Setting up a company in Nigeria remotely involves several steps that you need to follow. The first key major step for any foreigner seeking to do business in Nigeria is to register a company. It is after this step that other key steps like bank account opening and processing of a business permit can follow if required.
The company registration process is done through the Corporate Affairs Commission (CAC), the company registry which has the sole authority to register companies throughout Nigeria. The law governing incorporation in Nigeria is the Companies and Allied Matters Act (CAMA) 2020. The Act together with the Companies Regulations made pursuant to it allows the incorporation of a company in Nigeria remotely. The applicant needs not to be physically present in Nigeria to register a company, as the same can be done via accredited company registration agents who are mainly corporate lawyers and law firms.
Below are the general outlines of the process of company registration in Nigeria:
- Engage or Consult A Local Agent: Although all incorporation processes for a company registration can be done online via the CAC portal, however, it is advisable to engage a local accredited agent for the incorporation process. The local agent will explain the necessary requirements to achieve successful incorporation and may assist in providing some requirements some applicants, especially foreigners may not be able to provide. For instance, the incorporation of a company by a foreigner requires a mandatory appointment of a secretary by the company at the point of registration, there is also a requirement of a local registered office to address the registration process. A local agent or attorney can explain the appropriate ways to navigate through these statutory requirements. The agent might also be able to carefully check and advise on the appropriate share capital threshold based on the proposed business activities of the company.
- Choose Your Business Structure: Decide on the type of business structure you want to establish. The common option is a private company limited by shares (also known as LLC). This is the most suitable and recommended type of company that can be registered by foreigners remotely.
- Choose a Name: Choose a unique company name that adheres to the guidelines set by the Corporate Affairs Commission (CAC) in Nigeria. A registration agent can conduct a name availability search on the CAC's portal to ensure your chosen name is available for registration. And if not available, you will be advised to modify it or provide a new name.
- Register with the Corporate Affairs Commission (CAC): Register your company with the CAC by submitting the required documents, which include identification documents for the directors and shareholders of the company. If another foreign company will be a shareholder of the company, the certificate of incorporation of the foreign company and Company Resolution authorizing the registration of a subsidiary company in Nigeria will be required.
OTHER IMPORTANT STEPS FOR COMPANY SET UP IN NIGERIA
Apart from company registration, there are other key steps for setting up a company in Nigeria, which shall be discussed below.
- Register with the tax office (FIRS): A new company must register with the Federal Inland Revenue Service (FIRS). This is a requirement for tax purposes. The law mandates that all companies must specifically register with the Federal Inland Revenue Service (FIRS) within 6 months of incorporation and before commencing a business.
- Apply for Business Permit: The Nigerian immigration law mandates every wholly owned foreign company to obtain approval from the Minister of Interiors before the commencement of business in Nigeria. Consequently, a company 100% owned by foreigners must apply for a business permit after the company registration.
- Apply for Relevant Business Licenses: Depending on the nature of your business, you might need specific approvals or licenses from regulatory bodies in Nigeria. A local attorney should be able to advise whether the type of busines you want to engage in requires a special license. For instance, a company seeking to engage in mining must obtain relevant licenses from the Federal Ministry of Mines and Steel Development.
- Maintain Ongoing Compliance: After your company is registered, you'll need to adhere to annual compliance requirements, including filing annual returns and financial statements with the CAC.
It's important to note that regulations and processes can change, and it's recommended to work with legal and business professionals who have expertise in Nigerian company registration to ensure that you're following the correct procedures accurately. Apart from the incorporation of the company, the incorporation agents who are Attorneys can assist and advise with respect to other regulatory requirements to fully set up a company in Nigeria.
OPENING A COMPANY BANK ACCOUNT IN NIGERIA
One of the key steps in setting up a business is opening a business or corporate bank account. It is a crucial step after registering your company. Having a local bank account allows you to manage financial transactions, receive payments from clients or customers, and conduct business operations generally. There are strict guidelines pertaining to account opening in Nigeria that must be strictly complied with.
Here is a quick guide on how to open a business bank account in Nigeria:
- Choose a Bank: Research and choose a reputable bank that offers business banking services in Nigeria. Some of the major and tier 1 banks in Nigeria include First Bank PLC, Access Bank, Zenith Bank PLC, Guaranty Trust Bank (GTBank), United Bank for Africa (UBA), and Wema Bank PLC. Most Nigerian banks have a strong assets base and are managed efficiently.
- Gather Required Documents: The specific
documents required might vary from bank to bank, but generally,
you'll need the following documents for bank account
- Certificate of Incorporation (from the Corporate Affairs Commission).
- Copies of the Application Status of the company and Memorandum and Articles of Association.
- Identification for the directors and account signatories (e.g., international passport).
- Passport-sized photos of directors and signatories.
- Tax Identification Number (TIN) for the company
- Proof of address of the company (e.g., utility bill)
- Board resolution authorizing account opening and
- Complete Application Forms: Fill out the bank's business account application forms. These forms collect information about your company's details, activities, and authorized signatories. The Bank Verification Number (BVN) of the signatories and directors must be disclosed in the application form. Directors residing abroad can visit any BVN centers overseas to obtain his/her BVN. Under Nigerian banking regulations, a company bank account cannot be opened unless the signatory has a BVN.
- Verification Process: The bank will review your documents and conduct necessary checks for compliance. This process might take two or three days to be completed.
- Provide Two References: Under Nigerian banking regulations, a minimum of two references who are also corporate bank account holders must be provided. The bank will usually provide reference forms that two referees must complete. Only a corporate account holder who has maintained such accounts for a minimum of six months can reference a new company seeking to open an account.
- Receive Account Details: Once your application is approved and all verification processes are complete, the bank will provide you with your business bank account A company accounts can be opened in Naira, USD, GBP, and Euro if required.
- Online Banking Services: Many Nigerian banks offer online banking services that allow you to manage your account, make transfers, and access statements online. A new account holder can apply for online banking setup, which will require the bank to issue a token for login to the account.
Setting up a company in Nigeria remotely includes different steps and requirements that require engaging an expert to navigate through. In summary, these steps include registering a company, obtaining a business permit if it is a wholly owned foreign company, obtaining a regulatory license where applicable, registering for taxation, and opening a bank account. To carry out all of the above steps remotely, it is important to engage a local attorney such as a corporate law firm, or maintain a local partner for a seamless process. An experienced local attorney focusing on business setup and corporate law practice can provide great assistance in the whole setup process.
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.