Leaving home does not mean leaving opportunities behind. For many Nigerians living abroad, the dream of building or expanding a business back home is alive and strong. The reasons are clear: Nigeria remains Africa’s largest market, with over 200 million people, growing digital adoption, and untapped opportunities across industries. But alongside opportunity lies risk. Almost everyone knows of one diaspora entrepreneur who has lost money, time, and relationships due to sole reliance on relatives, proxies, or informal arrangements without proper structures in place.
The truth is simple: distance does not have to mean disorder. With the right legal and governance frameworks, you can build and run a Nigerian business that is safe, profitable, and scalable, you can run your Nigerian business smoothly, even from thousands of miles away.
Starting Fresh: Chika’s Story
Consider Chika, who relocated to the UK two years ago. Despite having left Nigeria, she never stopped dreaming of opening a fashion boutique in Lagos. Encouraged by her growing online following, she sent funds to her cousin to rent a shop and start operations under the name “Chika’s Styles.”
What she did not realise was that without registering the business with the Corporate Affairs Commission (CAC), she had no legal claim over the name. If someone else registered “Chika’s Styles,” they would legally own it. Nor did Chika put an agreement in place with her cousin, which left her exposed to the risks of mismanagement.
Her experience is common. Many diaspora Nigerians start businesses informally, relying on trust, only to discover later that they lack any enforceable rights. The first lesson is clear: register your business properly and use the right structure from the beginning.
1. Choosing the Right Business Structure
The foundation of every successful business is choosing the right legal entity. In Nigeria, the most common structures include:
- Private Limited Company (Ltd):
- This form is best suited for businesses that plan to scale, attract investors, or establish credibility.
- Shareholders enjoy limited liability, meaning personal assets are protected if the business fails.
- Allows for clear equity distribution among founders or investors.
- Business Name (often called Enterprise):
- Easiest and cheapest to register.
- Best for very small businesses or sole proprietorships.
- You must however note the major downside – there is no separation between personal and business liability.
- Partnerships and Joint Ventures:
- Useful for collaborations between diaspora investors and local operators.
- Disputes over profit sharing, management roles, or exit strategies are inevitable unless agreements and structure are properly done.
Do not just register a business. You must get advice from the start; to enable you choose a structure that aligns with your goals and protects your interests.
Tying Up Loose Ends: Businesses Left Behind
Not everyone in the diaspora is starting from scratch. Some left behind businesses when they relocated, assuming they could always return to them later, or assuming abandoning the business or closing the physical store amounts to shutting it down under the law. On the contrary, this leaves behind unfiled annual returns, unpaid taxes, or regulatory issues.
In such cases, the options include reviving the business, restructuring it into a more suitable form, or formally winding it up before starting anew. The key is to clean up old obligations before building something new, to avoid carrying liabilities into future ventures.
2. Protecting Shareholding and Ownership
Registration is not enough, especially for those investing in Nigerian companies or joint ventures with other parties. Ownership rights must be clear and enforceable. This is where propertly drafted agreements become indispensable, with key tools including shareholder agreements, pre-emption arrangements, and succession clauses.
Without these, you could find your shares transferred without consent or worse, your investment locked in a family dispute.
Case in Point:
A US-based client once “informally” invested ₦20 million into his brother’s construction business. When things soured, there was no agreement to prove ownership. In the eyes of the law, he was simply a lender, not a co-owner. He lost almost everything. Whatever you do, make sure you protect your equity with enforceable agreements.
3. Building Governance and Accountability
Even small businesses benefit from governance frameworks. Why? Because distance amplifies the risk of mismanagement. This is why we help our clients build bespoke frameworks that create checks and balances by way of proper structuring and processes that encourage reporting and transparency.
As a diaspora owner, insist on formal board meetings (virtual or hybrid) at least twice a year. Minutes should be recorded and shared. Make time to be a part of the business and provide your comments and insights on matters arising.
4. Managing from Abroad Without Losing Control
One of the biggest mistakes diaspora Nigerians make is granting unchecked power to friends or relatives. Unlimited Powers of Attorney can lead to abuse and irreversible losses because distance creates temptation for shortcuts. Consider the following, amongst others to remain in control:
- Limited Powers of Attorney: If appointing someone, make the authority specific (for example, “sign documents for CAC filing only”) and time-bound.
- Technology:
- Use cloud accounting software such as QuickBooks or Xero.
- Hold virtual AGMs via Zoom or Teams.
- Adopt e-signature platforms to approve key documents from abroad.
- Legal Representation: Have a trusted lawyer in Nigeria to verify documents, attend meetings, and report independently.
Example:
Kunle, based in Toronto, set up a fintech company in Lagos. Instead of giving his uncle free rein, he hired a law firm to act as company secretary and attend board meetings. Every decision is now backed by formal documentation. No surprises.
At Syntax Legal Practitioners (SLP), we provide Company Secretarial (CoSec) services to diaspora-owned businesses. Depending on your needs, we may act as your official representative before regulators, maintain statutory records, ensure timely filings with the CAC, and support your board with structured governance. With us, you have eyes and ears on the ground, not just cliché preparation of paperwork, but actual accountability.
5. Compliance and Risk Management
Running a Nigerian business from abroad means staying compliant with local laws, even if you are not physically present. Common areas include tax, regulatory licences, and employment law. We help our clients by conducting periodic checks to point out loopholes or risk areas before fines and other punitive consequences arise.
6. Why Legal Backing Matters
Every success story we have seen among diaspora entrepreneurs shares a common thread: they did not leave things to chance. They had the paperwork, the agreements, and the right legal team.
Compare these two stories:
- Mr. A (Ontario based) registered a business name through a friend, never checked in, and later discovered his “partner” sold the company’s only property. He had no legal recourse.
- Ms. B (Also Ontario based) set up a Limited Liability Company with shareholder agreements, hired a law firm as company secretary, and receives quarterly reports. She has expanded from one store in Ibadan to five across the southwest.
Same country. Same distance. Different outcomes, because one had structure and legal backing.
At SLP, we can help you set up a business that works. From registration and shareholder agreements to governance and compliance, we serve as your trusted representative on the ground. To learn how we can support your business, we offer you a discovery consultation at no cost. Simply reach out to us via lawyers@syntaxlaw.com.
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