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The short answer
Closing a Nigerian subsidiary runs in three tracks: people (notice under the Labour Act, final pay, last pension and PAYE remittances), tax (final returns, a tax clearance certificate and notifying the tax authority within 30 days that you are deregistering), and the company itself (strike-off or winding up at the CAC). Money going back to the US parent generally relies on the Certificate of Capital Importation for the original investment.
Plan the order before you announce anything
The most expensive mistake when closing a Nigerian subsidiary is doing it in the wrong order: closing the bank account before the last pension remittance, or applying to the CAC before tax is settled. A written exit plan, with dates and owners for each step, keeps the process orderly and protects directors, some of whom may be Nigerian residents who remain exposed after the US parent has moved on.
| Stage | Main tasks | Owner |
|---|---|---|
| 1. Decide and document | Board resolution, timeline, budget for final costs | Parent board |
| 2. People | Notice, final pay, pension, PAYE, handover | HR and finance |
| 3. Contracts and assets | End leases and supplier contracts, sell or move assets, collect receivables | Operations |
| 4. Tax | Final returns, TCC, deregistration notice | Tax adviser |
| 5. Money out | Repatriate remaining cash through the official market | Finance |
| 6. Company | Strike-off or winding up at CAC; close bank accounts last | Company secretary or lawyer |
Staff: notice, final pay and statutory deductions
Section 11 of the Labour Act sets minimum notice by length of service: one day for three months or less, one week for more than three months but under two years, two weeks for two to five years, and one month for five years or more. Notice of one week or more must be in writing, and pay in lieu of notice is allowed. Employment contracts often give more; the contract wins where it is more generous.
- Redundancy has its own rules; the Nigeria library explains redundancy and what you must pay, and our page on severance for Nigerian staff covers the US employer's view.
- Run a final payroll including accrued leave and any agreed severance, with PAYE deducted and remitted to the state IRS.
- Remit the final pension contributions within seven working days of the last salary payment, as the Pension Reform Act 2014 requires.
- Issue each employee a letter confirming their employment ended and their final pay, which they will need for their next employer and their PFA.
Tax: final returns, clearance and deregistration
The Nigeria Tax Administration Act 2025 deals directly with closing down. Section 10 says a taxpayer that ceases business permanently must notify the tax authority of its intention to deregister within 30 days, after which the Tax ID is deregistered; a temporary stop is notified the same way and the Tax ID is suspended instead.
- File final company income tax, VAT and withholding returns, and the employer's annual return of emoluments.
- Apply for a tax clearance certificate. Section 72 requires the authority to issue a TCC within two weeks of the demand or give reasons for refusing.
- Keep the books. Section 31 requires records for at least six years after the year of assessment, even after the company is gone; decide who will hold them.
The company: strike-off or winding up
The CAC's Operations Checklists (2022) list strike-off by application on form CAC 13 under section 692 of CAMA 2020, generally for a company that has stopped operating and settled its affairs. A company with assets to distribute or creditors to deal with goes through a formal winding up instead. The Nigeria library compares the two in how to strike off or wind up a company at CAC.
Simply stopping filings is not an exit. Techeconomy reported in July 2025 that the CAC gave about 100,000 companies 90 days to file outstanding returns before delisting under section 692; a company removed that way can leave directors and the parent with loose ends.
Moving the remaining money to the US parent
Mondaq's summary of the capital importation rules explains that a Certificate of Capital Importation, issued by the bank when the investment came in, is what allows sale or liquidation proceeds, dividends and capital to be repatriated in foreign currency through an authorised dealer, and that tax clearance is needed for dividend or interest remittances. Find the original CCIs early. Our guide to repatriating profits from a Nigerian subsidiary goes into the steps. On the US side, remember reporting for the Nigerian accounts in their final year; see FBAR for a US company's Nigerian bank account.
What to check first
- The original Certificates of Capital Importation and the bank that issued them.
- Every open obligation: leases, supplier contracts, loans, guarantees.
- Who will keep the records for six years and answer any later tax query.
Where Pryme fits
During a wind-down, the Compliance agent on a Pryme Business Account can hold the closing checklist and flag each deadline, and the Finance agent can prepare the final payroll and remittances; a person approves above a set ceiling, and every action is recorded. Verifiable statements and receipts make the final records easier for auditors and former staff to rely on.
Questions people ask
How do I close a company in Nigeria?
Settle staff, contracts and tax first, obtain a tax clearance certificate, notify the tax authority within 30 days that you are deregistering, then apply to the CAC to strike off (form CAC 13) or wind up.
How much notice must I give Nigerian staff when closing?
The Labour Act minimum runs from one day to one month depending on service; the contract applies if it gives more. Pay in lieu is allowed.
Can I just stop filing returns and let CAC remove the company?
It is not a clean exit. The CAC delists non-filing companies under section 692, but directors and the parent can be left with unresolved liabilities.
How do I get the remaining cash out to the US parent?
Through an authorised dealer bank, relying on the original Certificate of Capital Importation and, for dividends or interest, tax clearance.
Sources
- Labour Act, Cap L1 LFN 2004 (PLAC) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
- CAC: Operations checklists 2022 · accessed Oct 2026
- Techeconomy: CAC to delist 100,000 dormant companies (29 Jul 2025) · accessed Oct 2026
- Mondaq (Adeola Oyinlade): How to repatriate capital and profits in Nigeria as a foreign investor (19 Sep 2024) · accessed Oct 2026
- ThisDay: CPS, what you should know about employee's rights (20 Mar 2023) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.