NIGERIA
5.4 What foreign currency or exchange restrictions should foreign investors be aware of? Generally, there are no restrictions on currency convertibility and repatriation. The effect of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, chapter F34, the Laws of the Federation of Nigeria 2004 (the FEMM Act) and regulations made under that statute, is that a foreign investor wishing to remit dividends and profits offshore with funds from the official foreign exchange market must have inflowed investment capital through, and obtained a certificate of capital importation (CCI) evidencing such importation from, an authorised dealer of the Central Bank of Nigeria. The CCI is issued upon conversion of the inflow into naira.
5.5 Does the country prohibit domestic companies from doing business in any foreign jurisdictions? No, it does not.
7 Dispute resolution
7.1 How efficient are local courts’ enforcement and dispute resolution proceedings, and are there any procedural idiosyncrasies foreign investors must be aware of? The procedures for the enforcement of judgments and arbitral awards in Nigeria are fairly straightforward, and the courts are quite efficient in applying the relevant rules. Nigerian courts do not, however, have a very robust costs system to discourage frivolous challenges to enforcement proceedings. This means that enforcement proceedings in Nigerian courts can often be protracted or even truncated as a result of manifestly frivolous and dilatory tactics and applications employed by award or judgment debtors, given that the failure of such applications will not expose such debtors to significant penalties or liability in terms of costs.
6 Legal and regulatory framework
6.1 Are there any other FDI-specific laws that foreign investors must be aware of? The key legislation and regulations that affect FDI have been identified in our responses to the preceding questions. It should be noted that recently, discrete rules and regulations have been made by the SEC that seek to regulate private equity funds and managers, and that there are a variety of policies and initiatives that are being developed by the Nigerian government with the common objective of boosting FDI in Nigeria, for instance in relation to private equity and venture capital investments. In terms of draft legislation, the petroleum industry bill and the changes that it will introduce if passed as drafted will have important implications for FDI into the petroleum sector.
6.2 What challenges if any do investors find in getting certainty around local law and regulation? Where a statute or regulation is not clear, it is generally possible for investors or their local advisers to address verbal (or, for more definitive responses) written enquiries to regulators for clarification and guidance. The timing of the responses to such requests is, however, difficult to predict as this is entirely at the discretion of the relevant regulators.
7.2 Do the courts of the FDI jurisdiction respect foreign judgments and are arbitration awards enforceable in the jurisdiction? Yes, Nigerian courts recognise and enforce foreign judgments, if registered within a period of 12 months from the date on which the judgment is made. Although the Foreign Judgment Reciprocal Enforcement Act empowers the minister of justice to issue an order extending the provisions of the Act to judgments of any foreign country, if he is satisfied that judgments of superior courts in Nigeria will enjoy reciprocal recognition in that country. The effect of the minister’s order, when exercised, is to make judgments of such country enforceable within a period of six years from the date the judgment was made. The minister, however, has yet to exercise his power under the Act. Consequently, foreign judgments of any country will have to be registered and enforced within a period of 12 months from the dates on which such judgments are made.
Nigeria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards . Consequently, Nigerian courts will recognise and enforce foreign arbitral awards emanating from countries that have ratified the Convention.
7.3 Are judgments and arbitration awards from the FDI jurisdiction generally enforceable in other jurisdictions? We have no data regarding whether or not judgments and arbitral awards from Nigeria are enforced in other jurisdictions. Furthermore, the recognition and enforcement of Nigerian judgments and awards in other jurisdictions will be a question of the law of the jurisdictions involved.
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IFLR REPORT | FOREIGN DIRECT INVESTMENT 2014
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