In Nigeria, the procedure for incorporation of foreign company or foreign-owned company is actually governed by the Companies and Allied Matters Act (CAMA) LFN 2004 among other legislations. The government agency administering CAMA and responsible for all incorporations in Nigeria is the Corporate Affairs Commission (CAC).
Any company legally started in one country might desire that such business be legally established in various other nations, hence the need for registration of a subsidiary company.
A foreign business might open for business as a second establishment, like an office, bureau, subsidiary or branch in Nigeria. Nevertheless, such a business should fulfil specific legal requirements necessary to obtain local incorporation of the Nigerian subsidiary as a distinct legal entity.
Registration of a foreign subsidiary is actually the only mean a foreign entity is able to get a distinct authorized entity in Nigeria and legally carry on business.
In exactly the same vein, any individual foreigner looking forward to taking part in any type of business in Nigeria should also register such a business and meet some other requirements to get a company incorporated in Nigeria as stipulated by requisite laws.
GENERAL STEPS REQUIRED FOR A FOREIGNER OR FOREIGN OWNED COMPANY TO COMMENCE A BUSINESS OPERATION IN NIGERIA
- Company registration with the CAC in accordance with the CAMA
- Registration with Nigerian Investment Promotion Commission (NIPC).
- Obtainment of Nigerian Expatriate quotas
- Residence and immigrations requirements permit CERPAC Nigeria
- Obtainment of requisite license in which the company intends to participate in a specific area which usually requires a government agency's permit or approval.
- Obtainment of Certificate of Capital Importation for equity or maybe loan brought into Nigeria.
Having pointed out the measures and requirements that has got to be implemented or maybe obtained to build a business in Nigeria, we'd briefly highlight or perhaps detail some of the stated requirements.
INCORPORATION OF COMPANY WITH CAC
The very first necessity for international company registration in Nigeria possibly for a foreign person or maybe business entity, ready to begin a company in Nigeria is actually incorporating a company. Foreign owned company in Nigeria should commence having a registration of a business with at least N10, 000,000 authorized share capital. This doesn't imply such a foreign person or maybe organization is actually have to pay this sum right away to any entity or the government in Nigeria, it basically indicates the minimum amount the owners undertake to invest in the company or the extent of the assets of the company. Furthermore, every company registered in Nigeria have to be made up of a minimum of 2 members (shareholders) as well as 2 directors. Nevertheless, in the lack of a second individual to serve as a director, a different person or maybe entity might engage the services of a nominee director or perhaps even shareholder. Although a number of foreign jurisdictions now let a single person to register a company, but this is currently not possible under Nigerian law.
A business permit is actually given through the Ministry of Interiors and also enable companies or individuals to carry out businesses in the country. A business permit is a permanent and is usually required for a wholly owned foreign company.
However, even where the registered company is not wholly foreign owned, a business permit may still be necessary for the application of expatriate quota.
Expatriate quota describes the allowable number of foreigners to be used by business organizations wishing or operating to run in Nigeria. This approval granted to this particular business organization is what's referred to as expatriate quotas.
Expatriate quotas are granted to registered companies in Nigeria, who in turn allocate same quotas to their employees. Every foreign employee of the company, either as a company director or owner requires expatriate quota to work in Nigeria
OTHER IMMIGRATION REQUIREMENTS
The laws guiding immigration tasks in Nigeria are actually the Immigration Act 2015 as well as the Immigration Regulations 2017.
The immigration permits which could be given to foreigners seeking to work in Nigeria are:
- Resident Permits
- Temporary Work Permits (TWP)
We would enunciate briefly on the above
The Combined Expatriate Resident Permit along with Alien Card (CERPAC) is the work permit every foreigner seeking to work in Nigeria must possess.
CERPAC is necessary for expatriates working in Nigeria. It is otherwise known as the residence permit.
The validity of a residence permit is actually governed by the validity of expatriate quota. Valid residence permits may also be used for re-entry directly into Nigeria.
TEMPORARY WORK PERMIT (TWP)
This's an authorized visa authorizing an immigrant to work in Nigeria to be able to do a certain work within a specified time. TWP is typically given for a period of three months. The Comptroller of the Nigerian Immigration Service must approve each TWP cable visa.
CERTIFICATE OF CAPITAL IMPORTATION (CCI)
Subject to the Regulation produced by Central Bank of Nigeria on the 12th of June 2012, certificates of capital importation are actually to be given in regard of importations of raw materials and equipment, overseas exchange inflow for loans, investments or maybe capital.
This CCI is actually relevant for wholly foreign-owned businesses importing any form of capital into Nigeria.
By virtue of section 54 of the CAMA, each foreigner seeking to engage any business in Nigeria must incorporate a company except his undertakings falls to the purview of Section 56 of the CAMA, that deals with the exemption of foreign businesses from incorporation subject to the approval of the Secretary to the Government of Federation. Most businesses do not fall under these narrow exceptions hence the need for registration.
There are many advantages and rewards for foreigners conducting businesses in Nigeria, these perks include enabling foreigners to register & wholly own a Nigerian business or subsidiary, repatriation of profits and capital among others.
Originally published 03 August, 2020
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.