LEGAL REQUIREMENTS FOR FOREIGN PARTICIPATION IN BUSINESSES IN NIGERIA. (Part 1)
Peter Ogagaoghene Ekavwo B.L, LL.M(Master of Laws)
Principal Attorney at ADVOCARE POPULI LAW FIRM
(picture culled from medium.com)
Introduction:
Nigeria is a country situate in the West Africa sub region, with an estimated population of about 200 million people and an active work force. It is a country richly endowed with rich, natural and human resources, which if well harnessed, has the capacity to place the country among the top developed Country of the World. Some of her natural resources include but not limited to Crude Oil and Gas, Gold, Iron, rich and arable land for agriculture among others.
Why Invest in Nigeria?
With a rich population and being the largest market in Africa, there is ready-made market for goods and services, especially consumer goods. Besides, there is a high deficit in the area of IT, housing, Oil refining, domestic gas production, transport in highly populated urban areas, finance, food processing, tourism, construction, infrastructure development and a host of other areas. In essence there is huge return on investment for any entity that invests in these areas.
Foreign Participation:
Nigeria as a country is always eager and desirous of attracting foreign investment into the country. This is hinged on the fact, that the world is a global village and there is need for trade relations among countries of the world. In furtherance of this policy, the government of Nigeria has put various legal structures in place, to enable Foreigners and foreign companies, to invest in the rich economic space which the country offers.
Types of Foreign Participation in Nigeria:
Foreigners who intend to invest in Nigeria have two investment options to choose from, to wit: Foreign Direct Invest (FDI) and Foreign Portfolio Investment (FPI). Under the FDI model, a foreigner or foreign company can either solely set up a business in Nigeria or in partnership with other Nigerians. The FPI model on the other hand, is a process which allows foreigners or a foreign company, to invest in the shares of a Company in Nigeria, either in a Public Company or through direct allotment of shares in a private Company. In Part 2, we shall highlight various incentives foreign investors enjoy and proceed to discuss legal requirements for foreign participation in Nigeria. Thank you for reading!!