Nigeria and the Hong Kong Special Administrative Region have signed a Comprehensive Double Taxation Agreement (CDTA), marking a significant step in strengthening economic ties and creating a more attractive environment for cross-border investment and trade.
The agreement, signed virtually on Monday, July 13, is designed to eliminate double taxation on income earned across both jurisdictions, reduce tax-related barriers to investment, and provide greater certainty for businesses operating in Nigeria and Hong Kong. Nigeria’s Minister of Finance signed on behalf of the Federal Government, while Hong Kong’s Secretary for Financial Services and the Treasury represented the Asian financial hub.
The treaty forms part of Hong Kong’s expanding international tax treaty network, becoming its 59th comprehensive double taxation agreement and the fourth concluded in 2026. For Nigeria, the agreement aligns with ongoing efforts to improve the country’s investment climate and attract foreign direct investment into priority sectors.
A key provision of the agreement reduces the withholding tax on dividends, interest and royalty payments from Nigerian entities to Hong Kong residents from 10% to 7.5%. Withholding tax refers to tax deducted at source before payments are made to recipients abroad. Lower rates reduce the cost of doing business and improve investment returns for multinational companies.
The treaty also establishes a tax credit mechanism that allows taxes paid in one jurisdiction to be credited against tax liabilities in the other. This prevents the same income from being taxed twice, providing greater certainty for investors and businesses with operations in both markets.
In addition, the agreement incorporates anti-abuse measures consistent with standards developed by the Organisation for Economic Co-operation and Development (OECD). These provisions are intended to prevent treaty shopping, a practice in which companies route investments through jurisdictions solely to secure tax advantages, and strengthen efforts to combat tax avoidance.
Speaking after the signing ceremony, Nigeria’s finance minister described the agreement as an important milestone in the country’s economic reform agenda, noting that a more predictable tax framework could encourage long-term investment in sectors including infrastructure, financial services, technology and manufacturing.
Hong Kong officials also said the treaty would deepen commercial relations, lower tax burdens for businesses and promote greater regulatory certainty, creating new opportunities for trade, technology transfer and investment cooperation.
The agreement will enter into force only after both governments complete their respective domestic ratification procedures.
For investors, the treaty signals Nigeria’s continued commitment to aligning its tax framework with international best practices while improving its competitiveness as an investment destination. Analysts say the reduced tax burden and enhanced legal certainty could support increased capital flows from Hong Kong into sectors such as telecommunications, fintech, logistics, energy and professional services, while providing Nigerian companies with improved access to one of Asia’s leading financial centres.
