Last updated on July 16th, 2023 at 08:46 pm
Foreign nationals may undertake any type of business and own 100 percent equity and undertake any type of business in Nigeria except those in the negative list, that is, production of arms, narcotics and related substances which are prohibited to Nigerians and Foreign Investors alike.
In the spirit of the liberalization, foreign nationals not resident in Nigeria do not require permits before establishing business or investing in Nigeria. However, foreign nationals resident in the country need residence permit before forming a company while business permit is required for the business to commence.
Residence permits are obtained from the Nigerian Immigration Service while business permits are obtained from the Federal Ministry of Internal Affairs. Companies intending to use the services of foreign workers need to obtain expatriate quota from the Nigerian Investment Promotion Council.
EXEMPTION FROM REGISTRATION
Foreign companies intending to do business in Nigeria may apply for exemption from registration especially those undertaking special projects. Companies seeking exemption are to forward their applications to the Secretary to the Federal Government of Nigeria. accordance with Section 56 of the Companies and Allied Matters Act (CAMA) for exemption
Requirements for Business Permit by foreigner
a] Purchase NIPC form I for N10,000.00. Completed form submitted with original receipt.
b] Certificate of Incorporation.
c] A minimum share capital holding in the joint venture.
Details of share holding in the joint venture.
d] Joint venture/partnership Agreement where applicable.
e] Memorandum and Articles of Association.
f] CAC’s Form CO2 and CO7 duly certified.
g] Evidence of capital importation for wholly foreign companies.
h] Approval from the appropriate professional bodies where applicable.
STEPS AND REQUIREMENTS FOR A FOREIGNER TO CARRY ON BUSINESS IN NIGERIA
1 Company registration with CAC in accordance with the CAMA
2 Obtainment of a business permit in Nigeria from Ministry of Interiors
Registration with Nigerian Investment Promotion Commission (NIPC)
3 Obtainment of Tax Identification number (TIN), VAT, and Tax Clearance Certificate.
4 Obtainment of Nigerian Expatriate quotas
5 Immigrations requirements and Residence permit -CERPAC Nigeria
6 Obtainment of an export certificate in case the registered company intends to export goods or raw materials out of Nigeria
7 Obtainment of requisite license where the company intends to engage in a specialized sector that requires a government agency’s approval or permit.
8 Obtainment of Certificate of Capital Importation for equity or loan brought in for the business purpose.
You can also Read: How to Register your Company/Business in Nigeria with CAC
Registration of company with CAC by foreigner
Foreign participation in business in Nigeria must commence with a registration of a company with a minimum of N10, 000,000 authorized share capital.
The company must have at least 10,000,000 shares divided into 1 Naira per share. That does not imply such foreign individual or company is required to pay this amount immediately to the government or any entity in Nigeria, it simply indicates the extent promoter’s risks and liabilities to the company.
Also every Nigerian company must be composed of a minimum of two members (shareholders) and two directors. However, in the absence of a second person to act as a director, a foreign individual or entity may engage the services of a local director or even shareholder in compliance with the provisions of the Act. Although several foreign jurisdictions now allow a single individual to form a company, this is not acceptable under Nigerian law.
REGISTRATION WITH THE NIPC
Furthermore, registration with the Nigerian Investment Promotion Commission (NIPC) is vital. The Nigerian Investment Promotion Commission (NIPC) is a Federal Government Agency in Nigeria established by the NIPC Act to promote, coordinate and monitor all investments in Nigeria.
The basic functions and powers of the NIPC are as prescribed by Act. The Commission among other things, to coordinate, monitor, encourage and provide necessary assistance and guidance for the establishment and operation of enterprises in Nigeria, initiate and support measures which shall enhance the investment climate in Nigeria for both Nigerian and non-Nigerian investors among others as well as perform such other functions as are supplementary or incidental to the attainment of the objectives of NIPC Act.
The relevant laws governing foreign investment in Nigeria are as follows:
1. The Companies and Allied Matters Act Cap. C20 Laws of the Federation of Nigeria 2004;
2. Nigerian Investment Promotion Commission Act Cap. NI17 LFN, 2004;
2. Immigration Act Cap. I1 LFN,2004;
3. Investments and Securities Act Cap 124, LFN, 2007;
4. Foreign Exchange [Monitoring and [Miscellaneous Provisions]Act Cap. F34 LFN, 2004;
5. Industrial Inspectorate Act Cap. I8 LFN, 2004;
6. National Office for Technology Acquisition and Promotion Act Cap. N62 LFN, 2004.
By virtue of 36(1)(a) and (b) of the Immigration Act, 2015 a foreigner granted a business permit must be able to fit into the Expatriate quota. A business permit allows a foreigner to take up employment in Nigeria. However, all companies that intend to employ foreigners must have an expatriate quota.
Expatriate quota refers to the allowable number of foreigners to be employed by business organizations operating or wishing to operate in Nigeria. This approval granted to this business organization is what is known as Expatriate Quota. Expatriate quotas are of two types:
Permanent Until Reviewed (PUR), which is usually granted to the Chairman of the Board of a company or the Managing Director. It is permanent until a need arises for its review.
Temporary Quota (TQ), which is usually granted to the directors or other employees of the company. It is usually granted for a maximum period of 5years subject to renewal for another period of two years
The quota position attaches to a particular post or position. Therefore, the same quota can cover different persons.
IMMIGRATION REQUIREMENTS AND RESIDENCE PERMIT
The laws guiding immigration processes in Nigeria are the Immigration Act 2015 and the Immigration Regulations 2017, The key objective for issuing the Regulations is to create a legal framework for the implementation of the Immigration Act 2015. The Comptroller General of the Nigerian Immigration Service (CGI) issues residence permits to immigrants that intend to reside in Nigeria.
The immigration permits that may be granted to a foreign company or its employees are
Temporary Work Permits (TWP)
Subject to Regulation (STR) Visa
We would like to enunciate briefly on the above
TYPES OF COMPANIES YOU CAN REGISTERED IN NIGERIA
Basically, four types of companies are recognized for business ventures in Nigeria, namely:
1 Private Limited Company (LTD)
2 Public Limited Company (PLC)
3 Companies limited by guarantee and
4 Unlimited Companies.
The minimum membership for each of these companies is two and the maximum for private companies is fifty members while there is no upper limit for public companies. A minimum share capital of Ten Thousand Naira is prescribed for private companies and Five Hundred Thousand Naira for public companies with a minimum subscription of 25% of the shares.
Source: Corporate Affairs Commission