtel Nigeria).

REGULATORS OF PSB

The Central Bank of Nigeria is the main regulator of PSBs in Nigeria, Deposits are also Nigeria Deposit Insurance Corporation (NDIC) insured.

SERVICES PSBs CAN CARRY OUT

Accept deposits from customers and small businesses
Hold funds in an electronic wallet
Invest in an interest-bearing FBN and CBN securities and offer saving products
Provide POS and ATM Services
Build a network of physical banking agents for deposits, payments and withdrawals
Issue prepaid and debit cards
Provide inbound remittance services
Engage in different forms of local payments including merchant payments, bill payments ad person-to-person transfers.

SERVICES PSBs CAN NOT CARRY OUT

They are not to issue loans, advances and guarantees.
They are also not allowed to trade in foreign exchanges except for remittances
They are also not allowed to issue insurance products.

REGISTRATION REQUIREMENTS FOR PSBs

Steps to obtain a PSB license from CBN

Obtain the Grant of Approval-in-Principle (AIP)
Obtain the Grant for a Final Banking License

REQUIREMENTS FOR THE GRANT OF APPROVAL IN PRINCIPLE (AIP)

Formal application for the grant of a Payment Service Bank license addressed to the Governor of the CBN attached with a proposal to be submitted to the Director, Financial Policy and Regulation Department (FPRD), CBN. The proposal shall contain the business case, vision and strategy, corporate governance arrangements, risk management, compliance; and financial viability.
A non-refundable application fee of N500,000 (five hundred thousand Naira only) in bank draft, payable to the Central Bank of Nigeria or such other amount as the CBN may specify from time to time
Evidence of capital contribution made by each shareholder
Evidence of name reservation with the Corporate Affairs Commission (CAC)
Detailed business plan or feasibility report
The draft copy of the company’s Memorandum and Articles of Association (MEMART)
A written and duly executed undertaking by the promoters that the bank will be adequately capitalized for the volume and character of its business at all times, and that the CBN shall have powers to supervise and regulate its operations
Shareholders’ agreement providing for disposal/transfer of shares as well as authorization, amendments, waivers, reimbursement of expenses
Statement of intent to invest in the bank by each investor
Technical Services Agreement
Detailed Manuals and Policies, particularly

For corporate investors as the promoters shall forward the following additional documents:

Certificate of Incorporation and certified true copies of other incorporation documents
Board resolution supporting the company’s decision to invest in the equity shares of the proposed bank
Names and addresses (business and residential) of owners, directors, and their related companies, if any; and
Audited financial statements & reports of the company and Tax Clearance Certificate for the immediate past 3 years.

Where all the above requirements have been met, the CBN shall notify the applicant of its decision within 90 days. When the CBN is pleased with the application, it will grant the applicant an Approval-in-Principle (AIP).

Afterwards, the Applicant shall register the PSB with the Corporate Affairs Commission with a 5 Billion minimum share capital.

REQUIREMENTS FOR THE GRANT FOR A FINAL BANKING LICENSE

The applicants of a planned PSB must apply to the CBN for the grant of a final license not later than six (6) months after receiving the A.I.P. The application shall be accompanied by the following:

A non-refundable licensing fee of N2,000,000.00 (Two Million Naira Only) in bank draft payable to the Central Bank of Nigeria
Certified True Copy (CTC) of Certificate of Incorporation of the bank
CTC of MEMART
CTC of Form CAC 1.1
Evidence of the location of the Head Office (rented or owned) for the take-off of the business
Schedule of changes, if any, in the Board and Shareholding after the grant of AIP;
Evidence of ability to meet technical requirements and modern infrastructural facilities such as office equipment, computers, and telecommunications, to perform the bank’s operations and meet CBN and other regulatory requirements;
Copies of letters of offer and acceptance of employment in respect of the management team;
Detailed resumes of top management staff;
Completed Fitness and Propriety Questionnaire; and sworn declaration of net worth executed by top management staff;
Bank Verification Number (BVN) and Tax Clearance Certificate of each top management staff;
Comprehensive plan on the commencement of the bank’s operations with milestones and timelines for the roll-out of crucial payment channels; and
Board and staff training program.

Following that the above requirements have been met, the central bank of Nigeria shall conduct other inspection, which includes: checking the physical structure of the building, verifying the capital contributions of the promoters, meeting with the Board and Management team whose resumes had earlier been submitted to the CBN, check the original copy submitted in support of the license.

