Repatriation of capital and profits are very crucial matters for foreigners who are investing r seeking to invest in Nigeria. It is worthy of mention that Nigeria currently has no restriction policy placed on the movement of foreign funds out of Nigeria, as foreign investors are guaranteed unconditional and unrestricted transfer of their capital, investments, and profits in any convertible currency through an authorized dealer in accordance with the free entry and free exit policy of Nigeria. The 1999 Constitution of Nigeria (as amended), Nigerian Investment Promotion Commission (NIPC) Act and the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act guarantee foreign investors the unrestricted transferability of profits from their investment in Nigeria and capital repatriation in the event of liquidation.
Section 15 of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act provides that "any person may invest in any enterprise or security, with foreign currency or capital imported into Nigeria through an authorized dealer either by telegraphic transfer, cheques or other negotiable instruments and converted into the naira in accordance with the provisions of the Act".
Section 15(2) further provides that "the authorized dealer through which the foreign currency or capital for the investment referred to in subsection 1 of this section is imported shall, within 24 hours of the importation, issue a Certificate of Capital Importation to the investor and shall within 48 hours thereafter, make returns to the Central Bank giving such information as the Central Bank may from time to time require".
Foreign investors in Nigeria can successfully repatriate their investment and profit through the means of Certificate of Capital Importation (CCI); this can be achieved if the investment was brought under a Certificate of Capital Importation. A CCI is a pre-requisite document issued by an authorized dealer (usually a licensed Nigerian commercial bank) to a foreign investor to bring in the capital in form of cash, debt, equity, or goods into Nigeria. The holder of the CCI can open a foreign currency-denominated account and a special non-resident naira denominated account into which receipts of capital inflows from its Nigerian investment will be credited.
How to obtain the Certificate of Capital Importation
The Central Bank of Nigeria is the regulatory agency that issues a CCI. It was usually issued in a hard copy form, however, the CBN has introduced an electronic CCI called the E-CCIs, which is issued, managed, and administered by the CBN to which the Nigerian banks and investors have access.
The E-CCI is issued through the authorized dealer at the request of the foreign investor or the beneficiary of the foreign investment. The request is accompanied by supporting documentation that reflects the inflow of capital.
The Requirement for the Issuance of a Certificate of Capital Importation
The application requirements for the issuance of a CCI are usually type-specific. This means that the application requirement would depend on the nature of the foreign investment. The nature of investment could be in form of cash to be invested as a loan or equity; or as a machine and equipment to be given as a loan or equity, or it could be raw materials. However, the general requirements applicable to all type of applications include the followings;
- An official letter from the foreign investor or beneficiary requesting the Certificate of Capital Importation.
- A board resolution of the beneficiary authorizing the investment (from the Nigerian company).
- A copy of the beneficiary's Certificate of Incorporation.
- Tested telex copy stating the amount and purpose of inflow.
- Name and address of foreign investor, to be provided by the Nigerian company.
- Nature of business of the investor.
- The sector of operation of the beneficiary.
The repatriation process is completed within 24 hours of submitting the requests to the authorized dealer. Once the Certificate of Importation has been obtained, the profits attributed to the investment can be repatriated without any form of hindrance.
In conclusion, foreign investors willing to invest in Nigeria and repatriate their capital & profits in future should apply for CCI. The Certificate of Capital Importation validates the inflow of foreign capital into Nigeria and it is issued to the investor within 24 hours of capital inflow otherwise the investor may lose the benefits attached to the CCI. The major benefits attached to CCI is that it guarantees unhindered repatriation of capital and profits by foreign investors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.