A foreign-owned business desirous of doing business in Nigeria must be registered. This is in accordance with section 78 of the Companies and Allied Matters Act 2020. Thus, until such company is registered, the foreign company shall not carry on any business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria except for receipt of notices and other documents, as matters preliminary to incorporation under this Act.[i] Although, companies that fall within certain criteria may apply to the Minister for exemption from registration. [ii]
Thus, to register a foreign-owned business in Nigeria, this must be done;
- Register the company with Corporate Affairs Commission (CAC) and obtain the original certificate of Incorporation and other documents: the first step to be taken is to incorporate the company with CAC and obtain relevant documents upon completion of registration. According to the Ministry of Interior’s Handbook on Expatriate Quota Administration (revised 2022), the minimum paid-up capital of foreign-owned companies is N100,000,000.00 (One Hundred Million Naira).
The steps involved in registering a foreign-owned business in Nigeria include;
- Create an account on the CAC portal. This can only be created by one of the company directors/shareholders or an accredited agent which could be a Lawyer, Chartered Accountant, or Chartered Secretary.
- Conduct a name search and reserve a name.
- Complete all statutory forms on the CAC portal
- Pay CAC filing fees
- Pay stamp duties
- Submit the application for registration
- Upon approval, the certificate and all other incorporation documents like the Memorandum and Articles of Association can be downloaded online.
The documents needed for registration include;
- Form CAC Application for Registration
- Memorandum and Articles of Association
- Proficiency certificate (where applicable)
- Recognized form of identification (passport bio-data page, driver’s licence or National Identity Card) for Director(s)/Shareholder(s) and Secretary
- Foreign Certificate of Incorporation and Board resolution for subscription to Nigerian company (where applicable)
- Residence permit of resident foreigners (where applicable)
- Stamp duty evidence of payment
- Evidence of payment to CAC
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2. Register the company with Nigerian Investment Promotion Commission (NIPC): After incorporation with CAC and before the commencement of business, a foreign-owned company must register the business with NIPC. This is in accordance with section 19 of the NIPC Act.
The procedure for Registration with NIPC includes;
- Applicant downloads NIPC Form 1 from the NIPC website
- Applicant pays a non-refundable processing fee
- Applicant submits all required documents at the One Stop Investment Centre in NIPC or scanned copies sent to the appropriate email of OSIC.
- Lastly, Business Registration Certificate is issued to the applicant.
The documents needed for registration include;
- Duly completed NIPC Form I;
- Memorandum & Articles of Association of the company
- Certificate of Incorporation;
- CAC Form 1.1 or recent status report
- Power of Attorney/ Letter of Authority (where applicable);
- Approved Remita’s payment receipt of the non-refundable processing fee
- NIPC payment receipt
There is also the One Stop Investment Centre (OSIC), an initiative of NIPC that brings together relevant government agencies to one location to provide fast-tracked services to investors. The Centre is coordinated by the NIPC. The objective of the Centre is to simplify business entry processes by removing administrative and regulatory bottlenecks pertaining to doing business in Nigeria. The Centre presently has twenty-seven (27) participating agencies.
3. Registration with NOTAP: Where the foreign-owned business intends to transfer and acquire foreign technology, then the contract/agreement embodying such transfer of technology having an effect in Nigeria needs to be registered.
4. Business Permit: In accordance with Immigration Act, it is mandatory for a foreign-owned business to obtain a business permit from the Minister of Interior to lawfully conduct business in Nigeria. [iii] The business permit must be obtained before the commencement of the business in accordance with the prescribed procedure.
5. Expatriate Quota: This is the permission given to a company to employ non-Nigerians in the numbers and capacities contained in the quota. This is in accordance with section 38 of the Immigration Act, 2015. An application is made to the Comptroller General of Immigration in the prescribed manner. It is to be noted that the quota position attaches to a particular post hence different persons can be covered by the same quota. There are two types of quota which are the Temporary and Permanent Until Reviewed Quota.
6. Residence Permit: A non-citizen of Nigeria who is desirous of staying in Nigeria for more than three months must obtain a residence permit.
Thus, a foreign-owned business desirous of employing foreigners who are to stay in Nigeria for more than three months must obtain a residence permit. This is usually the duty of the employer, to apply for the permit on behalf of its employees.
7. Obtain Certificate of Capital Importation: The foreign-owned business should open a corporate account from a reputable bank in Nigeria and import its capital through the bank and thereafter obtain a certificate of capital importation issued by the Central Bank of Nigeria (CBN).
8. Obtain Relevant Permit from Regulatory Agencies: Depending on the type of business the foreign-owned company intends to engage in, there are certain permits to be obtained before the commencement of business;
- Bank – CBN license
- Insurance company – National Insurance Commission license
- Oil companies are required to obtain Oil exploration licenses, oil prospecting licenses, and oil mining leases
- Telecommunications services obtain licenses from the Nigerian Communications Commission
- Companies in manufacturing activities must obtain certification for their products from the Standards Organization of Nigeria (SON) and the Federal Competition & Consumer Protection Commission Lagos (FCCPC).
9. Apply to obtain relevant incentives and reliefs available: There are certain incentives and reliefs available for foreigners as part of the country’s initiative to encourage and improve foreign participation thereby improving the economy of the country. Examples of the incentives include the grant of Pioneer Status to deserving companies, Double Taxation Treaties Relief, Duty Drawback, Rural Investment Allowance, Petroleum Investment Allowance etc. It should be noted that these incentives are not automatically granted to the companies; it must be applied for to the appropriate agencies by the company once the company falls within the category of companies entitled to such incentives and reliefs.
Conclusion
Registering a foreign-owned business in Nigeria has been made easy especially with the initiative of OSIC by the NIPC. However, a foreigner desirous of establishing a business wither alone or in a joint venture agreement with Nigerians still require the service of an expert for a seamless registration.
[i] S. 78(1) CAMA 2020
[ii] ibid; section 80
[iii] S. 36(1)(b) of the Immigration Act 2015
Written by Rodiyyah Bashir for The Trusted Advisors
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