Buying land in Nigeria as a foreigner can be a profitable investment, especially with the country’s growing real estate market and urban expansion. However, the legal process for foreigners buying land in Nigeria is not as straightforward as it is for citizens. There are constitutional, statutory, and procedural restrictions that every non-Nigerian investor must understand before acquiring land.
This article explains the key laws, procedures, and considerations governing foreign ownership of land in Nigeria, helping you make informed and compliant investment decisions.
Legal Framework Governing Land Ownership in Nigeria
Land ownership in Nigeria is primarily governed by the Land Use Act of 1978, which vests all land in each state in the Governor, to be held in trust for the people. This Act gives the Governor authority to grant statutory rights of occupancy to individuals or entities, including foreigners, under specific conditions.
In addition to the Land Use Act, the following also regulates foreign land acquisition
- The Nigerian Investment Promotion Commission (NIPC) Act (1995): Allows foreigners to invest and own property in Nigeria through a registered company.
- The Companies and Allied Matters Act (CAMA, 2020): Requires foreign entities to register a local subsidiary before owning property.
- State Property Laws and Regulations: Some states impose additional rules or restrictions on land ownership by foreigners.
In essence, while foreign ownership of land in Nigeria is permitted, it is only possible through a locally incorporated company approved by the NIPC.
How Foreigners Can Acquire Land in Nigeria
Foreigners cannot personally hold legal title to land in their individual capacity. To acquire land legally, they must follow these steps:
1. Register a Nigerian Company
Foreign investors must first register a company with the Corporate Affairs Commission (CAC). This entity provides the legal personality that recognizes land ownership.
2. Obtain NIPC Registration
After incorporation, the company should register with the Nigerian Investment Promotion Commission (NIPC) to validate it as a foreign-invested enterprise. This ensures compliance with the NIPC Act.
3. Apply for a Right of Occupancy
Apply to the State Governor for a Statutory Right of Occupancy under the Land Use Act. The process involves land verification, survey, and payment of the requisite fees.
4. Execute and Register the Deed of Assignment
The Deed of Assignment is the legal document that transfers interest from the seller to the buyer (in this case, the company). Stamp, register, and fill this document at the Lands Registry in the relevant state.
5. Obtain the Certificate of Occupancy (C of O)
The Certificate of Occupancy is the final proof of ownership. It confers the recognized legal title to the company and should be safely preserved, as it is required for any future transaction or financing.
Restrictions and Limitations on Foreign Ownership
While land acquisition by foreigners in Nigeria is legally permissible, certain restrictions apply:
- Personal ownership is not allowed: Land must be owned through a locally registered entity.
- Governor’s consent is mandatory: No foreign or corporate ownership of land is valid without the State Governor’s written consent.
- Location limitations: Some areas, especially near borders or strategic government facilities, may not be open to foreign investment.
- Leasehold nature of ownership: All land titles in Nigeria are leaseholds, typically valid for 99 years, not freeholds.
These restrictions are designed to ensure that national land use policies remain under Nigerian control while encouraging foreign participation through corporate channels.
Important Considerations Before Buying Land
Investors should take precautionary steps to avoid disputes or invalid transactions:
- Conduct Due Diligence: Verify land ownership, check for encumbrances, and ensure the property is not under government acquisition.
- Engage a Property Lawyer: Legal professionals familiar with land law for non-citizens can help navigate complex documentation and approval processes.
- Confirm Zoning and Usage: Ensure the land is zoned for your intended purpose (residential, industrial, or agricultural).
- Secure Governor’s Consent Early: Delays in obtaining consent can affect your right to occupy or develop the property.
- Keep All Documents Registered: Only registered documents carry legal weight in Nigeria.
Common Legal Pitfalls to Avoid
Foreign investors often encounter avoidable challenges such as:
- Buying land from unauthorized sellers or family representatives without the true owner’s consent.
- Failure to register property documents at the Lands Registry.
- Assuming that a Deed of Assignment automatically confers ownership without a Certificate of Occupancy.
- Ignoring state-specific requirements for foreign participation.
For example, a foreign investor purchasing land in Lagos through a local partner must still register the land in the company’s name, not the individual’s. This helps to avoid ownership disputes.
Resolving Land Disputes
If disputes arise, address them as follows:
- Negotiation or Mediation: For minor issues such as boundary disputes or delayed consents.
- Litigation: The State High Court handles major conflicts, including fraudulent sales or title defects.
- Alternative Dispute Resolution (ADR): Increasingly preferred for commercial and property disputes to save time and cost.
Having a registered title and clear documentation significantly strengthens a foreign investor’s position in any dispute.
Practical Tips for Foreign Investors
- Partner with credible local agents or firms with a verifiable track record.
- Always verify land status at the State Lands Registry before making payments.
- Understand that expat property purchase in Nigeria requires strict adherence to documentation and consent procedures.
- Engage reputable surveyors and lawyers throughout the process.
Foreigners who approach land acquisition with diligence, legal guidance, and compliance can safely own and profit from Nigerian real estate.
Conclusion
While foreigners buying land in Nigeria face certain regulatory hurdles, the process remains open, legal, and potentially rewarding when approached correctly. The key lies in acquiring property through a registered Nigerian company, ensuring full compliance with land laws, and obtaining the necessary approvals.
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Navigating property laws in Nigeria can be complex, but the right legal guidance makes all the difference.
At Scotts Legal, we provide expert support in property acquisition, title investigation, registration, and property management, helping real estate investors make confident, compliant, and secure decisions.
For consultations and inquiries, send us a message – here.
