Compliance Requirement for Setting Up a Human Resource HR Company in Nigeria

Establishing a human resource company in Nigeria requires meticulous planning, strategic organization, and compliance with regulatory requirements.

A well-structured HR setup enables companies to provide effective talent management, foster a positive work environment, and maintain a competitive edge. In Nigeria, setting up an HR company is a regulated process with specific requirements.

These compliance requirements address various aspects such as employment practices, taxes, employee benefits, and general business operations. Below, we provide some key regulatory compliance requirements for HR companies in Nigeria.

1. Companies and Allied Matters Act (CAMA) 2020
2. Recruiters License from the Federal Ministry of Labour and Employment
3. National Pension Commission (PENCOM)
4. Tax Compliance
5. Nigerian Data Protection Commission (NDPC)
6. Money Laundering (Prohibition) Act
Conclusion
Why Choose Tcorporate?
Contact Us Today

1. Companies and Allied Matters Act (CAMA) 2020

CAMA regulates business registration, corporate governance, and legal structures of companies in Nigeria. Human Resource companies must be registered with the Corporate Affairs Commission (CAC) as it is unlawful to carry on business in Nigeria without first registering it. CAMA provides that a person or association of persons shall not carry on business in Nigeria as a company, limited liability partnership, limited partnership or under a business name without it being registered.

2. Recruiters License from the Federal Ministry of Labour and Employment

To operate a Human Resource Company and recruit staff in Nigeria, it is mandatory to obtain a Recruiters License from the Federal Ministry of Labour and Employment. There are two major categories of Recruiters Licenses:
a. Recruiters Licence for Domestic Operations
b. Recruiters Licence for International Operations

3. National Pension Commission (PENCOM)

Under the Pension Reform Act 2014, HR companies must ensure that employees are enrolled in the pension scheme. Employers are required to contribute 10% of the employee’s salary, while employees contribute 8%.

Get your PENCOM Documents Here

4. Tax Compliance

Upon incorporation with CAC, a Tax Identification Number (TIN) is assigned. Registration on the Tax Pro Max platform is required for filings and payments. HR companies must comply with several tax regulations:
a. PAYE (Pay-As-You-Earn)
b. VAT (Value Added Tax)
c. CIT (Corporate Income Tax)
d. Withholding Tax

5. Nigerian Data Protection Commission (NDPC)

HR companies processing personal data of over 200 individuals within 6 months must register with the NDPC as data controllers or processors of major importance.

Get to Know more

6. Money Laundering (Prohibition) Act

HR companies fall under Designated Non-Financial Businesses and Professions (DNFBPs) and must register with SCUML to comply with anti-money laundering laws.

Conclusion

Human Resource companies in Nigeria need to follow key regulations including company registration, tax compliance, pension contributions, and data protection. Staying compliant is crucial for long-term success in a constantly evolving legal environment.

Why Choose Tcorporate?

Setting up a human resource company requires expertise to navigate the legal and regulatory requirements effectively. At Tcorporate, we provide comprehensive legal support to help you:
• Assess readiness
• Ensure CAC compliance
• Draft and file necessary documents
• Handle post-incorporation matters
• Obtain permits and licenses