As a general rule, any company (whether local or foreign) which seeks to do business in Nigeria, must be first registered with the Corporate Affairs Commission and meet up with other requirements to be recognized by the relevant Government as a going concern.
Section 78 of CAMA 2020 provides:
(1) Subject to sections 80- 83 of the Act, every foreign company which before or after the commencement of this Act was incorporated outside Nigeria and has the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate legal entity in Nigeria for that purpose, But until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of document or processes in Nigeria for any purpose other than the receipt of notices and other documents as matters preliminary to incorporation under this Act.
However, the general rule stated above would not apply in situations where;
1. Foreign companies were granted an exemption under the previous Companies Act.
2. Foreign companies are exempted under any treaty to which Nigeria is a party.
3. Foreign companies are exempted by the Minister in charge of trade upon compliance with Section 80(1), (2), and (3) of the Companies and Allied Matters Act, 2020.
The category of companies the Minister can exempt by virtue of Section 80(1), (2), and (3) are;
1. Foreign companies invited to Nigeria by or on the approval of the federal government to execute any specified individual project.
2. Foreign companies which are in Nigeria for the execution of specific individual loan projects on behalf of a donor country or international organization.
3. Foreign government-owned companies engaged solely in export promotion activities. For instance, A Chinese Government owned company specializing in the manufacture of computer chips comes into Nigeria to promote the export of silicon and sharp sand for making computer chips.
4. Engineering consultants and technical experts engaged on any individual specialist project under contract with any of the government in the federation or their agencies with anybody or person, where such contract has been approved by the federal government. Experts could be individuals operating as a firm or company.
Where a foreign company falls within the exempted categories provided above, it may apply for an exemption to be incorporated as a subsidiary in line with the application requirements provided by the Companies and Allied Matters Act.
Foreign companies upon obtaining an exemption have the status of an unregistered company. It is nevertheless obliged to file annual returns with the Corporate Affairs Commission in the prescribed format.
REQUIREMENTS FOR REGISTERING A FOREIGN (PRIVATE) COMPANY IN NIGERIA.
1. A minimum of two or more names for reservation.
2. Particulars of the nature of business activities to be carried out by the company.
3. Proposed address of the company
4. Particulars of directors and shareholders of the proposed company (such as; Name, Address, email and phone number, and date of birth). Although a private company limited by shares can currently be registered by one person, that would not apply in situations where directors and shareholders of a foreign company are foreigners in this case, as its mandatory that such a company must be registered with at least one Nigerian citizen as either a director or shareholder of the company so as to obtain an approval.
5. Valid Government Issued ID cards of all directors and shareholders.
6. Minimum share capital requirement currently revised from 10,000,000 (ten million) shares to 100,000,000 (one hundred million shares). See the revised HANDBOOK ON EXPATRIATE QUOTA ADMINISTRATION.
7. Details of share ratio to be held by shareholders.
8. E-signatures of all directors, shareholders, and secretaries (if any).
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OTHER LICENSING REQUIREMENTS CHECKLISTS TO BE CONSIDERED BY FOREIGN COMPANIES.
1. Registration with the Nigerian Investment Promotion Commission (NIPC). The NIPC is responsible for coordinating and monitoring investment promotion activities in Nigeria.
2. Obtain a business permit and expatriate quota from the Department of Citizenship and Business from the Ministry of Interior. The business permit authorizes foreign companies registered in Nigeria to start and operate businesses in Nigeria, while the expatriate quota authorizes foreign companies to employ foreign employees and directors of the company to live and work legitimately in Nigeria.
3. Obtain Combined Expatriate Residence Permit and Alien Card (CERPAC) from the Nigerian Immigration Service. CERPAC is an Immigration document for foreigners who wish to stay in Nigeria for a long period of time (56 consecutive days) to hold. It is valid for a period of two years and subject to renewal after expiration.
4. Obtain a Certificate of Capital Importation from the Central Bank of Nigeria. In accordance with CBN regulations of 12th June 2012, foreign companies involved in activities such as; investments and capital through authorized dealers, importation of raw materials and equipment, and overseas exchange inflow for loans, must obtain a Certificate of Capital Importation. This requirement solely applies to wholly foreign-owned businesses importing any form of capital into Nigeria.
5. Obtain operating licenses for specialized sectors. Should a foreign company wish to operate in specialized sectors, certain licenses might be obtained from relevant government agencies. Some of these licenses and their respective agencies include;
i. License for production, distribution, and importation of food and drugs (i.e NAFDAC license). Obtained from National Agency for Food and Drug Administration and Control (NAFDAC).
ii. License for operation within the Oil and Gas Sector. Obtained for the Department of Petroleum Resources (DPR).
iii. License for operating within the Telecommunications Sector. Obtained from the Nigerian Communications Commission (NCC).
iv. License for operations within the Finance sector. Obtained from the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC).
v. License for operations within the Solid Minerals Sector. Obtained from the Ministry of Mines and Steel Development.
From the above, it is safe to conclude that foreign companies cannot operate the business (online or offline) in Nigeria, without being incorporated in Nigeria. Certain unregistered foreign companies may however operate in Nigeria provided they meet the requirements provided by Sections 78 and 80 of the Companies and Allied Matters Act, 2020.
As regulations for doing business within Nigeria continues to evolve, it is important for entities or individuals seeking access to the Nigerian market, to seek adequate and up-to-date information on the legal checklists to be considered before operating within Nigeria.
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