REQUIREMENTS FOR FOREIGN PARTICIPATION IN NIGERIAN BUSINESS SPACE
It is possible for a foreigner to participate in Nigerian business whether by forming a company, joining in forming a company, buying shares into an existing company.
REQUIREMENTS FOR FOREIGN PARTICIPATION IN NIGERIAN BUSINESS
How a Foreigner can Participate in Nigerian Business
Foreign participation means alien participation. Section 650 of Companies and Allied Matters Act (CAMA) defines an alien as a person or association, whether corporate or incorporated, other than a Nigerian citizen or association. It is possible for a foreigner to participate in Nigerian business whether by forming a company, joining in forming a company, buying shares into an existing company.A non-Nigerian whether company or individual may invest and participate in the operation of any enterprise in Nigeria except those in the negative list. The negative list includes arms and ammunition; narcotic drugs and psychotropic substance; para-military and military wears and accoutre.
There are some considerations to be made to enable foreigner participate in Nigerian business. They are:
Company Registration: Any company with the intention of carrying out business in Nigeria must register with Corporate Affairs Commission (CAC).Meanwhile, every foreigner seeking to participate in Nigerian business by registering a company in Nigeria must register a company with the minimum of 10,000,000 authorized shares capital to be able to subsequently register with NIPC
Nigerian Investment Promotion Commission (NIPC): Every business with foreign participation must be registered with NIPC and obtain a certificate. CAC registration needed before this can be achieved.
Business Permit: Every company with foreign participation in Nigeria must secure this permit before commencing business activities
Tax Registration: An incorporated company is also to register with Federal Inland Revenue Service (FIRS) and obtain Tax Identification Number (TIN) which will be used to obtain other licences and register with State Inland Revenue Service.
Trademark Registration /Protection: Companies are adviced to register their trademark at the Trademark Industry.
Operating a Bank Account: Most commercial banks in Nigeria require Evidence of Company Registration, TIN of the company, Proof of registered address, Identity of company's directors before company an operate a bank account.
Sector Specific Licensing: Some sectors require specific licence for its operators to operate. So every foreign company must enquire into what license required to operate
Advertisement: A foreign company must ensure that it has the permit to advertise to its customers
Any investor seeking to do business in Nigeria must also consider about immigrating to the country or sending workers to the country from abroad. Therefore, foreign investors and offshore companies doing business or looking to establish in Nigeria must obtain Expatriate Quota from the Minister of Interior. It is the authorization to a company to employ individual immigrants to specifically approved job designations, and also specifying the permissible duration of such employment. The expatriate quota is the work permit for expatriate employees to fill the expatriate quota obtained by the employer company.
Immigrant workers are required to obtain residence permits that allow them to work in Nigeria and remit their salaries abroad if necessary .It is granted to a foreigner who visited Nigeria using the Subject to Regularization (STR) Visa. The foreigner is required to change his status from a visitor to a resident by obtaining a Residence Permit. Residence Permit has a validity period of two years and is renewable. However, a foreigner who has imported an annual minimum “threshold of capital” over a period of time may be issued a Permanent Residence Permit in so far as the investment capital is not withdrawn and the foreigner has complied with any other condition prescribed for the issuance of the Permanent Residence Permit.
CERPAC is the acronym for Combined Expatriate Residence Permit and Aliens Card. The Nigeria Immigration Service requires foreigners living in Nigeria to get the new CERPAC or they will be considered to be illegal residents and subject to repatriation from Nigeria.
Persons that qualify for this are Expatriates resident or working in Nigeria, and exempted persons are Diplomats, Government Official (GO’s), Niger-wives, Non-Governmental Organization (NGO’s) are to be issued CERPAC Gratis.
INCENTIVES AVAILABLE FOR DOING BUSINESS IN NIGERIA.
The Nigerian Government has put in place a number of investment incentives for the stimulation of private sector investment from within and outside the country. Some of these incentives cover all sectors, others are limited to some specific sectors.
Easy immigration process put in place by the Nigerian government is one of them. Some of the other incentives for doing business in Nigeria include:
Companies Income Tax: The Companies Income Tax Act has been amended in order to encourage potential and existing foreign investors and entrepreneurs.
Pioneer Status Incentive: The grant of Pioneer Status to an industry is to enable the industry concerned to make a reasonable level of profit within its formative years The profit made is expected to be ploughed back into the business. Pioneer status is a tax holiday granted to qualified or (eligible) industries anywhere in the Federation for a period of 3 years (with additional 1 and 1 more years or 2 years straight).
Double Taxation Agreements: In the last few years, double taxation agreements have been entered into by Nigeria with a number of countries. These agreements are entered into to provide relief from double taxation in relation to taxes imposed on profit taxable in Nigeria and any taxes of similar character imposed by the law of the country concerned. The method of relief from double taxation under Nigeria’s tax treaties is by way of a “tax credit”.
Duty Drawback Scheme: Duty Drawback scheme provides for refunds of duties on raw materials including packing and packaging materials used for the manufacture of products upon the effective exportation of the final products. The new Duty Drawback scheme shall give automatic refunds (60%) on initial screening by the Duty Drawback Committee and upon the presentation of bond from a recognized Bank, Insurance Company or other financial institution.
Capital Importation and Repatriation: To fund their investments in Nigeria, foreigners are free, subject to money laundering restrictions, to bring in any recognized foreign currency into Nigeria.
In Conclusion, with the efforts if the government and from the provisions of relevant laws, Nigeria has been made conducive or foreigners to invest and carry out business.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY: CHAMAN LAW FIRM TEAM
E-MAIL: chamanlawfirm@gmail.com
Tel: 08065553671, 08024230080