Nigerian manufacturers looking to save expenses and gain access to regional markets are being offered broad tax breaks and expedited company setup by the Republic of Benin.

Eric Akouche, CEO of Benin's Agency for the Promotion of Investments and Exports, stated at the Benin-Nigeria Business Forum in Lagos on Wednesday that the nation has purposefully eliminated the majority of the administrative and fiscal expenses that usually discourage investors in the area.

All new investments, regardless of size, are free from corporate income tax, value added tax, and customs taxes under the nation's "Investment Code," which was created in 2020 to draw in international investment in important industries.

“In Benin, when you invest, there are no customs duties, and there is no VAT on your investment. It is free of taxes,” Akouche said.

Companies operating under the code can receive five to 17 years of corporate tax holidays, while firms in special economic zones may qualify for 12 to 17 years of relief. Authorities said the aim is to allow firms to recover capital and scale production before facing the full tax burden.

The law especially targets critical areas for economic development, delivering specialised incentives in agribusiness, textiles and manufacturing, renewable energy, logistics and ICT, and tourism that support infrastructure investments connected to hotels, sports, and health.

Speed is combined with the incentives. According to APiEx, companies can be incorporated using a single government platform in five hours without the need for a local partner, resident permit, or local management.

He said Nigerian manufacturers can relocate part of their production chain, import inputs tax-free, and either export outside the region or supply the Economic Community of West African States using certificates of origin, a structure that reduces costs while keeping access to Nigeria’s consumer base.

Investors could repatriate profits with “no limitations” on dividends and supplier payments. Repatriation of funds for loan servicing is permitted, though limited to the maturity period of the loan and the transfer of funds after asset sale is “limited to the revenue generated from the disposal.”

When they employ skilled workers, they get “employer’s tax exemptions.” Meanwhile, their foreign employees, under a minimum wage regime of 52,000 CFA Francs (XOF) (⁓N132,000), are permitted to transfer 80 percent of their salary back home.

As an additional incentive, the government grants spouses and children of investors under its code five-year resident permits. “ECOWAS people are considered Beninese people,” Akouche said.

The Glo-Djigbé Industrial Zone near Cotonou is central to Benin’s pitch. Power costs are lower than in much of the region, “$0.10 per Kilowatt,” representatives said, noting that the zone offers faster market access.

“From there, investors can serve Benin, Nigeria and other Francophone West African markets.”

Labour policy is also folded into the incentive framework. Akouche said training centres embedded within the zones are used to develop skills tailored to investors’ needs, particularly in textiles and light manufacturing.

According to the investment agency, the country is seeking more than 30 new factories to process the country’s cotton. It said it is willing to co-finance workforce training where skills gaps exist.

Benin is banking on an impressive international report card to boost its case. Akouche presented Benin’s World Bank rankings, which place the country first in West Africa for ease of doing business and among the top five in Africa.

Among the ECOWAS community, Benin ranks first for some indicators such as international trade, business location, utility and financial services, taxation, and remains top two in business entry and dispute resolution, according to the World Bank report.

In 2024, Benin’s GDP grew over seven percent to surpass IMF forecasts, driven largely by investments in infrastructure, agro-processing, and the expansion of the Glo-Djigbé Industrial Zone (GDIZ), which also saw exports rise 34 percent.

However savoury, some groups have raised concerns. Benin lacks a systematic investment screening system for incoming foreign investment, according to a 2025 Investment Climate Statement from the US Department of State.

It stated, "Foreign investments do not require prior approval under the Investment Code." It notes that problem is partially resolved by the High Council for Investments, which advises the government on major investments but is unable to use its veto power.

Concerns about “judicial independence” were also raised. The agency said that while the judiciary has the authority to review administrative decisions and regulations to ensure they comply with the law and the constitution, critics have highlighted a lack of transparency, susceptibility to corruption, and political interference as issues that “undermine public trust in the judicial system and can affect the fair and impartial administration of justice.”

In December 2025, Benin had a brief coup scare after a group of soldiers claimed to have deposed Patrice Talon, the Beninese president, sparking security actions that included the deployment of Nigerian fighter jets on the instructions of President Bola Tinubu.

Nigeria, however, claims that its doors are open. At the meeting, Leye Kuplouyi, chairman of the Lagos Chamber of Commerce and Industry, presented the proposal as a regional cooperation rather than a rivalry. "Everything in Benin is what Nigeria needs, and vice versa," he declared.

"Hundreds of Nigerian-owned companies" already formally operate in Benin, according to official confirmation.