AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A Nigerian business hiring someone who lives abroad usually engages them as an independent contractor or through an employer of record, because employing them directly can bring in the employment and tax rules of the country where they work. You can pay in their currency, but settle the withholding tax question first: Nigeria's 2024 withholding regulations set 10% as a final tax on professional and consultancy fees paid to non-residents where WHT applies, and whether it applies to work done wholly abroad is a point to confirm with a tax adviser.
Start with the real question: contractor or employee?
The label you put on the contract matters less than how the relationship works. In most countries, including Nigeria, someone who works set hours under your direction, uses your tools and works only for you looks like an employee, whatever the paperwork calls them. Someone who controls how and when the work is done, invoices for results and has other clients looks like a contractor.
| Independent contractor | Direct employee abroad | Employer of record (EoR) | |
|---|---|---|---|
| Who employs the person | Nobody; they run their own business | Your Nigerian company | A local EoR company in their country |
| Their local payroll tax and social security | They handle their own | You may have to register and run it there | The EoR runs it and bills you |
| Local employment rights | Generally not owed | Owed under their country's law | Owed, handled by the EoR |
| Your control over the work | By results, not hours | Full | Day-to-day, under the EoR contract |
| Typical fit | Specialist or project work | Rare for small firms | A long-term full-time hire |
If you want a full-time person under your direction, an employer of record is often the cleanest route; our guide to employer of record versus contractors sets out the trade-offs. If the work is a defined project, a contractor agreement is usually enough.
Which law applies
Section 87 of Nigeria's Labour Act allows rights under a lawful contract made outside Nigeria to be enforced, but it does not switch off the worker's own country's law. Employment protections in places such as the UK, Kenya or Canada usually attach to where the person physically works. A clause saying "governed by Nigerian law" will not remove rights the worker has at home. Take local advice before you treat someone abroad as a direct employee.
What the contractor agreement should cover
- The services and deliverables, and how you accept them.
- The fee, the currency and when invoices are due and paid.
- Who bears transfer charges and any foreign exchange cost.
- Tax: the contractor is responsible for their own taxes in their country; state how any Nigerian withholding tax is handled.
- Intellectual property: that work product belongs to your company once paid for.
- Confidentiality and data protection, especially if they handle customer data.
- Termination by notice from either side, and what is paid on termination.
The withholding tax point
PwC's summary of the Deduction of Tax at Source (Withholding) Regulations 2024, effective 1 July 2024, gives these rates for commission, consultancy, technical, management and professional fees:
| Recipient | Rate | Note |
|---|---|---|
| Resident (company or individual) | 5% | Credit against the recipient's own tax |
| Non-resident (company or individual) | 10% | Serves as the final tax |
| Other services, resident / non-resident | 2% / 5% | Simplified category |
The open question for a remote worker is whether their fee is taxable in Nigeria at all when the work is done entirely outside the country. That turns on Nigerian source rules and any tax treaty with their country, and it is a question to put to a tax adviser before you pay, not after. If WHT does apply, the regulations say the payer issues the receipt to the vendor and must remit by the 21st of the following month to the federal tax authority (now the Nigeria Revenue Service). Our guides to withholding tax for non-residents and the UK-Nigeria double tax treaty go further. These regulations predate the Nigeria Tax Act 2025, so check whether they have been revised.
Paying in their currency: a worked example
- If your adviser confirms no Nigerian WHT applies, you pay the full £2,000 on each invoice.
- If WHT at 10% applies, you pay £1,800, remit the naira equivalent of £200 to the tax authority and give the designer a WHT receipt. Agree in the contract whether the fee is gross or net of WHT; if net, you must gross up, which means paying £2,222.22 so that 10% (£222.22) leaves £2,000.
- If your revenue arrives in naira, the exchange rate on the day you convert sets your real cost. Never budget with a fixed rate; check the rate at the time you pay.
What to check first
- Will this person work like an employee or a contractor? If employee, talk to an EoR or a local adviser in their country.
- Ask your Nigerian tax adviser whether WHT applies and at what rate, given their country and any treaty.
- Write the contract: services, fee, currency, IP, confidentiality, termination.
- Decide how you will pay and who bears the charges.
- Keep invoices, payment proofs and any WHT receipts for at least six years, the record period under the Nigeria Tax Administration Act 2025.
Where Pryme fits
A Pryme Business Account holds NGN, USD, GBP and EUR with local account details for each, so you can collect from clients and pay a contractor in the same currency without converting twice. When you do need to convert, Swap shows the rate first and the fee on its own line, and you approve it. Outside Nigeria, these services are provided through regulated partners.
Questions people ask
Can a Nigerian company employ someone in the UK or US?
It can, but employing them directly usually brings in that country's payroll tax and employment law. Most small Nigerian businesses use a contractor agreement or an employer of record instead.
Do I deduct withholding tax when paying a foreign freelancer?
Under the 2024 regulations, professional fees paid to non-residents carry 10% WHT as a final tax where WHT applies. Whether it applies to work done wholly abroad needs a tax adviser's view.
Can I pay a remote worker in dollars from Nigeria?
Yes, from a domiciliary or multicurrency account. Agree the currency and who bears transfer and exchange costs in the contract.
Is a remote contractor entitled to leave or pension from me?
A genuine independent contractor generally is not. If the arrangement works like employment, the worker's own country may treat them as an employee with those rights.
Sources
- PwC Nigeria: Highlights of the Deduction at Source (Withholding) Regulations 2024 (Jul 2024) · accessed Oct 2026
- Labour Act, Cap. L1, Laws of the Federation of Nigeria 2004 (PLAC text) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (gazette copy) · 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.