IMPORTATION OF CAPITAL AND REPATRIATION OF PROFITS: WHAT INVESTORS IN NIGERIA NEED TO KNOW.

Every investor desires a return on their investment that is easy to obtain. Foreign investors intending to invest in Nigeria want reassurance that their money may be easily retrieved at any time. This article will be answering some basic questions on what investors in Nigeria need to know on Capital importation in Nigeria

What is Capital Importation?

Capital Importation or Importation of capital is the investment a foreigner is willing to import into an economy. For instance, where a foreigner from Germany is willing to invest $1 billion in the Nigerian Tech Space, that 1 billion dollars are the capital importation that has been made by the German investor. Capital importation could be through direct investment, portfolio investment, or other types of investments.

What is a Certificate of capital importation?

A Certificate of Capital Importation (CCI) is a document granted to a foreign investor as proof of an entry of foreign direct capital investment, which can be in the form of equity, debt, cash, or goods. On behalf of the Central Bank of Nigeria (CBN), a CCI is issued to the investor by an authorized dealer usually by the Nigerian Commercial Banks

Capital importation in Nigeria is important for every foreign investor who is looking to do business in Nigeria, as every investor wants a return on their investment. Prior to 2016, the Certificate was issued as a hard copy document; however, in 2017, the CBN automated the process and switched to an electronic CCI (e-CCI), which is hosted on the CBN server.

The CCI is issued by any Nigerian bank and it confirms the inflow of foreign capital either in the form of cash (loan or equity) or goods, and it is usually issued in the name of the investor within 24–48 hours of the inflow of the capital into Nigeria. 

What is the Certificate of capital importation used for?

1. The CCI assures repatriation of capital and profit upon maturity of the investment at the official market rate.
2. The Certificate of capital importation is used to protect against the risk of currency rate fluctuations in the Foreign Exchange (FX) market
3. The CCI allows an investor to repatriate cash through the official market, where rates are often more steady and favorable.

Requirements for obtaining a CCI

Below are the documentary requirements for obtaining a CCI, which is the sole evidence of capital importation in Nigeria.

Documents required to issue CCI for the importation of cash as equity investment/ cash as loan.

1. Letter from the customer requesting CCI 
2. Board resolution authorizing the investment (from the Nigerian company) 
3. A copy of the Nigerian company’s certificate of incorporation 
4. Tested SWIFT telex copy stating amount and purpose of inflow 
5. Name and address of foreign investor (to be provided by the Nigerian company). 
6. Registration number and date of registration of investors 
7. Nature of Business of Investor 
8. Sector of operation of the beneficiary. 
9. An offer letter by the investor and acceptance by the beneficiary
10. The loan agreement stating the repayment schedule (Tenor and interest rate)

Documents required to issue CCI for the importation of machinery & equipment as equity investment/ machinery & equipment as loan.

1. Letter from the customer requesting CCI 
2. Board resolution authorizing the investment (from the Nigerian Company) 
3. A copy of the Nigerian company’s certificate of incorporation 
4. Tested SWIFT telex copy stating amount and purpose of inflow 
5. Name and address of foreign investor (to be provided by the Nigerian company). 
6. Investors’ registration number and date of registration of investors 
7. Nature of Business of Investor 
8. Sector of operation of the beneficiary. 
9. Offer letter by the investor and acceptance by the beneficiary
10. The loan agreement stating the repayment schedule ( tenor and interest rate)
11. Risk assessment report/combine certificate of origin and value for destination inspection 
12. Certified copy of the bill of lading (original to be sighted). 
13. Certified copy of bill of entry/single goods declaration form (original to be sighted) 
14. Original import duty payment receipt bearing single goods declaration (SGD) form number 
15. Copy of Form M (non-valid). 
16. Goods exit note (evidencing clearance of goods not earlier than six Months).

Repatriation of funds from Nigeria

Subject to payment of all relevant taxes, overseas investors are guaranteed unrestricted repatriation of their investment capital and proceeds, in any convertible currency, if that capital was brought into Nigeria under a Certificate of Capital Importation (CCI)

How to obtain Certificate of capital importation in Nigeria

An application for a CCI should be submitted to the authorized dealer prior to the delivery of funds or equipment. Depending on the nature of the capital being imported, the bank will seek supporting documentation in addition to the letter for requesting a Certificate of capital importation.

Read More on the CBN guideline on Certificate of capital importation

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