Nigeria’s real estate sector has become one of the most attractive destinations for foreign direct investment (FDI) in Sub-Saharan Africa. With a population exceeding 200 million, rapid urbanization, and a housing deficit of over 20 million units, opportunities abound from residential estates to commercial developments, industrial parks, and hospitality projects.
However, while the potential for profit is high, so are the regulatory and legal complexities. Foreign investors cannot simply acquire land or commence development without complying with Nigerian laws governing foreign participation, land ownership, and capital inflow.
This blog explains the legal framework, regulatory steps, and compliance requirements every foreign investor should understand before entering Nigeria’s property market.
Understanding Foreign Direct Investment (FDI) in Nigerian Real Estate
Foreign Direct Investment (FDI) refers to capital inflows from foreign entities into the Nigerian economy either through ownership of a company, acquisition of real assets, or participation in joint ventures.
In real estate, this often takes the form of:
- Direct purchase of land or developed property.
- Development partnerships with Nigerian companies.
- Investment through Special Purpose Vehicles (SPVs).
- Joint ventures for estate development, hotels, malls, or housing projects.
The key is foreign participation is allowed but must be done in accordance with Nigerian law.
Legal Framework Governing FDI in Nigerian Real Estate
FDI in real estate is regulated by several laws and agencies, each with its own jurisdiction. The most relevant include:
- Companies and Allied Matters Act (CAMA) 2020: This law regulates the registration, operation and structure of company in Nigeria. It directs the structure for foreign investors in Nigeria. The agency responsible for the company registration in Nigeria is Corporate Affairs Commission (CAC)
- Nigeria Investment Promotion Commission (NIPC) Act, Cap N117 LFN 2004: This law guarantees free entry, ownership and repatriation of profits for foreign investors. The body responsible for this is Nigeria Investment Promotion Commission (NIPC).
- Land Use Act, Cap L5 LFN 2004: This law regulates urban and rural land. It vests ownership of land in the State to the State governor. It governs land acquisition and title for both urban and rural land. The State Ministry of Lands is the government body that regulates the land acquisition and title.
- Foreign Exchange (Monitoring and Miscellaneous Provision) Act 1995: The law governs capital importation and repatriation of dividends through Certificate of Capital Importation (CCI). This certificate is usually issued by an authorized bank on behalf of CBN to confirm the inflow of foreign capital into Nigeria. The Central Bank of Nigeria (CBN) regulates this.
- Immigration Act 2015 & Regulation 2017: It regulates, the application of Business Permit and Expatriate Quota for foreigners. The Federal Ministry of Interior is the agency in charge of processing the Permit.
- Stamp Duties Act & Land Instruments Registration Laws: The law regulates perfection and registration of title document. The payment of Stamp duty is done in the State Internal Revenue while the Land registration is done at the Lands Registry of the State where the Land is Situate. These are usually done at the State level that’s why it’s the Laws of the State that governs them.
Together, these laws form the regulatory backbone for any foreign participation in the Nigerian property market.
Read:How to Verify Land Ownership in Nigeria Before Buying
Step-by-Step Process for Foreign Investment in Nigerian Real Estate
Step 1: Incorporate a Company in Nigeria
Foreign investors cannot directly acquire land in Nigeria in their personal capacity.
They must register a Nigerian company (wholly foreign-owned or joint venture) with the Corporate Affairs Commission (CAC).
Requirements:
- Minimum ₦100 million share capital for companies with foreign shareholders.
- At least two directors and a secretary (can include foreigners or Nigerian).
- Registered office address in Nigeria.
Documents acquired after registration:
✅ Certificate of Incorporation
✅ Memorandum & Articles of Association
✅ CAC Status Report
Read: Company Registration (Limited Liability Company)
Step 2: Register with the Nigerian Investment Promotion Commission (NIPC)
The NIPC is the gateway for all foreign investors. Every company with foreign participation must obtain an NIPC Registration Certificate.
Documents required:
- CAC incorporation documents
- Details of directors/shareholders
- Evidence of capital importation (if available)
- Business plan or project proposal
Step 3: Obtain a Business Permit
Foreign-owned or part-foreign-owned companies must apply for a Business Permit from the Federal Ministry of Interior (FMI) before commencing operations.
Documents required:
- CAC and NIPC certificates
- Memorandum & Articles of Association
- Tax Identification Number (TIN)
- Evidence of shareholding
- Profile of directors
- Bank reference letter
Step 4: Obtain an Expatriate Quota (where applicable)
If the company intends to employ expatriate staff, it must apply for an Expatriate Quota Approval from the Federal Ministry of Interior (FMI). This specifies how many foreign workers the company can employ and for how long.
Step 5: Capital Importation and Certificate of Capital Importation (CCI)
To bring funds into Nigeria legally, the investor must remit capital through an authorized dealer (commercial bank), which issues a Certificate of Capital Importation (CCI). Without a CCI, an investor cannot legally repatriate funds out of Nigeria.
Step 6: Acquire and Register Land
Under the Land Use Act, all land in each state is vested in the Governor. Foreigners cannot directly acquire land except through a corporate entity duly registered in Nigeria. Some States, such as Lagos, allow leaseholds to foreign-owned companies for 99 years.
Step 7: Comply With Tax and Regulatory Requirements
All companies operating in Nigeria must comply with tax and regulatory obligations, including:
- Federal Inland Revenue Service (FIRS) – Company Income Tax, Withholding Tax, VAT.
- State Internal Revenue Service – Land Use Charges, Property Taxes.
- Local Government Authorities – Tenement rates, environmental levies.
In conclusion, Nigeria’s real estate sector presents tremendous opportunities for foreign investors from luxury estates to affordable housing and commercial developments.
However, successful investment depends not just on capital but on compliance, documentation, and local legal expertise. Maintaining compliance builds credibility and avoids disruption to operations.
For further enquiries
Email: info@verazadvocates.com.ng
Call/ WhatsApp: +234 8116486356
