Why Businesses are Choosing Employer of Record Services in Nigeria for Expansion

Nigeria, as Africa’s largest economy and most populous nation, offers businesses a strategic entry point into the African market. With a young, skilled workforce and growing technology sector, the country presents immense opportunities for international businesses to hire talent and build teams. However, navigating Nigeria’s labor laws, payroll management, and tax regulations can be complex for foreign companies looking to hire local staff.

An Employer of Record (EOR) simplifies the process of hiring in Nigeria, ensuring compliance with employment laws while managing payroll, taxes, and employee benefits. Cadana’s EOR services enable businesses to expand into Nigeria efficiently without the need to establish a local entity, thus simplifying how they hire and manage employees.

Here’s why more businesses are choosing EOR services in Nigeria for seamless international expansion, and how this approach allows them to hire top talent with ease.

1. Faster & Compliant Talent Acquisition Without a Local Entity

Setting up a legal entity in Nigeria involves complex registration processes, government approvals, and compliance with tax laws—which can take months. With an EOR in Nigeria, businesses can hire personnel immediately without establishing a local subsidiary.

How an EOR Helps Streamline Your Ability to Hire:

Eliminates entity setup requirements – The EOR legally employs workers on your behalf, making it easier to hire a workforce.
Faster market entry – Onboard employees in days instead of months, accelerating your ability to hire quickly and efficiently.
Legally compliant employment contracts – Ensures alignment with Nigeria’s labor laws, giving you peace of mind when you hire new staff.

By partnering with Cadana’s EOR services, businesses can start operations in Nigeria quickly, avoiding administrative hurdles and enabling them to hire the best candidates right away.

2. Hassle-Free Payroll Processing & Tax Compliance for Every Hire

Payroll in Nigeria involves multiple statutory deductions and contributions, including Pay-As-You-Earn (PAYE) tax, pension fund contributions, and the National Housing Fund (NHF). Businesses must also ensure that employees are paid on time and in compliance with tax laws, a process greatly simplified when you hire through an EOR.

Key Payroll & Tax Considerations in Nigeria:

PAYE (Pay-As-You-Earn) Tax: Progressive tax rates ranging from 7% to 24% based on income, impacting how you compensate each hire.
Pension Contributions: Employers contribute 10% and employees contribute 8% of gross earnings, a standard that affects every hiring decision.
National Housing Fund (NHF): Mandatory 2.5% deduction from employee salaries, a factor to consider when you hire new team members.
Industrial Training Fund (ITF): Employers contribute 1% of annual payroll for companies with more than five employees for employee training, influencing your long-term strategies for those you hire and develop.

How an EOR Ensures Compliance for Every New Hire:

Manages payroll processing and salary disbursements, ensuring every person you hire is paid accurately.
Ensures accurate tax deductions and filings, streamlining the financial responsibilities that come with every new hire.
Avoids financial penalties and compliance risks, protecting your investment in each hire.

With Cadana’s EOR services, businesses can focus on growth while we handle payroll, tax filings, and compliance, ensuring your ability to hire with confidence.

3. Full Compliance with Nigeria’s Labor Laws – A Cornerstone of Ethical Hiring

Nigeria’s employment laws and regulations protect employee rights and outline specific rules for hiring, termination, and statutory benefits. Non-compliance can lead to fines, legal action, or business restrictions, underscoring the importance of compliant hiring practices.

Key Employment Laws in Nigeria:

Labour Act of 2004 – Governs employment terms, wages, leave, and termination rules, setting the standard for how you hire and manage employees.
Pension Reform Act of 2014 – Mandates employer pension contributions, influencing benefits considerations for each hire.
National Housing Fund Act – Requires contributions for employee housing benefits, affecting how you structure compensation packages for those you hire.
Employees’ Compensation Act – Covers workplace injuries and compensation, influencing workplace safety policies for everyone you hire.

How an EOR Ensures Compliance with Ethical Hiring Practices:

Drafts legally compliant employment contracts, ensuring a fair and lawful foundation for each hire.
Manages employee benefits and statutory contributions, supporting the well-being of everyone you hire.
Handles terminations in accordance with Nigerian law, ensuring fair treatment in every hiring cycle.

Cadana ensures that businesses stay compliant with Nigerian employment regulations, preventing legal disputes and operational risks, and promoting responsible hiring practices.

4. Cost Savings & Reduced Administrative Burden – Making Every Hire More Efficient

Expanding into Nigeria through a traditional entity setup requires businesses to invest in legal, HR, and accounting infrastructure, which can be expensive. An EOR allows for smarter resource allocation, making every hire more efficient.

Using an EOR in Nigeria, businesses can:

Avoid entity registration costs – No need for a local subsidiary, saving significant resources on every hire.
Outsource HR, payroll, and compliance – Reduce administrative workload, allowing you to focus on strategic growth rather than administrative tasks related to each hire.
Lower operational risks – Ensure full legal and tax compliance, minimizing potential financial setbacks with every hire.

With Cadana’s cost-effective EOR services, businesses can hire in Nigeria affordably while focusing on core business growth. By reducing administrative and operational expenses, and reallocating resources to core business activities, you can ensure success with every team member you hire.

5. Risk Management and Mitigation – Protecting Every Hire and Your Business

Operating in a foreign market comes with the challenge of navigating local laws and regulations, which can be complex and subject to change. Non-compliance can lead to severe legal disputes and penalties that could impact a company’s reputation and financial stability, making every hire a potentially risky venture.

How an EOR Ensures Risk Management:

Transfers employment liabilities to the EOR – The EOR becomes the legal employer of the workforce, assuming responsibility for all employment-related risks, protecting your business with every hire.
Protects the Company from Legal Disputes and Compliance Issues - With in-depth knowledge of Nigeria’s labor laws and compliance requirements, the EOR ensures that businesses adhere to all necessary regulations, safeguarding every hire.
Ensuring consistent HR practices aligned with local norms - The EOR helps businesses navigate interpersonal dynamics, communication styles, and workplace expectations, ensuring a positive experience for everyone you hire.

With Cadana’s EOR services, businesses can build a strong, compliant workforce in Nigeria, leading to higher job satisfaction and retention, turning every hire into a long-term asset.

Why Choose Cadana as Your Employer of Record in Nigeria?

Expanding into Nigeria offers immense business opportunities, but navigating payroll, HR, and compliance challenges can be overwhelming. We simplify the process, enabling you to hire confidently and focus on expansion.

Cadana’s EOR services help businesses:

Hire employees in Nigeria quickly and legally.
Manage payroll, taxes, and statutory benefits hassle-free for every hire.
Ensure full compliance with Nigeria’s labor and tax regulations with each hire.
Reduce operational costs and administrative burden, optimizing resources for every hire.

Ready to expand into Nigeria? Partner with Cadana today to streamline your hiring process and start building your team with confidence!