Nigeria is Africa’s largest country by population. It is also considered to be an emerging market as well and thus opportunities abound. It is generally considered the socio-economic and commercial hub of Africa because it is factually the largest economy in Africa and has the 27th largest in terms of GDP worldwide according to the International Monetary Fund(IMF). A host of foreign companies continue to rush into the country because of its continued growth. Business registration in Nigeria is straightforward. The Corporate Affairs Commission (CAC) makes yearly revisions to ease doing business processes.
Can a Foreigner Do Business in Nigeria?
Absolutely, foreigners wishing to do business in Nigeria must register a company. They are required to register their business with the CAC and also obtain all necessary permit licenses and authorizations to do business. These include a business Permit and NIPC registration and Expatriate Quota.
There are four (4) types of companies recognized for foreign business in Nigeria:
1. Private Limited Liability Company (LTD): This is the most common form of business set up by investors and it requires a minimum share capital of NGN 10,000,000. However, new guidelines now require a minimum share capital of NGN 100,000,000 especially if the business will have foreigners living and working in Nigeria.
A private limited liability company is a legal entity in its own right, separate from those who own it. The company requires a minimum of one(1) and a maximum of fifty (50) shareholders and directors. Certain regulated industries require a minimum of two(2) directors.
This type of company is restricted from transferring its shares freely and prohibited from inviting the public to subscribe to its shares, debentures and/or deposit money for fixed periods or payable at call, whether or not bearing interest.
2. Public Limited Liability Company (PLC): A public company is just as the name in implies. There is no restriction on the maximum number of shareholders or their right to transfer their shares freely. The public may be invited to subscribe to its capital and the shares may be traded on any securities Exchange.
3. Company Limited by Guarantee (GTE): Generally incorporated as a not-for-profit, this kind of company limits its members’ liability to the amount of their respective guarantees.
4. Unlimited Company: This type of company has no limit on the liability of its members.
Business Registration Requirements in Nigeria
The requirements for Registering a foreign business in Nigeria include the following:
- Proposed Company/Business name
The proposed business name search is conducted to ensure it is not similar to an existing registered business. If approved, it is reserved for 30 days. CAC has a requirement on the minimum amount of names to be submitted, it is practice to submit 2 names however, it is important that you have a few more alternatives should these names be denied for any reason.
- Objectives of the Business
This is essentially the business that the company is being set up to carry out. This business must be entirely legal and not against public policy.
- Names of the Directors, Shareholders and contact details and email
For transparency and accountability purposes, CAC requires that the ownership information be indicated on the application for registration. Additionally, these individuals must have consented to be involved in the business.
- Proof of Identification
A valid and unexpired proof of identification must be provided for each director and shareholder of the business during the registration process. International passport is the only form of Identification accepted for foreigners who would like to register their business in Nigeria.
- Passport Photo
A clear and recent passport photograph must be provided for every owner owner and officer of the company.
6. Proof of Address
A recent utility bill, ideally within the last 3 months must be provided to serve as proof of business address while registering a business. Sidebrief provides registered address for business owners at an annual fee.
How much does it cost to formalize a foreign business in Nigeria?
Sidebrief registers a private limited liability company with foreign participation with N10,000,000 shares in Nigeria for the sum of $350.
How do I register my small business in Nigeria?
The Corporate Affairs Commission is in charge of business registration in Nigeria. However there are also several other agencies that regulates foreign businesses in Nigeria. These include Federal Inland Revenue Service, Nigerian Investment Promotion Commission, Ministry of Interior among others.
Where do I register my business in Nigeria?
Sidebrief is a RegTech startup that makes business registration and compliance easy for founders, entrepreneurs, and business owners across Africa by removing lengthy paperwork, complexity, and hidden fees. We provide the tools for founders to start and scale businesses across borders from a single interface. To take advantage of exclusive discounts and pricing, simply sign up to get started.
For further information,
Email – firstname.lastname@example.org
Phone – +2349018081296