The hotel business in Nigeria is very profitable. However, to provide these services, these potential investors have to comply with the laws and regulations applicable in the sector.

LEGAL AND REGULATORY REQUIREMENTS FOR ESTABLISHING A HOTEL

1. Legal Structure: The hotel business must be registered with the Corporate Affairs Commission. A limited liability company is the best option for any profit-oriented business.

 Below are the requirements for incorporating a company seeking to engage in the hotel business in Lagos State:

·  Two proposed names for the company: These names will be submitted to the CAC for name search, screening, and approval. Upon approval, the promoters may thereafter proceed to register the company with the approved name.

• Proposed registered address within Nigeria, email address, and phone number of the company.
• Details of the Shareholders, Director(s), and Company Secretary, which must include their names, Contact/Home address, Email address, Phone number, Date of birth, Occupation, National Identification Number (NIN), and electronic signature, respectively. Please note that for foreigners, an international passport will be sufficient as a means of identification.
• Object of the company: The company must be registered as a company engaged in the hotel business in its Memorandum of Association.^[i]

2. Registration with the Federal Inland Revenue Service (FIRS): A company is required to register with the Federal Inland Revenue Service (FIRS) for tax purposes. The following are the requirements for registration with the FIRS:

·  Application letter on the company’s letterhead paper

·  The company’s certificate of incorporation;

·  Particulars of the company directors, and

·  Utility bill of the registered address of the company.

3.  SCUML Registration: The hotel business is mandated to register with the EFCC’s Special Control Unit Against Money Laundering. The reason for the SCUML registration is that all non-designated financial institutions must register for and obtain a SCUML certificate, and the hotel business is one such business^[ii]. It also helps protect your corporate account from being targeted for money laundering. The requirements for SCUML registration include:

·  Certificate of Incorporation

·  Memorandum and Articles of Association

·  Tax Identification Number (TIN)

·  BVN, bank name, and account number

4. Intellectual Property Protection: It is advisable that hotels register their trademarks at the Trademark Registry in Nigeria. While not always mandatory, registering intellectual property (IP) like trademarks and patents for the hotel business in Nigeria is highly recommended to gain legal protection and enforceability of your brand and inventions.

5. Registration with the Nigerian Tourism Development Corporation (NTDC): The NTDC is the apex regulatory body guiding the hospitality and tourism sector in Nigeria. The corporation is also conferred with the authority to perform advisory services and promote research in the field of tourism. Any company seeking to engage in the hospitality or tourism sector in Lagos State is mandated to register with the corporation.

The following are the documents required to register with the NTDC: the completed application form,  CAC certificate of incorporation, applicant’s identification documents, company’s Memorandum and Articles of Association, personal Income Tax Clearance, Certificate of at least two directors (past 3 years), reference letter from the bank, corporate profile of the company, curriculum Vitae of key personnel supported by Professional Licenses, passport size photographs of the Managing Director/Chief Executive Officer, remittance proof of PAYE tax for key staff (LLC), development Levy of at least two Directors, proof/receipt of payment, any other supporting documents as may be required, etc.

6. Registration with the Nigerian Investment Promotion Council (NIPC)

NIPC is responsible for promoting, encouraging, and coordinating investment in Nigeria, including investments in the hospitality and tourism sector, both by Nigerian and non-Nigerian investors.^[iii]

The following are the prerequisite documents for registration with the NIPC:

·  Duly completed NIPC Form I;

·  Memorandum & Articles of Association;

·  Certificate of Incorporation;

·  CAC Form 1.1;

·  Power of Attorney/letter of Authority (where applicable);

·  Approved Remita payment receipt of N15,000.00 (non-refundable)

·  NIPC payment receipt

7.   Data Protection Law: In operating a hotel, a vast amount of personal data is collected from guests, and therefore, it must follow cybersecurity and data protection laws such as the Nigerian Data Protection Act.

CONCLUSION

For sustained business longevity, hotel owners must proactively seek comprehensive legal counsel and ensure full compliance with all applicable regulatory frameworks, industry standards, and statutory obligations governing hospitality operations.

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^[i] Section 27, Companies and Allied Matters Act, 2020, accessed on 29/10/24

^[ii] Salomi Toluwani, “A Comprehensive Guide for Establishing a Hotel Business in Nigeria”, <https://charislegalpractice.com.ng/a-comprehensive-guide-for-establishig-a-hotel-business-in-nigeria>, accessed on 29/10/24.

^[iii] Section 4, Nigerian Investment Promotion Council, accessed on 29/10/28

Written by Deborah Dada for The Trusted Advisors

Email us: info@cms.trustedadvisorslaw.com

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