Non-Nigerians and Foreign Companies are at liberty, and indeed encouraged to invest and participate in the operation of any enterprise or company in Nigeria. To invest in Nigeria, the promoters or investors must register a company in Nigeria.
A foreign company may apply in accordance with Section 56 of the Companies and Allied Matters Act (CAMA) for exemption from incorporating a local subsidiary if such a foreign company belongs to one of the following categories:-
1. Foreign companies invited to Nigeria by or with the approval of the Federal Government of Nigeria to execute any specified individual project;
2. Foreign companies which are in Nigeria for the execution of a specific individual loan project on behalf of a donor country or international organization;
3. Foreign government-owned companies engaged solely in export promotion activities, and;
4. Engineering consultants and technical experts engaged on any individual specialist project under contract with any of the Governments in the Federation or any of their agencies or with any other body or person, where such contract has been approved by the Federal Government.
A foreign company or investor may incorporate a Nigerian branch or subsidiary of the parent company by giving a Power of Attorney to a qualified solicitor in Nigeria for this purpose. The incorporation documents in this instance would, disclose that the Solicitor is merely acting as an "agent" of a "principal" whose name(s) should also appear in the document. The Power of Attorney shall indicate that the appointed Solicitor shall cease to function upon the conclusion of all registration formalities.
The minimum share capital of a company with foreign investment is N 10 million and where the foreigner is resident in Nigeria, he shall submit/file a copy of his residence permit along with other documents required for incorporation of a company.
Sequel to registration of the Company at the CAC, all companies with foreign investors must register with Nigerian Investment Promotion Commission (NIPC) and obtain a Business Permit from the Ministry of Internal Affairs through the NIPC before commencing formal operations.
Section 8(1) (b) of the Immigration Act provides that no person other than a Nigerian citizen shall on his own account or in partnership with any other person practice a profession or establish or take over any trade or business whatsoever or register or take over any company with limited liability for any such purpose without the written consent of the Minister of Internal Affairs. A Business Permit is the operational licence granted to an expatriate or foreign company to enable him carry on business activities in Nigeria.
Registration with the NIPC and application for Business Permit is processed by completing the NIPC application form accompanied with the following documents: –
1. Original copy of the treasury receipt for the purchase of NIPC Form.
2. A copy of the Certificate of Incorporation.
3. A copy of the Tax Clearance Certificate of the applicant company.
4. A copy of Certificate of Capital Importation
5. Certified True Copies of CAC Form 02 & 07 i.e. Particulars of Shareholders and Directors.
6. Certified True Copy of the Memorandum and Articles of Association;
7. A copy of treasury receipt as evidence of payment of stamp duties on the authorised share capital of the company
8. A copy of the Joint-Venture Agreement between the Nigerian Partners and Foreigners
9. A Copy of Feasibility Report and Project Implementation Programme. (Business Plan)
10.A copy of Deed of Sub-Lease/Agreement evidencing firm commitment to acquire requisite business premises for the company’s operation;
11. Profile of Foreign Investor as testimony of international expertise and credibility of the foreign partner in the proposed line of business.
If the foreign company intends to employ expatriates, an application shall be made to the Ministry of Internal Affairs to obtain Expatriate Quota. The Expatriate Quota is the official approval granted to a company to enable it employ individual expatriates to specifically designated jobs and the quota must state its duration. Section 8(1) (a) of the Immigration Act provides that “no person other than a citizen of Nigeria shall accept employment, not being employment with the Federal or a State Government, without the approval of the Chief Federal Immigration Officer.
There are two types of expatriate quotas which are:
- Permanent until Reviewed (PUR) – This is meant for positions that would be occupied on a permanent basis and is usually granted to the Chairman of the Board of a company or the Managing Director. As the name implies, it is permanent until there is a supervening circumstance, which will necessitate its review. The essence of granting the PUR is to ensure that the foreign company is able to protect its investment. Once a PUR is granted, a certificate is issued stating the position that the PUR covers.
- Temporary Quota – This is usually granted to the directors or other employees of the company. These positions are specifically stated on the permit and the expatriate employee’s qualification must be in par with the designation.
Please note that the quota is issued to the company and not the expatriate, as such when the expatriate leaves the company, the position reverts to the company and the company may place another expatriate on the same position for as long as the quota position remains valid.
To apply for Expatriate Quota Position, in addition to the documents submitted for the application for Business Permit, the following additional documents and information are needed:
1. Evidence of non-availability of expertise in the country;
2. A copy of training programme or personnel policy of the company, incorporating management succession schedule for qualified Nigerians;
3. Particulars of names, addresses, nationalities and occupations of the proposed directors of the company;
4. Job title designations of expatriate quota positions required, and the academic and working experience required for the occupants of such positions.
Once the expatriate quota is obtained, the Company shall apply to the Nigerian embassy or consular office for a subject to regularisation for residence work permit (STR) Visa in writing, confirming that there is a vacancy on the expatriate quota and stating the position in which prospective employee is to be employed and confirming acceptance of immigration responsibility.
STR visa is normally given for 90 days without reference, during which an application must be made to the Comptroller-General of Immigration, to regularise the stay of the prospective employee, and the person may assume his employment only when such application is approved and a RESIDENCE WORK PERMIT granted.