Ogun Guangdong Free Trade Zone is the result of the joint venture between the governments of Nigeria and China.
In 2006, the China- Africa Summit forum was conducted in Beijing, in which the decision was taken to establish numerous cooperation zones of China in Africa. The establishment of such zones in Nigeria will be beneficial for the economy of the country as well as it would strengthen the trade relations between Africa and China. The Ogun Guangdong Free Trade Zone (OGFTZ) is one of the free trade zones out of a group of eight free zones which have been designated to be formed in Africa and is the second free zone after the Lekki Free Trade Zone to be developed with the help of the Chinese government.
About Ogun Guangdong Free Trade Zone
The Ogun Guangdong Free Trade Zone is located in the city of Igbesa in the Ogun state of Nigeria. The construction work for the free zone started in the year 2008, and the activities of this free trade zone in Nigeria are run by a joint venture between a Chinese conglomerate called China African Investment Company (CAIC) and the Ogun State Government. This joint venture was approved by the Nigeria Export Processing Zone Authority (NEPZA) in the mid-2008.
The total planned area that the OGFTZ covers is close to 10,000 hectares, and it also has the lease on the land for 99 years. Since the free zone is a product of a joint venture, the China African Investment Company has the controlling stake in the management. CAIC, which is led by China’s Guangdong, is the owner of a whopping 82% of the complete free zone. The Ogun State Government has the remaining stake, that is 18%. The CAIC also has 100% management control of the free zone, and it consists of a 100-year concession for all the goods produced in the free zone.
The primary focus of the free zone is on the manufacturing and processing industries. The major industries in the region are related to furniture manufacturing, manufacture of lightweight objects and ceramics. In the long run, the OGFTZ is focused on expanding more into engineering, marketing and trading industries. As discussed in the China- Africa Summit forum, the free zone is trying to develop its real estate development and R&D department and is striving to provide services such as logistics, manufacturing, trading, financial assistance etc.
The free zone employs about 4000 people and has provided training to around 30,000 people in the past 11 years. This zone has provided the people with a platform to increase their skill level, and since the inception of the region, there are 30% more skilled workers by now. The phase two and three of the developmental activities in the zone will see more job creation and better services which the area will offer to its clients. There are various other benefits of setting up a company in the Ogun Guangdong Free Zone which are described below.
Benefits of Setting up a Company in OGFTZ
OGFTZ is looking into the prospect of partnering with some of the Asian countries such as India or Lebanon. This move will not only improve the trade relations of Nigeria with other countries but will also help in the uplifting of the Nigerian economy. The benefits of establishing a company in OGFTZ are:
1.No Duty applicable on Import of Raw Materials
As the company would be set up in the free zone, it is not required of these companies to follow the regulations which are observed in the rest of the country. One benefit is that they do not need to pay any duty on the import of raw materials.
2.Faster Customs Processing
The import or export of any goods will require the involvement of the customs department, which would process all the requests of the company faster, thus reducing the time taken for the whole process.
3.Exemption from Taxes
A company established in the free zones is not under the purview of government laws. They need not pay taxes according to the stipulated regulation but need to follow the rules set by the free zone management.
4.100% Foreign Ownership
Any foreign company can have 100% ownership of the company and will not require any local sponsor. This specific would increase the chances of an international company to set up is the base of operations in the free zone.
5.No Import or Export licence required
A company set up in the free zone has the liberty of importing or exporting goods without an import/export license.
6.One stop shop for all the licences
The free zone management would streamline all its services and would provide all the necessary documentation, certificates and licenses in a single place.
7.Curbing employment strikes
The employees of a company established in the free zone cannot go on strike or hold any lockouts for at least till ten years of the inception of the company.
Procedure to Set Up an Enterprise in OGFTZ
If you are interested in setting up a company in the free zone, first of all, you should fill up the required form and submit it with the required documents to the nearest NEPZA office. This application can be either downloaded from the portal of NEPZA or can be obtained at the NEPZA office. On the approval of the application, the management of the free zone will provide you with an operating license which would allow the company to start building the required infrastructure of the company. After the creation of the infrastructure, the company can start its operations.
Presently the zone focuses only on processing and manufacturing industries, and in the future, the management of the free zone has a target of bringing in 100 enterprises in two years. With such prospects, setting up a company in the free zone is a very lucrative option for budding entrepreneurs. If you are on the lookout for firms which would help you in setting up an enterprise in the free zone, then you must avail the services of Business Setup Worldwide. Our team consists of experts and professionals who will provide you with customized solutions to your business problems. For establishing your company in the free zone, feel free to contact us - We’d be happy to help you.