Nigeria, often referred to as the “Giant of Africa,” is the largest economy in Africa with vast potential for foreign investment. As a foreigner, starting a business in Nigeria can be daunting, given the unique legal, cultural, and economic landscape.
However, the process can be less intimidating and more rewarding with the right information and guidance. Some of the key requirements for starting a business in Nigeria as a foreigner include legal frameworks, market analysis, and the necessary steps for incorporation, registration, immigration, banking, and taxation.
Whether you are interested in agriculture, manufacturing, tech, or any other sector, this guide will provide you with essential insights and practical advice on navigating the Nigerian business environment and turning your entrepreneurial dreams into reality.
Legal Requirements For Starting A Business In Nigeria.
To start a business in Nigeria as a foreigner, the following requirements must be met:
- Incorporation/Registration of a business: You need to register your business with the Corporate Affairs Commission (CAC) and obtain a Certificate of Incorporation.
- Registration with Nigerian Investment Promotion Commission (NIPC): Foreign investors are required to register their businesses with the Nigerian Investment Promotion Commission (NIPC).
- Approval for Business Permits: Foreign investors must obtain approval for Business Permits from the Ministry of Interior.
- Immigration Requirements and Residence Permit (CERPAC)/ Application for Expatriate Quota: Foreigners must obtain the necessary immigration and residency permits to work and live in Nigeria legally.
- Bank Account Opening: You need to open a domiciliary account with a bank in Nigeria to receive and manage foreign capital.
- Procurement of Certificate of Capital Importation: A Certificate of Capital Importation (CCI) is required to certify the inflow of foreign capital into Nigeria.
- Taxation Registration: All businesses operating in Nigeria are required to register for taxation and obtain a Tax Identification Number (TIN).
Now, let’s look at how you can get the necessary requirement to start a business in Nigeria.
Incorporation & Registration Of Your Business In Nigeria
The process of incorporating/registering a business in Nigeria involves the following steps:
1. Choose a Business Name
The first step is to choose a distinctive name for your business. The name must not already be in use by another business and should not be offensive or contrary to public policy.
2. Conduct a Name Search
Once you have chosen a name, you must conduct a name search at the Corporate Affairs Commission (CAC) to ensure that the name is available for use. This can be done online through the CAC’s portal or at one of their offices.
3. Reserve the Business Name
If the name is available, you can proceed to reserve the name for a period of 60 days. This can also be done online or at the CAC’s office.
4. Prepare and File the Registration Documents
The next step is to prepare and file the necessary registration documents with the CAC. These documents include the Memorandum and Articles of Association, as well as Form CAC 1.1 (Application for Registration). In essence, you should complete all statutory forms correctly.
5. Pay The Fees And Stamp Duty
Once the documents are prepared, you will be required to pay the registration fees. The fee is N15.000 plus N8,000 for stamp duty. Then submit your application for registration.
6. Obtain the Certificate of Incorporation
After the documents and fees have been submitted, the CAC will review and process the application. If everything is in order, the CAC will issue a Certificate of Incorporation, which certifies that the business has been legally registered.
7. Documents You Will Receive After Business Is Registered
Here are the documents you will receive after your business name is registered:
- Certificate of Incorporation
- Tax Identification Number (TIN)
- Memorandum and Article of Association of the company (MEMART)
- Application for Registration Status of the company
Registration With Nigerian Investment Promotion Commission (NIPC) Process
Registration with the Nigerian Investment Promotion Commission (NIPC) is an important step for foreigners looking to do business in Nigeria. The process involves the following steps:
1. Submit the Application Form: The first step is to submit the application form to the NIPC. The application form can be obtained from the NIPC website or from their office.
2. Provide Required Information: The application form requires the provision of certain information such as the name and address of the company and the proposed business activities.
3. Pay the Application Fee: After providing the required information, you will be required to pay an application fee.
4. Submit Supporting Documents: You will be required to submit certain supporting documents such as the Certificate of Incorporation and the Memorandum and Articles of Association.
5. Obtain Certificate of Registration: Once the supporting documents are submitted and reviewed, the NIPC will issue a Certificate of Registration, which confirms that the investment has been registered with the NIPC. This takes 24 hours if you have correctly submitted all required documents.
Immigration Requirements And Residence Permit / Application For Expatriate Quota
Foreigners looking to establish a business in Nigeria are required to obtain Immigration Requirements and Residence Permit (CERPAC) and apply for an Expatriate Quota from the Nigerian Immigration Service (NIS).
The CERPAC and Expatriate Quota are required to legally work and reside in Nigeria as a foreigner. The process for obtaining CERPAC and Expatriate Quota involves the following steps:
1. Apply For CERPAC
The first step is to submit an application for CERPAC to the Nigerian Immigration Service (NIS). The application form requires the provision of certain information such as the name and address of the applicant, the purpose of the visit, and the proposed length of stay.
2. Provide Required Information
The application form requires the provision of certain information such as the name and address of the applicant, the purpose of the visit, and the proposed length of stay.
3. Pay The Application Fee
After providing the required information, you will be required to pay an application fee. The fee varies depending on the length of stay.
4. Submit Supporting Documents
After paying the application fee, you will be required to submit certain supporting documents such as a valid passport, a letter of invitation from the company in Nigeria, and a copy of the business permit.
5. Obtain CERPAC
Once the application and supporting documents are reviewed, the NIS will issue a CERPAC, which confirms that the foreigner is authorized to reside in Nigeria.
Bank Account Opening
After obtaining the necessary permits and registration, the next step for a foreigner wishing to start a business in Nigeria is to open a bank account. To open a bank account in Nigeria, foreign investors must follow these steps:
- Choose a Bank
- Provide Required Documents: The bank will require certain documents such as a copy of your company’s Certificate of Incorporation, Tax Identification Number (TIN), and the CERPAC or Residence Permit.
- Fill Out the Account Opening Form
- Obtain References: The bank may require references from other banks, clients, or suppliers. This is to confirm the credibility and viability of the business.
- Make an Initial Deposit
- Collect Cheque book.
Procurement of Certificate of Capital Importation
The Certificate of Capital Importation (CCI) is a document that certifies the inflow of foreign capital into Nigeria. It is required to repatriate dividends, capital, and profits out of Nigeria. Here are the steps to procure a CCI:
- Open a Domiciliary Account And Transfer Funds to the Account
- Obtain Form A: To obtain a CCI, you need to obtain a Form A from the bank. This form is used to declare the purpose of the capital and the source of the funds.
- Complete the Form A: You need to complete the Form A and submit it to the bank, along with other required documents, such as the Certificate of Incorporation, Memorandum and Articles of Association, and proof of share capital.
- Issue of CCI: After the submission of the Form A and other documents, the bank will issue a CCI, certifying the inflow of foreign capital into Nigeria.
It is important to note that the process for obtaining a CCI may vary depending on the bank. It is advisable to inquire about the specific requirements and procedures from your bank.
Conclusion
Starting a business in Nigeria as a foreigner may seem like a challenging task, but with the right knowledge and guidance, it can be a highly rewarding experience. By following the key requirements outlined in this article, including registrations, financing options, and support services, you can establish a successful business venture in Nigeria.
Do not let the complexity of the process deter you from exploring the vast potential that Nigeria has to offer. With determination, patience, and the right resources, you can turn your business aspirations into reality in Nigeria.