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The short answer
A loan from a UAE parent to its Nigerian subsidiary should come in as foreign currency through an Authorised Dealer bank in Nigeria, which issues a Certificate of Capital Importation (CCI) for capital imported as debt; the CCI is what supports buying foreign currency later to pay interest and repay principal. Interest paid to the parent normally suffers Nigerian withholding tax at 10%, the UAE is not on the 2022 list of Nigerian tax treaties in force, and connected-party interest deductions are capped at 30% of EBITDA.
Why the route the money takes matters
Nigeria guarantees repatriation of foreign investment that is documented when it arrives. A 2021 Mondaq article by Resolution Law Firm describes the Certificate of Capital Importation as issued by an Authorised Dealer, usually a commercial bank, for capital imported as "cash, debt, equity, or goods", and cites the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act for issue within 24 hours of importation and reporting to the CBN within 48 hours. A June 2026 Mondaq guide by Adeola Oyinlade describes the electronic CCI and the routing of inbound funds through an Authorised Dealer bank.
If the parent instead pays a supplier on the subsidiary's behalf, or the subsidiary sells the dollars informally, there may be no CCI. Without one, the subsidiary may struggle to buy foreign currency through official channels to repay. The CCI basics are covered in when you need a Certificate of Capital Importation.
Paperwork to have before the money moves
- A written loan agreement: amount, currency, interest rate and basis, repayment schedule, governing law.
- Board resolutions of both companies approving the loan.
- The subsidiary's incorporation documents, which the bank will ask for when issuing the CCI (the Resolution Law Firm article lists a request letter, board resolution, certificate of incorporation and a tested telex showing amount and purpose).
- Confirmation from the receiving Nigerian bank of exactly which documents it needs for a debt CCI. Loan-specific CBN conditions under the 2026 FX Manual were not confirmed for this article, so take the bank's current list as the working answer.
Tax on the interest
PwC's Nigeria summary, reviewed May 2026, gives a 10% withholding tax rate on interest paid to non-resident companies. Treaty rates can be lower, but a 2022 FIRS circular lists 16 treaties in force (Italy for air and shipping only, the UK, Belgium, Pakistan, the Czech Republic, Slovakia, France, the Netherlands, Romania, Canada, South Africa, China, the Philippines, Sweden, Spain and Singapore). The UAE is not on that list; check with the Nigeria Revenue Service for any later change. The same circular says a treaty claim for interest needs the loan agreement and the CCI, which shows how central the certificate is. UUBO's 2026 note says the Nigeria Tax Act removed the old exemptions for interest on eligible foreign loans.
On the deduction side, PwC says that from 1 January 2026 interest on connected-party loans is deductible only up to 30% of EBITDA, with the excess carried forward for up to five years. Nigeria's transfer pricing rules also require connected-party terms to be at arm's length, so a rate far above what an unrelated lender would charge invites adjustment. The subsidiary is the withholding agent: it deducts the tax when the interest is paid or credited, pays it over and should give the parent a receipt showing the gross amount, the tax deducted and the period, because the parent's bank and auditors will ask for it. Whether the UAE taxes the interest the parent receives is a UAE question; see UAE holding companies and Nigerian investments.
Worked example
Example, invented figures. The parent lends USD 500,000 at 8% a year. Annual interest is USD 40,000. The subsidiary withholds 10%, USD 4,000, pays it to the tax authority and remits USD 36,000 to the parent. Suppose the subsidiary's EBITDA is ₦400,000,000 and the interest, converted at the rate on the day, is ₦150,000,000. The cap is 30% x 400,000,000 = ₦120,000,000, so ₦30,000,000 of interest is not deductible this year and carries forward.
Repayment and the naira risk
A dollar loan to a company that earns naira puts the exchange risk on the subsidiary. If the naira weakens, the naira cost of each repayment rises and the subsidiary books exchange losses on the loan balance under IAS 21. The group can lend in naira instead, which moves the risk to the parent, but that changes how the CCI and repatriation work and should be discussed with the bank first. Some groups convert part of a loan into equity later, which needs its own CCI and corporate steps rather than a book entry. Plan the repayment schedule against the subsidiary's realistic naira cash flow, and keep the CCI, loan agreement, interest computations and withholding tax receipts in one file for each repayment request.
Where Pryme fits
Pryme is not an Authorised Dealer and does not issue CCIs, so the inbound loan should go through the Nigerian bank that will issue the certificate. Pryme can help around it: the Finance agent can track interest dates, withholding and the EBITDA cap working, and a Business multicurrency account can hold the parent's USD alongside naira for operating payments. Related reading: repatriating dividends to a UAE parent.
Questions people ask
Does an intercompany loan to Nigeria need a CCI?
The CCI is issued for capital imported as cash, debt, equity or goods, according to Resolution Law Firm. Without one, repaying in foreign currency through official channels is harder.
What withholding tax applies to interest paid to a UAE parent?
PwC gives 10% for non-resident companies. The UAE was not among the treaties in force in the 2022 FIRS circular, so no treaty rate applied then; check for later changes.
Is all the interest deductible in Nigeria?
Connected-party interest is capped at 30% of EBITDA from 2026 according to PwC, with the excess carried forward up to five years.
Can the parent lend in naira?
It can, but it changes who carries the exchange risk and how repatriation works. Discuss it with the receiving bank and your advisers first.
Sources
- Mondaq (Resolution Law Firm): Procedure for repatriation of capital and profits in Nigeria, 12 Apr 2021 · accessed Oct 2026
- Mondaq (Adeola Oyinlade): The 2026 foreign direct investor's legal guide to Nigeria, 24 Jun 2026 · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- FIRS Information Circular 2022/15 on claiming tax treaty benefits (KPMG copy) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria group taxation (reviewed 29 May 2026) · accessed Oct 2026
- UUBO: End of an Era (foreign loan interest under the Nigeria Tax Act), 2026 · 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.