Promoting Foreign Direct Investment (FDI) through Nigeria Finance Act 2022.


Foreign Direct Investment (FDI) plays a crucial role in the economic development of any country. It brings in capital, expertise and technology, fosters job creation and stimulates economic growth. Recognizing the importance of FDI, the Nigeria Finance Act 2022 has introduced several provisions aimed at promoting a more attractive investment environment. In this article, we will explore how the Nigeria Finance Act 2022 seeks to promote FDI and what it means for both foreign investors and the Nigerian economy.

Tax Incentives for Priority Sectors:

The Act offers tax incentives to foreign investors in priority sectors, such as manufacturing and agriculture. These incentives include reduced corporate income tax rates for the first five years of operation, providing a competitive advantage for FDI in these sectors.

Implication: Foreign investors are incentivized to channel their investments into sectors critical for Nigeria’s economic growth, leading to increased FDI flows.

Stable Tax Regime:

The Act emphasizes the importance of a stable tax regime by providing that changes to tax laws will not apply retrospectively. This ensures that investors can plan for the long term with confidence in the tax environment.

Implication: Foreign investors can make investment decisions with greater predictability and reduced risk of sudden tax changes affecting their operations.

Digital Economy and E-Commerce:

Recognizing the importance of the digital economy, the Act introduces measures to tax digital services provided by non-resident companies to Nigerian consumers. This ensures that foreign digital service providers contribute to the Nigerian tax base.

Implication: FDI in the digital economy is encouraged, and foreign digital service providers are brought into the Nigerian tax net.

Transfer Pricing Regulations:

The Act strengthens transfer pricing regulations to align with international standards. This enhances transparency and fairness in related-party transactions, providing a level playing field for foreign investors.

Implication: Foreign investors involved in related-party transactions can operate with greater confidence in the fairness and transparency of these transactions.

Customs Duties and Trade Facilitation:

The Act introduces changes to customs duties and trade facilitation measures, streamlining cross-border trade processes. This can reduce trade barriers and facilitate the movement of goods, making Nigeria a more attractive destination for FDI.

Implication: Foreign investors involved in cross-border trade benefit from simplified customs procedures and reduced trade-related costs.

Infrastructure Development:

The Act offers tax incentives for infrastructure development, encouraging foreign investors to participate in projects critical for Nigeria’s economic growth, such as roads, bridges, and power generation.

Implication: FDI in infrastructure projects is incentivized, leading to improved infrastructure which in turn, benefits all sectors of the economy.

Investor-Friendly Dispute Resolution Mechanisms:

The Act emphasizes the importance of efficient dispute resolution mechanisms. The Tax Appeal Tribunal (TAT) provides an independent platform for resolving tax disputes, ensuring a fair and transparent process.

Implication: Foreign investors can have confidence in an impartial dispute resolution process, enhancing the overall investment climate.


The Nigeria Finance Act 2022 demonstrates the government’s commitment to promoting FDI and creating a more attractive investment environment. By offering tax incentives, ensuring tax stability, regulating the digital economy, enhancing transfer pricing rules, simplifying trade processes and encouraging infrastructure development, the Act aims to position Nigeria as an appealing destination for foreign investors.

Foreign investors considering opportunities in Nigeria should carefully assess the implications of the Act on their specific investments and seek professional guidance when necessary. By doing so, they can leverage the incentives and opportunities provided by the Act to contribute to Nigeria’s economic growth and development while realizing the benefits of their investments.

For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, You can also reach us via WhatsApp at +2348038460036.