Introduction

On 31st August 2022, the Federal Ministry of Interior (‘MOI’) released the Revised Handbook for Expatriate Quota Administration in Nigeria (‘The Revised Handbook’) which took effect from 24th January 2022. The Revised Handbook provides for the services, extant guidelines, and requirements relating to the issuance of business permits and expatriate quota approvals applicable to companies wholly owned by foreigners or foreign owned Joint venture companies in Nigeria.

The Revised Handbook made significant changes with regards to the administration and compliance on the grant of business permit and expatriate quota approvals as well as penalties for the breach of the guidelines. These key changes are discussed below.

Key changes

1. Revalidation of Permanent Until Reviewed Status (“PUR”):

Based on the Revised Handbook, all companies/organisations that were granted Expatriate Quota (EQ) positions on a PUR status are required to apply to the MOI through its Citizenship and Business Department for revalidation[^1]. According to the MOI, this exercise is intended to assist the MOI to ascertain the length of time for which each PUR instrument has been held, the extent of the utilization of the facility by respective organisations and it would facilitate the assessment of the continued eligibility of holders while repositioning the management of the instrument for greater efficiency and effectiveness^[2].

In addition, the application for revalidation was given a deadline for 28th February 2022 and non-compliance is tantamount to the cancellation of the PUR status. Note that companies that are no longer on their PUR status granted and do not wish for it to be reviewed do not need to take any steps in this regard.

2. Increase in the Share Capital for the Grant of Business Permit:

Prior to the revised handbook, companies seeking to apply for a business permit and expatriate quota positions were required to have a minimum share capital of ten million (10,000,000) shares. However, the revised handbook has increased the required minimum share capital for companies seeking to apply for business permit to an issued or paid-up share capital of one hundred million (100,000,000)^[3]. This represents a clear and significant 900% increase the former minimum of ten million Naira (N10,000,000). It is important to note that the value of equipment or machinery imported into the country for the purpose of conducting business could also form a portion of the paid-up capital to be invested in the country.

3. Commencement of Inspection on Companies:

Companies/organisations applying for a grant of EQ facility will be inspected by the MOI. Further to this, the MOI has introduced inspection fees which is renewable every 2 years.

The inspection fees are as itemized below:

• Inspection of Organisations that are located outside FCT that require flight and overnight stay- N150,000 (one hundred and fifty thousand Naira)
• Inspection of Organisations in FCT or out of state which require overnight stay and journeys by Road – N80,000 (eighty thousand Naira)
• Inspection of Organisations located in FCT and neighboring states that do not require flight or overnight stay – N45,000 (forty-five thousand Naira).

4. Mandatory Monthly Submission of Expatriate Quota Returns:

It is now mandatory for all companies with approved EQ facilities to submit monthly returns on the utilization of all approved EQ Positions issued to their respective organisations online. The monthly returns must contain the National Identification Number (NIN) of the expatriates and the Nigerian understudies. All submission must be online via www.ecitibiz.interior.gov.ng, as manual submission has been cancelled and shall no longer be accepted. This directive also takes effect from 24th January 2022.

5. Extension of Project-Tagged Expatriate Quota:

Companies may now apply to extend a Project-Tagged EQ facility. This enables them to extend the services/employment of expatriates for the sole purpose of executing a specified project. It may be extended for a minimum period of six (6) months and a maximum period of two (2) years^[4].

6. Update on Details of Company Representatives:

Companies are now required to update the contact details of their company representatives, whether full time employees or consultants, by forwarding a formal letter to the address below:

Office of the Deputy Director (E, I&I)

Citizenship and Business Department

Ground Floor, Room 110 Ministry of Interior,

Federal Secretariat Area 1,

Abuja

The letter must contain the representative’s full name, position held in the company, official email address, official phone numbers, alternative cell phone numbers, full mailing address for courier services, two copies of a recent passport photograph and photocopy of official identity card.

7. Charges/Fees and Penalties:

The Revised Handbook now introduces a significant increase in the penalties for offences set out in the handbook. For instance, failure of a corporate entity to renew its expatriate quota within the stipulated time attracts a fine of N3,000,000.00 (three million Naira).

Failure to engage Nigerian employees to understudy expatriate employees also attracts a fine of N3,000,000.00 (three million Naira) for each month that a position is occupied by an expatriate without an understudy. Similarly, if forged documents or false information is submitted in the monthly EQ returns, the author of the information is liable upon conviction to imprisonment for a term of three years or a fine of N2,000,000.00 (two million Naira) or both and if it is a corporate body, it will be a fine of N5,000,000.00 (five million Naira). Furthermore, the court may issue an order to wind up the company[5].

Conclusion

The Revised Handbook and its key changes are a clear indication that the Federal Government of Nigeria (FGN) is continuously focusing attention on the development and effectiveness on Business Permit and EQ administration for both the FGN and the companies/organsations utilizing its facilities

We are however of the considered opinion that in view of providing a seamless operation with clarity on the new EQ regime, the MOI needs to provide clarity on the effective date of the Revised Handbook as the same appears to take a retrospective approach that will have a negative impact on pending applications.

In view of this, we therefore advise foreign-owned organisations seeking to do business in Nigeria should monitor developments in the new EQ regime and take diligent steps to comply.

Dentons Acas-Law is available for support in this regard.

1. Paragraph 2.10 and 4.6 (i – xv) Revised Handbook
2. MOI Press release: Updated Guidelines on administration of Expatriate Quota and other Business Instruments 31st August 2022
3. Paragraph 3.0 (i) Revised Handbook
4. Paragraph 2.7, Revised Handbook
5. Paragraph 5.1, Revised Handbook