Business Registration Requirements
All employers operating in Nigeria must comply with mandatory registration requirements before commencing business operations. The primary regulatory body overseeing business registration is the Corporate Affairs Commission (CAC), established under the Companies and Allied Matters Act (CAMA) 2020.
Corporate Affairs Commission Registration
Employers must register their business entities with the CAC within the following categories:
- Companies Limited by Shares: Minimum share capital of NGN 100,000 for private companies
- Companies Limited by Guarantee: Typically used for non-profit organizations
- Business Names: For sole proprietorships and partnerships, with registration fees starting at NGN 10,000
- Incorporated Trustees: For associations and non-governmental organizations
The registration process requires submission of Form CAC 1.1 along with supporting documents including memorandum and articles of association, evidence of payment of filing fees, and completed statutory forms.
Tax Registration Obligations
Employers must obtain the following tax registrations:
- Tax Identification Number (TIN): Required from the Federal Inland Revenue Service (FIRS)
- State Internal Revenue Service Registration: For applicable state taxes
- Pay-As-You-Earn (PAYE) Registration: Mandatory for all employers with staff
- Value Added Tax (VAT) Registration: Required for businesses with annual turnover exceeding NGN 25 million
Employment Law Compliance
Nigerian employers must adhere to comprehensive employment legislation, primarily governed by the Labour Act, Cap L1, Laws of the Federation of Nigeria 2004, and various subsidiary regulations.
Employment Contract Requirements
Under Section 7 of the Labour Act, employers must provide written contracts for employment exceeding three months duration. These contracts must specify:
- Job description and duties
- Remuneration and payment terms
- Working hours and overtime provisions
- Leave entitlements and public holidays
- Termination procedures and notice periods
- Disciplinary procedures
Wage and Hour Obligations
The National Minimum Wage Act 2019 establishes a minimum wage of NGN 30,000 per month for employees in both public and private sectors. Additional wage obligations include:
- Maximum working hours: 8 hours per day, 40 hours per week (Section 17, Labour Act)
- Overtime compensation: Time and half for work exceeding normal hours
- Rest periods: Minimum 24 consecutive hours weekly rest
- Public holiday pay: Full wage payment for recognized public holidays
Workplace Safety and Health Standards
Employers in Nigeria are subject to comprehensive occupational safety and health requirements under the Factories Act, Cap F1, Laws of the Federation of Nigeria 2004, and various subsidiary regulations.
General Safety Obligations
The Factories Act mandates that employers maintain safe working environments through:
- Workplace inspection: Regular safety audits and hazard assessments
- Safety equipment provision: Personal protective equipment (PPE) at no cost to employees
- Training programs: Mandatory safety orientation and ongoing training
- Incident reporting: Immediate notification of workplace accidents to relevant authorities
- Safety committees: Establishment of joint health and safety committees in workplaces with 20+ employees
Specific Industry Requirements
Certain industries face additional regulatory oversight:
- Manufacturing: Factory registration with the Federal Ministry of Labour and Employment
- Construction: Compliance with building codes and construction safety regulations
- Oil and Gas: Department of Petroleum Resources (DPR) safety standards
- Mining: Nigerian Mining and Geosciences Society safety protocols
Health Standards and Medical Requirements
Employers must ensure workplace health standards including:
- Adequate ventilation, lighting, and sanitation facilities
- Provision of first aid facilities and trained personnel
- Regular health screenings for employees in high-risk occupations
- Maintenance of health and safety records for minimum five years
Social Security and Insurance Obligations
Pension Contributions
Under the Pension Reform Act 2014, employers with 15 or more employees must:
- Register with a licensed Pension Fund Administrator (PFA)
- Contribute minimum 10% of employee's monthly emolument
- Ensure employee contributes minimum 8% of monthly emolument
- Remit contributions within 7 days of salary payment
National Housing Fund
The National Housing Fund Act requires employers to deduct 2.5% of employee salaries earning above NGN 3,000 monthly and remit to the Federal Mortgage Bank of Nigeria.
Industrial Training Fund
Companies with 25 or more employees must contribute 1% of annual payroll to the Industrial Training Fund (ITF) for employee skills development programs.
Record Keeping and Reporting Requirements
Nigerian employers must maintain comprehensive employment records including:
Mandatory Employment Records
- Employee registers: Names, addresses, job descriptions, and employment dates
- Wage records: Detailed payroll information including deductions
- Working time records: Hours worked, overtime, and leave taken
- Health and safety logs: Incident reports, safety training records, and medical examinations
- Tax records: PAYE deductions, remittances, and annual returns
Statutory Returns and Filings
Regular compliance reporting includes:
- Monthly PAYE returns to relevant tax authorities
- Quarterly pension contribution schedules
- Annual returns to Corporate Affairs Commission
- ITF annual contribution returns
- Labour inspection compliance certificates (to be verified for specific renewal periods)
Enforcement and Penalties
Non-compliance with employer obligations results in significant penalties:
- Labour Act violations: Fines up to NGN 100 per day of continued non-compliance
- Tax non-compliance: Penalties ranging from 5-200% of outstanding amounts
- Pension defaults: 2% monthly penalty on outstanding contributions plus 15% annual interest
- Safety violations: Fines and potential criminal prosecution under the Factories Act
The Federal Ministry of Labour and Employment conducts regular inspections to ensure compliance, with inspectors authorized to issue improvement notices and stop-work orders for serious violations.
Recent Legislative Updates
Employers should note recent changes including the Companies and Allied Matters Act 2020, which streamlined business registration processes, and ongoing discussions regarding updates to the Labour Act to address modern workplace challenges including remote work arrangements and gig economy employment (specific provisions to be verified upon final passage).