Introduction to the Real Estate sector in Nigeria
Nigeria’s real estate sector is one of her most active and commercially significant industries, given the rising housing needs both residential, industrial and mixed-use purposes. The Sector is driven by rapid and near-unchecked urbanization, explosive population growth, and hyper-sustained demand for properties across the country both for investment and usage purposes. Nigeria’s major economic hubs like Lagos, Abuja and Port Harcourt, continues to attract both local and foreign capital across property development, management and real estate investment activities.
However, despite its commercial viability, the real estate sector in Nigeria is regulated, and operating a real estate company in Nigeria extends beyond just incorporating an entity with the Corporate Affairs Commission, then setting up an office and operating therefrom in the sector. There are post-registration licensing requirements real estate companies in Nigeria are expected to meet in order to operate, depending on their specific real estate activities in Nigeria and depending on the State they operate in. Thus, for investors in the sector, understanding the regulatory and legal framework governing real estate operations in Nigeria is critical. Early structuring decisions, including the objectives of the company being incorporated, can have implications for post-registration licensing and compliance exposure.
This article outlines the key legal and regulatory requirements for registering and operating a real estate company in Nigeria, with a focus on entity incorporation, post-incorporation licensing, and other compliance considerations relevant to both local and internal investors.
What Qualifies as a Real Estate Company under Nigerian Law
Under Nigerian law, there is no single statute that specifically or expresses defines “a real estate company”. Instead, a business is treated as a real estate company based off its stated business objectives, be it real estate project management, property development, property management, real estate investment and asset management; leasing and letting, real estate brokerage or agency, real estate consultancy, among other activities that specifically deal on real estate activities in Nigeria. A company may have generic business objectives but still be treated as a real estate company if it has stated real estate-related activities in its objectives once it commences its business operations.
From a regulatory perspective, certain real estate activities – particularly brokerage, property management and agency – are more tightly regulated than passive real estate ownership or investment…that is, for companies whose objectives are to buy and own real estate, or act as investment vehicles holding real estate. As a result, the classification of a company becomes relevant at point of licensing or regulatory inspection, not necessarily at point of incorporation.
Who can Register a Real Estate Company in Nigeria
Nigerian Individuals and Companies
Nigerian citizens and Nigerian registered companies are permitted to register and incorporate real estate companies in Nigeria without restrictions, subject to compliance with applicable regulatory requirements. Such persons and Nigeria-registered entities can register and carry on real estate business activities in Nigeria in accordance with the objects of their Memorandum as approved by the Corporate Affairs Commission during incorporation of the company. Despite these general permissions, there may be post-incorporation licensing requirements and registrations before they can carry on real estate-related activities – especially as regards property development, management – through their registered entities.
Foreign-owned and partially foreign-controlled companies
As in other sectors, foreigners are permitted to register and operate real estate companies in Nigeria, subject to compliance with all regulatory requirements for foreign-owned companies in Nigeria. Foreigners can register such companies either as wholly foreign-owned, or in collaboration with locals (Nigerians). Foreigners seeking to register real estate companies in Nigeria should be aware that such companies are required to comply with requirements such as registration with the NIPC; application for and obtaining business permits from the Federal Ministry of Trade, Commerce and Industry; importing their share capital into Nigeria through authorized dealers and obtaining certificate of capital importation; applying for expatriate quotas, among others.
Share capital and ownership considerations
There are generally no restrictions to the share capital of companies seeking to operate in the Real Estate sector in Nigeria. As such, Nigerian-owned Real Estate companies can operate with modest share capital to ply their real estate activities in Nigeria.
By contrast, companies with foreign participation are required to have a much higher minimum share capital threshold before they can register such companies with the Corporate Affairs Commission to reflect foreign participation in the company. The minimum share capital for companies with foreign participation is ₦100,000,000 (One Hundred Million Naira) and this sum must be reflected as the company’s share capital at the time of incorporation with the CAC.
Incorporating a real estate company in Nigeria – requirements for incorporation
The foundational step for a company in Nigeria is incorporation through the Corporate Affairs Commission as provided under the Companies and Allied Matters Act. Regardless of what type of real estate activities the proposed company wishes to carry out, it has to first register as a company with the CAC. The key incorporation requirements are outlined below:
- Proposed company name:
Applicants must submit proposed company name for approval by the CAC. The name should align with the real estate company’s activities and comply with CAC naming rules regarding the qualifiers for name reservation for registration. These requirements have, in recent times, become stricter, all due to the automated parameters set for the CAC’s Artificial Intelligence. It is this AI that scrutinizes submitted names for compliance monitoring, compares the name chosen against previously registered and reserved names, and conduct name conflict checks. Once the proposed name passed through all checks, the AI marks the name available for reservation and same can then be reserved for registration. This name reservation lasts for a period of 60 days from date of reservation of name and the real estate company should be registered within this period, else the name will “lapse” and be recycled for future reservation by other interested parties seeking to use it. - Registered office address and other contact details for the company:
The company must provide a valid, physically verifiable Nigerian address as its registered address. This address serves as the official business location of the company for regulatory notices and correspondence. It will also appear on CAC public-facing records. The company may also have a head office different from its registered address and can also have branch offices, if the promoters of the company so wishes. - Particulars of directors:
Following the new company regime in Nigeria, companies can have just a single member, and real estate companies are not exempt from this. Thus, a real estate company seeking incorporation can have one director at incorporation. There can be more than one director, but given Nigeria’s new corporate regime that allows for single-member companies, the minimum number of directors is one. The directors of the company are required to provide their full names, service address, residential address, clear signatures, valid government-issued ID, phone number, email address, age, gender and occupation. - Particulars of shareholders (members):
Under the current corporate law regime, solopreneurs can now register companies, including real estate companies. At Kabbiz Legal, we have registered a couple of real estate companies with solo shareholders. However, the shareholders have to provide their personally identifiable details for registration such as: full name, service address, residential address, email address, date of birth, valid ID, phone number, gender, and occupation. If the proposed shareholders are companies, then the corporate shareholder will need to provide its certificate of incorporation, board resolution signed by the directors authorizing the company to subscribe to the proposed new company’s shares, and the personal details of a human representative of the company. - Issued share capital:
As aforementioned, locals who wish to register a real estate company in Nigeria can register such companies with conservating share capital, depending on how they want to structure their operations. However, if the company will have foreign participation, the issued share capital will increase to a minimum of ₦100 Million and be fully issued. - Incorporation fees payable to the CAC and Stamp duties payable to the FIRS: When registering a real estate company as with any other type of entity in Nigeria, there are applicable fees which apply for name reservation, incorporation fee to be paid to the CAC, and stamp duties to be paid to the FIRS – these are all dependent on the share capital of the company.
