How to Register Your Short-Term Rental Business in Nigeria

The short-term rental business is booming in Nigeria, with platforms like Airbnb and Booking.com making it easier for property owners to earn income by renting out their spaces to travellers.

However, to operate legally and gain credibility, it’s essential to register your business properly.

Registering your short-term rental business not only helps you comply with Nigerian laws but also allows you to access financial services, protect your brand, and ensure smooth operations.

Choose Your Business Structure

Before registering your short-term rental business, you need to decide on the best business structure for your operations. The most common options are:

a. Sole Proprietorship

This is the simplest business structure, where you operate as an individual. It’s easier and cheaper to register, but you are personally liable for all business debts.

b. Limited Liability Company (LLC)

This is the best option if you plan to expand your business. An LLC separates your personal assets from the business, protects you from liabilities, and enhances credibility.

How to Check Business Name Availability

Visit the Corporate Affairs Commission (CAC) portal: https://www.cac.gov.ng
Use the name search tool to check if your preferred business name is available.
Reserve your business name if it is available.

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Registering Your Business with CAC (Corporate Affairs Commission)

To legally operate in Nigeria, you need to register your business with the CAC. Here’s how:

Step 1: Name Reservation

After choosing a business name, apply for name reservation on the CAC portal. This usually takes 24-48 hours.

Step 2: Prepare Necessary Documents

For an LLC, you’ll need:

Two proposed business names
The objectives of your business
A registered business address
Names, addresses, and identification of directors/shareholders

Step 3: Complete Online Registration

Fill out the registration form on the CAC website
Upload the required documents
Pay the necessary fees

Step 4: Receive Your Certificate of Incorporation

Once CAC approves your application, you’ll receive a Certificate of Incorporation, which legally recognizes your business.

Obtain Necessary Licenses and Permits

Depending on your location, you may need additional permits to run a short-term rental business legally.

Local Government Permits

Some states require short-term rental operators to obtain local government approval. Check with your state’s regulatory body.

Business Permit for Foreign Investors

If you’re a foreign investor, you may need a business permit from the Nigerian Investment Promotion Commission (NIPC).

Health and Safety Inspections

In some areas, properties must pass health and safety inspections before being used for short-term rentals.

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Register for Tax and Compliance

To stay compliant, you need to register for tax and fulfill all tax obligations.

a. Get a Tax Identification Number (TIN)

Apply for a TIN from the Federal Inland Revenue Service (FIRS) online or at a tax office.
This number is required for tax payments and opening a business bank account.

b. Understand VAT and Withholding Tax Obligations

If your annual revenue exceeds ₦25 million, you must register for VAT and charge 7.5% on services.
You may also be required to deduct withholding tax when paying service providers.

c. Pay Tourism Levies (If Applicable)

In some states like Lagos, short-term rentals are required to pay tourism levies. Check with your state’s tourism board.

Open a Business Bank Account

It’s important to keep personal and business finances separate.

Why You Need a Business Bank Account

Helps manage business finances properly
Allows clients to make payments easily
Improves credibility when dealing with vendors and customers

Documents Needed to Open a Business Bank Account

Certificate of Incorporation
Tax Identification Number (TIN)
Valid means of identification (e.g., national ID, passport)
Proof of business address

Recommended Banks for Business Accounts in Nigeria

Zenith Bank
Access Bank
GTBank
First Bank

Complying with Local Laws and Regulations

Each state has different regulations for short-term rentals.

Short-Term Rental Regulations in Different States

Lagos State: Requires short-term rental businesses to register with the Lagos State Ministry of Tourism.
Abuja: Some residential areas restrict short-term rentals, so ensure compliance with local zoning laws.

Understanding Tenancy Laws and Guest Agreements

Draft rental agreements to outline rules for guests.
Clearly state cancellation policies, house rules, and liability clauses.

Noise and Security Regulations

Some residential areas have noise restrictions.
Consider hiring security personnel for guest safety.

Marketing Your Short-Term Rental Business

Once your business is registered, you need to attract guests and maximize bookings.

List Your Property on Major Platforms

Airbnb
Booking.com
Local rental platforms like Hotels.ng

Use Social Media and Influencer Marketing

Showcase your property on Instagram, TikTok, and Facebook.
Work with travel influencers to promote your rental.

Partner with Local Travel Agencies

Collaborate with tour operators to get more bookings.
Offer discounts for group stays.

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Conclusion

Registering your short-term rental business in Nigeria is an essential step to ensuring long-term success.

By following the right process, choosing a business structure, registering with CAC, obtaining the necessary permits, and complying with tax laws, you can legally operate and grow your business with confidence.