How to Register a Foreign Company and Hire Foreign/Expatriate Staff in Nigeria

It is a known fact that a business that is not registered to do business in Nigeria basically lacks a Legal/Corporate personality and in some regulated business sectors, is barred from participating in particular types of businesses such as Banking, Moneylending, or Courier services.

The requirement level for Foreign businesses becomes even higher when they seek to operate directly in Nigeria through subsidiaries. Nigerian law makes it perfectly clear that a Foreign national/citizen or company cannot engage in business operations of any sort in Nigeria without registering a company in Nigeria with the Corporate Affairs Commission.

This article will be dealing with the topics of :-

– What correctly constitutes a foreign business/company in this context.

– The Regulatory Framework governing the Registration of Foreign companies in Nigeria.

– The requirements for registration of Foreign companies in Nigeria.

What is a Foreign company?

A foreign company is simply one that is registered by foreigners under the laws of another country to carry out business in that same country. 

For the purpose of this article, a company with Nigerian shareholders or founding members doesn’t fit the description of a foreign business but will be required to carry out certain Regulatory compliance measures where it has foreign members bringing in capital into the country or where the company has proposed directors who are foreigners that are to work in Nigeria.

What are the major Regulatory agencies in charge of the registration of foreign companies in Nigeria?

The registration of foreign companies in Nigeria is governed mainly by the following Regulatory agencies :-

– The Ministry of Interior.

– The Nigerian Immigration Service

– The Corporate Affairs Commission (CAC)

– The Securities and Exchange Commission (SEC)

– The Nigerian Investment Promotion Commission (NIPC)

– The Federal Inland Revenue Service (FIRS) and other State Revenue agencies.

– Sector-specific apex regulators such as the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC)

Can foreign companies actually operate without the need for registration in Nigeria?

Yes they can, but only through a process known as EXEMPTION which is a registration waiver given to foreign companies that are :-

a). Invited by the government to carry out specialized projects which can be either infrastructural development projects or specialized technology transfer projects. 

b). Foreign companies exempted by the Companies Act of 1968.

c). Foreign Government-owned companies engaged in export promotion.

d). Foreign companies exempted by treaties to which Nigeria is a party.

e). Foreign companies in Nigeria for the execution of a loan project on behalf of a donor agency of any international organization.

This process is usually commenced by a written application to the Secretary to the Federal Government (SGF), however it should be noted that exempted companies might still be required to file compliance returns to the Corporate Affairs Commission and can sue & be sued despite the fact that they are basically unregistered companies.

Can foreign companies registered in Nigeria engage in any type of business?

Yes and no. The following businesses are not to be engaged in by foreign companies in Nigeria:-

– The production of arms and ammunition.

– The production, trafficking and selling of narcotics and psychotropic drugs.

– The production of military and paramilitary uniforms.

– Any other item as determined by the Federal Executive Council (FEC).

Do foreign companies to be registered in Nigeria come with a minimum capital requirement?

Yes they do. Foreign companies seeking to be registered in Nigeria must do so with a minimum share capital of 10 Million Naira. 

What are the steps/requirements needed to register and operate a foreign company in Nigeria?

The steps needed to register a Foreign company in Nigeria are:

– Registration of a company with a 10 Million Naira share capital.

– Registration of the company with the Nigerian Investment Promotion Commission (NIPC).

– Securing business permits and expatriate quotas from the Ministry of the Interior.

– Obtaining a resident permit (CERPAC) from the Nigerian Immigration Service (NIS). 

– Registration of the company as a tax-paying entity with the Federal Inland Revenue Service (FIRS) and the relevant State Internal Revenue Service.

– Obtaining the relevant business license where applicable e.g. CBN licensing if it’s for a Banking and Finance/Fintech license . 

– Obtaining a certificate of capital importation where the proposed foreign company is importing it’s operating capital into Nigeria.

What are the requirements for registering a company with the Corporate Affairs Commission, obtaining a Business Permit & Expatriate quota, and obtaining a resident permit for a foreign company  seeking to operate in Nigeria?

For Business registration, you will need –

– 2 directors.

– A minimum share capital of 10 Million Naira.

– A business office address

– Particulars of the directors and company secretary of the proposed company.

