Manufacturing companies in Nigeria are blessed with lots of industrial incentives. The reason for such incentives is to promote local production and consequently grow local economy. Incentives are in the form of import free duty for raw materials used in production. Others are in form of permission to import prohibited items. Also, there is lowest duty rate on equipment and implements for production. Again, there are free zones and free trade zones established to benefit manufacturing companies in Nigeria.
This are article will itemize incentives open to manufacturing companies in Nigeria. Additional articles to follow will discuss each incentive in more detail.
MANUFACTURING COMPANIES IN NIGERIA: PURPOSE OF THIS ARTICLE
The reason for this article is not to populate the internet with junks. Many readers have attested to the fact that I deal with real issues in a timeous way. So, what informed my decision to gather these pieces for public consumption is the demand for it. Everyday called blessed, I have had queries from manufacturers, would-be-manufacturers, importers and exporters, students and researchers on this subject.
Many inquirers are planning to establish manufacturing companies in Nigeria and would want to know if incentives apply to them. Therefore, I will add credibility to this claim by presenting one of such conversations with prospective investors. So, spare some fraction of your time to read through the following:
MANUFACTURING COMPANIES IN NIGERIA: PROSPECTIVE INVESTORS
The following conversation is typical of queries I treat on daily basis from those who like to tap into ease of doing business in Nigeria.
We are keen to establish a plastic recycling unit in Nigeria for export of processed plastics.
Thus, we are looking for a local consultant for regulatory assistance in Nigeria. Please get in touch for a discussion.
Mr Salome Hope (names changed)
Response from Me:
Your email well received.
We are an expert consulting company ready to work for establishments like yours.
Our services covers company registration, regulatory licences processing. We also do company setup, customs brokerage, imports and export handling. In addition, we do other supply chain logistics, etc.
Our company is adaptable, and tailor our services to the need of each client.
Kindly feel free to chat, email or call anytime. I will initiate a chat with you on WatsApp using your number below. So we can know more of the services you needed.
For Vagmon Integrated Services.
Dear Mr Wilson,
Thanks for your prompt response.
Our initial queries are related to feasibility of the project as follows:
- We may need to import plastic as raw material. Plastic imports are in 41-list and are not eligible for foreign exchange. In such case,
- Is it practical / possible to obtain Form M.
- Again is there any relaxation on import restriction if we export the finished product – MIBS scheme or otherwise?
If the feasibility is OK, we would want to go ahead. Please also advise on timeline and cost of company formation and other licenses to engage your services.
Mr Salome Hope (names changed).
Your email well received Sir.
We will check all things and give a detailed response as requested.
However, be rest assured that we process Form M for plastics regularly. I will explain what the options are in the said response.
Our further response:
Dear Mr Salome Hope,
Have a nice evening (India ahead of us some 4 and half hours).
Here are the answers to your requests.
- Form M is possible for your importation of plastics and raw materials.
- MIBS certainly will apply in your case, but will be after sometimes from setup. There are two other initial ways we can use to enable you import while waiting for MIBS. Suffice to say we are excellent in handling Form M issues.
- Company Setup: With our expertise, this will take just 2 weeks. The things to do include Company Registration and all Tax issues setup (Tax Identification Number inclusive). We will also meet other legal requirements with the Nigeria Government Agencies.
- Note that you have to appoint at least one director from Nigeria (does not have to work with you, but to get registered). We can arrange this if needed.
Again, if you like us to go into property acquisition or rental, Our legal team is excellent in it.
We hope to have informed you well, otherwise feel free to ask additional questions.
Thanks for your email.
Our biggest concern is Form-M due to forex restrictions for plastics. We have to be absolutely sure that we have no problems in Form M before we can invest.
Please advise if forex invalid is applicable for units in Free Trade Zone also. Is it possible to setup in FTZ if we export?
Is there any other method for smooth functioning?
We understand that list only bans forex from official window and we can source outside, but in our experience of rice trading, we found that it is practically impossible to obtain form-M for rice even if we arrange forex for outside.
Clarity on the issue would be very helpful.
There are 3 ways to obtain Form M for plastics like I said in my earlier mail. The case of rice is outright ban by the Government. Plastics are not under ban, but restricted for forex, which isn’t applicable to production companies.
Besides, I can make prove with visible Form M processed for one of our clients who imports plastics.
Free Trade Zone is open to just all manufacturing companies in Nigeria. All that is needed is registration with the Free Trade Zone Authority.
Do have a good day sir.
We particularly want to import these 2 HSN codes. Please check if form M can be processed for these.
39151000 and 39159000.
Form M for HS Codes 39151…and 39159…are very much allowed.
Let me search from my clients to send you items in the 41 list that I have processed Form M a couple of time.
My advice now is get to action to see how it works. Leave the rest of the things for us.
I owe you some Form M samples. Will search and send them to you.
Read Also: CARGO CLEARING NIGERIA PORTS: REGULAR ISSUES
MANUFACTURING COMPANIES NIGERIA: WHAT ARE THE INDUSTRIAL INCENTIVES?
This article will list industrial incentives open to manufacturing companies in Nigeria. Subsequent articles will delve deeper into such incentives and how to benefit from them. Therefore, our focus here is industrial incentives relating to import and export. The following are some of the industrial incentives enjoyed by manufacturing companies in Nigeria:
- Export Expansion Grant Scheme (EEGS)
- Bonafide Manufacturer and assemblers (BMA)
- Manufacturers Export In Bond Scheme (MEIBS)
- Free Trade Zones, including Oil and Gas Free Zone, and Export Processing Zones.
- Exempt from Restriction on 41 Items not-valid-for-foreign-exchange.
- Lowest (5%) Import Duty Rate on Production Equipment
In my next article, I will deal a great on each of these industrial, import/export incentives for manufacturing companies in Nigeria.
Read Also: FORM M NIGERIA: HOW TO PROCESS AND OBTAIN IT
Nigerian Government is in a mission – that of providing enabling business environment. Policies, politics and governance revolve around promoting local industries to stimulate economic growth. Consequently, lots of industrial incentives and waivers are being granted to manufacturing companies in Nigeria.
Vagmon Group is a consortium, with responsibility to help you process incentives in a timely way. Hence, whether you are contemplating a start-up, or you are already in business, we can help you. Finally, call us today on +2349075526276 or see the contact us footer on this weblog. We wish you well. Thank you for spending time to read this article. Take action; reach out to us for the hassle.