Procedures for Establishing a Business Enterprise by a Foreigner in Nigeria

Step I

Incorporation of the Business at the Corporate Affairs Commission (CAC) in accordance with the Companies and Allied Matters Act, 1990.

Step II

Registration of the company with Nigerian Investment Promotion Commission for the granting of Business Permit. NIPC also grants approvals for expatriate quota positions and incentives.

Requirements for Business Permit

Purchase NIPC Form I for N10,000.00. Completed form submitted with original receipt.

Certificate of Incorporation.

A minimum share capital of N5 million.

Details of share holding in the joint venture.

Joint venture/partnership Agreement where applicable.

Memorandum and Articles of Association.

CAC's Form C02 and C07 duly certified.

Evidence of capital importation for wholly foreign companies.

Approval from the appropriate professional bodies where applicable.

Expatriate Quota

In addition to the requirements listed under Business Permit, the following additional requirements have to be met for expatriate quota approvals.

Evidence of acquisition of operational premises and operational machinery/equipment in the case of industrial establishment.

Evidence of Foreign Capital Importation.

Management and Technical Services agreement (for service companies).

Tax Clearance Certificate.

Minimum authorised share capital of N5 million.

Evidence that the personnel required is not likely to be available in Nigeria .

Minimum share capital of N15 million (for two automatic expatriate quota positions) and of N30 million share capital (in case of four automatic expatriate quota positions).

Supply names, addresses, qualifications and positions to be occupied by the expatriates.

The company must produce its project implementation programme.

The company must produce a training programme for Nigerians in addition to management succession schedule.

The Company will furnish its feasibility report where applicable especially for new and pioneer industries.

Incentives

These include Pioneer Status and Technical Agreement incentives:

Pioneer Status

The benefit of a Pioneer Status Certificate is that the holder (i.e. the company) is exempted from payment of tax for a specified number of y ears (5 years or 7 years for companies located in economically disadvantaged areas)

Requirements

Certificate of Incorporation.

Memorandum and Articles of Association.

Feasibility study.

Tax Clearance Certificate.

Joint Venture Agreement.

Evidence of acquisition and installation.

Evidence of development carried out at factory site.

NIPC Form II (to be purchased from NIPC at 10,000 and should be returned with original purchase receipt).

The company must not be more than one year old from its commencement date of production.

Evidence of physical development of the factory site.

Joint venture must attain a minimum expenditure of N5 million

Technical Service Agreement

This is a form of technical co-operation agreement in which a party will agree to offer technical services to a company for the payment of a fee.

Details and terms of such agreements are normally worked out between the parties involved but such agreements should be registered with the National Office for Technology, Acquisition and Promotion (NOTAP).

Fees Payable

Purchase of NIPC Form I or II - N10,000.00

Approval Fees

Business Permit N5,000.00

Expatriate Quota N5,000.00 per slot

Renewal or Redesignation of Quota N5,000.00 per slot

Amendment of Business Permit N2,500.00

Permanent Until Reviewed (PUR) $5,000 per slot

Pioneer Status N10,000.00

Technical Committee on Business Approvals

A committee of NIPC has been constituted to consider and grant or reject applications for business permit, pioneer status and expatriate quota within 14 days. The committee is headed by the Executive Secretary