The registration process can take 48 hours – 4 weeks and comes with the following cost implications :-

Foreign Company registration(10 Million Naira minimum share capital) :-

1. Name availability search/ reservation – 3600.00 Naira

2. Filing fees/Stamp duties – 411,000.00 Naira

3. Legal fees – 220,000 Naira

4. Miscellaneous costs – 20,000.00 Naira

Total :- 440,000.00 Naira

To secure a Business Permit, a foreign company needs to first carry out its NIPC Registration which can be commenced by its lawyer making an application on the online NIPC portal. This carries the following cost implications (subject to review by the relevant Regulatory agencies)

Statutory Costs :- 15,000.00 Naira.

Legal fees :- 45,000.00 Naira

Miscellaneous costs – 10,000.00 Naira

Sum total – 70,000.00 Naira

This process also carries a time implication -of 24-72 hours

A Business Permit application is in turn needed for an Expatriate quota and is commenced via a proposed foreign company through its lawyer making an online application to the Ministry of the Interior. This process comes with the following cost implications regarding statutory charges and Legal fees:- 

Statutory fees :-

– Automation fee – 100,000.00 Naira

– Processing fee – 100,000.00 Naira

– Approval Fee – 100,000.00 Naira

– Portal Fee – 50,000.00 Naira

Statutory cost total – 350,000.00 Naira

Legal fees – 300,000.00 Naira

Miscellaneous costs – 50,000.00 Naira

Sum total – 700,000.00 Naira

This process carries a Time implication of 7working days to 3 weeks.

The same process also applies to Expatriate Quota grants which are necessary permits for the employment of an approved number of foreigners as staff of foreign AND Nigerian-owned companies registered in Nigeria and which carry the following cost implications:-

Statutory Fees 

Automation Fee – 100,000.00 Naira

Processing Fee – 100,000.00 Naira

Approval Fee – 50,000.00 Naira

Portal Fee – 50,000.00 Naira

Legal fees – 250,000.00 Naira

Miscellaneous costs – 50,000.00 Naira

Sum Total – 600,000.00 Naira

Expatriate Quota applications carry a time implication of 7 working days to 3 weeks.

For the purpose of hiring expatriate staff and having them being able to live with their dependents in Nigeria, a Subject To Regularization (STR) Visa/Permit grant by the Nigerian Embassy/Commission in the home country of the proposed expatriate staff will first be required  for the next step which is a Combined Expatriate Resident Permit & Aliens  Card(CERPAC) application.

STR applications carry a time implication period of 2 to 3 weeks and come with the following cost implications:- 

Statutory costs – Varies depending on the home country of the expatriate.

Legal fees – Not less than 150,000.00 Naira minus costs.

STR applications require the following among other requirements:-

1. A copy of the employment offer letter given to the expatriate.
2. An International passport with at least 6 months validity.
3. The expatriate’s CV/Resume.

CERPAC application

For a CERPAC grant( from which children , citizens of the West African ECOWAS area , diplomats, Non-Governmental Organizations, foreign wives of Nigerians, and officials of foreign governments are exempted), applications are commenced via Legal representation to the Nigerian Immigration Service and carry the following cost implications:- 

Statutory costs – $ 2,000(subject to review by the Nigerian Immigration Service/Ministry of Interior)

Legal fees – 550,000.00 Naira

Miscellaneous costs – 60,000.00 Naira

This process carries time implication frame of 14 working days.

CERPAC applications require among other requirements the following:-

1. An application letter from the expatriate’s employer requesting a regularization of stay and accepting the expatriate’s Immigration responsibility on his behalf.

2. The expatriate’s International passport with an STR Visa endorsement.

3. A copy of the employer’s expatriate quota approval from the Ministry of the Interior.

It should however be noted that time implication frames might be longer due to certain factors. Also , any defect in an application will result in a fresh application with the original fees so accurate application information as required by the relevant Regulatory agencies must be submitted to your lawyer when seeking any of the permits mentioned above.

How long do STRs and CERPAC grants last?

STR Visas last 90 days and are non-extendable while CERPAC grants last 2 years and are renewable every 2 years. 

Conclusion:- It can be seen from the above write-up that Foreign participation in Nigeria is quite regulated with the aim of protecting Nigerian content and businesses while providing an effective framework for regulating the entry and operation of foreign owned businesses and skilled manpower in Nigeria. It is thus also very necessary to seek the right professional guidance if you’re a foreign business person seeking to do business in Nigeria or a Nigerian business person seeking to hire foreign staff for your business operations in Nigeria.