IMPROVING THE EASE OF DOING BUSINESS IN THE FREE ZONES February 2017
What is ease of doing business? Ease of doing business is an index published by the World Bank. It is an aggregate figure that includes different parameters which define the ease of doing business in a country. These parameters indicate better, usually simpler, regulations for businesses and stronger protections of property rights within a country. These parameters/indicators used for the assessment include the following: Ease of starting a business in a country/region. - Ease of getting connected to electricity for industrial and commercial purposes. - Ease of accessing credit for business purpose. - Ease of enforcing contractual obligation in a country. - Ease of getting commercial disputes resolved. - Ease of obtaining project approvals from government. - Ease of getting environmental clearance for a project. - Ease of making tax payment. - How simple are the direct taxation norms? -
1.0 Registration of business Documents Required for Registration as a Free Zone Enterprise NIGERIAN REGISTERED COMPANIES: Letter of Application - DPR Certificate - Certificate of Incorporation - Memorandum and Articles of Association - Company Brochure/Profile - Contact Person, Designation, phone Numbers and Address of Company - Report of the Feasibility Studies of the intended Investment in the Zone (Business Plan) 3-5 years - Financial Profile - Personnel Profile - Sources of funding (Foreign) – Evidence of Capital Importation - Company’s last three years Audited Account (Not applicable to Companies less than one year in operation) - Evidence of lease of land/office space within the Free Zone - Payment of the licence and processing fees. -
1.0 Registration of business Documents Required for Registration as a Free Zone Enterprise OFFSHORE COMPANIES: A Notarized Copy of the Company’s Overseas Incorporation documents - Memorandum and Articles of Association - Company Brochure/Profile - Contact Person, Designation, phone Numbers and Address of Company - Report of the Feasibility Studies of the intended Investment in the Zone (Business Plan) 3-5 years - Financial Profile - Personnel Profile (foreign staff profile and local staff profile - Sources of funding – Evidence of Capital Importation. - Company’s last three years Audited Account (Not applicable to Companies less Than one year in operation) - Evidence of lease of land /office space within the Free Zone - All Companies registered by the Authority shall bear the Acronym FZE (Free Zone Enterprise)
1.2. Registration and licensing: The OGFZA Position For Licensing and permits, qualified investors will receive approval to commence business within 30 days- Sections 9 &10 of the OGFZA Act, 2010 and Article 40(3) of the OGFZA Regulations, 2003. Comparative Analysis: Other Countries Ras Al Khaima Free Zone, U.A.E. – 30 DAYS FOR RENEWAL OF LICENSE - Dubai Multi Commodities Centre U.A.E. – 15 -31 DAYS FOR LICENSE - Gabon Special Economic Zone - – 21 DAYS FOR LICENSE - Ghana Free Zone – 28 DAYS FOR LICENSE -
1.3 Renewal of Licenses All Operating licenses expire on the 31ST of December and the process of renewal will require the supply of the following Documents/ Information while Filing Annual Returns, Regulation 35 of the OGFZA Regulations, 2003. Particulars of Directors - Capital/Stock/Shares Profile - Source of Raw Materials - Profile of Service Providers/Vendors/Contractors - Volume/Value of imports - Primary/Secondary Contacts details - Audited Accounts - Staff/Personnel Profile (Foreign Staff Profile and local staff profile) - Evidence of remittance of PAYE, Withholding Tax (WHT), VAT and ITF Contributions - Employment Generated - Skills acquired/Technology Transfer - Details of additional Foreign Direct Investment. - New Projects Information (if any) - Evidence of current land lease or office space - Payment of the required fees as contained in the attached (Free Zones Tariffs & Other Charges) Order 2015. -
1.4 Cost of registration – as listed below See Free Zone (Tariffs & Other Charges) Order 2015 Application Form/Processing Zone/Enterprise Enterprise Application/Processing $5,000.00 Registration $25,000.00 $25,000.00 Renewal Zones and Sub-Zones Application $5,000.00 Registration $250,000.00 Renewal $50,000.00 Free Zones Developer (s) Application $5,000.00 Registration $200,000.00 Renewal $50,000.00 Extension Application $5,000.00 Registration $100,000.00 Renewal $50,000.00 75% Duty Rebate License Application $5,000.00 Registration $15,000.00 Renewal $15,000.00
1.4.1 Cost of registration – as listed below LICENSING OF SPECIAL ACTIVITIES Refineries Application $5,000.00 Registration $100,000.00 Renewal $40,000.00 Petrochemicals Application $5,000.00 Registration $100,000.00 Renewal $40,000.00 Assembly Plants Application $5,000.00 Registration $100,000.00 Renewal $40,000.00 Independent Power Plants Application $5,000.00 Registration $100,000.00 Renewal $40,000.00 Fertilizer Plant Application $5,000.00 Registration $100,000.00 Renewal $40,000.00 Tank Farms Application $5,000.00 Registration $50,000.00 Renewal $40,000.00
2.0 Procedure for Registering a Property in the Free Zone Application to the MD/CEO for registration of an investor/licensee’s property attaching its particulars. - Evidence of place of business verifiable by the Authority within the Free zone. -
3.0 Taxes in the Free Zones 3.1 EXEMPTION OF TAXES All the Licensed Enterprises are exempted from the payment of all Federal, State and Local Government taxes, rates and levies 3.2 APPLICABLE TAXES Employees in the Free Zones are expected to pay PAYE, which is deducted and remitted directly to the appropriate - tax Authority by investors Investors are to deduct Withholding Tax (WHT), VAT from unlicensed companies/service providers and remit same to - the appropriate Tax Authorities ALL LICENCED COMPANIES ARE EXEMPTED FROM WITHOLDING TAX AND VAT
4.0 Enforcing contract 4.1 What Are The Procedures Required To Resolve Conflict Over Contracts – Section 12 and 13 of the OGZFA Regulations, 2003 By reconciliation between parties - By mediations - Arbitration - See Regulation 13 of the OGFZA Regulations, 2003 4.2 Number Of Working Days It Takes To Resolve Disputes Minimum of 14 days with the use of ADR methods above – listed. - Where the dispute remains unresolved by the above ADR methods an aggrieved party is by law allowed to seek - redress in court. However the Authority shall by the extant laws be a party to any action instituted. Regulation 14 of the OGFZA Regulations, 2003.
5 .0 Challenges Failure of investors to meet requirements for renewal of licences on time and supply of other information when 1. required. Late/Incomplete submission of annual returns documents . 2. The incessant incursions into the free zone by tax agencies without recourse to the Authority. 1. Investors’ direct dealings with other agencies without recourse to the Authority. 2. Conflicting and ambiguous legal provisions 3.
6 .0 Way forward OUR COMMITMENT TO REFORMS: To Eliminate bottlenecks in granting/renewal of licenses by deploying operating procedures supported by ICT Platforms. • Registration process will be web-based and made accessible online to enable prospective investors fill and submit relevant information and documentation on line. • Licenses to be granted within 21 working days as against the current position of 30 days. • Renewal of Licences will be concluded within 3 days To Address power supply within the Zones based on a PPP Framework. To improve access to relevant information by our clients • Publication of brochures, newsletters etc • Our Website has been updated and repackaged OGFZA will interface between our clients and other Government Agencies • All Disputes on Taxes and other matters between our clients and other Government agencies should be referred OGFZA for resolution To Deepen aftercare services for the clients To Empower our staff to enhance professionalism To strengthen our legal framework in order to eliminate areas of conflict and ambiguity
Contact Us OGFZA Onne Port Complex Onne RIV Nigeria +234-700-OGFZA Visit our website at www.ogfza.gov.ng for more details.
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