Consultancy agreement in Nigeria: Template, Key Clauses and Local Law (2026)

What is a consultancy agreement in Nigeria, and what does the law require? A consultancy agreement in Nigeria is a contract for services under which an independent consultant provides expertise or work to a client for a fee. It is not a contract of employment. The consultant is in business on their own account, controls how the work is done, and is not entitled to employee protections such as pension, leave or statutory notice under the Labour Act. There is no single consultancy statute. The agreement rests on the general law of contract, together with company law where the consultant is a company and tax law on how fees are taxed. Two local features matter. First, classification. Nigerian courts and tax authorities look at the substance of the relationship, not just the label. If a consultant works fixed hours, under close direction, with employee-style benefits and no real independence, the arrangement can be treated as employment, which brings PAYE, pension and other duties. A genuine consultancy keeps the consultant independent in fact. Second, withholding tax. A client paying consultancy or professional fees is generally required to deduct withholding tax at source and remit it to the Federal Inland Revenue Service or the relevant state authority, giving the consultant a credit note. The common rate for professional and consultancy services is in the region of 5 to 10 percent, so confirm the current rate and whether VAT also applies. This article is general information, not legal advice. Classification and tax turn on the facts and on current rules, so confirm the position with Nigerian counsel or a tax adviser. Last verified October 2026. ## A Nigeria consultancy agreement template you can copy ```

CONSULTANCY AGREEMENT This Agreement is made on [DATE] BETWEEN: [CLIENT NAME], RC [number], of [address] ("Client") AND [CONSULTANT NAME], [RC / ID number], of [address] ("Consultant") 1. SERVICES The Consultant will provide the services described in Schedule 1 (the "Services") with reasonable skill and care and to professional standards. 2. INDEPENDENT CONTRACTOR The Consultant is an independent contractor, not an employee, partner or agent of the Client. The Consultant controls the manner and means of performing the Services and is responsible for its own tax, pension and insurance. 3. TERM This Agreement begins on [START DATE] and continues until [END DATE / completion of the Services], unless ended earlier under clause 9. 4. FEES AND WITHHOLDING TAX The Client will pay fees of [amount] naira [per deliverable / per month / per day] on [invoicing terms]. The Client may deduct withholding tax at the applicable rate and remit it to the relevant tax authority, issuing the Consultant a withholding tax credit note. [State whether VAT is added.] 5. EXPENSES The Client will reimburse pre-approved, reasonable expenses on production of receipts. 6. DELIVERABLES AND ACCEPTANCE The Consultant will deliver [the deliverables] by [dates]. The Client has [N] days to accept or request reasonable changes. 7. CONFIDENTIALITY The Consultant will keep the Client's confidential information secret and use it only for the Services, during and after the term. 8. INTELLECTUAL PROPERTY On full payment, all intellectual property in the deliverables created for the Client is assigned to the Client. The Consultant keeps its pre-existing materials and grants a licence to use them in the deliverables. 9. TERMINATION Either party may end this Agreement on [N] days written notice, or immediately for material breach not remedied within [N] days. The Client pays for Services properly performed up to termination. 10. DATA PROTECTION Where the Consultant processes personal data for the Client, it will do so only on the Client's instructions and comply with the Nigeria Data Protection Act 2023. 11. LIABILITY [Set a liability cap and any exclusions, as negotiated.] 12. GOVERNING LAW This Agreement is governed by the laws of the Federal Republic of Nigeria. Signed: For the Client: __________ For the Consultant: __________ Name / designation / date Name / designation / date

- **Fees and withholding tax (clause 4).** Record the fee basis and invoicing terms. A client paying professional or consultancy fees generally withholds tax at source and remits it, giving the consultant a credit note the consultant can set against its own tax. Confirm the current rate and whether VAT applies, so the gross and net figures are clear to both sides.
- **Deliverables and acceptance (clause 6).** A consultancy dispute is usually about scope. Define the deliverables and an acceptance window so "done" is objective.
- **Intellectual property (clause 8).** A client paying for work usually wants to own the output. Assign the deliverables on full payment, while letting the consultant keep its own pre-existing tools under a licence.
- **Data protection (clause 10).** If the consultant handles personal data for the client, for example customer or staff records, the Nigeria Data Protection Act 2023 applies. Add a clause requiring processing only on the client's instructions and with proper safeguards.
- **Termination (clause 9).** Set a clean notice period and a payment-on-termination rule so neither side is left out of pocket for work already done. ## Red flags to watch for - **A consultancy that is really employment.** Fixed hours, close supervision, employee benefits and no other clients point to employment, with PAYE and pension exposure for the client. Keep the consultant genuinely independent, or hire them as an employee.
- **Silence on withholding tax.** If the agreement does not deal with withholding tax, the parties argue later about whether the fee was gross or net. State it.
- **No IP assignment.** Without clause 8 the consultant may own the work the client paid for. Assign it, on payment.
- **Vague scope.** "Advisory services as required" leads to scope disputes and fee arguments. List the deliverables.
- **Ignoring data protection.** If personal data is involved and there is no data clause, the client can breach the 2023 Act even though a consultant did the processing. ## A note on jurisdiction and current law A Nigerian consultancy agreement rests on freedom of contract, with the real risks sitting in classification and tax. Get the independence wrong and the arrangement becomes employment. Get the tax wrong and the fee position is unclear. The Nigeria Data Protection Act 2023 adds obligations where personal data is processed. Because the current withholding rate, VAT treatment and classification tests turn on the facts and on live rules, confirm the position with Nigerian counsel or a tax adviser. Adira is built around Indian corporate law first and is architected to expand. Deeper, verified Nigerian coverage is on the roadmap rather than live today, so use this template as a sound starting point and have local counsel check anything high-value. ## Where a contract workspace helps A company that uses consultants tends to use many, on similar but not identical terms. The work that outlasts one agreement is keeping the independence wording, the tax treatment and the IP assignment consistent across every engagement, and tracking who is engaged until when, with what deliverables due. Keeping the drafting, review and signed versions in one AI workspace tuned to how your company engages consultants means the independence, tax and IP terms stay consistent across every agreement, with edits made in plain language. [Adira](https://adiralaw.com) is one workspace built to work this way. This template alone is enough to put a fair Nigerian consultancy agreement in place. *This article is general information, not legal advice. Classification, withholding tax and data protection rules turn on the facts and change, so have qualified Nigerian counsel or a tax adviser review anything important. Last verified October 2026.*