Entering the Nigeria market –

3 Options for a Global Company Hiring Employees in Nigeria

February 13, 2023


Multinationals seeking to hire remotely in Nigeria can leverage three possibilities:
1. By establishing a legal entity
2. By establishing a legal entity
3. By partnering with a Nigeria Employer of Record

Each of these has its perks, but partnering with a Nigeria EoR is particularly powerful in that it replaces your need to have an entity and can help you hire employees and contractors whenever and wherever the need arises.

As a global organisation looking to expand into or test Nigeria’s markets, hiring employees in Nigeria is one of the first challenges that immediately comes to the fore. Your organisation can only be as successful as the people behind your business operations, so you need the right talent to build your brand, handle business operations effectively, achieve your overarching organisational goals and maintain competitive advantage.

However, recruiting staff in Nigeria can be difficult when you must comply with a whole new set of labour laws and continue running your organisation simultaneously. While hiring in Nigeria may be challenging, this guide will help you understand how to hiring employees compliantly, works in Nigeria.

3 Options for a Global Company Hiring Staff in Nigeria

It is understandable for it to look complicated when you're based elsewhere and hoping to hire in Nigeria.

As mentioned earlier, one of Africa's powerhouse countries has different labour laws to your home country, which can make employing staff a tricky endeavour – if you're uncertain how to go about it.

There are three options to go about adding people to your team; you can do one of the following:

Hiring Employees in Nigeria - Option 1 :
Establish a Legal Entity

If you plan to set down roots or expand into Nigeria, the first option that comes to mind is setting up a legal entity. Doing so can enable your business position for long-term expansion and maximise the value of physical presence, but it can also be costly and time-consuming.

For example, if a U.S.A. technology company want to open a Nigeria headquarters, they may choose to set up a permanent presence in any of Nigeria's cities. Establishing such a presence ensures that the organisation has complete legal control and can grow exponentially.

However, handling payroll can become a challenge when establishing a legal entity. That's where Workforce Africa's Payroll Solution is helpful, as it allows your organisation to pay employees when you have a legal entity in Nigeria.

Similarly, we can help you avoid the hassles of a rigorous set-up process and seamlessly assist in establishing and expanding your company's geographic footprint in Nigeria and across twenty-three (23) other African countries.

If you are considering establishing a legal entity in Nigeria, here are five (5) steps to get the process done:

Determine the legal entity you want

Choose whether your company is a limited liability company, registered business name, Incorporated Trustees or Limited by Guarantee, Limited Partnership or Limited Liability Partnership – only available in Lagos.

Decide on a name

As an organisation expanding into Nigeria, you will likely already have a company name. However, you may decide on establishing a separate entity, subsidiary or a new business altogether. A name availability search and reservation is carried out at the Corporate Affairs Commission (CAC) and typically takes 1-5 days.

Complete your CAC documentation

This entails providing forms CAC 2, CAC 7, CAC 3 and CAC 2.1. Learn more about these forms here

Pay your stamp duties

Stamp duties are assessed on your organisation's share capital. 

File at the CAC. 

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While establishing a legal entity in Nigeria is certainly the right choice if it is part of your growth strategy, better alternatives are available if your goal is to hire the best global talent.

Hiring Employees in Nigeria - Option 2 :
Hire Talent as Contractors

For short-term needs, hiring independent contractors (freelancers) is a possible option. Moreover, laws on hiring contractors are significantly simpler in Nigeria.

Hiring contractors in Nigeria allows your organisation to quickly onboard highly skilled talent with few or no payroll contributions. Onboarding only takes a few days, and you and your talent have greater flexibility.

However, the risk of misclassification of workers may arise when employment officials see contractors as employees. 

Workforce Africa's Independent Contractor Management Service can help you avoid talent misclassification in Nigeria and across Africa that could result in expensive fines and reputational damage.

Why Hire Independent Contractors in Nigeria?

Here are some of the reasons for hiring contractors in Nigeria: 

It's the fastest way to hire

Hiring contractors is often a faster process as compared full-time employees and with EoRs like Workforce Africa; it is only a matter of days. This way, you can quickly attract the best talent without losing them to a rigorous paperwork process. 

Flexibility for you and your team

Hiring independent contractors in Nigeria often means you're not responsible for things like health insurance or paid time off. This gives you more flexibility and gives your talent more options.

Hiring Employees in Nigeria - Option 3 :
Partner with an Employer of Record (EOR) in Nigeria

A more pragmatic approach to employing staff in Nigeria is partnering with an employer of record. An employer of record (EoR) like Workforce Africa removes the guesswork from hiring staff in Nigeria and ensures your global organisation remains compliant with Nigerian labour laws.

An employer of record simplifies the onboarding and payment processes for global organisations. Rather than choosing to set up a legal entity in Nigeria, you can partner with an EoR and not have to worry about the sometimes-tedious processes of hiring employees.

For example, if the earlier-mentioned U.S.A. technology company want to hire Nigerian consultants for a new business offering, they would benefit from partnering with an EoR like Workforce Africa. In addition, workforce Africa ensures labour law compliance in Nigeria and other African countries, making it easy to expand and operate safely and efficiently.

In summary, Workforce Africa can help you:

Start Hiring Employees in Nigeria and Across Africa

As a global organisation, it can be a complex process recruiting staff and managing payroll in Nigeria.

In addition, managing compliance risks can take time away from business operations, which is why partnering with a global EoR like Workforce Africa is important to streamline your business growth in Nigeria and across Africa.

Our full suite of solutions makes it easier for global organisations to employ talent beyond borders. Through these solutions, your organisation can employ staff to onboard, pay, and retain your team while remaining compliant with indigenous labour laws.

Schedule a free consultation with us today to find out how your organisation can easily expand across the African market.

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