How to pay international contractors as a Nigerian business

Paying a contractor abroad from a Nigerian company runs on a Form A, because Form A covers services and Form M covers goods. Your bank will want the service agreement, the invoice and evidence of tax paid. Verto, Daya Business, Grey Business and Juicyway all do the payment without a branch visit.

Daya Business says a Nigerian company can hold dollars, pounds and euros, against dollars at Grey Business, which lists pounds and euros as coming soon. The tax side is the part that catches people: from 1 January 2026 you deduct 10% from a non-resident's consultancy, technical, management or professional fee even when every hour was worked outside Nigeria, and you self-account for 7.5% VAT on top.

For the wider picture of how a Nigerian company moves money in and out, see how Nigerian businesses pay and get paid globally. This piece is about paying a person or an agency abroad for work.

Do you need a Form A to pay a contractor abroad?

Yes, and not a Form M. The CBN's Foreign Exchange Manual splits the two in one line each. Form A is the "application to pay for service transactions", which the manual calls invisible trade. Form M is the "application to import goods", which it calls visible trade. A contractor's invoice is a service, so it travels on a Form A.

That distinction is worth holding onto, because Form M is the form Nigerian businesses hear about most and it has nothing to do with paying for work. The manual ties Form M to physical goods entering Nigeria, and requires it "irrespective of the value and whether or not payment is involved". If nothing is being shipped to you, there's no Form M in your transaction at all.

What it means for you: the paperwork your designer in Berlin or your development agency in Bangalore generates is a Form A with a contract and an invoice attached, not a customs process. Form M, Form NXP and the goods paperwork are covered in do you still need Form A and Form M in Nigeria in 2026?.

What documents does your bank ask for?

The CBN publishes the document list itself, item by item, in the miscellaneous payments section of the Foreign Exchange Manual, and your bank is working from it. For an ordinary contractor or agency invoice the list runs to four things: the service agreement, confirmation of the service fee, the invoice, and evidence of tax paid on the amount you're sending.

The fourth one surprises people. Evidence of tax paid isn't a tax-office formality you deal with later; it's a condition of the foreign exchange payment, so the deduction has to be made and paid before the money leaves. Several other categories carry the same line.

NOTAP is the National Office for Technology Acquisition and Promotion, and its registration step is the one almost nobody writing about this mentions. If what you're buying is technical work, consultancy, a software licence or the use of somebody's technology, the agreement has to be registered with NOTAP and NOTAP has to confirm the fee is reasonable before the bank will remit. On software the manual also caps annual technical support at 23% of the licence fee.

One wrinkle in the same list is worth knowing before you pick a category. The technical and consultancy item asks for "evidence that the services were rendered locally", with hotel bills, visas and air tickets given as examples, because it's drafted for an expert who came to Nigeria. A designer who never left Lisbon doesn't fit that. An ordinary offshore invoice sits more naturally under the contract service fee item, which carries no local-performance condition.

On cost, the CBN's Guide to Charges prices an outward transfer at a "0.5% commission on transfer plus associated offshore bank charges". The last phrase is the open-ended part, and the Guide puts no maximum naira figure on either. It also prices the purchase of a Form A at NGN 3,000, though Sterling Bank's own teller FAQ quotes a Form A charge of NGN 500, so ask your own bank what it will debit. That Guide took effect on 1 January 2020 and is still the current one.

How much tax do you deduct from a foreign contractor's invoice?

For a non-resident contractor, 10% on consultancy, technical, management and professional fees, and 5% on other services. The resident rates are lower, 5% and 2%, so paying somebody abroad costs twice as much in withholding as paying the same person in Nigeria. For the contractor, that deduction is the final Nigerian tax on the payment unless they have a presence in Nigeria the income can be attributed to.

The change that matters is where the work happens. The Nigeria Tax Act 2025, in force from 1 January 2026, brings into charge a payment made by a person resident in Nigeria "in respect of services furnished from outside of Nigeria to a resident of Nigeria". In plain terms:

• Your contractor never set foot in Nigeria, worked entirely from their own country, and has no office or staff here.
• You still deduct, because the test the Act applies is who is paying and where they are resident, not where the laptop was.
• The professional reading before this Act was the opposite, which is why older guidance and some accountants will tell you offshore services sit outside the net.

Two practical points follow. First, your contractor will quote you a number and expect to receive it, so decide early whether your fee is gross or net of the deduction and put it in the contract, because the 10% comes out of their money and they will notice. Second, a supplier with no Tax Identification Number is charged at double the rate on services, so ask for the TIN before the first invoice.

Small companies get a break on the deducting itself. A company with turnover below NGN 25 million doesn't have to deduct where the supplier has a valid TIN and the transaction is NGN 2 million or less in that month. That's the deduction obligation, not the tax, and it's worth checking against your own month rather than assuming.

This is the newest law in the piece and practice is still settling, so take the numbers to your accountant with the invoice in front of you rather than treating this as advice. Crypto and digital asset payments follow a separate set of rules, covered in crypto tax in Nigeria: what changed in 2026.

Do you owe VAT on a service bought from abroad?

Yes, at 7.5%, and you're the one who accounts for it. Where the foreign supplier doesn't charge Nigerian VAT, and most contractors don't, the rule is that the person the service is supplied to self-accounts for the tax. So on a $5,000 invoice your company reports and remits the VAT itself, to the Nigeria Revenue Service.

