Expatriate Employment Levy (EEl): What Multinational Employers Need to Know
The EEL is a mandatory financial contribution imposed on employers engaging foreign workers in Nigeria, reflecting the government's commitment to balancing the benefits of expatriate employment with the protection of local labor markets and resources.
Objectives of the Expatriate Employee Levy (EEL)
The EEL serves multiple purposes, including promoting skill transfer, fostering economic and social equilibrium, enhancing collaboration between public and private sectors, and encouraging businesses to invest in local talent and long-term economic prosperity.
Scope of Industries Covered
The EEL applies to private sector industries relying on foreign labor, encompassing sectors such as Construction, Information and Communication Technology (ICT), Agriculture, Manufacturing, Oil and Gas, Telecommunication, Services, Banking and Finance, Maritime and Shipping, and Healthcare.
Any organization employing expatriate talent is subject to and liable to pay the EEL. Notably, the EEL extends to Cross-Border Assignments and Secondments, covering situations where an expatriate temporarily works for a foreign company while holding a quota position in a Nigerian company.
Duration of Residency/Employment
Expatriate workers employed for at least 183 days within a year are obligated to pay the EEL annually. However, short-term employments or assignments totaling less than 183 days in a fiscal year may be exempt.
Exemptions from the Expatriate Employee Levy (EEL)
Certain categories, including staff of Diplomatic Missions, government officials, and accredited International Agencies, as well as dependents not seeking employment in Nigeria, are exempt from the EEL.
Rate for Expatriate Employment Levy (EEL)
Employers of expatriates covered by the EEL are required to pay an annual levy of $15,000 for Directors and $10,000 for other categories of expatriates.
Penalties
Non-compliance with the EEL regulations attracts penalties. Companies failing to file within 30 days of the due date, register new employees promptly, submit accurate information, or renew the EEL on time may face a penalty of N3 million.
Conclusion
While the EEL is a commendable policy aimed at increasing local employment, concerns linger regarding potential impacts on foreign investment and the percentage of foreign participation in Nigeria. It is hoped that the government will conduct a thorough economic analysis to strengthen opportunities for local employment while balancing the needs of foreign investors.
