Whether you’re a Nigerian in the diaspora putting money back home or a foreign company entering one of Africa’s largest markets, Nigeria offers enormous opportunity. It also offers enormous legal risk, especially for those who don’t know the terrain.
At our firm, we have advised clients across oil and gas, real estate, and banking and finance transactions. Time and again, we see the same mistakes derail otherwise sound investments. Here are the five most common mistakes and what you should do instead.
Mistake #1: Skipping Proper Due Diligence on Land and Property Titles
This is the single most expensive mistake investors make in Nigeria. A plot of land may be offered with a Deed of Assignment, a Survey Plan, or even a Governor’s Consent and still be legally compromised.
We have seen clients purchase property that was already sold to another buyer, land subject to government acquisition under the Land Use Act, and titles with forged signatures on the chain of title documents.
What you must do: Before any property transaction, conduct a thorough search at the relevant State Land Registry and the Corporate Affairs Commission (CAC) where applicable. Verify the root of title, confirm no government acquisition notice exists, and ensure Governor’s Consent has been obtained for any assignment as required under the Land Use Act 1978. In Lagos, also conduct searches at the Lagos State Land Bureau and check for any LASRERA registration requirements.
Never rely solely on documents presented by the vendor. Instruct an independent solicitor to conduct these searches on your behalf.
Mistake #2: Entering Joint Ventures Without a Shareholders’ or JV Agreement
Nigeria is a relationship-driven market. Many investors, particularly those working with local partners seal arrangements with a handshake, a Memorandum of Understanding, or a brief email exchange. When the business grows or disputes arise, there is nothing enforceable to stand on.
We have advised clients who discovered mid-project that their Nigerian partner had pledged shared assets as collateral for a loan, diverted company funds, or claimed sole ownership of intellectual property developed jointly all because the foundational agreement was silent on these issues.
What you must do: Before committing capital or beginning operations, execute a comprehensive Shareholders’ Agreement or Joint Venture Agreement that clearly addresses capital contributions, profit-sharing ratios, governance and decision-making rights, exit mechanisms, dispute resolution, and what happens upon the death or incapacity of a partner. Under CAMA 2020, shareholders’ agreements must align with the company’s Articles of Association, a detail many investors overlook until it is too late.
Mistake #3: Ignoring Sector-Specific Regulatory Compliance
Nigeria has a complex, multi-layered regulatory environment. The rules governing an oil and gas investment are entirely different from those governing a fintech startup or a real estate development and the penalties for non-compliance can include fines, license revocation, and criminal liability.
Foreign companies frequently assume that incorporating a Nigerian entity through the CAC is sufficient to begin operations. It is not. Depending on your sector, you may also need approvals from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) or the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for energy investments; the Central Bank of Nigeria (CBN) for financial services, payment solutions, or lending activities; the Securities and Exchange Commission (SEC) for capital market activities; or the Federal Competition and Consumer Protection Commission (FCCPC) for mergers and acquisitions above the notification threshold.
What you must do: Before structuring your investment, obtain a regulatory roadmap specific to your sector. Understand every license, permit, and filing obligation that applies and build the timeline and cost of obtaining them into your transaction plan. Regulatory non-compliance discovered mid-deal can collapse a transaction entirely.
Mistake #4: Failing to Register and Protect Intellectual Property
This mistake is particularly common among technology companies, creative businesses, and branded consumer goods investors. Many assume that a trademark registered in the United Kingdom, the United States, or the European Union automatically protects them in Nigeria. It does not.
Nigeria is not a member of the Madrid Protocol, meaning international trademark registrations do not extend to Nigeria automatically. Without a Nigerian trademark registration through the Trademarks, Patents and Designs Registry, your brand, product name, or logo is vulnerable to imitation, passing off, and outright theft with limited legal recourse available to you.
What you must do: Register your trademarks, patents, and copyrights under Nigerian law before entering the market or launching your product. A registration certificate is your strongest evidence of ownership in any enforcement action. Given that the registration process can take time, this should be initiated early in your market-entry planning.
Mistake #5: Choosing the Wrong Dispute Resolution Mechanism
Nigeria’s court system, while improving, can be slow. Commercial litigation can take years to resolve, tying up capital and management attention. Investors who fail to plan for this reality at the contract drafting stage often find themselves locked into a process they cannot afford financially or strategically.
The mistake is twofold: either including no dispute resolution clause at all, or defaulting to Nigerian court litigation without considering whether arbitration or mediation is more appropriate for the transaction.
What you must do: Every commercial agreement should include a carefully drafted dispute resolution clause. For cross-border transactions or high-value commercial contracts, consider international arbitration under the rules of the Lagos Court of Arbitration (LCA), the ICC, or the LCIA with a neutral seat agreed upon by both parties. Nigeria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, meaning arbitral awards can be enforced in Nigeria and in over 170 other countries. For domestic transactions, the Lagos Multi-Door Courthouse (LMDC) offers mediation and arbitration options that are significantly faster than conventional litigation.
The Common Thread
Every one of these mistakes shares the same root cause: investors entering the Nigerian market without qualified local legal counsel engaged from the very beginning not after problems arise, but before the first document is signed.
Nigeria rewards informed investors. The legal framework, when properly navigated, offers robust protections for capital, intellectual property, and contractual rights. The firms and individuals who thrive here are those who treat legal advisory not as a cost, but as the foundation of every transaction.
How We Can Help
Our firm advises investors across oil and gas, real estate, and banking and finance transactions. Whether you are structuring a joint venture, acquiring property, seeking regulatory approvals, or enforcing a commercial agreement, we bring deep technical expertise and on-the-ground knowledge of Nigeria’s legal and regulatory landscape.
Contact us today for a confidential consultation.
This article is intended for general informational purposes only and does not constitute legal advice. Readers should seek independent legal counsel in relation to their specific circumstances. No solicitor-client relationship is created by reading or sharing this article.