On 27 February 2024, the Federal Government of Nigeria (FGN) released the Expatriate Employment Levy (EEL), a mandatory contribution imposed on companies and employers who hire and maintain expatriates as part of their workforce.
Recognising the growing expatriate strength in Nigeria, the FGN has implemented this levy to serve the following purposes:
- Balance the benefits of foreign direct investment with the protection of local labour resources.
- Address socio-economic considerations and advance social equity and workforce development.
- Promote knowledge and skill transfer from expatriates to local employees.
Who is subject to the EEL?
All employers within the private sector, including startups, small and medium-sized enterprises (SMEs), multinational corporations, and other entities that employ expatriates, are required to pay the EEL. The EEL applies to (3) categories of expatriate workers:
- Holders of work or residence permits in Nigeria.
- Persons working temporarily outside of Nigeria but holding a quota position in a Nigerian company.
- Individuals with temporary work permits who have worked in Nigeria for at least 183 days per year.
For each of these categories, the expatriate must have worked in Nigeria for at least 183 days during the fiscal year.
It is important to note that expatriates with temporary work permits who have worked for multiple Nigerian companies will be exempt from paying the levy unless they have worked for a total of 183 days in a year. In that case, the last employer responsible for their immigration status is liable for the EEL payment.
Who is not subject to the EEL?
The EEL does not apply to accredited diplomatic personnel, international agencies, government officials, or their dependents.
Who enforces the EEL?
The Nigeria Immigration Service (NIS) determines who is subject to the EEL and enforces compliance with the levy under the Immigration Act and Nigeria Visa Policy. The NIS has put in place online reporting platforms, audits, and cross-checking of reported information against other data sources to aid EEL compliance.
What are the responsibilities of the employer?
Employers are responsible for maintaining records, timely reporting of expatriate details, notifying of changes in employment status, meeting filing deadlines, and providing comprehensive EEL compliance training to their human resources staff.
What are the responsibilities of the expatriate?
Expatriates are responsible for providing their employers with accurate personal and employment information to help them meet their reporting obligations.
Offences and penalties
Failure to provide accurate and complete reporting can lead to significant consequences, posing both financial and reputational risks. Offenders face severe penalties under Section 56(5) of the Immigration Act, including imprisonment for up to five years, a fine of ₦1,000,000 (one million Naira), or both. In addition, Regulation 52(6) of the Immigration Regulations 2017 outlines further sanctions.
EEL validation and payment process
The registration process for expatriates working with Nigerian companies can now be initiated; however, the implementation of the EEL will commence on Friday, 15th March 2024. It is imperative for employers to comply with the EEL by the deadline, which is Monday, 15th April 2024.
Employers under the EEL can fulfil their obligations through the online portal at www.eel.interior.gov.ng. The applicable levy is $15,000 (fifteen thousand US Dollars) for expatriates in directorship positions and $10,000 (ten thousand US Dollars) for all other categories of expatriates, and it is payable annually.
During the EEL validation period, employers can change or replace expatriate employees who are no longer employed by the company with new expatriate employees at no additional cost through the portal.
The EEL introduces the EEL card, similar to an international passport, which will be required of an expatriate at the time of lawful exit and entry into the country.
Got any questions about the EEL? Please send us an email at hello@tlpadvisory.com, and we will clarify.
