Diaspora Guide: 9 Steps to Verify a Nigerian Company Before Investing

For Nigerians in the diaspora, the dream of investing back home often comes with a harsh reality: fraudulent companies targeting diaspora remittances. From real estate scams to bogus agri-investment schemes, many hardworking Nigerians abroad have lost savings due to poor due diligence.

Before committing your money, whether it’s ₦1 million or $10,000, you must verify the legitimacy of a company. Here’s a step-by-step guide tailored for diaspora investors.

1. Confirm Corporate Registration

Corporate Affairs Commission (CAC): Every legitimate Nigerian company must be registered with the CAC. Use the CAC public search portal to check if the business name or RC number is valid.

 If a company cannot provide its CAC number or the details don’t match, walk away.

2. Check Regulatory Licenses

The type of investment determines which regulator should oversee the company:

Financial services: Central Bank of Nigeria (CBN) or Securities and Exchange Commission (SEC).

Insurance: National Insurance Commission (NAICOM).

Cooperatives or microfinance schemes: Often regulated by state authorities.

Real estate developers: Look for approvals from relevant state ministries or housing authorities. A serious company will not hide its regulatory details.

3. Verify Physical Presence

• Request the office address and confirm it exists.

• Use Google Maps/Street View or send a trusted contact in Nigeria to visit the location.

• Many fraudulent firms operate from virtual offices or untraceable addresses.

4. Review Company Directors and Management

• The CAC portal lists company directors. Research them online via LinkedIn, news mentions, or professional associations.

• Check if they’ve been linked to failed or fraudulent ventures in the past.

• A credible company will have transparent leadership profiles available on its website.

5. Scrutinize Financial Promises

• If a company offers “guaranteed” 50% returns in six months, it’s almost certainly a Ponzi scheme.

• Compare promised returns with industry standards. For example:

• Treasury bills (10–15% yearly).

• Real estate (15–25% yearly, depending on location).

  
  

• Agriculture (10–20% per cycle).

Anything far above these benchmarks should raise suspicion.

6. Demand Documentation

Request official documents such as:

• Certificate of Incorporation (CAC).

• Regulatory licenses.

• Audited financial statements.

• Investment contracts (signed by both parties).

• Ensure contracts are reviewed by a Nigerian lawyer before you sign.

7. Look for Independent Reviews

• Search for past investor experiences on forums, social media, and reputable business directories.

• Beware of only “positive” testimonials they could be fabricated.

• Diaspora organizations and embassies sometimes maintain blacklists of fraudulent firms.

8. Use Professional Due Diligence Services

If the investment amount is substantial, consider hiring a:

• Law firm in Nigeria to run background checks.

• Investment advisory firm to analyze financial viability.

• Real estate surveyor/valuer if property is involved.

The small fee you pay for verification can save you from massive losses.

9. Trust Your Instincts

Many fraud victims admit they ignored early red flags  evasive answers, pressure to pay quickly, or deals that sounded too good to be true.

• If something feels off, step back.

• A legitimate company will never pressure you into “urgent” payments.

For Nigerians in the diaspora, investing back home is both an opportunity and a risk. The difference between success and regret often comes down to proper verification. By checking registration, regulation, physical presence, financial claims, and documentation, you can protect yourself from scams and ensure your money works for you.