Operating a restaurant in Nigeria comes with a lot of legal and regulatory requirements aimed at ensuring public health, food safety, and fair business practices. For local entrepreneurs and foreign investors, understanding and adhering to these requirements is essential to running a compliant and successful restaurant in Nigeria.

Whether you own a fast food chain, a local kitchen/cottage outlet; a café shop; a bakery; a food truck; or a fine dining establishment, this comprehensive guide provides an in-depth look at the legal compliance requirements, the regulatory bodies, necessary documentation, and post-registration obligations you need to have at your finger tip. This guide is also useful to individuals offering catering services, as well as hotel owners offering restaurant services.

What Are the Regulatory Bodies Overseeing Restaurant Operators in Nigeria?

The Corporate Affairs Commission

The Corporate Affairs Commission (“the Commission”) oversees the registration of business and non-business entities in Nigeria—from registration/incorporation to cessation/winding up. As a restaurant operator, the law requires that you register your business with the Commission within twenty-eight (28) days of commencement of business. This is the first regulatory compliance for all types of businesses.

Depending on the kind of outlet you want to establish, you can register a business name which is best suited for small kitchen/cottage outlets; a partnership—whether a general, limited partnership or limited liability partnership; or a limited liability company. See our article to know which business structure will best suit your restaurant business.

Note that, foreign investors/restaurant operators can only register a limited liability company with a minimum of 100million naira share capital.

Additionally, as a registered business entity, to keep the status of your business active on the Commission’s Register of Businesses, it is essential to file your annual returns as and when due. Annual Returns filing with the Commission is not same as Annual Returns filing with the Revenue Service Agencies like Federal Inland Revenue Service (FIRS). It is a yearly update of a business’ information with the Commission. Failure to file annual returns attracts penalties/fines that accrues every year.

The Federal Inland Revenue Service

The Federal Inland Revenue Service (FIRS) is the body that regulates taxes and taxpayers in Nigeria. As a restaurant operator in Nigeria, you are liable to pay certain taxes to the government through the FIRS, as and when due.

In order to comply with this requirement, your business must be duly registered with the CAC, then you can obtain a tax identification number after registration with the FIRS. Some applicable taxes to be filed include, Value Added Tax (VAT) Companies Income Tax (CIT), Personal Income Tax (PIT). See our article on the types of tax payable depending on the kind of business entity.

National Agency for Food and Drug Administration and Control

Another important regulatory body that oversees the affairs of restaurant operators in Nigeria is the National Agency for Food and Drug Administration and Control (NAFDAC). Matters relating to the hygiene practices of all food outlets, personnel hygiene, inspections etc., fall under the regulatory purview of NAFDAC.

NAFDAC Compliance Requirements for Restaurant Operators in Nigeria

Once registered with the Corporate Affairs Commission and the Federal Inland Revenue Service, the next compliance step for a restaurant operator in Nigeria is to observe the following Food Hygiene practices as part of NAFDAC compliance requirements:

1. Ensure that you have obtained a food handler’s certificate from either the State Ministry of Health or a recognized health facility. A food handler’s test typically includes a blood test, sputum test, urine test, widal test, hepatitis etc.
2. Ensure you have accurate documentation and/or credentials of all staff, whether food handlers, cleaners, waiters etc.
3. Ensure you have a standard operating procedure document for various aspects of your business operations, including production, quality control and cleaning.
4. Ensure compliance with NAFDAC’s Food Hygiene Guidelines. Complying with NAFDAC’s Food Hygiene guidelines cannot be dispensed with. Some aspects of the guidelines include; keeping clean indoor and outdoor environment for food, no polluted environment, avoid food contamination, disposing spoilt food/unsold food, designated rest room places/changing rooms, storing food at the right temperature and not handling food with bare hands among others.

It is essential to note that NAFDAC carries out routine inspections to fast food and restaurant outlets to ensure compliance with these guidelines. As a result of these inspections, many fast food outlets have been shut down due to non-compliance with NAFDAC hygiene guidelines.

