If you are a foreigner looking to establish a business in Nigeria or a foreign company looking to undertake a project within Nigeria and in partnership with a local company in Nigeria, you are required to obtain a business permit.
A business permit is a certificate issued by the Nigerian government to enable either wholly foreign-owned or joint venture companies with foreign participation, to operate legally.
The reason behind this requirement is to protect local businesses from being ousted from the local market and to promote employment within the country.
Please note that a foreign company is not exempted from applying for an expatriate quota after obtaining a business permit as the former, enables the company to have foreign employees working within its organization.
WHO NEEDS A BUSINESS PERMIT
Any newly formed company fully owned by foreigners. Foreigners in this context do not include Nigerian citizens who are in the diaspora. Where it is proved that a Nigerian citizen has partial ownership of the company in question, there will be no need for a business permit.
REQUIREMENTS FOR OBTAINING A BUSINESS PERMIT
To obtain a business permit, the following are the specific requirements;
i. Application letter on Company’s letterhead;
ii. Certificate of Incorporation or registration of business name duly issued by Corporate Affairs Commission;
iii. Memorandum and Articles of Association
iv. Feasibility Report/Business Plan or company profile (where applicable)
v. Corporate Affairs Commission’s Form CAC 2.3 & 2.5 or CAC C02 & C07 or CAC 1.1 or e-status report (as applicable)
vi. Joint Venture Agreement for partnership between Nigerian(s) and foreigner(s)
vii. Company’s Current Tax Clearance Certificate or individual income tax certificates for Partnership Businesses/firms (as applicable)
viii. License/Permit/Certificate from relevant Government Agencies/departments/Ministries to operate business legally in Nigeria for companies engaged in oil exploration/services, health care services, fishing, mining, engineering services, etc.
ix. Evidence of acquisition of permanent operating premises i.e. lease/tenancy agreement, C of O or R of O
x. Certificate of Capital Importation along with a cover letter from the bank or with scan-able QR Code
xi. Evidence of importation of equipment/machinery (with details of the value) such as Form M, Proforma invoice, shipping documents, and Clean Certificate of Inspection, Bill of Lading (where applicable)
xii. Evidence of work at hand, its duration, and value attached to the contract(s) if the company is engaged in building, civil engineering, construction, and other sectors
xiii. Evidence of capital importation or another source of funding
xiv. Data page of International Passport of Directors/National Identity Card (for Nigerians)
xv. Valid telephone number and e-mail addresses of authorized representatives
xvi. Bank reference letter and Bank statement showing tangible inflow that supports feasibility study.
HOW MUCH IS A BUSINESS PERMIT IN NIGERIA
The required issued or paid-up share capital of the applicant company while incorporating the company has currently been revised from N10,000,000 (ten million naira) to N100,000,000 (one hundred million naira).
The above share capital requirement does not include statutory charges and professional fees should you seek to engage the services of a lawyer to act on your behalf. The statutory charge for the permit is issued after an application for a business permit is submitted.
HOW LONG DOES IT TAKE TO PROCESS A BUSINESS PERMIT
It takes about 7 days for the application to be processed. But it could take longer on some occasions.
HOW LONG DOES THE PERMIT LAST
A business permit remains valid after being issued and may be amended to reflect any changes in the licensed company’s information.
A business permit is in no way similar to a business license. While a business permit enables foreigners to carry out business in Nigeria, a business license applies to both Nigerians and foreigners and enables such applicant(s), to operate within a sector.
If you are in need of processing a business permit or wish to set up a foreign-owned business in Nigeria, our law firm is made up of a team of expert professionals who are willing to assist you with the process. You may reach out to us here, and we will be delighted to assist you.