How do I set up a company in Nigeria?
The Embassy cannot register a company for you, nor can we provide advice on legal matters. While we have set out some general points regarding company formation and registration, we would strongly advise Irish businesses to contact a lawyer or business consultant for assistance in these matters. It is much better to pay a fee for professional advice than to discover later that you have not registered your company correctly.
Other than in the oil & gas sectors, foreign companies and individuals are permitted to retain 100% ownership of the Nigerian entity (although registration is usually faster if one of the directors is a Nigerian entity). To establish a company, there must be a minimum of 2 directors. A Nigerian director can own as little as 1 share out of the minimum 1,000,000 shares needed to establish a limited liability company. After the company has been officially established, directors can be amended or added.
The exemption is the oil & gas industry. The Local Content Act stipulates that 51% of a Nigerian subsidiary will have to be owned by Nigerians. More details can be found of the website of the Nigerian Content Development and Monitoring Boards.
Any company conducting business in Nigeria is required to register with the Corporate Affairs Commission (CAC). The process of registering a corporate entity has to be completed by a solicitor who has the approval to deal with the CAC. The steps to processing the company registration are:
- Full payment of professional fee for registration of company with CAC (contact your lawyer for a full quotation on registration cost).
- A form for Availability check / reservation of name of name is completed by the solicitor you appoint. Usually “Nigeria Limited” is added to the international name. However it is always best to provide an alternate name in the event that the first choice is not approved.
- A set of incorporation forms are made available to the client to be completed by:
- Two Directors (a form of identification for each of the directors, preferably a passport, must be provided)
- A Company Secretary, appointed by the Directors. The Company Secretary’s details are included in the incorporation forms. For an annual retainer, most solicitors who register a company can also serve as company secretary.
- A draft Memorandum and Articles of Association of the proposed company are sent to the client by the solicitor in which the client provides details of the type of business s/he seeks to engage in, the ratio of shareholding etc. Upon receipt of the completed incorporation forms, the signed Memorandum and Articles of Association, the solicitor can proceed with the registration of the company. Provided that all of the documents have been filled correctly and the business name is approved, registration should be completed after one week.
- The Companies and Allied Matters Act (CAMA) of 1990 sets out exceptions to the general rule that all foreign companies doing business in Nigeria must incorporate in Nigeria. These exceptions include companies engaged by the Federal Government to execute specific projects, companies undertaking approved loan projects on behalf of donor countries or international organisations, and foreign government owned companies engaged wholly in export promotion activities.
Foreign companies may also set up a Representative Office in Nigeria. However, a Representative Office (which must also be registered with the CAC) may only serve as a promotional and/or liaison office. It cannot engage in business, conclude contracts or open or negotiate any Letters of Credit. The local operational expenses of the Representational Office must flow from the foreign company.
Complete information on all registration issues can be found here. The Embassy strongly recommends that you engage a reliable and experienced service provider and /or lawyer to guide you through the process.