We are rounding up this series on how to start a business in Nigeria. We released the first two blogs part 1 and part 2 earlier this month. In this last part, we will cover more legal stuff like tax registration, permits and documentations.
Enrol your Business under Federal Inland Revenue Service
It is important to enrol your business under Federal Inland Revenue Service after registering your business with Corporate Affair Commission. This will enable you receive a Tax Identification Number (TIN) which you will use to open a corporate bank account. There are many people that feel like getting registered to have a tax number is a waste of time, especially in an economical environment like Nigeria. I feel you! What are the benefits? Why go through this stress just to start a business in Nigeria?
Develop credibility and track record
But hey, do you not want to grow your business? Do you not want to one day be competitive in your industry? Ok, look at it this way, simply for credibility sake developing a track record is key! I remember when we needed to get some partners on board for our business. We were actually required us to show a proof of tax payment for the last 3 years. Bam! So if we have not done it, we would have been all stressed up trying to figure this out. The thing about tax is that, if you do not make enough profits, you do not pay tax. But well, we want you to make well enough profits to be able to pay tax, right? So do not shy away registering your business.
Open a Business Account to start a business in Nigeria
When you have enrolled your business at FIRS, you will receive a tax number. This is what you can now use to open a bank account at a bank of your choice. All these structures are to give your business credibility, both for investors and consumers. Consider below a list of requirements to open a business bank account to start a business in Nigeria, specifically Zenith Bank. You can always contact your bank of choice to get the current requirements.
- Duly filled and signed Account Opening Form
- Two (2) Specimen Signature Cards
- Two (2) independent and satisfactory references
- Two (2) recent and clear passport size photographs of each signatory
- Form of Identification of Signatories
- Certificate of Registration (originals to be sighted)
- Form of Application for Registration (Certified as True Copy by CAC and originals to be sighted)
- Photocopy of Public Utility Receipt (original sighted)
- Tax Identification Number
- Mandatory Initial Deposit
- Visitation Report (Residential and Official)
- Risk assessment Form
- Additional KYC Form
Obtain Necessary services, documentations and Permits/Licenses
This is dependent on the nature of business you are interested in but it is important to carry out research to know if there is a regulatory body for the business. Take Food Canteen for instance, there is an association body that you must pay some sort of levy to. Also Road Transport requires inter or intra-state permit from National Union of Road Transport Workers. Subscribe to our newsletter for more details regarding permits in the future. You might need further permit or certification from entities like NAFDAC who regulate food, cosmetics and drugs. These are just a few of the regulatory bodies you might want to consider when you want to start a business in Nigeria. We are happy to connect you with our recommended legal support agency if you decide to embark on this journey.
Create a Customer Care system for your Business
System is structure. Structure helps grow a business idea! Developing a customer care system helps to increase your customers’ satisfaction. Customer care is an important element of many successful businesses, not only because you make the paying customer happy but also to gather enough information on how to further build your business. In our upcoming Joadre Business Vlog series season 2 starting April 2021 on our JoadreTV page, we would address how important it is to gather information and how to go about this. Not to miss out make sure you have subscribed to our newsletter. Also, in a previous blog, we talked more about how to protect your business ideas using great customer care – read the blog here. I also recommend you read this blog if your next thought now is How to get Clients for your Business .
Document your Business Operation
It is important to print and have a track of invoices, have a customer agreement drafted, terms and policy for the business operation. You probably wouldn’t know the importance of this until you are pitching to an investor or an employee leaves your team and you are left to find yourself, if you lack proper documentation, you may find yourself starting from the scratch or totally lost. Documentation would protect your integrity as a business both in the face of investor and client, therefore instilling confidence in your brand.
So that was it this week. I hope we have been able to give you some more information about how to start a business in Nigeria. Remember it is a 3 part blog and you can go read the complete series to learn more. If you have questions or comments, use the section provided beneath to drop them. We look forward to reading from you.