Upon incorporation, companies with foreign participation–either wholly foreign-owned or as a Joint Venture in collaboration with Nigerian Nationals–are required to apply for and obtain a Business Permit before they commence business in Nigeria. This is one of the licences they are required to obtain before they commence operations; another is registration with the NIPC.
Regulatory Body that Regulates Business Permits in Nigeria
The Federal Ministry of Interior is the regulator that administers and enforces the provisions of the Nigerian Immigration Act, 2015, the Immigration Regulations, 2017, among other Handbooks for the residence and operations of foreign nationals in Nigeria. The Federal Ministry of Interior has the responsibility of regulation as it relates to the establishment of fully foreign-owned companies in Nigeria or Joint Ventures and the employment of expatriates to work in Nigeria. Thus, the Ministry issues the Business Permit and the Expatriate Quota.
What is a Business Permit?
A Business Permit is a formal document issued by the Government of the federal Republic of Nigeria, which allows foreigners to conduct business in Nigeria. Business Permits are issued solely to wholly foreign-owned companies or Joint Ventures; local companies do not require a business permit before they can operate in Nigeria.
It is important not to confuse a Business Permit with a business licence which some companies may have to apply for and obtain before they can operate in specific sectors of the Nigerian economy. A business licence relates to specific industries, while the other relates to doing business within Nigeria generally.
Share Capital Requirements for a foreign company that wishes to apply for a Business Permit in Nigeria
The Ministry of Interior issued a revised Handbook on Expatriate Quota Administration 2022 which increased the minimum share capital requirement of companies with foreign participation to ₦100,000,000 (One Hundred Million Naira). It is thus a regulatory compliance requirement for companies with foreign participation to have a share capital of ₦100,000,000 (One Hundred Million Naira) which is a prerequisite to the issuance of a Business Permit before they commence operations in Nigeria. The Corporate Affairs Commission has not implemented this Rule and so companies with foreign participation/ownership are required to have a share capital of ₦10,000,000 (Ten Million Naira) before they can be registered in Nigeria, a requirement different from what is expected for them to apply for Business Permit in Nigeria.
Documents to accompany your application
- Certificate of Incorporation of your company issued by the Corporate Affairs Commission;
- Memorandum and Articles of Association of the company;
- Feasibility Report. This should be certified or registered with the Corporate Affairs Commission.
- CAC Form C02 & C07 OR CAC 2.2, CAC 2.3 & CAC 2.5 or CAC 1.1. Generally, the CAC Form 1.1–the E-Status Report–covers all the information in the other forms if you have it, so that alone can suffice.
- Joint Venture Agreement if it is a partnership venture between Nigerians and Foreigners. The original of the Joint Venture Agreement will be presented for sighting.
- Company’s Current Tax Clearance Certificate.
- Lease Agreement or Certificate of Occupancy for operating premises.
- Evidence of capital importation through authorized dealers
What is the application Timeline?
Upon application, the official timeline within which to obtain a business permit is generally two weeks.
For more information, or for your inquiries, we invite you to email us at corporateservices@kabbizlegal.comÂ
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