Restrictions and Limitations on Foreign Investors

While Nigeria welcomes Foreign Direct Investment (FDI), there are a few limitations investors should know:

1. Foreign individuals cannot personally own land; ownership must be through a registered Nigerian company.
2. Certain areas, such as land near military zones or government estates, may be restricted.
3. Real estate businesses involving housing for low-income citizens may attract specific state-level policies or partnership terms.
4. Projects funded through foreign loans must comply with the CBN’s debt registration requirements.

Investment Channels for Foreign Participation

Foreign investors can invest in Nigerian real estate through different structures like:

1. Wholly Foreign-Owned Company: This is a company wholly owned by foreigners whose share is 100% foreign shareholding. This is majorly for high-value commercial or industrial projects.
2. Joint Venture (JV): as the name implies, it is a company owned jointly by Nigerians and foreigners. Both parties forms partnership to achieve a common goal. The common goal can be large scale estate or infrastructure development.
3. Special Purpose Vehicle (SPV); it is an entity created for specific project. They use Public Private Partnership for the financial arrangement.
4. Real Estate Investment Trust (REIT): this is regulated investment fund for property income. Institutional investors and co-operative society usually use this to make housing accessible and affordable to her members.

Note: Each option has different tax, legal, and risk implications. Professional advice is essential before choosing.

Read: Foreign Direct Investment in Nigeria Real Estate: Regulatory and Legal Basics

Incentives for Foreign Real Estate Investors

Nigeria offers several incentives to attract foreign participation in real estate. The incentives includes:

• Tax holidays for pioneer industries (housing and construction may qualify).
• Capital allowances on qualifying expenditures.
• Unrestricted repatriation of profits and dividends via Certificate of Capital Importation (CCI.)
• Investment protection guarantees under the NIPC Act.
• Access to bilateral investment treaties (BITs) offering protection against expropriation.

Common Pitfalls to Avoid

1. Failure to obtain NIPC registration or CCI may limit repatriation rights.
2. Acquiring land through individuals instead of a registered real estate company may lead to scam.
3. Ignoring local planning regulations may result in demolition.
4. Not registering title documents your ownership may be disputed.
5. Non-compliance with tax and immigration laws will attract penalties.

In conclusion, foreign investment in Nigerian real estate is not only permissible, it is encouraged but it must be done through proper channels of registering your company to obtaining NIPC and business permits. Capitals must be Imported legally and comply with registration and tax requirements. By following the regulatory framework, investors can enjoy security, profitability, and full repatriation rights under Nigerian law.

In Nigerian real estate, the law is not a barrier to investment rather it is your protection. If you are planning to invest in Nigeria property, work with experienced real estate lawyers and investment advisors who understand both the local market and international regulatory standards.

Are you thinking of investing in Nigerian real estate from abroad? Contact us today for professional legal guidance on company registration, land acquisition, and regulatory compliance for foreign investors.

Email: info@verazadvocates.com.ng

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