Helping Clients Achieve Their Business Objectives
The most common form of business organization in Nigeria is the limited liability company (private or public). Company incorporation in Nigeria has been very much simplified. It can be accomplished within between twenty-four hours on urgent basis, and four weeks, depending upon the circumstances of the investor and the nature of business, provided correct incorporation papers have been properly filed with the appropriate authority.
BUSINESS PERMIT & EXPATRIATE QUOTA
The Immigration Act requires that any person who is not a citizen of Nigeria who wishes to register or takeover any company with limited liability shall obtain the consent in writing of the Minister of Interior. This consent is commonly referred to as "Business Permit". The same law requires that any person who is not a citizen of Nigeria, who wishes to accept employment (not being employment with the Federal Government or a State Government), shall obtain the consent in writing of the Director of Immigration. This is commonly called "Expatriate Quota".
CAPITAL IMPORTATION & CERTIFICATION OF CAPITAL IMPORTATION
Investment of foreign currencies and capital in enterprises or securities in Nigeria is governed by the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, F34, 2004. Any person may invest in any enterprise or security, with foreign currency or capital imported into Nigeria through an Authorised Dealer either by telegraphic transfer, cheques or other negotiable instruments and converted into the naira in the Market in accordance with the provisions of this Act.
The Authorised Dealer through which the foreign currency or capital for the investment is imported shall, within 24hours of the importation, issue a Certificate of Capital Importation to the investor and shall, within 48hours thereafter, make returns to the Central Bank giving such information as the Central Bank may, from time to time, require.
No money imported for the purpose of this Act shall be liable to seizure or forfeiture or suffer any form of expropriation by the Federal or a State Government.
NIGERIAN INVESTMENT PROMOTION COMMISSION
With a view to easing and accelerating investment in Nigeria, the Nigerian Investment Promotion Commission was established by the Federal Government as a one-stop-shop to coordinate the process of establishing and doing business in Nigeria. Companies established in Nigeria are required to also register with the Commission.
Investors have free choice of location of their business premises any where in the thirty-six States of the Federation and Ahuja Federal Capital Territory. There are of course various factors which must influence the choice, including the nature of the business itself and it side alenvironment. Lagos appears to be very popular and most attractive to investors for many reasons. Leases of business premises are readily available and are supported with binding contracts. One of the requirements for the issuance of business permit is that the applicant investor should show evidence of business premises. This is often satisfied with the production of valid lease contract.
OPENING A BANK ACCOUNT
Nigeria has a virile and robust banking sector, with links to the worlds leading financial institutions. To open a bank account with any bank of the investor's free choice, certain documents are required. These include, Certificate of Incorporation, Memorandum and Articles of Association of the Company, Particulars of the Directors of the Company, Particulars of Registered Office (sometimes), Resolution of the Board of Directors, Residence Permit of signatories (in the case of foreign signatory), and duly completed opening forms.
OPERATION OF FOREIGN CURRENCY DOMICILIARY ACCOUNT
Any company or individual may open, maintain and operate a domiciliary account designated in foreign currency with any bank. The foreign currency in which a domiciliary account may be opened, maintained and operated shall be any internationally convertible currency. Except as provided under any other enactment or law, acompany or a person making an application to open a domiciliary account shall not be obliged to disclose the source of the foreign currency sought to be deposited in the account. Any company or a person may open more than one domiciliary account designated in the same or different foreign currencies and at the same or in different banks.
INTELLECTUAL PROPERTY, NOTAP, ETC.
Where the business of the company is wholly or partially for or in connection with the use of trademarks; the right to use patented inventions; the supply of technical expertise in the form of the preparation of plans, diagrams, operating manuals or any other form of technical assistance of any description whatsoever; the supply of basic or detailed engineering; the supply of machinery and plant; and the provision of operating staff or managerial assistance and the training of personnel; application is required to be made to the National Office for Technology Acquisition and Promotion (NOTAP) for registration of the relevant contract. Such registration enables the foreign investort or emit the proceeds from such business and/or services.
COMPANY ADMINISTRATION & COMPLIANCE
The legal framework for company administration is governed primarily by the provisions of CAMA. It is basically the same as that of all the common-law countries of the Western world. Good corporate governance requires compliance with basic rules and regulations. In this connection, there is a pool of competent corporate lawyers who can guide the Company.
The current company income tax rate is 30%. It is fairly constant. The Nigerian income tax regime includes petroleum profit tax, education tax, information technology tax, capital gains tax, withholding tax, value added tax, and personal income tax as may be applicable. Further details are available from our law firm.
DIVIDENDS AND REPATRIATION OF FUNDS
Foreign currency imported into Nigeria and invested in any enterprise in accordance with the law shall be guaranteed unconditional transferability of funds, through an Authorised Dealer in freely convertible currency, relating to dividends or profits (net of taxes) attributable to the investment; payments in respect of loan servicing where a foreign loan has been obtained; and the remittance of proceeds (net of all taxes) and other obligations in the event of sale or liquidation of the enterprise or any interest attributable to the investment.