For bespoke consultation on setting up a Payment Service Bank in Nigeria

Regville Associates                                                                                                                    08065111667                                                                                                   info@regville.com

Bidders & Contractors: Compliance Checklist for 2023

Taxation of Expatriates in Nigeria

Introduction

There have been instances whereby people move from a different country to another for different reasons. This is due to Globalization and trans-border migration. As a result, these people move across various national borders for permanent migration, tourism, and work.

Moreover, it should be noted that such persons who find jobs abroad or overseas are usually referred to as expatriates. There are several countries in the world where expatriates migrate to another country for the sake of a new life and greener pastures. However, when it comes to recruiting or employing expatriates, Nigeria is included, especially in the sphere of oil and gas and also the mining industries.

Regardless of their respective countries, every expatriate in Nigeria is bound by the Federal Republic of Nigeria’s laws, which also include the various tax laws that exist in the country. There are certain tax obligations on expatriates and Nigerian nationals based on income and others.

Importantly, every expatriate must get familiar with his/her tax obligations by the various tax laws which are done to abide by the tax laws imposed.

Who Are Expatriates?

Expatriates are those people who chose or have been chosen to live in another country other than where they legally reside for employment or tourism. On the other hand, they are citizens of other nations who have chosen to live in other places of the world. They are also known as expats, who sometimes form their communities in their foreign country.

Tax Obligations of Expatriates in Nigeria

Generally, all expatriates are subject to similar tax laws as Nigerian citizens based on their income. Every expatriate should note that their assessable income for taxation about the income from their employment is the amount of the income of the particular year of assessment.

However, any expatriate whose employment duties are done wholly or partly in Nigeria will not be seen to derive the income from their employment in Nigeria where;

If the duties are executed on behalf of an employer in another country, and the remuneration of expatriates is not borne by a fixed base of the employer in Nigeria; and

If the expatriate is not in Nigeria for 183 days, including annual leave or a temporary period of absence.

The employee’s income is taxed in the other country under a treaty preventing double taxation in that country.

The personal income tax of an expatriate is paid to the relevant tax authority in their state of residence. Therefore they must pay their income tax for any particular year of assessment to the State if they have been there for that particular year. An expatriate’s place of residence must necessarily be the place that is available for his domestic use for a relevant day. Note that the place of residence does not include hotels or other temporary lodging places.

However, if an expatriate is a temporary worker, he must remit income tax to any state where he is found during the year. Any income tax that the expatriate may have paid to the tax authority of another State during a specific assessment year would be applied as a tax credit against the tax due.

What Portion of an Expatriate’s Income is taxable?

Every expatriate is taxed based on the aggregate amount of their yearly income, which may come from salary, fee, wage, allowance, or other employment gain or profits, which include bonuses, compensations, premiums, benefits, or other favors granted by the employer to the expatriate.

Income Tax Rates

When it comes to taxation, Nigeria works on a progressive tax rate system whereby people are required to pay taxes based on total taxable income. Therefore, Consolidated Tax Relief Allowance is granted to those who pay taxes before the income and application of the tax rate band. The relief is granted as high as N200,000 or One per cent of the Annual Gross Income, including 20 per cent of the Annual Gross Income.

It should be noted that the Annual Gross Income serves as the total gross emoluments less all tax exemptions, deductions, and statutory reliefs. Below are the Annual Total income and Marginal Rate;

Total Annual Income (NGN)	Marginal Rate
First N300,000	7%
Next N300,000	11%
Next N500,000	15%
Next N500,000	19%
Next N1,600,000	21%
Above N3,200,000	24%

Deduction of Personal Income Tax

The personal income tax of an expatriate under paid employment must be deducted at the source from any remuneration paid or from the payment made on account of the remuneration by his or her employer based on the Pay-As-You-Earn (PAYE) Scheme.

Additionally, the employer must submit a return detailing all remuneration given to the expatriate by January 31st of each year with regard to the year prior. This return must be submitted to the appropriate State tax authorities.

Frequently Asked Questions

Which items are Exempted from Taxes?

The dividends, interests, rents, and royalties earned abroad and brought into Nigeria through channels approved by governments are exempted from Nigerian tax.

What Taxation System does Nigeria Use?

Nigeria uses a decentralized tax system that works in a way that each level of government is independently responsible for the administration of taxes within its jurisdiction. The revenues generated to fund government expenditures are sourced from a pool of taxes from each tier of government.

Is Foreign Income Taxable in Nigeria?

Once a fixed base/taxable presence is established, foreign persons making business profits in Nigeria are subject to taxation under Section 6 of the PITA, subject to any applicable treaties.

