It usually starts with good intentions. You want to invest in property, support a relative’s business, or fund a new venture back home. The excitement builds, the pictures look convincing, and the numbers sound promising. Then you send the money.
Months later, the story changes. The land you bought turns out to have multiple owners, your “partner” becomes unreachable, or the company you thought you owned does not even exist on the Corporate Affairs Commission register.
For many in the diaspora, this story feels familiar. Investing from abroad can be rewarding, but it also comes with serious risks if done without structure or legal oversight.
1. The Cost of Skipping Due Diligence
Distance creates vulnerability, not necessarily because the diaspora entrepreneur is careless, but because you no longer have the proximity-based oversight you used to, something people back home may take advantage of.
It is tempting to rely on family, friends, or a familiar face to handle transactions. Unfortunately, this approach has cost many investors millions.
We once advised a client who paid for two adjoining plots in Lekki through an uncle. The documents looked legitimate, but the land was already under government acquisition. It took over a year of legal and regulatory work to resolve, and the uncle wasn’t even interested in helping during that year.
Due diligence could have exposed that risk before a single naira was paid.
2. What Proper Due Diligence Really Means
Many people assume due diligence is just “checking documents.” It goes far beyond that. A proper legal due diligence exercise investigates every element of an investment to confirm ownership, authenticity, and compliance.
For example:
- For property investments: Verify title ownership at the land registry, check for encumbrances, confirm survey boundaries and so much more.
- For business or startup investments: Review the company’s CAC filings, corporate structure, directors, existing liabilities, and pending disputes.
- For personal or partnership arrangements: Assess the legality of the proposed structure and ensure that ownership rights, revenue sharing, and exit options are clearly documented.
The above list is not exhaustive, and no article can ever provide you a list that fully applies to your situation. The specific circumstances at hand always determine the depth of investigation to be carried out. The checks for bare land differ from those for one that already has a building. Where the investment is a company, the age of the company, registration structure, and sector all raise different questions.
Whatever the case is, the goal is simple: uncover the risks before they uncover you.
3. Structuring Smart Investments
Even after confirming an opportunity, the next challenge is how to structure it. The right structure determines who controls what, how profits are shared, and how ownership is protected if things go wrong.
Some people register limited liability companies, while some already have multiple companies and merge, re-arrange, or create holding companies. Others simply need fixed term partnership agreements and joint ventures. Some others just require well drafted power of attorney or trust and nominee arrangements without complex structures.
Each of these requires careful legal drafting and regulatory compliance. A good lawyer helps you choose what best fits your goals and level of involvement.
4. Example: A Diaspora Investor Who Got It Right
Emeka, a UK-based engineer, wanted to invest in a small manufacturing venture in Ogun State. Instead of wiring funds directly, he engaged a Nigerian law firm to conduct due diligence on the proposed business. The firm discovered that the company was behind on taxes and had pending environmental compliance issues.
With that knowledge, Emeka renegotiated the deal, established a new entity with verified partners, and structured the venture under a Limited Liability Company. Within a year, the business became profitable and attracted a foreign distribution partner.
The difference was not luck. It was structure, backed by legal due diligence.
5. Key Tips for Diaspora Investors
If you plan to invest in Nigeria from abroad, consider these practical steps before transferring funds or signing any documents:
- Engage a Lawyer Early: Your lawyer should verify every document and transaction before payment is made.
- Insist on Written Agreements: Never rely on verbal commitments, even with family. Every contribution, share, or role should be documented.
- Use Proper Channels: Send funds through traceable, regulated platforms that can provide transaction evidence if needed.
- Confirm Company or Property Records: Always cross-check CAC details, land registry information, and tax status before committing.
- Plan for Oversight: Distance requires structure. A firm with company secretarial or governance experience can represent you locally, attend meetings, and provide regular reports.
6. Why Legal Backing Matters
Many investors lose money not because they chose the wrong business or property, but because they relied on the wrong process. A legally guided approach ensures that every step, from due diligence to structuring and compliance protects your interests.
The truth is that no online tutorial or checklist can replace professional oversight. Every transaction has unique facts, and every investor has different goals and risk levels.
Ready to Invest Confidently?
Nigeria remains one of Africa’s most promising investment destinations, especially for those who understand how to navigate its legal and regulatory terrain.
At Syntax Legal Practitioners, we assist Nigerians in the diaspora and foreign investors in conducting due diligence, structuring local businesses, and managing property or joint ventures with complete legal backing.
Your next investment deserves certainty, not assumptions.
📩 Email us at lawyers@syntaxlaw.com to begin your investment journey the right way.
Syntax Legal Practitioners 