Mar 6, 2017

Doing business in Nigeria: how foreigners can set up businesses in Nigeria| Hightower Lawyers


Nigeria is ever-ready to welcome foreigners to its shores, for business. There are many foreign controlled/owned businesses contributing to her prosperity.

An important step which precedes a foreigner’s ability to do business in Nigeria is setting up a viable business structure. This text describes how a foreigner can register a company in Nigeria.

According to Section 54, The Company and Allied Matters Act,1990, (CAMA), every foreign company incorporated outside Nigeria and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria and until so incorporated, the foreign company shall not carry on business in Nigeria.

The procedure of registering a foreign company is the same as that of indigenous companies in Nigeria subject to Section 22,24 and 25 CAMA, except that it shall not invite subscription for shares without the prior approval of the Securities and Exchange Commission.

However, a company may be exempted from the provision of Section 54,CAMA, after it has applied to the Federal Executive Council through the office of the Secretary of the government in certain instances, such as;

Where the foreign company was invited to Nigeria by the federal government to execute any specified individual project.
Where the foreign company is in Nigeria for the execution of specific individual loan project on behalf of a donor country or international organisation.
Where foreign government owned companies engage solely in export promotion activities.

A foreign company exempted from registration under Section54, CAMA, shall have the status of an unregistered company.

Furthermore, foreign companies just like all other companies in Nigeria that intends to operate in Nigeria must be registered with the Corporate Affairs Commission(CAC). The minimum share capital which a Company must have is 10,000 (Ten thousand Naira). While for foreign owned companies, the minimum share capital is 10,000,000 (Ten million Naira).
It is compulsory that after registration, the Tax Identification Number (TIN) of the company is obtained. The newly registered company must also register for Value Added Tax (VAT) at the nearest Federal Inland Revenue Service to its proposed office address.

Another crucial aspect is the funding of the newly registered business. The newly registered business must open and operate a domiciliary bank account with a commercial bank in Nigeria and obtain certificate of capital importation.

The Company must concurrently register at the Nigerian Investment Promotion Council (NIPC), and  obtain a business permit from the Ministry of Internal Affairs.
Requirement for obtaining NIPC registration

1. Application to the Nigeria Investment Promotion Commission

2. Completed copies of the NIPC Form 1 (in triplicates)

3. Original copy of receipt of purchase of NIPC Form 1 (and 3 copies) d   Copy of Certificate of Incorporation

4. Memorandum and Article of Association

5. Evidence that the Company has a minimum share capital of 10million (3 copies)

6. Company’s allotment of shares- Form CO 2 (3 copies)

7. Company’s particulars of directors – Form CO 7 (3 copies)

8. Details of the shareholding structure of the company (3 copies)

9.  Shareholders agreement , where applicable (3 copies)

10. Registration with FIRS (Federal Inland Revenue Service)

Requirements for Business Permit
·        Purchase NIPC form I for N10,000.00. Completed form submitted with original receipt.

·        Certificate of Incorporation.

·        A minimum share capital holding in the joint venture.

·        Details of share holding in the joint venture.

·        Joint venture/partnership Agreement where applicable.

·        Memorandum and Articles of Association.

·        CAC’s Form CO2 and CO7 duly certified.

·        Evidence of capital importation for wholly foreign companies.

·        Approval from the appropriate professional bodies where applicable.

·        We recommend that you carefully read the information contained in this blog post to understand what the procedure entails. In addition, you can engage a reliable and experienced solicitor to guide you through the process.

·        Are you interested in setting up a Company in Nigeria? Need any help with the process? Get in touch via email at hightowerlawyers@gmail.com or call +2347014979879. You will be glad you did.

HightowerLawyers


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