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QUICK GUIDE TO FOREIGN INCORPORATION

Introduction

  1. Companies And Allied Matters Act (CAMA), the principal legislation regulating companies in Nigeria, requires any foreign company intending to carry on business in Nigeria (except for companies exempted upon the grant of the assent of the President) to be incorporated as a separate entity in Nigeria.
  2. Companies registered under CAMA may be private or public; and a company, whether private or public, may be limited by shares, limited by guarantee or unlimited.
  3. Under Nigerian law, a private company limited by shares essentially has the following characteristics;
  • The company’s Memorandum and Articles of Association restricts transfer of its shares
  • The total number of members of such Company does not exceed 50
  • A minimum of two persons are shareholders
  • Such Company is restricted from inviting the public to subscribe to its shares or debentures from trading or selling its shares to the public and /or depositing money for fixed periods or payable at call, whether or not bearing interest
  • A private Company limited by shares must also end with the word “Limited”

Public Companies

A public Company on the other hand is a Company with the following characteristics:

  1. The name of such Company must end with the word “Plc”
  2. The Company can invite the public to subscribe e shares or debentures of the company provided it is listed on the floor of the Nigerian Stock Exchange
  3. Public Companies can therefore raise money via IPO’s or Public Offers
  4. Public Companies must have a minimum authorized share capital of N500,000
  5. A company listed on the floor of the Nigerian Stock Exchange must be a Public Limited Company but not all Public Limited Company must be listed
  6. Shareholders of Public Limited Companies must be a minimum of 50.
  • Generally, the most used company structure used by investors in Nigeria is the private limited company due to its flexibility and amount of control which the shareholders are given under the law.
  • The minimum share capital for a foreign Private company desirous of carrying on business in Nigeria is N10,000,000 (Ten Million Naira)
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Information and Documentations for registration at the CAC

  1. For the incorporation, the incorporation forms needs to be filled with certain vital information. These incorporation forms generally need to be executed by the subscribers   proposed directors, and the proposed company secretary. The relevant incorporation forms to be submitted to the CAC are:
  • CAC Form 2- Two copies are required
  • CAC Form 2.1;
  • CAC Form 3;
  • CAC Form 7.
  1. To ensure a seamless incorporation, the following information and documents are vital and need to be known and submitted to the CAC.
  • The Nominal Share Capital of Company
  • The Particulars of the Subscribers
  • Proof of Identity of the Subscribers
  • The Particulars of the Company Secretary
  • The Registered Address of the Company
  • The Particulars of Directors of the Company
  • Proof of Identity of the Directors
  • Memorandum and Articles of Association (Memart)
  • Certificate of proficiency, for businesses of a professional nature

Professional Fees

Our professional fees for incorporating a Nigerian company at the CAC is the sum of $1500 (One Thousand, Five Hundred United States Dollars).

Registration with the Nigerian Investment Promotion Commission (“NIPC”)

  1. Apart from seeking local incorporation in Nigeria, a foreign entity seeking to carry on business in Nigeria must register with the NIPC in accordance with the NIPC Act.
  2. The NIPC Act requires every company with foreign participation to be registered with the NIPC before commencing business and guarantees any foreign enterprise registered with it, protection against nationalisation and expropriation of the foreign enterprise by any government of Nigeria.
  3. The information and documentation required for registration with the NIPC are as follows:

Information and Documentation for NIPC Registration

  • Original copy of the duly completed NIPC Form 1
  • A copy of the  Memorandum and Articles of Association
  • A copy of the  certificate of incorporation
  • A copy of CAC Form 2 (Return of Allotment) and CAC Form 7 (Particulars of Directors)
  • Power of Attorney/Letter of Authority (where applicable)

Professional Fees

Our professional fees for registration with the NIPC is the sum of $1000 (One Thousand United States Dollars). The sum is however, exclusive of disbursements and expenses we incur whilst acting for you.

Obtaining Business Permits from the Nigerian Immigration Service (“NIS”)

  1. Apart from the aforementioned permits, a foreign company desirous of carrying on business in Nigeria, must before beginning its operations obtain a business permit. A business permit is the permanent authorisation for the local operation of a business with foreign investment either as a branch or subsidiary of a foreign company or otherwise.
  2. The information and documentation required for the attainment of a business permit from the Nigerian Immigration Service are as follows:

Information and Documentation

  • Original copy of the duly completed NIPC Form
  • Original copy of the treasury receipt of purchase of NIPC Form
  • A copy of the Company’s certificate of incorporation
  • Evidence that the Company  has a minimum share capital of N10,000,000
  • A copy of the Tax Clearance Certificate of the applicant
  • A copy of Certificate of Capital Importation
  • A copy of CAC Form 2 (return of Allotment) and CAC Form & (particulars of Directors)
  • A copy of the Memart
  • A copy of treasury receipt as evidence of payment of stamp duties on the authorised share capital of the company as at date of application;
  • A Copy of Feasibility Report and Project Implementation Programme of a company for its proposed business
  • Copies of information brochure on foreign shareholder (if available) as testimony of international expertise and credibility of the foreign partner in the proposed line of business
  • Details of Shareholding Structure of the Company
  • A copy of Joint Venture, Shareholders’ or Partnership Agreement, (Unless 100% foreign ownership is applicable).

Professional Fees

Our professional fees for getting a business permit is the sum of $1000 (One Thousand United States Dollars). The sum is however, exclusive of disbursements and expenses we incur whilst acting for you.

We hope the above assists.

Yours faithfully,

Legitng