Financial and legal experts have urged Nigerian startup founders to prioritise regulatory and compliance issues in their business strategies to improve sustainability and long-term survival rate, as well as avoid heavy fines.
They warned that neglecting legal requirements in the early stages of business development could lead to heavy financial losses and missed growth opportunities, especially as the tax reform takes off in January 2026.
This was stated at the second edition of BlackCrest’s Founders Meet and Chat, a forum designed to educate business owners on regulatory compliance, held in Lagos.
The Managing Partner of BlackCrest Law, Osita James, warned Nigerian startups that the era of “build first, comply later” is over, as regulatory agencies intensify enforcement of tax, corporate and data protection obligations.
He stressed that regulatory obligations are not optional, regardless of financial challenges faced by startups, adding that the government does not consider whether you are making a profit or not, while describing it as “legal duties, not moral obligations.”
Addressing startups already in breach, James said it is never too late to regularise their operations, warning that delays could be costly as penalties at the Corporate Affairs Commission (CAC) accrue daily, with private companies paying up to N500 per day for late filings.
He also advised data-driven startups to proactively conduct data protection audits rather than wait for regulatory sanctions from the Nigeria Data Protection Commission.
“Government is now actively going after companies that have not paid their taxes and are behind on their Corporate Affairs Commission filings, or are mishandling user data. It may cost between N800,000 and N1 million to do proper audits, but the fine for non-compliance can be as high as N10 million. No serious founder should wait for a breach notice before acting,” he said.
James noted that Lagos, as Africa’s leading startup hub, requires stronger platforms for knowledge-sharing among founders, adding that the forum brings together entrepreneurs at different stages, from early-stage founders to Series A-backed companies, to exchange experiences.
Founder of Allies Limited, Samuel Linus, emphasised that many startup founders focus exclusively on solving problems, entering markets and generating revenue, often treating compliance as a secondary concern.
According to him, this lack of early attention to regulatory issues eventually catches up with businesses when they begin to scale.
Linus noted that the implications of poor compliance for startups often far outweigh the initial cost of meeting regulatory requirements.
He said simple registrations that could cost between N50,000 and N100,000 can later result in fines running into as much as N5 million if neglected.
Linus said delayed compliance leads to wasted time and operational disruptions, especially when companies are forced to hurriedly regularise their status under pressure, causing loss of vital funding and partnership opportunities when they are unable to meet due diligence demands from investors.
Meanwhile, the Managing Director of Darey.io, a technology company, Blessing Bossman, highlighted the unique challenges of building businesses in Nigeria, describing the environment as complex and demanding due to multiple layers of taxation and regulatory oversight.
