THE LEGAL FRAMEWORK FOR INVESTOR PROTECTION IN NIGERIA
1. THE 1999 CONSTITUTION OF THE FEDERAL REPUBLIC OF NIGERIA
This is one of the major legal frameworks for the protection of investors, particularly foreign investors in Nigeria. The protection guaranteed by the Constitution, particularly Chapter 4, unarguably extends to investors and they are therefore entitled to equal, fair and humane treatment. It can be agreed that the guarantee of the welfare of an investor, especially one engaging in Foreign Direct Investment which might require his/her physical presence, is not just essential but mandatory.
The Constitutional safeguards are geared towards ensuring that investors, especially those domiciled in Nigeria or that frequently visit the country, feel safe enough to conduct business. These include the right to dignity of the human person, freedom from discrimination, right to form assembly, freedom of expression and freedom of speech. Notable amongst these is also the right to own property.
2. NIGERIA INVESTMENT PROMOTION COMMISSION ACT (NIPC ACT) CAP N117 LFN 2004
This Act also provides extensive protection for investors in Nigeria. It provides that foreign investors are allowed to freely invest in the economy either through Foreign Direct Investment or Foreign Portfolio Investment.
In an effort to protect investors and promote investment, shares can be made in convertible currency and the returns on these shares are made free of charges, also in the convertible currency where the investor so requires.
The Act further guarantees freedom from expropriation or nationalization. This is an essential protection as it ensures that the assets of an investor cannot be converted by the government into a public-owned property and by extension, precludes the government from assuming ownership of same.
An extension of this provision is that the investor cannot be mandated to surrender ownership of his assets to any governmental agency except where such request is made by the Federal government for overriding public interest and adequate compensation is made without unnecessary delay.
3. THE ARBITRATION AND MEDIATION ACT 2023
This is another legal framework for the protection of investors in Nigeria. Investors, particularly foreign investors, are granted the freedom to decide which mode of settlement of dispute should be explored as opposed to litigation which can be by arbitration or conciliation. It goes further to provide a system that gives a unified method of arbitration and conciliation arising from disputes that are commercial or transactional in nature. It further admits the enforcement of foreign arbitral award subject to the provisions of the Act.
4. FOREIGN EXCHANGE (MONITORING AND MISCELLANEOUS PROVISIONS) ACT CAP. F34 LFN 2004
This Act authorizes investment in foreign currency provided it is through an authorized dealer. The provision of authorized dealers and licensing of same is geared towards ensuring that investors do not get swindled. There is also the additional requirement of the issuance of a Capital Importation certificate to further authenticate the transaction.
The Act further guarantees the repatriation of profit in the same currency in relation to dividend or even the capital itself. This repatriation is 100% repatriation guarantee available at any time.
5. THE IMMIGRATION REGULATION 2017
The regulation introduces the issuance of Investor Visa which is open to all investors who invest within the threshold provided. The visa is valid for five years and can subsequently be renewed. This visa grants right of entry and domicile to the holder.
6. DOUBLE TAXATION AGREEMENTS
These are international treaties or legal arrangements that Nigeria is a signatory to. These agreements allow income and capital gains to be precluded from double taxation. A DTA is a form of tax relief to ensure that investors are protected from double taxation relating to their capital gains. However, the investor must be from a state party to the treaty.
7. THE ECOWAS TRADE LIBERATION SCHEME
Nigeria is a signatory to this treaty and is regulated by the contents and provisions of the said treaty. This treaty ensures the free movement of goods within the borders of West African member states, including Nigeria and exclusion from payment of custom duties on goods produced by or within the boundaries of member states.
8. INTERNATIONAL CONVENTIONS
Nigeria is a signatory to a host of International Conventions for the protection of investors within member states. Some of them include the Convention for Settlement of Investment Disputes, the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, etc. These Conventions provide protection for investors in the event of a dispute arising from the investment or related commercial transactions, especially when the disputes involve the government as the neutrality of the dispute resolution must not be in question.