Environmental Agencies and Regulations for Restuarants in Nigeria

Every food outlet must adhere to environmental regulations within its State of operation. As a restaurant operator, it is also important to be abreast with regulations like the National Environmental Standards and Regulations Enforcement Agency (NESREA) Act; National Environmental Health Practice Regulation

In Lagos State, the Lagos State Environmental and Protection Agency (LASEPA) regulates, among other industries, the activities of food industries within Lagos State, and imposes environmental development levies to be remitted to the Lagos State Government annually.

These environmental regulations typically cover areas such as; waste management and disposal; air quality and emissions control; water usage and treatment; standard procedures for environmental sanitation etc.

See the LASEPA Checklists for Restaurants, Bars and Clubs to guide you in setting up your food outlets as a restaurant operator in Lagos State.

Nigerian Tourism Development Corporation

The Nigerian Tourism Development Corporation (NTDC) also regulates the activities of hospitality and tourism establishments including, restaurants; fast food chains; hotels; resorts; etc., and prescribes the minimum operational standards to be maintained by them. The NTDC also issues operational licenses to these establishments before commencement of business.

Labour/Employment Regulations

Another very crucial aspect of operating a restaurant or food outlet is the labour or staff, which includes food handlers, waiters, cleaners, security guards etc. Most restaurant operators tend to overlook this aspect. However, failure to adhere to regulations like the Employee Compensation Act which provides for insurance covers for employees, adequate compensation etc., can lead to grave consequences for restaurant owners.

Advertisement Agencies

To ensure that all advertisements comply with state regulations on content, location, safety, and aesthetics, restaurant operators who wish to promote their business through outdoor signage, billboards, banners, or other forms of public advertising are required to obtain a permit from the Advertisement Agencies in the State of Operation, particularly, restaurant operators in Lagos State must obtain a permit from the Lagos State Signage and Advertisement Agency (LASAA).

Additional Compliance Requirements for Foreign Restaurant Operators in Nigeria

In addition to the above compliance requirements, restaurant operators with foreign participation or ownership are required to register with the following regulatory bodies to legally carry on their restaurant businesses:

The Nigerian Investment Promotion Commission (NIPC)

Registration with the Nigerian Investment Promotion Commission is a crucial step for foreign restaurant operators as it provides the opportunity for certain incentives on their investment. Being in the hospitality industry, foreign/restaurant operators are entitled to exemption from company income tax of up to 25% income in convertible currency.

The Nigerian Immigration Service (NIS)

The Nigeria Immigration Service is the government agency in Nigeria that is charged with the responsibility of migration management. Therefore, foreigners coming into Nigeria to set up their businesses must obtain the necessary permits to live and work in Nigeria. For ECOWAS nationals, a residence permit is required while for Non-ECOWAS nationals, a Combined Expatriate Residence Permit and Alien Card (CERPAC) is required.

The Federal Ministry of Interior

One of the core functions of the Federal Ministry of Interior (the “Ministry”) in Nigeria, is the supervision of the Nigeria Immigration Service and as such, the Ministry is also responsible for issuing expatriate quotas and business permits. While expatriate quota is granted to companies, both indigenous and foreign-owned—allowing them to employ foreign nationals or directors to work and live in Nigeria, business permit on the other hand is issued by the Ministry to foreigners to legally start and operate a business in Nigeria.

Conclusion

Adhering to these regulations is crucial to avoid penalties and to ensure the safety of consumers and the general public. Non-compliance with NAFDAC regulations can result in fines of up to ₦800,000 or imprisonment for up to one year, or both, depending on the severity of the offense.

Also, non-compliance with environmental regulations within Lagos State, such as noise pollution or improper waste management can lead to fines up to ₦500,000 or temporary closure of the establishment.

If you have any enquiries with legal compliance for your restaurant business, kindly reach out to us.

Also read on regulatory compliance for manufacturing business