Starting an import and export business in the country is beyond just wanting to register a company. It involves tying up all loose ends and ensuring you’re completely in line with the law.
While starting an import and export business in the country can be lucrative depending on what channel you choose to focus on, cutting corners can make you lose a whole lot of money when you get discovered.
If you want to start and grow a successful import and export business in the country without running into major problems with the law, here are 11 legal requirements every import and export business in Nigeria must completely take care of:
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1. Register The Business:
The first step to start any business in Nigeria or Africa is to register it legally. Registering your business makes you able to open a bank account for it and carry out several business activities, including starting an import and export business in Nigeria.
To register your import and export business in Nigeria, a name search would first be carried out, which would go on to determine if your business name is available. If the search is successful you’d be able to complete the registration and continue the process of obtaining an import and export license in Nigeria.
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2. Have A Minimum Of Two Directors:
In the business registration process, there must be a minimum of two directors if you’re registering a company. If you’re registering as an enterprise instead, you may be the only one running the business, and so, be listed as the only party, whereas when you register as a limited liability company, you don’t have a choice since the law stipulates there must be at least two directors for a Limited Liability Company to be registered.
3. Have A Registered Office Address:
As with any other type of business, if you’re starting an import and export business in Nigeria, you must have a registered office address. At the start of your business, you may have to use your home address as the office address, since you may have little to no cash to afford an office till your business scales.
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4. Obtain A Tax Identification Number (TIN):
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After registering your business, the next step is to obtain a Tax Identification Number (TIN). This ensures you’re a registered taxpayer in the country and is your first step towards becoming tax compliant. At various stages of your business, your tax identification number would be required, which you’d have to submit whenever it is requested.
5. Register With The Nigerian Export Promotion Council (NEPC):
One of the most important steps of registering an import and export business in Nigeria is to register with the Nigerian Export Promotion Council (NEPC). The registration is totally compulsory, as you would not be able to run an import and export business in Nigeria without it.
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To register with the Nigerian Export Promotion Council (NEPC), you can first visit their website located at www.nepc.gov.ng and give a call to their office locations in your state in Nigeria.
Unlike many other government agencies that rarely pick their calls or even refuse to help out without you being present, the Nigerian Export Promotion Council (NEPC) is very responsive and helpful.
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Requirements For Import/Export Business
6. Register With Customs By Completing The Form NXP:
The next step is to register with customs by completing the Form NXP. This registration is done with an Authorized Dealer (any Commercial or Merchant Bank) of your choice. According to the customs website, some reasons for completing the Form NXP include:
- Those goods to be exported meet with the buyer’s expectation (order) since the goods will be subjected to inspection, conducted by relevant Government agencies. Depending on the export items, these include Plant Quarantine, (Federal Ministry of Agriculture), Federal Produce Inspection Service (Federal Ministry of Commerce and Tourism), National Agency for Food and Drugs (Federal Ministry of Health), and Standards Organization of Nigeria (SON).
- That only goods that have satisfied the buyer’s order have been shipped – the Nigeria Customs Service on shipment will duly certify a copy of the form.
- That proceeds (payment) due to the exporter are duly repatriated within 90 days of shipment of goods and credited to his Domiciliary Account maintained with the Authorized Dealer that proceeds or registered the Form NXP.
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Requirements For Import/Export Business
7. Obtain Special Licences And Permits For The Goods You’re Dealing In:
To run an import and export business in Nigeria, you have to obtain the proper licenses for the goods you’re either importing or exporting. For example, you cannot import car trackers into Nigeria if you don’t have a license from the Nigerian Communications Commission (NCC) to import them.
Doing so without a license could result in you losing all the investment you put into getting them into the country.
So before you decide what to import into Nigeria, you must ensure you have the complete licenses and permits to bring those goods in.
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Requirements For Import/Export Business
8. Obtain Full Licences From The Countries You’re Going To Be Exporting To Or Importing From:
Just as you’re to obtain the necessary licenses to import certain types of goods into the country, you’re also required to obtain the required license in whatever country you’re exporting your goods to.
Not complying with this can result in a loss of investments and possible prosecution in the said country.
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Requirements For Import/Export Business
9. Verify Your Products Are Not On The Prohibited Goods List:
This is a very important part of running an import and export business in the country. Every product that you import or export must be cross-checked thoroughly to ensure they’re not on the “prohibited goods list”. Importing or exporting goods listed in this category will most certainly get you arrested and probably prosecuted.
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10. Get Your Insurance Covered:
Always pay an insurance premium for any product that is exported or imported, so you can recoup your investments in the event that the goods get damaged or worse, while in transit.
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Requirements For Import/Export Business
11. Partner With A Freight Forwarding Service Company To Ship Your Goods:
Lastly, find a good freight forwarding service company (shipping company) to always ship your goods with. They’re usually very experienced and have faced almost all types of issues you stand to face when running your business. Their years of experience spent running their businesses will provide you with valuable information, especially on what type of items to export, import, or totally avoid.
A shipping company that has been in the business for many years is usually a better choice to go with than new companies that have lesser experience and have shipped products to fewer countries.