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Legal Framework for Foreign Companies to Carry on Business in Nigeria

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Legal Framework for Foreign Companies to Carry on Business in Nigeria

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How can a foreign company carry on business in Nigeria?

Any company incorporated outside Nigeria may carry on business in Nigeria and exercise the powers of a Nigerian company once it is duly registered with Nigeria’s Corporate Affairs Commission (“Company Registry”). It is an offence for a foreign company to carry on business in Nigeria without being registered in Nigeria.

Can a foreign company be exempted from registration in Nigeria?

A company may be exempted from registration if there is a treaty between Nigeria and another country or countries to that effect. Moreover, a foreign company invited to Nigeria by the Federal Government to execute an individual project; a foreign company invited to Nigeria to execute a specific individual loan project on behalf of a donor country or international organization; foreign government owned companies engaged solely in export promotion activities; engineering consultants and technical experts engaged by any of the governments in Nigeria to execute an individual project approved by the Federal Government may apply to the National Council of Ministers for an exemption from registration in Nigeria.

Can a foreign company hold shares in its company registered in Nigeria?

A foreign company may hold 100% of shares in the company. Nevertheless, the company must have at least 2 shareholders.

Can a foreigner hold directorship position in its company registered in Nigeria?

A foreigner may hold directorship position in the company but it must furnish the Company Registry with details of his residence abroad. If the foreigner is resident in Nigeria, it must furnish the Company Registry with his Combined Expatriate Residence Permit and Alien Card (“CERPAC”).

Does the Company Registry accept certifications of institutions abroad?

In some instances, the Company Registry requires certifications of the Directors to ensure that they are qualified to engage in some businesses in Nigeria. The Registry accepts certifications of accredited institutions abroad for this purpose.

What are the tax exemptions for companies registered in Nigeria?

Companies engaged in agriculture, manufacturing, mining and other budding sectors enjoy tax holiday for some years. The dividend of the company is not taxed to encourage investments in those sectors.

Are there cases of interference by the State or unfair practices against foreign companies registered in Nigeria?

Once a foreign company is registered in Nigeria, it acquires the same status as a Nigerian company. Unless the company commits an offence or engages in fraud, it is illegal for the State or its agency to interfere with the operation of the company’s business. There are no cases in Nigeria of forceful takeover by government or powerful competitors.

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