Lagos is a city of small businesses: shops, salons, kiosks, bukas and workshops line every street. Starting one is easy. Running one legally means dealing with several layers of government, each with its own permit or levy.
Register the business
Register a business name or a company with the Corporate Affairs Commission, and get a tax identification number.
State and local permits
Depending on what you do and where, you may need:
- A signage permit for your shop sign, from the state’s signage and advertisement agency.
- Local government permits and levies — trade permits, shop and kiosk rates, and others set by your local government.
- Health and environmental permits for food businesses and anything that makes noise or waste.
- Sector licences: NAFDAC for food and cosmetics you make and sell, pharmacy and patent medicine licences, and so on.
Ask your local government office what applies to you, and get every permit and receipt in the business’s name.
Officials and touts
Officials from many agencies visit small businesses, and so do people pretending to be officials. Ask for identification and an official demand notice, pay into a government account rather than in cash to a person, and keep every receipt. A receipt from a real agency is your protection when the next visitor comes.
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Tax
Your profits are taxed: as personal income by the LIRS for a business name, or as company profits for a company. Small companies under the threshold pay no company income tax and need not charge VAT, but must still file.
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Power and premises
Budget for backup power from the start; a shop that closes in a power cut loses customers. Get the shop’s lease in writing, with the rent, the period and who pays which levies.
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