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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:
- Lekki Free Zone Development Company – a major industrial and commercial hub linked to the Lekki Deep Sea Port.
- Lagos Free Zone (LFZ) – a free zone with focus on manufacturing, Fast Moving Consumer Goods (FMCG), and general trade.
- Alaro City (Special Economic Zone) – a mixed-use industrial and residential development within the Lekki Area.
- LADOL Free Zone (Lagos Deep Offshore Logistics Base) – an offshore oil and gas engineering and logistics.
- NAHCO Free Trade Zone – a free zone linked to Murtala Muhammed International Airport in Lagos State for aviation and cargo logistics.
- Ogun-Guangdong Free Trade Zone – a China-Nigeria joint venture for manufacturing located in Ogun State.
- 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:
- Manufacturing and Processing of goods for export
- Trading, Warehousing, Freight Forwarding
- Logistics and Services
- Tourism and Real Estate Development Services
- Technology and Research
- Banking, stock exchange, insurance, reinsurance, and other financial services
- International Commercial Arbitration services
- Oil and gas services
- Import of goods for special services, exhibitions, and publicity
- 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:
- NEPZA Application Form 1
- AT least 2 directors, and allotment of Shares of Directors (NEPZA Form 2)
- Memorandum and Articles of Association (MEMART)
- Board Resolutions
- Nature of Business
- Directors' passport photos and data page of International passports
- Declaration of compliance (NEPZA Form 3) to be filled by a lawyer
- DPR Certificate, for oil and gas companies
- Infrastructure plan and Environmental Impact Assessment (EIA), where applicable
- Feasibility study
- Other documents that may be required by the FZE.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
