Paying Yourself When You Live Abroad but Your Company Is in Nigeria

If you live in the United States, the United Kingdom or Europe and draw income from a company you own in Nigeria, paying yourself is a question about two tax systems at once. Where you live usually decides where that pay is taxed, and if you hold a US passport, your citizenship decides it wherever you live. The mechanics change from one country to the next, and the relief a founder leans on in London works differently from the one in New York or Amsterdam. This is a common situation for diaspora founders, and it does not fit guidance written for people who live and work in a single country. What follows is how to approach it, and where the traps are.

The first question is where you are taxed

The fact that governs your pay is usually your tax residence: where you actually live and spend your time, rather than where your company is registered.

Most countries tax their residents on worldwide income. If you live in the UK, Canada, or an EU country such as Germany, France or the Netherlands, that country generally taxes what your Nigerian company pays you, even where the money never leaves Lagos. Where the cash physically sits does not change the position; your residence does. UK founders should note one nuance: from 6 April 2025 the UK taxes residents on worldwide income and the old non-domicile treatment has gone, though founders who have only recently become UK-resident may qualify for temporary relief under the new four-year foreign income and gains regime (HMRC’s rules on foreign income).

The United States is the exception, and an important one. It taxes its citizens and green-card holders on their worldwide income no matter where they live (IRS on the foreign earned income exclusion). An American founder running a Nigerian company from Lagos still files a US return every year. For an American, the passport matters as much as the address.

Does a treaty stand between you and a double bill

Usually you are not taxed in full twice, but how the relief works depends on whether your country has a tax treaty with Nigeria, and that varies more than founders expect.

Nigeria has double-tax treaties with a limited set of countries, including the United Kingdom, Canada, and nine EU members such as Belgium, France, Italy, the Netherlands, Spain and Sweden (Nigeria’s treaty network). If you live in one of these, a treaty and foreign tax credit relief generally let you offset tax paid in Nigeria against what you owe at home, so the same income is not taxed in full on both sides.

Nigeria has no tax treaty with the United States. American founders therefore cannot lean on treaty relief. They rely instead on the US foreign tax credit and, for salary, the foreign earned income exclusion, which lets a qualifying founder exclude up to 132,900 dollars of foreign earned income in 2026. That combination usually prevents a genuine double bill, but it is more manual, and it does not shelter dividends the way it shelters salary.

Wherever you live, the relief has to be claimed, and the income has to be declared where you are liable in the first place. The larger risk for most diaspora founders is not double taxation but a failure to declare, on the assumption that a Nigerian company keeps their pay out of reach of the tax authority where they live. No authority accepts that as a defence.

Salary or dividends

How you take the money carries its own treatment, and the efficient answer differs by country.

Salary is a deductible cost for the company and is taxed in your hands as employment income where you live. An American founder may be able to shelter part of it under the foreign earned income exclusion; a UK or EU founder is taxed at local employment rates, with credit for Nigerian tax. Dividends are paid from post-tax profit and taxed under a separate regime, and here the countries diverge: the UK taxes dividends at its own rates, the US separates qualified from ordinary dividends, and treatment across the EU varies by member state. Nigeria also withholds tax on dividends before they leave, which then feeds into your credit at home.

So the mix that works for a founder in Berlin rarely matches the one that works for a founder in Boston. This is the same salary-versus-dividend decision covered in how much to pay yourself, with a second tax system added to it, and it is worth modelling rather than judging by eye.

Owning the company can tax you before you take a penny

There is a trap that catches founders who assume that leaving profit inside the Nigerian company defers the personal tax until they take it out. In several countries it does not.

The United States is the sharpest example. For a founder who owns most or all of a Nigerian company, its controlled-foreign-corporation rules can tax the American owner on a share of the company’s profits every year, whether or not a naira is distributed, under the Subpart F and GILTI regimes (how CFC rules tax US owners). An American founder can owe US tax on Nigerian profits that never left the business. There are elections that soften this, but they have to be made deliberately and in advance.

Other countries have their own anti-avoidance rules that can attribute a foreign company’s income to a resident owner. The safe assumption is that parking profit in the Nigerian company will not reliably defer your personal tax, and that the position has to be checked for the specific country you live in.

Getting the money to you

None of this matters until the money actually reaches you, and moving it out of Nigeria is its own exercise. Foreign-currency transfers, domiciliary accounts and the capital-importation paperwork all sit between a declared dividend and cash in your account abroad. This runs straight into getting money in and out of Nigeria and the question of which currency to hold your pay in.

Do not draw money informally

Whatever you decide, the amount you take has to be characterised as salary or dividend, recorded in the company’s books, and declared where you are taxed. Dipping into the company account whenever you need cash does none of this. It blurs the line between you and the company, creates problems in two tax systems at once, and is exactly the kind of thing an investor’s accountant flags in due diligence. Draw a defined salary or declare a dividend, and record it.

Pay yourself as a two-country business

Founders who handle this well treat their pay as a decision made across two tax systems: taken deliberately, documented properly, and set up so that neither the tax authority where they live nor the Nigeria Revenue Service meets a surprise. Because the rules turn on your specific country, general guidance only takes you so far.

If you live in the US, the UK or Europe and draw from a Nigerian company, or are about to start, book a conversation and we will map your pay across both sides, for your country in particular, so you keep more of it, cleanly.