Starting a business in Nigeria is by no means easy. The Nigerian government has put in place a number of bureaucratic hurdles, which can be quite frustrating at times.
Fortunately, the Nigerian government does not make starting a business difficult for everyone. Some group of people is exempt from many of these bureaucratic hurdles. These groups are the foreigners who are seeking to start businesses in Nigeria and Nigerians who have lived abroad for more than five years.
What are the Procedures for Starting a Business in Nigeria?
Starting a business in Nigeria is an exciting prospect for anyone looking to set up their own business. It is not only possible but also feasible with the right steps and guidance.
The following are some of the procedures for starting a business in Nigeria:
– Formulate your idea and research the market for this idea.
– Identify your target market, location, and competitors.
– Register your name with appropriate agencies where required by law.
– Designate legal structure for your business entity (LLP, sole proprietorship, etc.).
– Be aware of any laws that may apply to the scope of your business activities.
What is the Minimum Capital Required to Start Up My Own Business
Your start-up capital is the money you need to launch and sustain your business.
It depends on what type of business you want to start. You can buy a franchise for an established company, or you can create your own company from scratch with just an idea in mind.
You do not need much capital to start up your own business if it is an online business that requires only a little upfront investment like web design or graphics design services. If it is a more complicated business with production costs, then more than likely you will need more than $5,000 to get things off the ground.
Can I Raise Funds for My Nigerian Startup?
There are many ways to raise funds for your Nigerian startup. You can look into getting a loan or equity financing, securing government grants, reaching out to investors, crowdfunding, etc.
- Getting a loan- Your bank might be willing to give you a loan for your startup. For example, UBA launched the UBA Startup Fund which provides loans up to N1 million at affordable interest rates of 10%.
- Equity financing- Raising funds through equity financing means that the investor buys shares in your company with an expectation of future returns on their investment. The share of ownership can be bought on the secondary market or through an initial public offering (IPO).
3) Securing government grants- Government grants are usually available for social enterprises that focus on impacting society in some way.
The Importance of Tax Compliance and Tax Planning
Tax compliance is important because all individuals and organizations will be subject to taxation with the implementation of the Income Tax Act, CAP CXXVII of 1991. Tax compliance ensures that people and companies pay their taxes on time and in full.
There are different types of tax compliance such as corporate tax compliance, income tax compliance, and VAT (Value Added Tax) Compliance.
Tax planning involves minimizing your future tax liability and maximizing your deductions. Tax planning is also done with a view to complying with statutory requirements for taxation purposes.
Taxation law in Nigeria requires all Nigerians residing in Nigeria or abroad to submit an annual income return before the end of April each year.