Kano Free Trade Zone provides every service possible to the companies set up in the free zone and also uplifts the economy of the country.
Kano Free Trade Zone is the second free trade zone in Nigeria which is owned by the federal government and is located in Panisau Road area of the Ungogo Local Government Area. The sponsor/developer of the Kano free Trade Zone is the federal government, and though it was proclaimed as an Export Processing Zone (EPZ) in 1998, it was later converted into a Free Trade Zone in 2001 by gaining approval from the president-in-council. Its area of specialization is in warehousing, manufacturing and providing logistic services.
Covering almost 262 hectares of land, the Free Trade Zone is fully operational and provides a very competitive environment for all the companies set up in the zone. A total of 33 companies have been registered in the free-zone out of which 13 of them have started their operations. The region also consists of 19 massive warehouses which are being utilized by the above mentioned 13 of the companies which are set up in the free zone and are fully functional.
In the year 2010, Kano Free Trade Zone received a grant of ₦ 5.2 billion from the federal government of Nigeria for the development of the free zone. This grant will help in increasing the efficiency of the various services in the region and will also allow the management to develop more infrastructure suited to the needs of the businesses in the area. There were many other significant upgrades made to the free zone such as making a joint task force which will improve and increase the commercial activities in the zone, Great improvement on Foreign Direct Investors from all over the world.
Many investors and entrepreneurs are still unfamiliar with the multiple benefits that a free zone can provide to a company. The Government of Nigeria is working towards spreading the awareness of the various benefits of the free zone. The Kano State pension trust fund is providing its services to the companies in the Kano Free Trade Zone and is helping in the development of the area.
Incentives of Setting Up Business in Kano Free Trade Zone
The various benefits that a company set up in the free zone can avail are:
● Complete Ownership and Repatriation of Profits
A foreign businessman does not require a local sponsor and can own 100% of the company in the free zone. All the profits and dividends can be sent back to the entrepreneurs’ home country.
● No application of Import License or any Expatriate Quota
A company set up in the free zone does not require an import license to import any goods or raw materials and also the companies have don’t expect to maintain the expatriate quota. According to the expatriate quota, a company needs to get approval before hiring any foreign employees or directors for a business.
● Duty- free, Tax-free import of specific goods
If the company is set up in the free zone, it does not need to follow the regulations that are being developed in the country. This means that the companies do not need to pay any import duty or any tax related to the import and export of raw materials.
● No Strikes or Lockouts
The employees of a company formed in the free zone can’t have strikes or lockouts for at least the initial ten years of setting up the company.
● No Rent during the first six months of Construction
The company won’t be charged any rent during the first six months while the necessary infrastructure is created.
● Approvals for all Permits and Licenses under a Single Roof
All the required permits and licenses will be accessible at one place. This would significantly reduce the duration for the period of the commencement of the business activities.
● Complete Tax Holiday
Laws that are mostly observed by companies all over the country are not followed in the free zones. The companies do not need to pay any taxes, duties or levies
● Permission to sell 100% of goods domestically
Enterprises that have been set up in the free zones have agreement to sell their products in the country. They are also allowed to sell any imports which they bring in.
Why Invest in KFTZ?
There are many reasons for an entrepreneur to choose Kano Free Trade Zone over the other free zones in Nigeria, such as:
- Enterprises set up in KFTZ have permission to sell 100% of the manufactured, assembled or imported goods in the domestic market.
- Kano state is in close to many other West African Countries like Chad, Niger, Mali etc. which could serve as export markets for the companies.
- While selling the produced goods in the domestic markets, the import duty on goods manufactured in the Free Zone is usually ascertained based on the value of the raw materials or components used in assembly.
- Kano is the largest consumer market in Nigeria, with a population of 13 million people (approx).
- There are abundant natural resources present nearby such as Gum, Sesame seeds, Groundnuts, Garlic, Tomatoes, Pepper, Ginger, etc.
- Kano Free Trade Zone is a part of the African Growth and Opportunity Act (AGOA) which was approved by the U.S. Congress. The primary purpose of this act is to improve economic relations between the two countries.
- Availability of skilled and unskilled labour at competitive rates.
- 100% ownership of the investment.
- 100% repatriation of capital, profits and dividends.
Formation of a company in the Kano Free Trade Zone is very beneficial to both the budding entrepreneurs and also the economy of the country of Nigeria. The free zone will also provide a platform to increase employment in the country and thus help uplift the GDP.
How to Set Up an Enterprise in KFTZ
Setting up a business in the free zones requires the businessman to go through certain stages. These steps are:
- First, download or pick up an application form from the Management of Kano Free Trade Zone/NEPZA Headquarters. This Application would cost $500 or its naira equivalent.
- Please fill out the application form and then submit it to the Kano Free Trade Zone or NEPZA Headquarters in Abuja along with the required documents
- After gaining approval, an operating licence can be obtained, which would be enough to incorporate your business in Nigeria officially. After the permit is received, the free zone management will assign a specific space for you to develop the needed infrastructure.
- Get a certificate of capital importation from the bank in the free zone.
- Build the necessary infrastructure required by your business and must submit the required documents within the first three months after the execution of the agreement.
- Commence your business!
Setting up a company in a free zone may become a complex process depending upon the size and nature of the business and may require a certain amount of knowledge. If you need assistance regarding setting up a company in Nigeria, you can put your faith in the services of Business Setup Worldwide. Our team of experts will tackle all your business related problems and provide you with solutions customized according to you. For establishing your company in the free zone, feel free to contact us - We’d be happy to help you.