Step-by-Step Process for Incorporating a Real Estate Company in Nigeria
Reservation of Company Name
The incorporation process begins with a name availability check on the Corporate Affairs Commission (CAC) portal to confirm that the proposed real estate company name is not identical or confusingly similar to an existing registered name. The proposed name must also comply with CAC naming guidelines. Once approved, the name is reserved upon payment of the prescribed fee and remains valid for a limited period within which the incorporation application must be completed.
Preparation of Incorporation Information and Documents
Following name reservation, the required incorporation details are collated and prepared. These include identification and signature details of shareholders and directors, the company’s registered office address, shareholding structure, and carefully drafted business objects reflecting real estate–related activities. Where a shareholder is a corporate entity, additional corporate documentation and resolutions are required.
Submission of Application for the Real Estate Company
The company registration application is then filed electronically with the CAC using the reserved company name. All statutory information and documents must be submitted within the validity period of the name reservation, failing which the reserved name will lapse and a fresh reservation will be required.
Issuance of Certificate of Incorporation and Statutory Documents
Upon successful review and approval of the application, the CAC issues the Certificate of Incorporation together with the company’s certified statutory documents, including the Memorandum and Articles of Association and the CAC status report. At this stage, the real estate company is formally incorporated and legally recognised under Nigerian law.
Post-Incorporation Regulatory Requirements
Unlike traditional businesses, real estate companies carrying on activities in the real estate sector are subject to additional regulatory licensing before they can commence operations in Nigeria, open and operate bank accounts, and advertise their services to prospects in Nigeria.
Tax Registration with the Federal Inland Revenue Service (FIRS)
Following incorporation, a real estate company is required to register with the Federal Inland Revenue Service for tax onboarding purposes. This includes obtaining a Tax Identification Number (TIN) and registering on the Tax system for filing of applicable taxes. Real estate companies are subject to corporate income tax at determined thresholds and, depending on the nature of their transactions, may also be required to register for Value Added Tax and comply with withholding tax obligations.
Tax registration is a foundational compliance step and is required before the company can open corporate bank accounts, apply for regulatory licences, or enter into certain commercial arrangements.
Registration as a Designated Non-Financial Institution (DNFI) with SCUML
Real estate companies in Nigeria are classified as Designated Non-Financial Institutions under the anti-money laundering framework. As a result, they are required to register with the Special Control Unit against Money Laundering (SCUML) and obtain a SCUML certificate.
SCUML registration is mandatory for real estate businesses involved in property transactions, brokerage, development, or asset management. The certificate is frequently requested by banks and counterparties and is a prerequisite for maintaining compliant banking relationships.
Sector-Specific Regulatory Registrations and Professional Bodies
Registration with the Real Estate Developers Association of Nigeria (REDAN)
Real estate companies engaged in property development are usually register with the Real Estate Developers Association of Nigeria (REDAN). REDAN functions as the umbrella body for property developers in Nigeria and plays a significant role in industry coordination, regulatory engagement, and policy advocacy in the Sector. Given that one of the requirements for registration as a member of REDAN is the company’s audited financial statements for at least three years, a newly registered real estate company engaging in real estate development may withhold holding off membership of the Association until it meets all requirements for registration.
Registration with the Nigerian Institution of Estate Surveyors and Valuers (NIESV)
Certain real estate activities, particularly those involving estate surveying, valuation, and professional advisory services, are regulated through the Nigerian Institution of Estate Surveyors and Valuers (NIESV). Companies operating in these areas may be required to have registered estate surveyors or valuers involved in their operations and to comply with NIESV’s professional standards and regulatory framework.
Registration with the Lagos State Real Estate Regulatory Authority — for a Real Estate company in Lagos
In Lagos, real estate companies involved in brokerage, agency, property management, or development are required to register with the Lagos State Real Estate Regulatory Authority (LASRERA). LASRERA registration is mandatory for covered activities and applies regardless of whether the company is Nigerian-owned or foreign-owned.
Failure to register with LASRERA where required may expose the company and its principals to regulatory sanctions, including fines and restrictions on operations. As a result, companies intending to operate in Lagos State should prioritise LASRERA compliance as part of their post-incorporation regulatory strategy.
This article does not constitute legal advice. We encourage you to seek specialist guidance for your circumstances.
This article has been prepared by the Real Estate practice group at Kabbiz Legal as part of our ongoing advisory work for local and international clients operating in Nigeria’s property sector.
For guidance on the subject matter, or tailored legal advice and assistance with registering and structuring a real estate company in Nigeria, you can contact us at contact@kabbizlegal.com or call at +2348064231176. Alternatively, click the link here to chat us on WhatsApp.
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