FOREIGN COMPANY REGISTRATION IN NIGERIA
Operations of Foreign Companies in Nigeria
A foreigner may invest and participate in the operation of any enterprise in Nigeria, except in sectors explicitly excluded by law. However, to conduct business operations in Nigeria, a foreign company must incorporate or register the company as a Nigerian branch or subsidiary, which will act as a separate legal entity in Nigeria. Until the company is incorporated, it is prohibited from carrying on business or exercising the powers of a registered company in Nigeria.
To incorporate a company in Nigeria, the foreign investor may engage the services of a qualified solicitor within the country.
Steps for Registration
Once incorporated as a local entity, the Nigerian branch or subsidiary of the foreign company must:
Apply to the Nigerian Investment Promotion Commission (NIPC): If the equity of the company is 100% foreign-owned, the company must obtain a Business Permit from the NIPC.
Secure Other Requisite Licenses and Permits: Depending on the nature of the business, the company may be required to obtain additional permits or licenses from relevant regulatory bodies.
Exemptions to the Mandatory Registration Requirement
In certain circumstances, a foreign company may apply for an exemption from incorporating a local subsidiary. These exemptions are granted under specific conditions as outlined in Section 56 of the Companies and Allied Matters Act (CAMA) 2020. Foreign companies may qualify for an exemption if they fall into one of the following categories:
Federal Government Invitation: Foreign companies invited to Nigeria by or with the approval of the Federal Government to execute a specified individual project.
Donor-Funded Projects: Foreign companies engaged in the execution of a specific individual loan project on behalf of a donor country or an international organization.
Export Promotion Activities: Foreign government-owned companies involved exclusively in export promotion activities.
Specialized Technical Services: Engineering consultants and technical experts engaged in an individual specialist project under a contract with the Federal Government, its agencies, or any other approved entity, provided the contract has been approved by the Federal Government.
Conclusion
Foreign investors seeking to establish operations in Nigeria must comply with the country’s legal and regulatory requirements for business registration. While the general rule mandates incorporation of a local subsidiary, exemptions are available for companies engaged in specialized, government-approved projects. Engaging the services of experienced legal practitioners in Nigeria can ensure a smooth registration process and compliance with all relevant laws.