Conclusion

The Personal Income Tax Act outlines what income is subject to taxation, what deductions are permitted by law, and who is responsible for collecting personal income tax in Nigeria as a method of determining how much tax is owed by people or employees. For this purpose, expats in Nigeria need to have a fundamental awareness of their tax obligations.

For more information, inquiries and filings about the taxation of expatriates in Nigeria, kindly reach out to us.

Tolulope Oguntade 
Regville Associates                                                                                                                    08065111667                                                                                                   compliance@regville.com

What are Trade Secrets, and How Can they be Protected in Nigeria?

Introduction

For decades, most companies and corporations worldwide have done virtually everything possible to conceal their trade secrets from the public. Similarly, protecting trade secrets is important for any company that wants to stay prosperous and function perfectly for a long time.

For information to be declared a trade secret under the law of certain countries, a company must take reasonable steps to keep it hidden from the general public, have economic value on its own, and contain relevant information. Trade secrets are a part of a company’s intellectual property.

What are Trade Secrets?

Trade secrets are the process of production or practice that looks valuable to a company and is not to be generally known or revealed to the public. Trade secrets are valuable to every company because they serve as a competitive strategy or advantage that the company has over its competitors.

The Scope of Trade Secrets

The development of trade secrets began with keeping confidential information away from society. This concept is said to be traced back to the middle of the 19th century, which served as a period when capitalism was on the rise. However, trade secrets became inoperative when it was realized that the concept would be a relevant part of the law.

However, it should be noted that the case of Prince Albert v Strange played a crucial part in developing the area of law in as much as trade secrets are concerned. According to the facts of the case, the Queen and Prince Albert made artwork (which are specifically etchings) for the sole purpose of their amusement and their private entertainment, but they sometimes had prints to give to friends. As a result, the defendant had made unauthorized copies intending to put them on public display. Accordingly, an injunction was granted to restrain him from doing so.

Suppose the authority of the relevant law had helped to restrain third parties from taking credit for other people’s research, hard work, and valuable information. In that case, trade secrets don’t necessarily have to be innovations or inventions. Still, they should serve as valuable information regarding processes, finance, and technical know-how, which should not be known or made available to the general public.

The rationale for the Protection of Trade Secrets

One of the frequently asked questions which need to be answered in the world of intellectual property rights is- why should trade secrets be protected when it is already a secret? The best answer to this challenging but demanding question is that when a trade secret of a business is said to be protected, that protection preserves the ingenuity of such a secret since it has a real economic value in the eyes of the company protecting it. According to the World Intellectual Property Organization (WIPO), protecting trade secrets will assist most businesses in the following:

1. A strategic motive to prevent competitors from utilizing similar ideas or innovations without bearing the expense or risk associated with developing the innovations.

2. Maintaining and promoting specific standards of commercial ethics and fair dealing.

3. Provides the best idea for businesses to innovate by protecting the substantial time and capital invested in developing innovations that are competitively advantageous in the sphere of technology or commerce, especially those that are kept secret or do not merit the cost of patenting.

You should also know that since trade secrets serve as intangible property, they can be utilized as collateral in the event of debt financing.

How are Trade Secrets Protected in Nigeria?

Trade secrets also serve as confidential information in some jurisdictions and become public knowledge when lost. The protection also goes forever as a result of this. In Nigeria, the law concerning trade secrets could be more systematic. Although there are several technology-driven start-ups in Nigeria, the regulation of intellectual property is a limitation to the likes of Patents, Copyright, Designs, and Trademark.

Suppose there is an absence of any definite law that seeks to protect and regulate trade secrets in Nigeria. In that case, the architect of such a trade secret has to endeavor to protect such information from being disclosed to a third party.

Frequently Asked Questions

How are Trade Secrets Protected in Nigeria?

The concept of trade secrets in Nigeria was derived from common law. As a result, persons and private and even public companies have relied upon contract laws and other legal principles to prove a claim for the misappropriation of trade secrets.

What Qualifies as Trade Secrets?

A trade secret will be qualified as one if it is subject to reasonable efforts to keep it secret, has actual or potential independent economic worth due to not being commonly known, and has value to others who cannot access the information legally.

What is the Trade Secret of Coca-Cola?

According to a source from the web, the secret recipe for Coca-Cola is called pepsin, which is a digestive enzyme extracted from the stomach of pigs. However, Coca-Cola was initially referred to as Pepsin Cola in 1896 and then Pepsi-Cola in 1898.

However, the name Coca-Cola was created by Pemberton, a medicine inventor and morphine addict. This drink was made from a secret mixture of stimulant cocoa leaf and African kola nuts containing caffeine.

What is the Difference Between Trademarks and Trade Secrets?

