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The short answer
A Nigerian subsidiary deducts 10% withholding tax from a dividend paid to its US parent, with no treaty reduction available. To buy dollars and send the net dividend through the official market, the bank will expect the Certificate of Capital Importation (CCI) issued when the parent's capital came in, plus evidence that tax has been paid.
Two separate questions
Paying a dividend out of Nigeria involves a tax question (how much Nigerian tax comes off) and a foreign exchange question (how the naira becomes dollars in a US account). They are handled by different bodies: the Nigeria Revenue Service for the tax, and the subsidiary's bank, acting as an authorised dealer under CBN rules, for the FX. Getting one right does not fix the other.
The tax: 10% WHT, no treaty
PwC's Nigeria withholding tax summary (reviewed 29 May 2026) lists 10% on dividends paid to non-resident companies. The treaty table on the same page shows no United States entry, and the IRS list of US income tax treaties (reviewed 3 Jan 2026) does not include Nigeria, so the 10% is not reduced. The subsidiary deducts the WHT when it pays, files it by the 21st of the following month and keeps the receipt.
The dividend is paid out of profits that have already borne Nigerian company income tax, so the WHT is a second layer on the same profits. Check that the company has distributable profits on its audited accounts before the board declares anything.
The FX: why the CCI matters
When the US parent first sent money into the subsidiary, as share capital or a loan, the receiving bank should have issued a Certificate of Capital Importation. Mondaq's 2024 guide describes the CCI as issued by an authorised dealer on behalf of the CBN within 24 hours of the inflow, and says it enables repatriation of dividends and profits net of tax in any convertible currency. A Templars FAQ (c.2020) adds that the CCI is not mandatory but that without it an investor cannot access the official FX market for repatriation. The CBN Foreign Exchange Manual 2026, as summarised by Pavestones (June 2026), refers to electronic CCIs registered within 24 to 48 hours of inflow.
The NIPC's own FAQ says Nigerian investment law guarantees foreign investors the right to repatriate profits, dividends and capital after payment of applicable taxes, and lists the CCI among the documents it requires. If the parent funded the subsidiary informally, for example by paying its bills from the US, there may be no CCI. Fix that before you plan a dividend; read repatriating profits from a Nigerian subsidiary.
Steps
- Finalise audited accounts showing distributable profits.
- Board resolution declaring the dividend, and shareholder approval if the articles require it.
- Deduct 10% WHT and remit it to NRS by the 21st of the following month; obtain the receipt.
- Gather the bank pack: CCI, audited accounts, resolution, WHT receipt and tax clearance (Mondaq notes tax clearance is expected for dividends and interest).
- Apply to the bank to buy dollars and remit the net dividend to the parent's account.
- Keep the full file for the US return and for the next audit.
Worked example
Example only, at an assumed ₦1,500 to $1; the actual rate is the market rate when the bank sells you the dollars.
- Dividend declared: ₦300,000,000
- WHT at 10%: ₦30,000,000 to NRS
- Net dividend: ₦270,000,000
- Dollars remitted at the assumed rate: $180,000, before bank charges
The rate is the variable you cannot control. CBN publishes the NFEM rate, which it describes as derived at volume-weighted average and the official rate for the day; check it on the CBN rates page rather than relying on a figure in an article.
Timing and common delays
Plan the dividend as a project of several weeks rather than a payment run. The audited accounts must be signed before the board can rely on them; the WHT receipt must be issued before the bank pack is complete; and the bank then has to source the dollars. Delays usually come from documents rather than rules: a CCI in a different name from the shareholder on the register, a CCI for a smaller amount than the capital the parent believes it injected, or a missing tax clearance. Reconcile the share register, the CCIs and the parent's ledger of capital injections before the year-end, so the gaps are fixed while there is time.
If the subsidiary has accumulated losses, there are no distributable profits and a dividend is not available. Repaying a properly documented shareholder loan or charging an arm's-length fee are different routes with different tax results; take advice before choosing.
The US side
The parent reports the gross dividend; how it is taxed and whether the Nigerian WHT is creditable depends on the parent's structure (C corporation, LLC taxed as a partnership, or an individual owner) and on the rules for controlled foreign corporations. The IRS says generally only foreign income taxes, or taxes in lieu of them, qualify for the foreign tax credit. Take advice before the board meets, not after the money arrives. Related reading: WHT on payments to a US parent and CFC rules for a Nigerian company.
Where Pryme fits
A Pryme Business Account holds NGN and USD with local details for each. The CCI and the dividend remittance run through the authorised dealer bank that handled the original inflow, so confirm the process with that bank first. Swap shows the rate and the fee before you approve any conversion.
Questions people ask
What is the WHT on dividends from Nigeria to the US?
10% of the gross dividend, with no treaty reduction because there is no US-Nigeria income tax treaty.
Do I need a CCI to repatriate dividends from Nigeria?
It is not strictly mandatory, but without a CCI an investor cannot access the official FX market to repatriate, so in practice banks expect it.
What documents does the bank need to remit a dividend abroad?
Typically the CCI, audited accounts, the board resolution, proof of WHT and tax clearance. Ask your bank for its current list.
Is a dividend from a Nigerian subsidiary taxed in the US?
Generally reported by the parent, but the treatment depends on its structure and the CFC rules. Ask a US tax adviser.
Sources
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (last reviewed 29 May 2026) · accessed Oct 2026
- IRS: United States income tax treaties, A to Z (reviewed 3 Jan 2026) · accessed Oct 2026
- Mondaq: How to repatriate capital and profits in Nigeria as a foreign investor (19 Sep 2024) · accessed Oct 2026
- Templars: Repatriation of funds and capital importation in Nigeria, FAQs (c.2020) · accessed Oct 2026
- NIPC: Frequently asked questions · accessed Oct 2026
- Mondaq (Pavestones Legal): the CBN Foreign Exchange Manual 2026 (24 Jun 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.