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Starting a business in Nigeria



Starting a business in Nigeria


Nigeria is essentially a free enterprise country, subject only to such regulations as are necessary for national interest. As such, any person can participate in the Nigerian Economy. Participation may be through sole proprietorship, partnerships, and unincorporated joint ventures, limited and unlimited liability companies.

2.2.The Company and Allied Matters Act (CAMA) provides, under different parts, for the following types of business organizations:

2.2.1. Part A Limited Liability Company: a company where the liability of its members is limited by the memorandum of association as to the amount, if any, unpaid on the shares respectively held by them. Unlimited Liability Company: a company not having any limit as regards the liability of its members. Company limited by Guarantee: a company without a share capital. (Most times a not for profit organization)

2.2.2 Part B Business Name registrations for

i. Partnership/Firm

ii. Sole proprietorship

2.2.3 Part C Incorporated trustees Foreign Company (branch or subsidiary of a foreign company) Representative Office

2.3 Any two or more persons may form and incorporate a company in Nigeria as long as the laid down requirements for doing so are followed. With regards to foreigners, however, there are additional requirements which must be met before a business can be establishment in Nigeria.

2.4 A foreigner or foreign company may participate in forming a company, subject to the provision of any law regulating the rights and capacity of foreigners to engage and trade in business in Nigeria.

2.5 By virtue of the Nigerian Investment Promotion Decree (now Act) of 1995, non-Nigerians can freely invest and participate in the operation of any enterprise in Nigeria, with the exception of those enterprises in the negative list of the Act.

2.6 The negative list includes the production (not rendering of service) of arms, ammunition, military and paramilitary wears and such other items as the Federal Executive Council may from time to time determine. “Invest” refers to shareholding, while “participate in the operation” refers to management of the enterprise.

2.7 Where the area of investment is not prohibited, a foreign investor may engage in any enterprise in Nigeria in any of two ways.

2.8 The investor can start a business on his/her own or in a joint venture with Nigerians by forming and registering a company at the Corporate Affairs Commission (CAC), and then registered with the Nigerian Investment Promotion Commission (NIPC)

2.9 The NIPC acts as a liaison between the foreign enterprise and relevant government departments from which the foreigner may need to obtain certain permits.

2.10 Although all foreign companies intending to do business in Nigeria must take necessary steps to obtain incorporation as a separate entity in Nigeria, a foreign company may apply to the Federal Executive Council for exemption from registration locally if it belongs to one of the following categories, that is:

2.10.2 Foreign companies invited to Nigeria by or with the approval of the Federal Government to execute only specified individual projects.

2.10.3 Foreign companies which are in Nigeria to execute special loan projects on behalf of donor countries.

2.10.4 Foreign Government owned companies engaged solely in export promotion activities.

2.10.5 Engineering consultants and technicians engaged on any individual specialist project under contract with any governments in the Federation or Government Agencies where the contract has been approved by the Federal Government.

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