Hello fellow Nigerian business owner operating in the USA! As you navigate the complexities of running a business across borders, it is crucial to understand the compliance, legal, and beneficial ownership reporting requirements that come with it. From navigating the intricacies of the Foreign Account Tax Compliance Act (FATCA) to ensuring your business is in line with the Nigerian Companies and Allied Matters Act (CAMA), staying on top of these regulations is key to your success. Let’s explore how you can effectively manage these requirements to protect your business and ensure its growth in both countries.

As a Nigerian entrepreneur expanding your business to the USA, it’s important to familiarize yourself with the unique legal and compliance landscape of both countries. From understanding the implications of the Nigerian Financial Reporting Council Act to complying with the US Securities and Exchange Commission (SEC) regulations, there are various reporting requirements that you need to be aware of. By staying informed and proactive in meeting these obligations, you can build a strong foundation for your business and establish credibility with both local and international stakeholders. Let’s dive into the specifics of compliance, legal, and beneficial ownership reporting to help you navigate this complex terrain successfully.

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Nigeria must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Nigerian Company in the US

Even if none of the specific criteria apply, a Nigerian company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Nigeria. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Nigerian companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Nigerian businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Nigeria need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Nigerian Businesses:

Tax Treaties

As a Nigerian business operating in the United States, it’s crucial to understand that there is no tax treaty between Nigeria and the USA. This absence of a tax treaty means that your company may be subject to taxation in both countries on the same income, potentially leading to double taxation. Without the protections and benefits typically provided by a tax treaty, your business could face higher overall tax burdens and increased complexity in managing tax obligations across both jurisdictions. It’s advisable to consult with international tax experts to navigate this situation and explore strategies to minimize the impact of double taxation on your operations.

Trade Considerations

When conducting business with the USA, Nigerian companies should be aware of the African Growth and Opportunity Act (AGOA), which provides duty-free access to the U.S. market for certain products. Additionally, the U.S.-Nigeria Trade and Investment Framework Agreement (TIFA) aims to strengthen bilateral trade relations. However, Nigerian businesses must comply with U.S. import regulations, including those set by the Food and Drug Administration (FDA) for food and drug products, and the Consumer Product Safety Commission (CPSC) for consumer goods. It’s crucial to research industry-specific regulations, as requirements may vary depending on the nature of the products or services being traded. Consulting with legal experts and trade associations can help ensure compliance with all relevant U.S. trade laws and regulations.

Your Path to Compliance: Key Takeaways for Nigerian Businesses in the U.S.

Operating a Nigerian business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.