Investing in Nigeria 2026: What Changed, What It Pays and What to Watch
NIGERIA · EXPAT GUIDE
Key Facts
- —The tax reset Four new acts took effect on 1 January 2026. Individuals pay up to 25 percent on gains, companies 30.
- —The share rule Gains are taxed only where proceeds top US$113,000 and the gain itself tops US$7,540.
- —The new reach Offshore share sales that change control of a local company are now taxable.
- —The market The main index is up 56 percent this year and was the best performer worldwide in dollars.
- —The carry One-year bills yield about 19.9 percent against inflation of 15.4 percent.
- —The catch The rally is domestic. The foreign share of turnover fell from 22 percent to 12.
The best performing stock market in the world this year sits in a country that rewrote its entire tax code on 1 January. Both facts matter, and the second is less widely understood.
Anyone investing in Nigeria this year is dealing with a country that replaced its tax code on 1 January 2026. Four acts took effect at once.
The revenue service itself was renamed and restructured in the process. Any guide still referring to the old federal inland revenue service is out of date.
The second thing to know is the market. The main index has risen about 56 percent this year.
Measured in dollars it was the best performing equity market in the world. Currency strength did part of that work.
The Currency Has Strengthened
The official rate was 1,326.52 naira to the dollar on 11 September 2026. Note that the following day was a Saturday, so no official rate was set.
The currency opened the year at 1,430.35 and has appreciated about eight percent since. That reverses a decade of the opposite.
External reserves reached US$54.41 billion on 10 September, the highest of the year. They were US$32.11 billion at the trough in April 2024.
The float of June 2023 has been followed by an electronic matching system for interbank trading and a formal currency code. Daily turnover regularly exceeds US$1 billion.
Thousands of bureau de change licences were revoked and only 82 remain fully licensed. Those that survive now buy through the banks inside the official market.
What the New Tax Law Does
Capital gains no longer have their own flat rate. For individuals they fold into total income and are taxed on the scale, which runs from zero to 25 percent.
For companies they fold into profits and are taxed at 30 percent. Anyone quoting a single rate of 30 percent for everybody has it wrong.
The thresholds on share disposals are cumulative. Proceeds must exceed 150 million naira, about US$113,000, in a twelve-month period.
The gain itself must also exceed 10 million naira, some US$7,540. Fall short on either limb and nothing is chargeable.
In dollars that is about US$113,000 of proceeds and US$7,540 of gain. Those are low bars for an institution and meaningful ones for a private investor.
There is relief where the proceeds are reinvested. The mechanics of it are not clearly published, so take advice before relying on it.
The Provision Nobody Expected
This is the change that matters most to a foreign structure. The act taxes gains on a disposal of shares by a non-resident where the disposal changes the ownership of a local company.
It also catches a change of ownership, title or interest in any asset located in the country. Selling the offshore holding company is no longer outside the net.
Digital assets are treated as situated locally where the beneficial owner is resident or has a permanent establishment. The revenue service published a 28-page guideline on taxing them on 31 July 2026.
That guideline splits virtual assets into six categories. Staking rewards and decentralised finance yield are taxable as income when received.
What Is Exempt
Income from federal and state government bonds is exempt. That is a significant carve-out and it does not obviously extend to treasury bills, so do not assume it does.
A four percent development levy applies to assessable profits of local companies. Non-resident companies are outside it, which is worth knowing.
Gains made by angel investors, venture funds and private equity on labelled startups are exempt. The assets must have been held locally for at least 24 months.
Value added tax stayed at 7.5 percent. The increases trailed in the draft bills did not survive into law.
The Market
The index stood at 243,052.74 on 11 September, against 155,613 at the end of 2025. Equity market capitalisation was 157.59 trillion naira, about US$118.8 billion.
Note that the market is below its May peak, when the index passed 250,000. This has not been a straight line.
