Registration of a company with foreign participation in Nigeria

Registration of a company with foreign participation in Nigeria

February 22, 2024

Section 650 of Company and Allied Matters Act  2020 (CAMA), defines “an alien (foreigner) as a person or association, whether corporate or incorporated, other than a Nigerian citizen or association”. A foreigner is permitted to participate in forming a company. Also section 20(4) of CAMA states that, “subject to the provisions of any enactment regulating the rights and capacity of aliens to participate or undertake in a trade or business, an alien or a foreign company may join in forming of a company”.

Any person desirous of carrying out business in Nigeria, must register his or her business with the Corporate Affairs Commission (CAC). This applies to both Nigerian citizens and non-Nigerians.

Under the revised handbook on expatriate quota administration 2022, all existing companies with foreign participation must have a minimum paid-up capital of N100,000,000 (One hundred Million Naira), this has been recently implemented by CAC by notice given on the 5th of December, 2023. Where there is non-compliance, CAC shall commence proceedings for the compulsory winding-up of the companies as stated under Section 571(e) of the CAMA 2020.

A foreigner whether company or individual may invest and participate in the operation of any enterprise in Nigeria except those in the negative list. The negative list includes arms and ammunition, narcotic drugs and psychotropic substance, para-military and military wears and accoutre.

A foreigner may choose to register a business name, as a sole proprietorship or partnership, a company which can be private or public limited liability company, or he may wish to buy shares into an existing company.

CLASSIFICATION OF FOREIGN PARTICIPATION

There are two forms of foreign participation which are namely:

  • Foreign direct investment: This is a direct investment made by foreign investors who invest in Nigeria by setting up a company. This form of foreign participation requires registration with the Corporate Affairs Commission, to enjoy the incorporation status.
  • Portfolio investment: This is the purchase of shares of existing Nigerian companies which could be private or public. This is done by foreign currency being imported through an authorized dealer usually a bank or non-banking organization appointed by the Central bank of Nigeria and converted to Naira at the official exchange rate.

DETAILS REQUIRED FOR CAC REGISTRATION AS A COMPANY WITH FOREIGN PARTICIPATION

  • Proposed name of the company
  • Nature of the principal business
  • Registered office address of the company
  • Type of company to be incorporated (Private or Public).
  • Particulars of the director.
  • Particulars of the shareholders
  • Percentage of shares to be held by each shareholder.
  • Particulars of the company secretary.

DOCUMENTS REQUIRED

  • Proficiency certificate (where applicable)
  • Means of identification
  • Foreign certificate of incorporation and Board resolution for subscription to Nigerian company (where applicable)
  • Residence permit of residence foreigners (where applicable).

In instances where the proposed company will be 100% owned by non-resident shareholders, the promoters should prepare a joint-venture agreement between prospective shareholders. The joint venture may specify the mode of subscription by parties, manner of board composition, mutually protective quorum for meetings, specific actions which would necessitate shareholders’ approval by resolution.

Team 618 Bees

 

618 Bees can quickly and easily help you register your Nigerian business wih foreign participants. Log on to our website www.618bees.com or email hello@618bees.com, or give us a call on +2349017190079/08080819653. 618 Bees will complete your application with the CAC and any other relevant compliance agency.

 

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached

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Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.
  • Must my Company Secretary be a Lawyer?

    Although it’s ideal to have a lawyer as a company secretary, it is not compulsory for small private businesses.
  • Why is mutual assent important in a contract?

    This is one of the key elements of a contract because is shows the meeting of the minds of both parties
  • What are the penalties for not registering my products with the SON?
      1. Seizure of goods by the Inspectorate and Compliance Directorate
      2. Payment of a fine.
      3. Prosecution

     
  • Is it legal to transfer the personal data you obtained legally to another person?

    No, its not legal. This is because the law prohibits anyone from transferring the data of a third party to another person without consent from the third party to do same even if the data was rightfully obtained in the first instance.
  • Does Trademark registration protect my website domain name?

    Yes, it does.
  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.
  • Can a minor be a company director?

    No, a minor cannot be a director. A minor under Nigerian Law is anyone who is below 18 years of age.
  • What is a trademark?

    A trademark can be any word, sign, symbol or graphic that you apply to your company, goods or services to distinguish them from those of your competitors; for example, a brand, product or company name, or logo. The trademark serves as a badge of origin for your business and its brands and products, and can consist of words, logos, slogans, colours and shapes, or a combination of all of these.
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