Intercompany Service Agreement Template for Nigeria

An Intercompany Service Agreement is a critical legal document that governs service relationships between related companies within a corporate group operating in Nigeria. This agreement ensures compliance with Nigerian corporate law while establishing clear terms for shared services, technical support, management assistance, or other intra-group service arrangements.

When do you need this document?

You need an Intercompany Service Agreement when your parent company provides IT support to subsidiaries, when establishing shared service centers for finance or HR functions, or when transferring employees between group companies. The document becomes essential if your holding company offers management consulting to operating entities, when sister companies share research and development resources, or if your regional headquarters provides administrative services to local offices. Nigerian regulators require formal documentation for all intercompany transactions to ensure proper transfer pricing compliance and corporate governance.

Key legal considerations

Your agreement must establish arm's length pricing principles to comply with Nigeria's Income Tax (Transfer Pricing) Regulations 2018. Include detailed service level agreements, performance metrics, and clear termination clauses to protect both parties. Address intellectual property rights, confidentiality obligations, and liability limitations between related entities. Ensure the pricing methodology reflects market rates and includes proper documentation for tax authorities. Consider currency denomination and foreign exchange compliance under the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, especially for international group structures. Include dispute resolution mechanisms and governing law clauses to manage potential conflicts.

Legal requirements in Nigeria

Under the Companies and Allied Matters Act (CAMA) 2020, you must ensure board resolutions authorize the service arrangement and comply with related party transaction requirements. The Federal Inland Revenue Service requires transfer pricing documentation demonstrating arm's length principles for all intercompany services. If services involve employee transfers or secondments, compliance with the Nigerian Labour Act becomes mandatory, including proper employment contracts and benefit arrangements. For international payments, obtain necessary approvals from the Central Bank of Nigeria under foreign exchange regulations. Maintain detailed records of services provided, invoicing procedures, and payment terms to satisfy regulatory requirements. Consider withholding tax obligations on service fees and ensure proper tax registration for both service provider and recipient entities operating in Nigeria.