How to Register a Foreign Company in Nigeria
Nigeria remains one of Africa’s leading investment destinations, offering significant opportunities across sectors such as technology, manufacturing, agriculture, healthcare, and financial services. For foreign investors looking to establish a presence in Nigeria, one of the first decisions to make is whether to operate through a branch or a subsidiary.
Although these terms are often used interchangeably, they have different legal implications. More importantly, Nigerian law generally permits foreign companies to carry on business through a subsidiary rather than a branch.
This article explains the difference between the two structures, the legal position under Nigerian law, and the requirements for registering a foreign-owned company in Nigeria.
Branch vs. Subsidiary: What is the Difference?
A branch is an extension of a foreign company and does not have a separate legal identity from its parent company. This means that the foreign company remains responsible for the branch’s liabilities, obligations, and business activities.
A subsidiary, on the other hand, is a separate legal entity incorporated in Nigeria. Although it may be wholly or partly owned by a foreign company, it operates independently, can own property, enter into contracts, sue and be sued in its own name, and enjoys limited liability.
For most foreign investors, a subsidiary is the legally recognized structure for carrying on business in Nigeria.
What Does Nigerian Law Say?
The Companies and Allied Matters Act, 2020 (CAMA) governs the incorporation of companies in Nigeria.
Under Section 78 of CAMA, a foreign company intending to carry on business in Nigeria is generally required to incorporate a separate company in Nigeria before commencing business. Until incorporation, the foreign company cannot lawfully carry on business or exercise the powers of a registered company in Nigeria, except for activities that are merely incidental to its incorporation.
This means that, as a general rule, foreign companies cannot simply establish a branch and commence commercial operations in Nigeria.
However, Section 80 of CAMA provides limited exceptions. Certain foreign companies may apply for exemption from the incorporation requirement, including companies invited by the Federal Government to execute specific projects, foreign government-owned companies engaged solely in export promotion activities, and engineering consultants or technical experts engaged for approved specialist projects.
Unless a foreign company qualifies for one of these statutory exemptions, it is expected to establish a Nigerian subsidiary before carrying on business.
Requirements for Registering a Foreign-Owned Company in Nigeria
Where a foreign investor intends to establish a subsidiary in Nigeria, the following information and documents are generally required:
- Reservation of the proposed company name with the Corporate Affairs Commission (CAC).
- Details of the company’s shareholders, whether individuals or corporate entities.
- Particulars of the proposed directors and company secretary (where applicable).
- A registered business address in Nigeria.
- The company’s objects, stating the nature of the business it intends to carry on.
- Details of the company’s issued share capital which is a minimum of 100 million for foreign companies.
- Valid means of identification for the directors and shareholders.
- Where a foreign company will be a shareholder, its incorporation documents and a resolution authorizing the investment may also be required.
- A Statement of Compliance confirming that the incorporation requirements under CAMA have been met.
Once the application is approved, the CAC issues the company’s Certificate of Incorporation, Status Report, and Memorandum of Articles and Association.
What Happens After Incorporation?
Incorporating the company is only the first step. Depending on the nature of the business, additional registrations and approvals may be required before operations can commence.
These may include:
- Registration with the Nigerian Investment Promotion Commission (NIPC);
- Registration with the Nigeria Revenue Service (NRS) for tax purposes;
- Obtaining a Business Permit where applicable;
- Applying for Expatriate Quota approvals where the company intends to employ foreign nationals; and
- Obtaining industry-specific licenses or permits where the business operates in a regulated sector.
The specific requirements will depend on the industry and the nature of the company’s activities in Nigeria.
Ensuring compliance with the applicable incorporation requirements and post-registration obligations not only satisfies regulatory requirements but also provides a solid legal foundation for doing business in Nigeria. Seeking professional legal advice before commencing the registration process can help foreign investors navigate the regulatory landscape and establish their businesses with confidence.
Planning to expand your business into Nigeria? We can assist with the incorporation of foreign-owned companies, NIPC registration, and the necessary licenses and regulatory approvals required to establish and operate your business in compliance with Nigerian law.
Team 618 Bees
Need help registering your business or company with CAC?
Let 618 Bees take the stress off your plate. Call/WhatsApp: 09017190079 Email: hello@618bees.com Website: www.618bees.com
Chat on WhatsApp