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BRIEF GUIDE TO A BUSINESS SETUP IN NIGERIA

https://resolutionlawng.com/brief-guide-to-a-busines-setup-in-nigeria<br>Nigeria currently has the largest economy in Africa. The abundant oil reserves and huge human resources have made the country a destination of choice for the global investing community.

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BRIEF GUIDE TO A BUSINESS SETUP IN NIGERIA

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  1. BRIEF  GUIDE  TO  A  BUSINESS  SETUP  IN  NIGERIA     Nigeria  currently  has  the  largest  economy  in  Africa.  The  abundant  oil  reserves  and   huge  human  resources  have  made  the  country  a  destination  of  choice  for  the  global   investing  community.     The  first  step  to  take  for  any  individual  or  investor  seeking  to  start  a  business  in   Nigeria  is  to  register  a  company.  The  requirements  for  company  registration  in   Nigeria  for  foreigners  are  slightly  different  from  the  similar  requirements  for  the   citizens.  Every  Nigerian  citizen  can  register  any  company  with  any  threshold  of   authorized  share  capital  he  or  she  desires,  but  a  foreigner  or  foreign  company   registering  in  Nigeria  must  register  a  company  with  minimum  of  N10,  000,000  (Ten   Million  Naira)  share  capital.   However,  company  registration  is  just  one  of  the  requirements  for  a  business  setup   in  Nigeria,  especially  for  the  foreigners.  Apart  from  company  registration,  every   foreign  entity  seeking  to  navigate  the  path  of  successful  business  setup  in  Nigeria   must  also  comply  with  the  following  requirements  for  a  proper  business  setup:   1)Registration  of  the  registered  company  with  Nigeria  Investment   Promotion  Commission  (NIPC):  NIPC  is  a  statutory  body  that  promotes   foreign  investment  in  Nigeria.  The  commission  registers  any  company  with   foreign  participation  and  issues  its  certificate  to  such  company.  The  major   requirement  for  a  registration  with  NIPC  is  an  incorporation  documents  for   the  registered  company.  The  commission  will  also  seek  additional  details   concerning  the  nature  of  the  business  and  the  capital  to  be  imported  for  the   business  purpose.   2)Tax  Clearance  Certificate  (TCC),  Tax  Identification  Number  (TIN)  and   Value  Added  Tax  (VAT)  registrations:  Every  new  company  must  register   with  the  Federal  Inland  Revenue  Service  for  TCC,  TIN  and  VAT  numbers.  The   tax  identification  number  would  enable  the  company  to  remit  its  taxes.   Moreover,  every  other  government  organizations  processing  any  document   for  the  new  company  or  its  directors  in  future  may  also  demand  the  evidence   of  the  company’s  tax  clearance  certificate.   3)Business  Permit  with  the  Ministry  of  Interiors:  Every  new  company   wholly  owned  by  foreigners  must  apply  to  the  Ministry  of  Interiors  for  a   business  permit.  A  company  that  is  partly  owned  or  controlled  by  a  Nigerian   citizen  may  not  be  subjected  to  this  requirement.  There  are  requirements   highlighted  for  processing  of  the  business  permit  with  the  Ministry  of   Interiors.   4)Expatriate  Quota:  This  is  another  permit  being  issued  by  the  Ministry  of   Interiors  upon  the  application  of  company  for  the  benefit  of  any  foreigner   seeking  to  work  in  Nigeria,  either  permanently  as  the  owner  of  the  business   or  temporary  as  the  employee.  The  application  for  expatriate  quota  in   Nigeria  must  be  accompanied  with  the  prescribed  documents.   5)Combined  Expatriate  Residence  Permit  and  Aliens  Card  (CERPAC):   Every  individual  foreigner  seeking  to  work  in  Nigeria  must  hold  a  valid  

  2. residence  or  work  permit.  In  Nigeria,  CERPAC  serves  as  the  work  permit   every  foreigner  living  or  working  in  the  country  must  hold.  CERPAC  Nigeria   entitles  the  holder  to  live  and  work  in  the  country.  The  application  must  be   preceded  with  the  expatriate  quota  approval  for  the  company.    CERPAC  is   issued  upon  the  application  to  the  Comptroller  General  of  the  Nigerian   Immigration  Service  or  Comptroller  of  Immigration  Service  in  various  state   commands.   6)Bank  Account  Opening:  One  of  the  criteria  for  business  setup  in  Nigeria  or   anywhere  in  the  world  is  bank  account  opening.  Regardless  of  any  bank  in   Nigeria  an  investor  chooses  to  bank  with,  the  requirements  for  bank  account   opening  are  consistent  among  all  banks.  Such  requirements  will  include   incorporation  certificate  and  documents,  valid  mode  of  identification,   account  opening  package  duly  completed  and  signed,  company’s  board   resolution  authorizing  an  account  to  be  opened,  Tax  Identification  Number   (TIN)  and  Bank  Verification  Number  (BVN).  The  BVN  must  be  obtained   inside  a  banking  hall  in  Nigeria.  Therefore,  every  foreign  company  must  have   its  directors  resident  in  Nigeria  to  be  able  to  open  a  bank  account.  An   international  entity  seeking  to  setup  a  business  in  Nigeria  and  resident   overseas  must  either  get  a  local  partner  or  nominee  directors  who  can  be   able  to  open  a  bank  account  to  carry  on  such  business.   7)Export  Permit,  Import  Permit  or  Business  License:  Depending  on  the   sector  of  the  economy  any  new  company,  either  foreign  owned  or  locally   owned,  may  choose  to  engage  in,  an  additional  permit  or  business  license   maybe  required.  For  instance,  any  company  that  chooses  to  import  any   pharmaceutical  or  food  product  into  Nigeria  must  obtain  a  permit  or   approval  from  the  National  Agency  for  Food  and  Drug  Administration  and   Control  (NAFDAC).  And  any  company  engaging  in  telecomm  services  must   obtain  a  license  from  the  Nigerian  Communication  Commission  (NCC).    In  the   same  vein,  every  company  seeking  to  trade  and  export  Nigerian  mineral   resources  must  obtain  purchase  or  possess  license  and  export  permit  from   the  Ministry  of  Mines  and  Steel  Development.     Finally,  it  is  worthy  of  note  that  business  registration  process  in  Nigeria  has  been   simplified.  The  Nigerian  company  house-­‐  the  Corporate  Affairs  Commission   (CAC),  as  a  company  may  now  be  formed  in  less  than  a  week  in  Nigeria.  And  in   line  with  the  presidential  directives  on  ease  of  doing  business  in  Nigeria,  every   other  government  ministries  must  also  follow  the  CAC  example  by  ensuring   seamless  and  smoothness  processing  of  any  required  permits,  approvals  or   licenses  for  a  quick  business  setup  in  Nigeria.     There  are  various  incentives  applicable  to  doing  business  in  Nigeria  and  the   country  will  continue  to  attract  plethora  of  international  businesses  and   investments  for  many  years  to  come.     Written  by  Olusola  Jegede,  a  Partner  at  Resolution  Law  Firm,  Nigeria  

  3. Tel:            +2348099223322   Email:  info@resolutionlawng.com  

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