Registration of a company with foreign participation in Nigeria

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 5^th 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.

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