The Oil and Gas Export Free Zone Act No. 8 of 1996 established an Oil and Gas Free Zone Authority to manage, control and co-ordinate all the activities within the zone. This zone encompasses three oil and gas service centres around the ports of Onne (near Port Harcourt), Calabar and Warri. All three ports have enhanced stacking and warehousing facilities awaiting subscribers. Incentives and fiscal measures approved by government that favour and encourage large investments in the region include:

· No personal income tax
· 100% repatriation of capital and profit
· No pre-shipment inspection for goods imported into the free zone.


The Federal Government of Nigeria has passed an aggressive Free Zone Law which has created a business friendly environment benefiting from the following incentives:

· Complete tax holiday for all Federal, State and Local Government taxes, rates, custom duties and levies.
· One-stop approval for all permits, operating licences and incorporation papers.

· Duty-free, tax-free import of raw materials for goods destined for re-export.

· Duty-free introduction of capital goods, consumer goods, components, machinery, equipment and furniture.

· Permission to sell 100% of manufactured, assembled or imported goods into the domestic Nigerian Market.

· When selling into the domestic market, the amount of import of import duty on goods manufactured in the free zones is calculated on the basis of the value of the raw materials or components used in assembly not the finished product.

· 100% foreign ownership of investments.

· 100% repatriation of capital, profits and dividends.

· Waiver of all import and export licenses.

· Waiver on all expatriate quotas for companies operating in the zones.

· Prohibition of strikes and lockouts.

· Rent-free land during the first 6 months of construction.


(i) Exemption from tax of companies profits in respect of goods exported from Nigeria provided the proceeds are repatriated to Nigeria and used exclusively for purchase of raw materials,
plants equipment and spare parts

ii) Exclusion from taxes the profits of companies whose supplies are exclusively from input to the manufacturing of products for exports.

iii) All new industrial undertakings including foreign companies and individual operating in an Export Processing Zone (EPZ) are allowed full tax holidays for three consecutive years.

iv) As a means of encouraging industrial technology, companies and other organizations that engage in research and development activities for commercialization enjoy 20% investment tax credit on their qualifying expenditure.

v) Dividends distributed by Unit in Nigeria are free of tax and no withholding tax is deducted there from since such incomes have already suffered tax in the first instance.

vi) All companies engaged wholly in fabrication of tools, spare parts and simple machinery for local consumption and export are to enjoy 25% investment tax credit on their qualifying capital expenditure while any tax payer who purchases locally manufactured plants and machinery are similarly entitled to 15% investment tax credit on such fixed assets bought for use.