The service doesn't have to be performed in Nigeria for this to bite. The test is where it's consumed, so a service provided to and used by your company in Nigeria is taxable whatever country the provider sits in.

What it means for you: on one contractor invoice there are two separate tax events pointing in opposite directions. The 10% withholding comes out of the contractor's fee, so it's their money, and it usually becomes a negotiation about who absorbs it. The 7.5% VAT is yours, on top, and it's recoverable as input VAT against the VAT you charge your own customers. Budget the second one as cash flow rather than as cost.

Does a tax treaty reduce what you deduct?

Almost never on a contractor's fee, which is the opposite of what most people assume. Nigeria's treaties set the withholding rate on management and technical fees at 10% for every treaty country, which is the same 10% you would deduct without a treaty. So the treaty gives you no rate saving on exactly the payments a company makes most often.

Treaties still matter elsewhere, on dividends, interest and royalties, and the Tax Act preserves them. Two things to know before anyone builds a plan on one:

1. The number of treaties in force is smaller than the number signed. The tax authority's own circular lists 16 in force, while advisers commonly list around 30 signed, because several have never been ratified on both sides.
2. Claiming a treaty rate is an application, not a tick box. The procedure asks for a written application to the revenue service with a certificate of residence stamped by the contractor's own tax authority, plus a copy of the contract.

For a one-off invoice from a freelancer, that process costs more than it saves. For a recurring agency retainer in a treaty country, it's worth an hour with your accountant.

Which apps let a Nigerian company pay a contractor abroad?

This is where the market is thinner than it looks. Most providers describe paying contractors abroad in detail and never say whether a Nigerian-registered company can be the one doing the paying. Of the five below, only Verto states it outright on a first-party page, and Daya Business answers it by stating what it asks for at signup.

Verto publishes the most price detail of the five. Its Nigeria pricing page runs a free plan plus tiers at $15 and $35 a month, charges $25 on an international SWIFT payment on every plan, makes local payments free, and prices non-naira collections at 0.5% falling to 0.2% at volume. Juicyway publishes no figure at all beyond free transfers between Juicyway accounts, and Payoneer publishes no price for a Nigerian business paying somebody abroad.

Two things to check before you commit to any of them, because none publishes an answer:

• Whether it will pay an individual rather than a company. Grey Business and Payoneer both describe bulk payouts without saying whether the recipient can be a person.
• Which countries and currencies your actual contractors are in. Juicyway says same-day payments in five currencies and never names them.

The provider-by-provider price comparison for a business dollar account sits in best business dollar accounts in Nigeria, compared, and the bank route against the fintech route for a company is in corporate domiciliary account vs a business USD account.

Where does Daya Business fit?

Daya Business is a cross-border account for CAC-registered Nigerian companies, so the question of whether a Nigerian company can be the payer is answered by what it asks for at signup. Daya Business says a business can receive US dollars, British pounds and euros, hold them, convert between dollars and naira, and pay out by bank transfer, wire, ACH or on-chain in USDT and USDC. Opening an account needs CAC registration and business verification, which means a BVN or NIN, personal ID, your CAC documents and director details.

Against the rest of the table, the currency coverage is the clearest difference: three currencies a Nigerian company can hold, where Grey Business publishes dollars and lists pounds and euros as coming soon. The payout list is the other one, because bank transfer, wire, ACH and on-chain stablecoins in one account covers both a contractor who wants a local transfer and one who invoices in USDC.

Where Daya Business isn't the pick:

• You're a sole trader without a registered company. Daya Business needs CAC registration, and Daya Borders is the account for an individual.
• You want corporate cards for the team today. Daya Business lists team cards as coming soon, while Verto and Grey Business both issue them now.
• You want to compare monthly plans before you sign up. Verto publishes its plan prices on its Nigeria page.

Whichever you use, the Form A, the NOTAP step where it applies and the two tax deductions are the same, because they are conditions on the payment rather than features of a provider.

Can you use Deel, Remote.com or Wise Business instead?

Deel and Remote are contractor management platforms rather than accounts, and they solve a different part of the problem: contracts, invoices and compliance for people you work with regularly. Deel publishes $49 per contractor per month and Remote publishes $29 per contractor per month. Neither says on its pricing page whether a Nigerian-registered company can be the customer, so that's a question for their sales team before you plan around it.

Wise Business has a harder answer. Nigeria isn't on Wise's list of unsupported countries, so a Nigerian company isn't blanket-excluded, but Wise says you can't get US dollar account details if your address is in Nigeria, and it names Nigeria again specifically under its Wise Business restrictions. If your contractors invoice in dollars, that's the limitation that decides it.

Worth noting on the platforms: a monthly fee to Deel or Remote is itself a service bought from abroad, so your own Form A, withholding and VAT analysis applies to their invoice too. Ask your accountant how they're handling it before the first one arrives.

What to do before you send the first payment

A short sequence that keeps the bank, the contractor and your accountant in agreement:

1. Get a signed service agreement and the contractor's Tax Identification Number, and agree in writing whether your fee is gross or net of Nigerian withholding tax.
2. Check whether what you're buying is technical work, consultancy, a software licence or the use of technology. If so, start the NOTAP registration early, because it gates the payment.
3. Deduct the withholding tax, remit it, and keep the evidence, because your bank asks for proof of tax paid on the amount being sent.
4. Self-account for the 7.5% VAT on the invoice and claim it as input VAT in the same return.
5. Then pick the route, and ask your provider what it charges and what proof of payment you will get, since that's the document your contractor will chase you for.