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A free zone company is a company registered and situated in a free zone. A free zone is a designated geographical area within a country where companies set up to enjoy exemptions or reduced taxes, customs duties, and regulations. Free zones are especially attractive to investors, whether local or foreign, who may want to take advantage of favorable tax holidays, duty-free imports, and other incentives that apply to free zones.

In Nigeria, these companies are regarded as Free Zone Enterprises (“FZE”), and are regulated by the Nigeria Export Processing Zones Authority (“NEPZA”); and the Oil and Gas Export Free Zones Authority (“OGEFZA”), for Oil and Gas Free Zones (“OGFZ”).

This article offers a guide to a step-by-step registration process of registering a free zone company in Nigeria, including the requirements, costs, and timelines.

Major Free Zones in Nigeria

Nigeria currently has over 40 licensed Free Zones managed by either the Nigerian Export Processing Zones Authority (NEPZA) or the Oil & Gas Free Zones Authority (OGFZA).

Some of the most notable include:

1. Lekki Free Zone Development Company – a major industrial and commercial hub linked to the Lekki Deep Sea Port.
2. Lagos Free Zone (LFZ) – a free zone with focus on manufacturing, Fast Moving Consumer Goods (FMCG), and general trade.
3. Alaro City (Special Economic Zone) – a mixed-use industrial and residential development within the Lekki Area.
4. LADOL Free Zone (Lagos Deep Offshore Logistics Base) – an offshore oil and gas engineering and logistics.
5. NAHCO Free Trade Zone – a free zone linked to Murtala Muhammed International Airport in Lagos State for aviation and cargo logistics.
6. Ogun-Guangdong Free Trade Zone – a China-Nigeria joint venture for manufacturing located in Ogun State.
7. Eko Support Free Zone – an offshore oil and gas support services free zone based in Apapa, Lagos State.

Beyond these, a number of other specialized free zones exist across the country, and investors can choose based on their industry focus and location preference.

What Business Activities Are Allowed in A Free Zone in Nigeria?

Generally, the approved activities for free zones are classified as:

1. Manufacturing and Processing of goods for export
2. Trading, Warehousing, Freight Forwarding
3. Logistics and Services
4. Tourism and Real Estate Development Services
5. Technology and Research
6. Banking, stock exchange, insurance, reinsurance, and other financial services
7. International Commercial Arbitration services
8. Oil and gas services
9. Import of goods for special services, exhibitions, and publicity
10. Handling of duty-free goods (transshipment, sorting, marketing, packaging, etc.)

However, some free zones are sector-specific, permitting certain services while restricting others. It is important to know the approved activities for each zone before choosing a location.

What Are the Requirements for Registering and Operating a Free Zone Company in Nigeria?

Below are some of the requirements for registering a free zone company in Nigeria:

1. NEPZA Application Form 1
2. AT least 2 directors, and allotment of Shares of Directors (NEPZA Form 2)
3. Memorandum and Articles of Association (MEMART)
4. Board Resolutions
5. Nature of Business
6. Directors’ passport photos and data page of International passports
7. Declaration of compliance (NEPZA Form 3) to be filled by a lawyer
8. DPR Certificate, for oil and gas companies
9. Infrastructure plan and Environmental Impact Assessment (EIA), where applicable
10. Feasibility study
11. Other documents that may be required by the FZE.

Step-By-Step Process of Registering a Free Zone Enterprise in Nigeria

Step 1: Choose Your Location

Depending on the industry and target market, choose the appropriate free zone to register your company. Complete the zone’s application forms after making payment.

Step 2: Obtain an Operating License From NEPZA

To obtain your operating License from NEPZA, you have to complete the NEPZA registration form, which can be downloaded online or obtained from the administration of the free zone, with a non-refundable fee of US$1,500 or its Naira equivalent.

Note that there may be other forms to fill depending on the particular free zone.

Step 3: Submit the Application Form

Submit the completed NEPZA FZE registration form to the Zone Administration, along with the required Project Plan/Feasibility Study. The application will be reviewed and either approved or returned with observations within five (5) working days.

