Nigeria’s Tax Reform 2025: Why the New Rules on Offshore Profits Should Be Your First Concern
September 19, 2025
Nigeria’s 2025 tax reforms are sweeping, ambitious, and complex.
A central feature of these reforms is the proposed introduction of Controlled Foreign Corporation (CFC) rules—an anti-avoidance measure aimed at curbing tax deferral through offshore subsidiaries.
Here’s the blunt reality: if your Nigerian company controls a foreign subsidiary, and that subsidiary is impacted by these new CFC rules, it could impact you. Nigerian companies with foreign subsidiaries need to assess exposure to deemed income taxation. Unfortunately, the draft bill is not clear on what defines control of a foreign subsidiary, so hopefully clarity will be forthcoming. As stated, what is clear is the need to review your Nigerian company’s exposure to the new CFC rules and take professional advice.
But it’s only the beginning of Nigeria’s new tax landscape.
Other Major Changes You Need to Know
1. Corporate Tax and the New Development Levy
- Standard corporate tax will gradually reduce from 30% to 25% in the coming years, giving businesses some relief.
- However, a new 4% Development Levy consolidates sector-specific levies like the education tax and IT levy. For many large businesses, this effectively pushes the total burden back up, in some cases close to 34%.
2. Capital Gains Tax (CGT)
- Companies will now pay CGT at the same rate as corporate tax — a sharp rise from 10% to 30%.
- Indirect transfers of Nigerian assets through offshore holding companies are also caught, closing a common avoidance route.
3. VAT Modernisation
- The VAT rate remains at 7.5%, but Nigeria now has a “real” VAT system: businesses can claim input VAT on expenses and assets, aligning with global practice.
- Essential goods and services — food, healthcare, rent, electricity, education — are zero-rated, easing pressure on households.
- Mandatory e-invoicing and VAT “fiscalisation” will apply from 2026, signalling Nigeria’s shift into digital compliance.
4. Small Business Relief
- Companies with turnover below ₦50m (approx. USD 33,000) are exempt from corporate tax and VAT registration.
- Filing requirements are simplified, aimed at drawing informal traders into the formal tax net.
5. Personal Income Tax Reform
- Individuals earning less than ₦800,000 (approx. USD 520) annually are now tax-free.
- High earners face a new top rate of 25% on income above ₦50m (approx. USD 33,000).
- Rent relief of up to ₦500,000 provides extra breathing space for lower- and middle-income households.
Why This Matters for Global Investors
Nigeria is raising its tax-to-GDP ratio from just 10% to 18% by 2026, without officially “raising taxes.” The strategy is to simplify rules, close loopholes, and enforce compliance harder.
For international clients, the risks and opportunities are clear:
- CFC rules mean offshore profits are no longer sheltered.
- Residency tests may pull foreign entities into Nigerian taxation if managed locally.
- Transfer pricing rules will bite harder under the new regime.
- Digital compliance (VAT e-invoicing, fiscalisation) will demand new systems and controls.
The Challenges Ahead
The reforms are bold, but implementation will decide whether they succeed. Potential pitfalls include:
- Administrative strain — training staff, updating systems, and issuing clear guidance.
- Overzealous enforcement — risk of aggressive assessments undermining business confidence.
- Inflation erosion — thresholds set in naira may quickly lose relevance in real terms.
Conclusion: Prepare, Don’t Wait
Nigeria’s 2025 tax reforms are more than technical housekeeping — they redraw the rules of engagement for doing business in Africa’s largest economy.
For SMEs and households, the changes promise relief. For multinationals, high-net-worth individuals, and cross-border investors, they introduce tougher compliance, higher risks, and new traps such as the CFC rules.
At Mosaic Chambers Group, we help clients structure cross-border operations, manage tax exposure, and stay compliant across jurisdictions. If you have Nigerian interests, now is the time to review your arrangements before the reforms take effect in 2026.
Contact us to discuss how these changes may impact your business or investment strategy.