Firstly, what needs to be known is that trademarks protect products, brand names, and services. In addition, the product’s logo is also protected by the package design. On the other hand, Trade secrets are certain kind of intellectual property that includes things like patent, copyright, and trademarks.

Why is Trade Secret Better Than Copyright?

The protection of trade secrets is not limited to twenty years, like patents or copyrights (100 years). Restricting access to information or limiting the number of people with knowledge of it is most of the ways to protect trade secrets.

Conclusion

Trade secrets are an essential component of intellectual property portfolios, enabling organizations to safeguard their exclusive know-how, secret formulas, and other basic knowledge that are not public information, whose secrecy provides an economic benefit to their holder, and there is also active protection.

For further inquiries about intellectual property protection. Feel Free to contact us

Tolulope Oguntade 
Regville Associates                                                                                                       info@regville.com                                                                                                                 08065111667

AN OVERVIEW OF THIRD-PARTY INSURANCE IN NIGERIA

There are different kinds of circumstances in life that man cannot prevent. On the other hand, we can protect ourselves from incidents such as financial fallouts and other unfortunate losses, which is where insurance comes in. However, selecting a specific type of insurance is essential based on the situation. Insurance comes in various styles, but this article will focus on third-party insurance.

What is Third Party Insurance?

Third-party insurance aims to protect the insured if a loss or damage is sustained by a third party other than the insured. Third-party insurance has to do with car insurance. Other expenses, such as medical expenses of the third party, are covered by this insurance up to the sum of 3 million naira for a private motor, according to a new circular from the National Insurance Commission (NAICOM), effective 1st of January, 2023. So as you know, this kind of insurance is the most common form of auto insurance.

This is called third-party insurance because it doesn’t protect you from damages caused to yourself in the event of an accident or any other incident. It also doesn’t include coverage for claims related to drunk driving or driving without a license.

Third-Party Insurance in Nigeria

Having third-party insurance in Nigeria is compulsory. This law is backed up by the Motor Vehicle (Third Party) Insurance Act of 1950, which is part of the six mandatory classes of insurance under the laws of the Federal Republic of Nigeria.

One of the reasons most vehicle owners in Nigeria third-party insurance is that they want to get cleared by law enforcement agencies in case anything happens. Another primary reason is that third-party insurance is cheaper than a comprehensive insurance policy.

Therefore, all insurance companies in Nigeria are being supervised by the National Insurance Commission (NAICOM) This is done to stabilize the insurance industry by contributing optimally to Nigeria’s economy.

Third-Party Insurance Policy; How Does It Work?

Third-party insurance works in a way that shields the policyholder from legal responsibility or liability if the use of the vehicle causes the death or injury of a third person.

Roles of the National Insurance Commission (NAICOM)

NAICOM discharges several functions, known as mandates, as specified in the NAICOM Act of 1997. These functions apply to every insurance company in Nigeria. They are stated below;

● To develop standards for the conduct of insurance companies in Nigeria.
● Act as transaction regulators between insurers and reinsurers, which includes those outside Nigeria.
● Approves warranties, standards, and conditions applicable to every class of insurance business.
● Approves premium insurance rates to be paid for all insurance business classes.
● NAICOM also acts as a counsellor or adviser to the Federal Government on every issue related to insurance.

How to Get Third-Party Insurance in Nigeria

In Nigeria, Third-party insurance can be obtainable in any company with a license from the National Insurance Commission (NAICOM), which should serve as general or for composite insurance companies. Note that there are procedures to buy such an insurance policy. Applicants must fill out the following forms;

● Know Your Customer (KYC) Form
● Insurance Physical Inspection Form
● Motor Proposal Form

However, applicants can get this done in any insurance company around Nigeria offering Third-Party Insurance. Some of these companies will be listed below;

● NEM Insurance
● Mutual Benefit Insurance
● Leadway Assurance
● Consolidated Hallmark
● Custodian Insurance Plc
● Axa Mansard
● Allianz Nigeria Insurance
● AIICO Insurance

What is the Cost of Third-Party Insurance?

The National Insurance Commission raised the premium for third-party motor insurance premium from N5,000 to N15,000, effective January 1, 2023.

Why is Third-Party Insurance Important?

This insurance policy favors only a third party and not the insurer to some extent. Nevertheless, the insurer gets protected from having to sort out the cost of repair or replacements of third-party damages. The following reasons below will state the importance of having third-party insurance.

● The insurance policy provides protection against liability based on damages suffered by a third party.
● Protection from facing the punishment of the law.
● Compared to comprehensive insurance, third-party insurance is cheaper.
● Serves as the primary form of auto insurance with lower premiums.
● Several third-party companies, like Leadway Assurance, offer hybrid plans.
● Also offers protection from further complications with the law in the event of an accident.