Step 4: Approval and License

On approval of the application, an Operating License (OPL) will be issued by the Free Zone Administration (FZA). It is pertinent to state here that being licensed by the Authority constitutes registration, and no further registration is required with the Corporate Affairs Commission (CAC). Also, at this stage, the FZA will discuss your site location and assign or reserve a space within the zone for you.

Notably, not all free zones in Nigeria require a proposed enterprise to acquire physical land or factory space before the registration process is complete. In fact, some zones permit enterprises that are primarily service-oriented—such as consultancy firms, ICT providers, logistics companies, etc.—to formally register within the zone without taking up land or industrial facilities. Therefore, an investor who is not looking to set up physically within a zone will have to confirm with that zone before proceeding.

Step 5: Remit Capital

Remit your investment capital through banks located in the zone which will then issue a Certificate of Capital Importation (CCI). Your CCI allows you to take advantage of the capital repatriation incentive enjoyed by free zone enterprise.

Step 6: Prepare Building Space

The next step to take is to prepare your building or warehouse space. Investors who are constructing their own buildings must submit four (4) copies of full architectural drawings for approval by Zone Management according to established building codes. It is pertinent to note that the built-up spaces should not exceed 70% of the leased land, and construction should start within three (3) months after execution of the agreement.

Step 7: Obtain Expatriate Quota and Residence Permit for Your Expatriates

As a foreign investor looking to set up a company in a free zone in Nigeria, you will need to obtain an expatriate quota and the required work and residence permit for your expatriates from the Ministry of Interior and the Nigeria Immigration Service.

Finally, after the necessary payments have been made and the Zone Management has satisfied itself that the applicants have complied with all the registration requirements, the Certificate of Registration as a Free Zone Enterprise will be issued. Note that the certificate is valid for one (1) year, after which you must renew your license annually.

What Are the Benefits of Registering a Free Zone Company in Nigeria?

There are numerous benefits of registering a company within any of Nigeria’s free zones. Below are some of the incentives:

1. Legislative provisions pertaining to taxes, levies, duties, and foreign exchange regulations do not apply within the Zones.
2. Repatriation of foreign capital investment in the Zones at any time with capital appreciation of the investment.
3. Remittance of profits and dividends earned by foreign investors in the Zones
4. No import or export license is required.
5. Up to 25% of production may be sold in the customs territory against a valid permit and on payment of appropriate duties.
6. Rent-free land at the construction stage; thereafter, rent will be as determined by the Authority.
7. Up to 100% foreign ownership of business in the Zones allowable.
8. Foreign managers and qualified personnel may be employed by companies operating in the Zones.

It is important to state that although free zone enterprises are generally not taxable, however, there are instances where certain transactions are taxed. See our article for more details regarding the taxes paid by companies within the zone.

How Long Does It Take to Register a Free Zone Company in Nigeria?

Registering a company within a free zone in Nigeria typically takes 1-4 weeks depending on the accuracy of your documentation, obtaining various approvals, and the nature of the business.

How Much Does It Cost to Register a Free Zone Company in Nigeria?

S/NO	DESCRIPTION	COST (USD)
	Application Form	1,000 – 1,500 Depending on the free zone
	NEPZA Registration Form	1,500
	FZE Registration Fee	Depends on the particular free zone and the nature of business.
	NEPZA Operating Licensing Fee	Between 5,000 – 25,000, depending on the nature of business.
	Minimum Share Capital	Not less than 1,000USD
	Legal Search	200 – 500 Depending on the free zone.
	NEPZA Certificate and CTC of Registration Forms	600

Table : Cost of registering a Free Zone Enterprise in Nigeria

Conclusion

In conclusion, it is important to note that, to register as a free zone enterprise in an export processing zone in Nigeria, a minimum of 75% of your products must be exported. Registering a company within any of Nigeria’s free zones offers a pathway for business growth in the long term as a result of the incentives.

Firmus has a team of experts that can advise and assist with setting up your company within a free zone company in Nigeria. Kindly reach out to us today.

After you’ve handled company incorporation, be sure to check our article on Tax Compliance for Businesses in Free Trade Zones (FTZs) in Nigeria to ensure your company meets all regulatory obligations. Also, if you’re a foreign investor or need special incentives, read Registering your Business with the NIPC for procedures and benefits