How to Register a Foreign Company in Nigeria with CAC in 2024

Foreign Investment in Nigeria

Nigeria operates an open economy, with policies that allow for both local and foreign operators to conduct their businesses in Nigeria. For foreign entrepreneurs and companies across the globe, establishing a company locally in Nigeria offers them the potential to tap into Nigeria’s vast resources, foster local partnerships, operate optimally locally, and furthermore, meet regulatory requirements, particularly in certain sectors of the Nigerian economy.

As a foreigner or foreign company seeking to open its doors in Nigeria, understanding the regulatory and legal requirements governing the registration of foreign companies in Nigeria is important. To that effect, we have created this article to guide you through the process, from registration of your company, to securing necessary permits and licences for operations.

Regulatory Agency that Governs Company Registrations in Nigeria

The regulator that governs registration of companies in Nigeria and other allied matters is the Corporate Affairs Commission.

Principal Legislation that Governs Registration of Companies in Nigeria

The Companies and Allied Matters Act [CAMA] 2020 is the principal legislation that regulates the registration of companies in Nigeria, alongside other matters that relate to the running and operations of companies, partnerships, et cetera. It is worthy to note that there are numerous other regulatory requirements a foreigner must meet before any company they register can legally commence business operations in Nigeria.

Can a foreign company carry on business in Nigeria?

The short answer is yes, subject to meeting certain regulatory requirements. A foreign company which is registered outside Nigeria but which intends to carry on business in Nigeria must first be incorporated as a separate legal entity in Nigeria. Until same is done, such a foreign company cannot legally carry on business within Nigeria. It should be noted that there are category of foreign companies that can apply for exemption from registration within Nigeria. There are four classes of companies that can be exempt from incorporation in Nigeria and these include: foreign government-owned companies engaged solely in export promotion activities, engineering consultants and technical experts engaged in any individual specialist project under contract with the federal government of Nigeria or its agencies, among others.

Documents and Information required to Register a Foreign Company in Nigeria

There are certain essential documents the operators of a foreign company seeking registration in Nigeria will require, and these include:

Memorandum and Articles of Association: These are the foundation documents of any company in Nigeria and they outline the structure of the company, its objectives, its members, regulations and other details.
Proficiency Certificates. If the company wishes to perform specific activities that requires professional qualifications, copies of relevant proficiency certificates are necessary.
Proof of identification: The company will have to provide relevant, valid IDs of its principal officers [directors, secretary] and its shareholders.
Certificate of [foreign] incorporation and Board Resolution approving subscription to the Nigerian company: Given that the company is located and carries on operations outside Nigeria, CAC requires additional context and authorization for the company to become a going concern in Nigeria.
Evidence of payment of all appropriate filing fees.

What is the Minimum Share Capital Requirements for Foreign-Owned Companies in Nigeria

The minimum share capital for a foreign-owned company in Nigeria or at least, a company with foreign participation, is ₦10,000,000 [Ten Million Naira]. Thus, any new company with foreigners as its sole owners, or with foreign participation, must have an authorized share capital of at least ₦10,000,000 [Ten Million Naira] which the company is required as a compliance requirement to import into Nigeria through authorized dealers.

Requirements Checklist to register a foreign company in Nigeria

Choose proposed company name[s]. The foreign company that intends to register in Nigeria has to first choose its proposed name for its Nigerian operations. For example, tech giant Google International LLC is registered in Nigeria and carries on its business operations in Nigeria as “Google Global Services Nigeria Limited”. Thus, every foreign company which is trying to be registered in Nigeria is required to choose a name for its Nigerian operations. The applicant company [or its agents] is required to submit two names to the Corporate Affairs Commission for consideration, in order of preference.
Particulars of directors and secretary. The particulars of each director required includes: name, address, passport photograph, signature, valid Government-issued identification document [Passport, NIN card, Driver’s Licence], address, telephone number, email address, age, gender.
Particulars of members of the company. The foreign company must supply details of the members who will subscribe to the shareholding of the company upon incorporation.
Filing fees. For each step in the registration process, there are fees which needs to be paid, from the point of reservation of the new company name, to the point of payment for incorporation proper.
Authorized share capital. As aforementioned, the [minimum] authorized share capital for a foreign-owned company in Nigeria is ₦10,000,000 [Ten Million Naira].