Navigating the UAE Employment Visa Process in 2026 Relocating to the United Arab Emirates for employment offers significant professional and financial opportunities. However, the UAE employment visa process is structured, compliance-driven and time sensitive. Understanding each stage in advance avoids unnecessary delays and protects both employer and employee from regulatory issues. Below is a comprehensive, easy-to-follow guide to the UAE employment visa process as it stands in 2026. Step 1: Securing a Confirmed Job Offer The UAE employment visa process begins with a formal job offer from a UAE-licensed entity. Only an employer registered with the relevant mainland authority or free zone authority can sponsor an employee. The employer becomes the visa sponsor and assumes legal responsibility for: Applying for the work permit Processing the residence visa Ensuring compliance with UAE labour law Covering government application fees (in most cases) Employees cannot independently apply for a standard employment visa without sponsorship. Step 2: Work Permit Application (Entry Permit Approval) Once the employment contract is signed, the employer applies for a work permit (also known as a labour approval) through the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant free zone authority. Documents typically required include: Passport copy (valid for at least six months) Passport-size photographs Signed employment contract Attested educational certificates (if required for the role) If the employee is outside the UAE, an entry permit is issued, allowing them to enter the country legally for employment purposes. If the employee is already inside the UAE on a visit visa, status adjustment procedures apply. Step 3: Entry to the UAE (If Applying From Abroad) For applicants outside the UAE, the entry permit allows legal entry into the country. Once inside the UAE, the individual must complete the residency formalities within the validity period of the entry permit (usually 60 days). Timing is critical at this stage. Failure to complete the process within the permitted window may result in fines. Step 4: Medical Fitness Test All employment visa applicants must undergo a mandatory medical examination at an approved UAE medical centre. The test typically screens for: HIV Tuberculosis Hepatitis (in certain categories) The medical fitness certificate is a mandatory component of the residence visa application. Processing time: usually 24–72 hours depending on service speed selected. Step 5: Emirates ID Biometrics The applicant must apply for an Emirates ID, which serves as the UAE’s official identification card. This process includes: Biometric data capture (fingerprints and photograph) Identity verification The Emirates ID is linked directly to the residence visa and is essential for: Opening bank accounts Renting property Obtaining a driving licence Accessing utilities and telecom services Step 6: Residence Visa Stamping Following medical clearance and Emirates ID application, the residence visa is issued and stamped electronically against the passport record. Employment residence visas are typically valid for: 2 years (mainland companies) 2–3 years (depending on free zone authority) Once issued, the employee is legally resident in the UAE and may sponsor eligible dependants (subject to salary thresholds). Key Considerations in 2026 1. Free Zone vs Mainland Sponsorship Visa procedures differ slightly between mainland entities and free zone authorities. Free zones operate under independent regulatory frameworks, although federal immigration approval remains central. The choice between mainland and free zone employment has broader implications, including: Corporate structuring Tax residency status Social security considerations Family sponsorship options These should be assessed before finalising relocation plans. 2. Employment Visa vs Other UAE Visa Categories The UAE also offers: Green Visas (for skilled professionals and freelancers) Golden Visas (long-term residence for investors and high earners) Investor/Partner Visas For entrepreneurs and senior executives, an employment visa is not always the optimal route. Strategic structuring may offer longer validity and greater flexibility. 3. Tax Residency Implications The UAE does not levy personal income tax. However, relocating professionals must consider: Exit tax implications in their home country UK Statutory Residence Test (for British nationals) Split-year treatment Ongoing ties and centre-of-vital-interests rules Corporate tax exposure for business owners Inadequate pre-departure planning can result in unintended dual tax exposure. 4. Corporate Tax and Employment Structuring With the introduction of UAE Corporate Tax, business owners relocating to the UAE must assess: Whether they will remain directors of overseas entities Permanent establishment risks Substance requirements Intercompany arrangements Employment structuring must align with the broader corporate and tax strategy. Why a Structured Relocation Approach Matters Many professionals treat the employment visa as a simple administrative formality. In practice, it forms part of a much larger relocation framework that includes: Tax residency planning Wealth structuring Asset protection Banking arrangements Property acquisition Family visa coordination A piecemeal approach often creates long-term complications. How Mosaic Chambers Group Supports Your Move to the UAE At Mosaic Chambers Group, we provide integrated advisory services for internationally mobile individuals and entrepreneurs. We coordinate: Pre-departure UK tax planning UAE tax structuring advice Cross-border compliance Local regulatory compliance We work alongside trusted UAE-based partners to manage: Visa processing Company formation Corporate structuring analysis Family sponsorship applications Wealth protection strategies Relocating to the UAE should be strategic, compliant and financially efficient - not reactive. Speak to Our Advisory Team If you are considering accepting a UAE job offer or relocating your business operations to the Emirates, we recommend obtaining professional tax and structuring advice before finalising your move. Early planning protects your position, reduces risk and ensures your move to the UAE is commercially sound and fully compliant. Get in touch with our team today to begin your relocation strategy with clarity and confidence.
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