A technology transfer agreement (TTA) is a legal contract usually entered into when a company (Licensor/transferor) assigns, licenses, or transfers to another (Licensee/transferee) a registered industrial and intellectual property rights (patents, utility models, trademarks, copyright, etc.) as well as technical assistance and know-how. The TTA Department of The National Office for Technology Acquisition and Promotion (NOTAP) is in charge of registering TTA in Nigeria.

For a TTA to be registrable, its purpose must be in the opinion of the NOTAP wholly or partially, for or in connection with any of the following purposes; the use of trademarks, the right to use patented inventions, the supply of technical expertise in the form of the preparation of plans, diagrams, operating manuals or any other form of technical assistance of any description, the supply of basic or detailed engineering, the supply of machinery and plant, and the provision of operating staff or managerial assistance and the training of personnel.

TTA is registered in the following sectors: Manufacturing, Information and Communication Technology (ICT), Finance & Insurance, Hotels, and Restaurant, Oil and Gas, Civil Construction, Agriculture/Forestry, Transport & Logistics, Franchising, Power and Energy, Mining & Quarry, etc Technical Know-How and under the following titles; Technical Know-How & Management Services Agreement, Technical Services Agreement, Consultancy Agreement, Management Services Agreement, Software License Agreement, Value Added Services Agreement, Trademark License Agreement, Research & Development Agreement, Franchise Agreement, Hotel Management Agreement, Consultancy and Technical Know-How Agreement.

General Requirement for Registration of TTA with NOTAP

  • All TTA should include a provision that gives the Nigerian recipient explicit rights to the use and exploitation of the technology and should include the duration.
  • Where it involves the right to practice a process, the concept of know-how should be clearly expressed and defined, and concepts such as “technical information” or “technical services” should only be treated as complementary to the know-how.
  • Capacity building must be included and details of the Nigerians understudying the experts should be available.
  • The TTA should provision for deduction of appropriate local taxes.
  • Research carried out should be incorporated in the
  • Companies who sell imported products should separate the net sales of the imported products from that of locally manufactured ones and this should be reflected in their Audited Accounts. Payment of technology fees should be based only on locally manufactured products.
  • All Nigeria Government Projects must be governed by Nigerian Laws of Arbitration and the seat of arbitration should be in Nigeria.
  • TTA based on assembling of Completely Knocked Down or Partly Knocked Down parts will not be approved except it is for short term technical services.
  • The scope of services and the services to be rendered by the transferor should be clearly stated.
  • The TTA should state the methods for the domestication of technology, local raw material development, skills acquisition, etc.
  • A detailed plan for the local development and production of raw materials should be provided.
  • Agreements relating to food items will no longer be approved except where the agreement is for short-term technical services for installation, commissioning of plants, training, etc to enable the recipient company to commence operation. However, 1-2% of net sales may be approved for a start-up company involved in this type of business to enhance its smooth take off.
  • All fees relating to packaging using state of the art technology should be tied to profit before tax. However, where the company's equity is wholly foreign-owned, evidence of capital importation should be provided and expatriates should repatriate their earnings through Personal Home Remittance (PHR).
  • Technical Service fees should be daily or monthly based, If the duration of stay of the seconded personnel is more than 6 months, licensees are advised to pay the Technical Service fee through the (PHR).
  • Submission of Shareholders Approval for the Company to enter into such Agreement.
  • Details of expatriates and evidence to show that advertisements have been done locally for the required professional skills|/expertise before recruiting expatriates to carry out services in Nigeria.

Documents Required for Registering TTA

  • Completed Application Form, NOTAP Questionnaire, and TAA Pre-Qualification Form.
  • Draft Copy of the Technology Transfer Agreement to be Registered.
  • Company's Memorandum and Article of Association.
  • Certificate of Incorporation.
  • Completed Monitoring Form (for Renewal Agreement).
  • Annual Report.
  • Tax Clearance Certificate and Tax Identification Number (TIN).
  • Performance Bond for Advance Payment.
  • Engineering Drawings, Feasibility Study, Report where applicable.
  • Approval\Licenses Obtained from Appropriate Authorities and Bodies.
  • Transferor/Licensor Profile.

Procedure for Registering TTA

Step 1 – The applicant has to obtain the Application form, sends in the completed Form for filing accompanied by copies of TTA and the above listed required documents, and pay the prescribed fee for initiating the application. This should be done within 30 days from the date of execution of the Transfer Agreement.

Step 2 - this involves the screening of the required documents, evaluation, and analysis of the TTA by NOTAP. The agreement is evaluated from the legal, economic, and technical perspectives, It must comply with the Guidelines for Registration of TTA.

Step 3 - Upon compliance with all the criteria and payment of the prescribed fee, the schedule officer will verify and resubmit the file for clearance. Where the agreement is not in compliance with the criteria, the agreement will be recommended for review, the applicant is to respond and re-submit the amended agreements, where no issue is raised or issues raised have been appropriately responded to, a letter of approval will be issued indicating the amount to be paid as registration fee and for submission of 2 certified copies of the agreement one of which must be the original copy for processing, after which the approved agreement will be stamped and a Certificate of Registration issued.

Step 4 – this stage involves the collection of Certificate of Registration, this will be issued to the applicant along with the original copy of the Transfer Agreement certified by the office at the Directors general's Office, while the second copy is filed in NOTAP for record purposes.

Step 5 – After issuance of the Certificate, the applicant is to proceed to his bank for conformation of reasonableness and remittance of the prescribed fee, the bank will request that NOTAP confirms the authenticity of the certificate and the appropriate fees to be paid.  NOTAP has to issue a letter of confirmation, it is usually forwarded to the applicant along with the CTC of the Certificate of Registration.

Processing Registration of TTA from the date of filing to the issuance of confirmation of reasonableness is average of 60 Days.

Finally, it is worthy to note that additional requirements may be requested for specific types of TTA, however, the main procedure and requirements for registration of TTA with NOTAP are as stated above.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.