How To Launch A Startup In Lagos, Nigeria

With more than 20 million residents, Lagos is a bustling megacity in Nigeria and one of the biggest cities on the African continent. As skyscrapers decorate the skyline and the streets buzz with market vendors, it’s easy to feel the energy that the city exudes.

Tourists continue to visit Lagos to experience its animated nightlife and unique attractions. From historic features like Freedom Park and the Nike Art Gallery to the sandy beaches of Tarkwa Bay, the city is never short on things to do and see.

However, beyond its tourist hotspots and lively culture, Lagos has caught the eye of curious entrepreneurs and investors looking for their next project.

 

Why Start A Business In Lagos?

 

For those who are wanting to target the African market, starting a business in Lagos may just be the smartest move to make. There has been a major surge in startups in recent years and there are a few good reasons for this happening.

It’s a tech hub: Lagos has been dubbed the “Silicon Valley” of Africa as it has produced companies that have reached global unicorn status, including Paystack and Flutterwave.

Limited language barrier: The official language is English which makes it easy for foreign entrepreneurs to communicate with locals when doing business.

Access to the African market: With a population of more than 220 million people, Nigeria is a good starting point to grow a business into West Africa and beyond.

Interest from investors: As a country, Nigeria is one of the top African countries that investors are eager to invest in. This makes Lagos a great location for new startups who can benefit from this funding.

 

Industries With High-Growth Potential

 

If you want to build a high-impact startup, you have to consider the environment of your business. The location of your business will have a lot of influence over its long-term success so for those with their eye on Lagos, here are some of the industries that are gaining serious momentum.

HealthTech: There are evident gaps in the public healthcare system in Lagos which has resulted in a need for online consultations and the delivery of prescription medications.

FinTech: This is currently the biggest industry in Lagos with the likes of Opay reshaping how locals save, spend and invest their money.

Logistics: While e-commerce has become very popular with online shopping, the logistics of it is still tricky. This has led to a massive opportunity for startups in delivery and warehousing.

EdTech: Nigeria has a huge young population that is eager to learn especially online, opening the door for digital learning platforms and e-classrooms.

 

Accelerator And Incubator Programmes In Lagos

 

All startups, but especially new entrepreneurs, can benefit from joining an accelerator or incubator programme. These are designed to help ventures in their early stages with guidance and support by connecting them to investors or even offering funding.

Lagos Innovates: Run by the Lagos State Government, this initiative provides funding, mentorship and vouchers for workspaces to new local businesses.

CcHub: The Co-Creation Hub is one of Nigeria’s most well-known innovation hubs that equip startups with funding, incubation and networking opportunities.

GreenHouse Lab: An accelerator that focuses on female-led tech startups across Africa.

Founders Institute Lagos: This initiative helps founders with innovative ideas through guidance and access to a global network.

 

What Funding Opportunities Are There For Startups?

 

Raising the capital that you need to get your startup off the ground is never easy, but Lagos has more options than most other African cities. Here are a few of them that you could consider.

Venture capital: There are a host of VC firms to help startups in Lagos including Microtraction, EchoVC and GreenHouse Capital.

Government grants: The Tony Elumelu Foundation provides African entrepreneurs with access to seed capital and training. Additionally, the Bank of Industry offers small to medium size enterprises (SMEs) in Nigeria with grants and loans.

International funding: Some startups in Lagos have successfully secured funding from global VC firms like Sequoia Capital and Y Combinator.

 

 

Visa Requirements For Foreign Entrepreneurs

 

If you are not a Nigerian citizen but wish to start a business in Lagos, you will need to apply for a visa or sponsorship. To find out which one is right for you, it’s always recommended to consult with a local professional to help you.

Business Visa: Offers short-term entry up to 90 days, suitable for business meetings or scoping out new opportunities.

Combined Expatriate Residence Permit and Aliens Card: This is required for foreigners who want to live and work in Nigeria. It can be applied for through the Nigeria Immigration Service and will need a sponsorship from a registered Nigerian business.

Business Registration Sponsorship: To be able to register a business, you will either need a Nigerian partner or to register a foreign-owned company with the Corporate Affairs Commission. If you want to own your business as a foreigner, you will need a Tax Identification Number and a Nigerian address to be able to do so.

 

How To Start A Business In Lagos

 

Setting up your business in Lagos is a fairly straightforward process. Here is a step-by-step guide on how you can get up and running to operate legally in the city.

 

Register The Company

 

You can visit the Corporate Affairs Commission website to search for your desired business name. If it is available, you can reserve it. Here, you can also submit your registration documents and obtain your Certificate of Incorporation.

You will also be issued with a Tax Identification Number (TIN) from the Federal Inland Revenue Service.

 

Open A Business Bank Account

 

The next step is to open a corporate bank account with your CAC documents and TIN. This can be done with any Nigerian bank such as Zenith or Access Bank.

 

Set Up Your Business Infrastructure

 

You can choose to work at a co-working space, have a physical office or work online. Depending on which industry you are in, you may need specific licenses. For example, FinTech startups need approval from the Central Bank of Nigeria.

 

Should You Launch A Startup In Lagos?

 

If you are ambitious and resilient enough to start a business in Africa, Lagos is the perfect mix of creativity, energy and opportunity. Really, the entrepreneurial spirit in this city is unmatched.

So if you are ready to innovate in finance, healthcare or logistics, a market excited for innovation is waiting for you to hit the ground running.

Good luck!