Index providers have taken notice. FTSE Russell restored frontier market status with effect from September 2026, and another provider placed the country on a 2027 watchlist.
Settlement moved to two days in December 2025 and is moving to one. Since August 2026 foreign portfolio investors are not required to prefund their trades.
But read the participation data carefully. Foreign investors were 22 percent of turnover in 2025 and 12.33 percent in the first five months of 2026.
Those are gross transactions rather than net flows. Either way, the 2026 rally in Nigeria has been driven by domestic money.
Fixed Income
One-year treasury bills cleared at a discount rate of 16.62 percent on 9 September. That works out at a true yield near 19.9 percent.
Six-month paper yields about 18 percent and three-month about 17. Those are computed from the published discount rates.
Set that against headline inflation of 15.43 percent in July and the real return is roughly four and a half points. The currency has been a tailwind rather than a drag.
The one-year auction was more than five times oversubscribed. Yields have fallen steadily since July, so the edge is compressing from both ends.
The policy rate is 26.5 percent, cut from 27 in February 2026 and held since. Food inflation, unusually, is rising while the headline falls.
Dividends, Withholding and Treaties
Dividends and interest paid to non-residents carry 10 percent withholding tax. Royalties carry five percent.
Whether that is final for dividends and interest is not clearly stated in the new law. Treat it as generally final and confirm it for your own structure.
Treaty relief cuts the rate to 7.5 percent for residents of China, Singapore, South Africa, Spain and Sweden. Britain and the Netherlands get no advantage at all.
That last point matters because those two are the usual holding jurisdictions. The country also now participates in automatic exchange of financial information.
Direct Investment and Getting Money Out
Foreign-owned companies register with the investment promotion commission. The fee is 150,000 naira, about US$113, and processing is stated at 48 hours.
A business permit from the interior ministry is separate and mandatory. The expatriate quota runs three years initially and is renewable within a seven-year life.
Pioneer status has been replaced by a new incentive giving a five percent tax credit on qualifying capital expenditure. Approval runs through three stages over about sixteen weeks.
The document that governs repatriation is the certificate of capital importation, now issued electronically. It entitles you to buy foreign currency in the official market to send profits and capital home.
Understand precisely what it does not do. It guarantees access to the market, not a rate and not a timetable.
The Risk Worth Understanding
The forward contract episode of 2023 and 2024 is the clearest guide to how this country behaves. A forensic audit found significant irregularities in undelivered contracts.
Valid contracts were honoured and paid. Invalid ones were cancelled, the naira received was returned, and there is no right of appeal.
The central bank stated plainly that no right to foreign currency arises where the underlying transaction is tainted by illegality or non-compliance. The matter is closed.
The lesson for a foreign investor is not that Nigeria defaults. It is that documentation discipline decides whether your claim is enforceable, so get the capital importation certificate right on the way in.
Policy reversal remains the honest headline risk. The same institution that ran an eight-year import restriction regime ran the liberalisation that followed it.
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Frequently Asked Questions
How are capital gains taxed in Nigeria?
Individuals pay on the personal scale, zero to 25 percent. Companies pay 30 percent. The old flat rate of 10 percent is gone.
When are share gains taxable?
Only where proceeds exceed about US$113,000 in a twelve-month period and the gain itself exceeds about US$7,540. Both limbs must be met.
Are offshore share sales caught?
Yes. A disposal by a non-resident is chargeable where it changes the ownership of a local company or of an asset located there.
What do government bonds and bills yield?
One-year treasury bills cleared near a 19.9 percent true yield in September, against inflation of 15.43 percent.
Can I repatriate profits?
Yes, through the certificate of capital importation, which gives access to the official currency market. It does not guarantee a rate or a timetable.
Sources: Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Investments and Securities Act 2025, Central Bank of Nigeria, Nigerian Exchange Group, Securities and Exchange Commission, Nigeria Revenue Service, NIPC, FTSE Russell.
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