Frequently Asked Questions

What Happens if I Have an Accident on Third-Party Insurance?
You will be required to pay for your vehicle’s damages if they determine that you are at fault. Send any correspondence or claim forms you receive from the other driver or their insurer after an accident to your own insurance company.

What are The Disadvantages of Third-Party Insurance?
If there is an accident, a third-party auto insurance policy will not cover the cost of any damage done to the vehicle or any possessions within. Additionally, it won’t cover your car or if your goods are lost or destroyed.

Why is it called Third-Party Insurance? It is necessary to have third-party liability insurance, the lowest level of protection you may get. A person involved in a car insurance claim who is not you is referred to as a “third party” (the policyholder or the driver).

Conclusion

Third-Party insurance has played a significant role based on how road users have prevented themselves from emergencies and costs. However, lots of people need to be made aware of the fact that third-party insurance exists and has several benefits. Understanding the policy and the conditions attached to third-party insurance will help you lay claims and reports.

A GUIDE TO SETTING UP AN NGO (NON-GOVERNMENTAL ORGANIZATION) IN NIGERIA

INTRODUCTION

It’s the Holiday Season; it is a time of reflection, visiting friends and loved ones, meeting old friends and colleagues, sharing thoughts, giving to friends and family, giving back to society, and impacting lives. Sometimes, we desire to formalise this gathering, meeting, giving back, giving it a structure, and making it go beyond this season, then thoughts of a foundation, NGO, club, etc. sets in.

Here is a guide to setting up your NGO, Club, Foundation, Society,

OUTLINE YOUR PURPOSE OR MOTIVATION. NGOs are generally set up to advance religious, educational, literary, scientific, social/cultural development, and sporting and charitable causes.

Identify and outline your primary purpose and motivation.

DRAFT OUT A LIST OF NAMES: Draft a list of names that align with or reflect your purpose, e.g. Tolulope Oguntade Foundation, Advocacy for Better Governance, Resistance Against Domestic Violence, Sokoto Youths for Better Education etc.

The names must be unambiguous, not identical or nearly resembles any NGO already registered, must not be undesirable, offensive or otherwise contrary to public policy, or must be capable of undermining public peace and national security.

PEN DOWN THE TRUSTEE(S). A Trustee acts as a guardian for the NGO who protects and maintains the core values and purposes of the NGO. As a collective body, the trustees hold the authority and responsibility to ensure the fulfilment of an NGO’s mission. A person qualified to be appointed a Trustee must not be under 18 years of age, unsound mind; undischarged bankrupt; or convicted of an offence involving fraud or dishonesty within five years of his proposed appointment.

When choosing a Trustee, consider their views, opinion and what they stand for, and make sure it aligns with your purpose and objective of setting up the NGO in the first place.

ENGAGE AN ACCREDITED SOLICITOR: Registering an NGO at the Corporate Affairs Commission requires expertise and know-how; the Solicitor or Firm will help in:

a. The Consent of the RG is required by law to register an NGO; the request form requires three (3) Name Options, Aims, and Objectives of the NGO, Tenure of Trustees, Personal Details of Trustees, Head Office of the Organization, etc

b. As required by law, The Solicitor will publish details of the NGO in two widely spread newspapers; if there is any opposition to the registration, that should be addressed to the Registrar General.

c. The Constitution of the NGO will also be drafted by the Solicitor, which sets outs the internal affairs of the NGO

d. The Minutes of the first meeting will be drafted by the Solicitor, detailing the members present, the appointment of the Trustees, the mode of appointment, adoption of the Special Clause

e. The Solicitor shall also present to each Trustee a Declaration Form to fill, affix passport, and sign declaring that he/she is not an infant, not of unsound mind, has not been declared bankrupt etc. the declaration must be made before a Commissioner of Oaths or a Notary Public.

SETTING OUT: Once the NGO is registered, it becomes a legal entity, having a life, can acquire assets, sue and be sued, and Bank Accounts can be opened in the name of the NGO. Formal meetings can be called for to discuss the Aims and Objectives of the NGO, and you can call for Donations and Pledges both from members are the public.

CONCLUSION

NGOs are not for profit-making. Hence, they are exempted from some taxes, including Company Income Tax and Education Tax; the donations received are primarily meant for the aims and objectives of the NGO.

For more information, guidance, and registration of NGOs, we are readily available to help.

Tolulope Oguntade 
Regville Associates
info@regville.com
08065111667