CAN MY FOREIGN FRIEND JOIN ME TO ESTABLISH A COMPANY IN NIGERIA?

This question must have been on your mind for sometime now. The simple answer is Yes. Nigeria as a free trade country encourages foreigners to establish any business in Nigeria either alone, with other foreigners or with a Nigerian except for some types of businesses.

But I need to paint a scenario for you.

You had the opportunity to travel out of Nigeria for your masters degree program and during the program you connected with lots of foreign friends but one became your best friend. Now you are both done with your masters program and the two of you have agreed to establish a Travel and tours company in Nigeria because of your experience and connections in traveling and tourism. In fact, traveling has always been a hobby for you. And like they say "turn your hobby to a source of income"

Trust me, that is a very good plan especially when you have a foreigner in the company but then let us talk about the process of the registration of the company. That is the first step after the two of you have conceived the idea and have decided to implement it to birth a company. Now the process of incorporating this company with your foreign friend is what we call incorporation of company with foreign participation. This simply means that it is different from just incorporation of a company.

There are certain things you must know before you can establish a company with foreign participation:

1. Minimum share capital: The minimum share capital for a company with foreign participation is 100,000,000 share capital. This is an upgrade from the former prescribed minimum share capital of 10,000,000 in line with?the revised?handbook on expatriate quota administration. This is particularly the case if the foreign company would like to obtain an expatriate quota for foreign staff in Nigeria. This means that even if CAC accepts the old minimum share capital, there would be need for an upgrade when the company applies for expatriate quota for its foreign staff.
2. Shareholders: The company could be 100% owned by foreigners. However for some sectors, there has to be at least 50% ownership and control by a Nigerian. These sectors includes oil and gas, aviation, domestic coastal carriage, etc. Also, it must be at least 2 shareholders.
3. Directors: Ordinarily when incorporating a Company in Nigeria according to the CAMA 2020, the company could have a sole shareholder and a sole director. However for a company with foreign participation, the shareholders must be at least 2 shareholders and the directors must be at least 2 directors one of which must be resident in Nigeria.
4. Other required registration are registration with the Nigerian Investment Promotion Commission (NIPC) Registration and registration with the Nigerian Immigration Registration to obtain Expatriate Quota, resident permits and business permit before commencing business activities. This is handled by the Nigerian Immigration Services in Collaboration with the Ministry of Interior.
5. Obtaining Sector specific licenses and Permits to operate their business. These could be licenses and permits from NAFDAC, NCC, CBN, NAICOM, Nigerian Civil Aviation Authority (NCAA) etc. This depends on the type of business the company intends to carry on.
6. Certificate of Capital Importation: The company will need to obtain a Certificate of Capital Importation (CCI) from an authorized dealer which is usually a local bank to serve as evidence of importation of capital. The Capital could be equity, debt, cash or goods into the country. The CCI also guarantees the unconditional repatriation of capital and profits out of the country.
7. Protection of Intellectual Property: This is mainly trademark and patent registrations. It is very important that you carry out these registrations to protect the companies unique marks and inventions.

I advise any foreigner who wishes to establish business in Nigeria to engage the services of a Business lawyer for guidance on the requirements, registration process and also licenses to operate in their desired sector.

I am very much available for consultations, enquires and registrations. Contact on 07030446925.