««| Investment Guide | Doing business in Imo | Industries | Investment Potentials | Incentives

Some of the incentives include:

FREE FLOW OF INVESTMENT:
There is a fully liberalized economy and foreign exchange. Exchange control regulations have been liberalized to ensure free flow of international finance and unrestricted movement of investment capital.
Functional, efficient and responsive banking services
Capital Allowances
Easy remittance of profits, dividends and capital
Various income tax reliefs.
Five years tax holidays for companies which plough back their profits into their business in the country
Tax Relief for Research and Development
Various Sectoral Incentives

Free trade zones offer numerous incentives to businesses
Locating in any free trade zone in Nigeria automatically confers on the investor certain locational advantages as well as very generous incentives.
Read more

Various incentives on offer to stimulate biofuel industry
A number of incentives have been introduced to stimulate Nigeria's biofuel industry. The objective of the Biofuel Production Programme is to firmly establish a thriving fuel ethanol industry by utilising agricultural products.
Read more

Investment Promotion and Protection Agreement (IPPA)
As part of an additional effort to foster foreign investors' confidence in Nigeria, the federal government continues to enter into bilateral investment promotion and protection agreements (IPPAs) with countries that do business with Nigeria.
Read more

Small and Medium Enterprises Equity Investment Scheme
The Small and Medium Enterprises Equity Investment Scheme (SMEEIS) requires all banks in Nigeria to set aside 10% of their Profit After Tax (PAT) for equity investment and promotion of small and medium enterprises.
Read more

Tax incentives to the gas industry
In view of the enormous potentials in this sector, government has approved various fiscal incentives.
Read more

Tax relief for investment in infrastructure
Incentives are granted to industries that provide facilities that ordinarily should have been provided by government.

Benefits:
20% of the cost of providing these infrastructural facilities, where they do not exist, is tax deductible.

Applicant profile:
Facilities which fall under the scheme include access roads, pipe borne water and electricity.

Tax relief for research and development
Industrial establishments are expected to engage in research and development (R&D) activities for the improvement of their processes and products. Tax relief is given for such projects.

Benefits:
Up to 120% of expenses for R&D projects are tax deductible. Regarding expenses for R&D on local raw materials, up to 140% are tax deductible. Where the research is long-term, it will be regarded as a capital expenditure and will be written off against profit.

Applicant Profile:
Tax relief for R&D are given provided that such activities are carried out in Nigeria and are connected with the business from which income or profits is derived.

Incentives to the agriculture sector
Numerous incentives are given to stimulate investment in agricultural activities.

Benefits: 
Companies in the agro-allied business do not have their capital allowance restricted. It is granted in full i.e. 100%.
The payments of minimum tax by companies that make small or no profits at all do not apply to agro-allied businesses.
Agro-allied plants and equipment enjoy enhanced capital allowances of up to 50%.
Processing of agricultural produce is a pioneer industry, consequently there is 100% tax-free period for 5 years.
All agricultural and agro-industrial machines and equipment enjoy 1% duty.
The Agricultural Credit Guarantee Scheme Fund (ACGSF), administered by the Central Bank of Nigeria, guarantees up to 75% for all loans granted by commercial banks for agricultural production and processing.
The Interest Drawback Program Fund provides a 60% repayment of interest paid by those who borrow from banks under the ACGS, for the purpose of cassava production and processing. To qualify for these repayments, borrowers need to repay their loans on schedule.

Incentives to the tourism sector
Businesses operating in the tourism industry are entitled to the following benefits:

The tourism sector was accorded preferred sector status in 1999. This makes the sector qualify for incentives (available to similar sectors of the economy) such as tax holidays, longer years of moratorium and import duty exemption on tourism related equipment.
Provision of basic infrastructure such as roads, water supply, electricity and communication facilities to the centre of attraction. Some states have allocated specific areas as tourism development zones thereby making acquisition of land easier.
Provision of land for tourism development at concessional rates.
Availability of soft loans with long period of moratorium.

Incentives for the solid minerals sector
The following incentives are available in the solid minerals sector:
3 to 5 years tax holiday;
Low income tax of between 20% and 30%;
Deferred royalty payments depending on the magnitude of the investment and the strategic nature of the project;
Possible capitalisation of expenditure on exploration and surveys;
Extension of infrastructure such as roads and electricity to mining sites;
The holder of a mining lease shall, where qualified, be entitled to:
a) Depreciation or capital allowance of 75% of the certified true capital expenditure incurred in the year of investment and 50% in subsequent years
b) Investment allowance of 5%
c) Exemption from payment of customs and import duties
d) Expatriate quota and resident permit for approved expatriate personnel
In addition to roll-over relief under the capital gains tax (CGT), companies replacing their plants and machinery are to enjoy a once-and-for-all 95% capital allowance in the first year with 5% retention value until the assets is disposed, 15% will be granted for replacement of an asset.