Steps to Reasons to register a foreign company in Nigeria

Conduct Name Availability search and reserve proposed name. This is the very first step to register a foreign company in Nigeria.
Prepare all necessary Documents: The CAC-accredited agent registering your foreign company as a Nigerian entity on your behalf should provide you a detailed checklist of all required documents you need to provide to make the registration of the company possible.
Begin Registration: This involves all the steps to be taken and the documents to be submitted for approval of the registration of your foreign company as a legal entity that can carry on business in Nigeria.

Fees required to Register a Foreign Company in Nigeria

Asides the agency fees the foreign company will pay to local CAC-accredited Firm to handles its local incorporation, a foreign company is required to pay all CAC-approved fees for the registration of their foreign company in Nigeria. These fees include: the Name Reservation Fee, payment for the incorporation proper and stamp duties.

Timeline for registering a Foreign Company in Nigeria

Registration of a foreign company in Nigeria will usually take between twelve days to fourteen days, depending on the backlog of work from the Corporate Affairs Commission. The Commission has been working hard to reduce the registration turnaround time to the shortest possible time.

Benefits of Registering a Foreign Company in Nigeria

There are benefits associated with registering a foreign company in Nigeria:

Legal protection: When a foreign company registers in Nigeria and becomes a going concern in Nigeria, such a company will enjoy the legality of being registered under Nigerian law. Such a company becomes a legal entity with rights, obligations and protection.
Credibility: When a foreign company registers in Nigeria and becomes a Nigerian company, such a company will enhance its local reputation within the Nigerian business market, in whatever sector it operates in.

Tax Requirements

Tax identification number [TIN] is automatically issued to every new company incorporated in Nigeria by default, so that step will be taken care of automatically at the point of final approval of the company to become a legal entity in Nigeria. The certificate of incorporation of the company will bear the new company’s TIN. This is to ensure compliance with Nigerian tax laws so the company can fulfil its tax obligations and pay corporate taxes and other taxes as may be required in the course of its business operations.

Upon incorporation, your new company should register for Value Added Tax [VAT] at the Federal Inland Revenue Service. This is an important step, as companies are regarded as agents of the FIRS and can collect VAT on its behalf, then remit same to the Regulator.

NIPC Registration

The National Investment and Promotion Council [NIPC] monitors foreign investment in Nigeria and thus requires foreign-owned companies operating in Nigeria to be registered with it. There is a compliance requirement for this. The company should make its application to the NIPC and provide detailed information on the company, investment plans, and financial projections. The NIPC application is made after incorporation of the company as a Nigerian entity.

Business Permits, Expatriate Quota and Work Permits in Nigeria

Upon incorporation, the company can apply for business permit from the Federal Ministry of Interior by filling and submitting the appropriate form. Detailed information regarding the company’s ownership, activities and proposed investments are required before the Ministry of Interior grants a business permit to a foreign-owned company for same to begin its business operations in Nigeria.

On the other hand, the expatriate quota is necessary for applications to be made for foreigners to be issued with work permits to live and work within Nigeria. Where such application is approved, the expatriate involved will be issued with a Combined Expatriate Residence Permit and Aliens Card [CERPAC].

Local Bank Accounts and Certificate of Capital Importation

Upon incorporation, a foreign-owned company which is registered to carry on business in Nigeria will have to open a local bank account with any Bank in Nigeria. There are processes involved in getting this done, and documents which the local Bank will require before setting up an account for the company. These include the Tax Identification Number, company details, et cetera.

To be able to transact locally within Nigeria, a foreign-owned company will need to apply for and be issued with a Certificate of Capital Importation from an authorized dealer. This will serve as its evidence of the company’s importation of cash into Nigeria either in the form of equity, debt, goods, or even [more particularly] cash.

Conclusion

Nigeria operates a free business economy and foreign companies can enter into the country to commence business operations, subject to meeting all approved regulatory requirements and getting incorporated as registered entities in Nigeria. The process to doing business as a foreigner in Nigeria is an involved one, which is why we advise you seek expert guidance if you are a foreign business doing business in Nigeria or trying to.

[This article is provided for information purposes only and does not constitute legal advice. To learn more about our incorporation services for foreign companies in Nigeria or you ned general legal advisory, we invite you can reach out to our partner at kingsley.ani@kabbizlegal.com for more information or call/whatsapp +2348064231176]

This article is from the corporate and commercial law practice group at Kabbiz Legal & Advisory.