Doing business in Nigeria 2018
There are different investment vehicles that could be used for carrying on business in Nigeria. These include partnerships, unincorporated joint ventures and limited and unlimited liability companies. However, the authorized mode of investment by foreigners in Nigeria is through limited liability companies.
Under section 54 of the Companies and Allied Matters Act (CAMA), the law that regulates company formation and operation in Nigeria, no foreign company may carry on business in Nigeria unless it incorporates a local subsidiary in the country. However, the Federal Executive Council is empowered by section 56 to grant exemption from this mandatory requirement to foreign companies in the following categories:
Foreign companies invited by or with approval of the Federal Government to execute special projects
- Foreign companies which are in Nigeria for the execution of specific loan projects on behalf of donor countries or international organizations
- Foreign government-owned companies engaged solely in export promotion activities; and
- Engineering consultants and technical experts engaged in specialist projects under contracts with any of the Governments of the Federation or any of their agencies or under contracts with any person where such contracts have been approved by the Federal Government.
3.1 Requirements for Incorporation of a company The foreign company would have to conduct a name search at the Corporate Affairs Commission (CAC) to ensure that the preferred name has not been issued to an existing company, or is not a prohibited name. The following documents are required to incorporate a company in Nigeria:
- Memorandum of Association
- Articles of Association
- Statement of Share Capital
- Declaration of Compliance with CAMA
- Notice of situation of the Registered Office of the company; and
- Return of Allotment of Shares and Particulars of First Directors
Stamp duty is payable at 0.75% on the authorized share capital of a company in addition to filing fees payable to the CAC. Once the registration process is completed, the Registrar General of the CAC will issue a Certificate of Incorporation to a company certifying that the conditions for incorporation have been fulfilled. Thereafter, the company would be required to register with the FIRS for tax purposes, and other regulatory agencies.
It is quite possible for a foreign investor to acquire an already producing oil and gas asset, or form a strategic technical partnership with a Nigerian entity to carry-on petroleum operations.