Guide to Investing in Nigeria

Introduction

Types of Businesses

There are four (4) types of companies recognised for business in Nigeria:

1.     Private Limited Liability Company (LTD): This is the most common form of business set up by investors and it requires a minimum share capital of NGN 10, 000. A private limited liability company is a legal entity in its own right, separate from those who own it. The company requires a minimum of two (2) and a maximum of fifty (50) shareholders and directors. Such a company is restricted from transferring its shares freely and prohibited from inviting the public to subscribe to its shares, debentures and/or deposit money for fixed periods or payable at call, whether or not bearing interest.
2.     Public Limited Liability Company (PLC): The minimum share capital for this type of company is NGN 500,000. A Public Limited Company required a memorandum of Understanding of two (2) shareholders. There is no restriction  on the maximum number of shareholders or their right to transfer their shares freely. The public may be invited to subscribe to its capital and the shares may be traded on any securities Exchange.
3.     Company Limited by Guarantee (GTE): Generally incorporated as a not-for-profit, this kind of company limits its members’ liability to the amount of their respective guarantees.
4.     Unlimited Company: This type of company has no limit on the liability of its members.

Business Incorporation Process

Businesses can be registered online via the CAC Company Registration Portal. Through this site, investors – or their agents – can conduct name searches, complete the required forms, submit all relevant incorporation documents, and also pay associated fees. However, investors may also visit the CAC office or the One-Stop Investment Centre (OSIC) of the Nigerian Investment Promotion Commission (NIPC) to complete or submit paper applications.

The online registration process is laid out below:

1. Create an account on the CAC portal. This can only be created by one of the company directors/shareholders or an accredited agent (a Lawyer, Chartered Accountant or a Chartered Secretary)  https://services.cac.gov.ng/
2. Conduct name search and reserve a name.
3. Complete registration form (CAC 1.1. Application for Registration) providing details of the directors, shareholders and nature of business.
4. Pay CAC filing fees and stamp duty. The stamp will be electronically affixed once payment is made.
5. Download completed online form and Memorandum and Articles of Association, then append signatures accordingly.
6. Upload scanned documents for processing.
7. Present original copies of uploaded documents and collect certificate of incorporation/registration from the preferred location. Once the certificate of incorporation is ready, a Tax Identification Number (TIN) will be generated by the Federal Inland Revenue Service and sent to registrant’s email.

Exemption from Incorporation

Foreign companies intending to do business in Nigeria may apply for exemption from the standard registration requirements if they are:

• invited by any tier of government for specific individual projects;
• executing specific individual loan projects on behalf of a donor country or international organisation;
• foreign government-owned companies engaged solely in export promotion activities; and
• engineering consultants or technical experts engaged in specialist projects with any tier of government

Such applications for exemption shall be forwarded to the office of the Secretary to the Government of the Federation (SGF).

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Procedure for NIPC Business Registration

One-Stop Investment Centre (OSIC)

Services at OSIC

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Environmental Impact Assessment

NESREA Headquarters Abuja, Nigeria

The Environmental Impact Assessment (EIA) is used to evaluate the probable positive and negative environmental, health and social impacts of a proposed project. The process provides the Federal Ministry of Environment and National Environmental Standards Regulatory and Enforcement Agency (NESREA) with information to determine the appropriate permit status of a project.

See Link: Permits

The procedures for obtaining EIA Certificate are outlined below:

1. Applicant (i.e.approved company representative) submits a comprehensive project proposal and completed EIA Notification form to the Ministry of Environment.
2. The Ministry registers the proposal and issues a registration number, while providing necessary guidelines to the applicant.
3. NESREA conducts an Initial Environmental Examination (IEE) and presents a screening report within 10 days.
4. Applicant conducts a scoping exercise to ensure that all significant impacts and reasonable alternatives are addressed in the intended EIA. A public hearing may be requested if there is public interest in the project.
5. Applicant submits the scope of the EIA, and if approved by NESREA, undertakes the EIA study.
6. Applicant submits the draft EIA report. This should include proceedings of consultations with adjoining communities and other stakeholders.
7. The draft EIA report is reviewed by an independent panel, relevant regulators and the public (the report is displayed in the public for a period of 21 working days.)
8. Applicant develops and submits the final EIA report, incorporating all review comments.
9. Ministry approves final EIA report; issues the Environmental Impact Statement (EIS) and the EIA Certificate
10. Applicant proceeds to implement the project according to specifications and stipulated mitigation measures contained in the final EIA report. This process shall be monitored by the Ministry from site preparation to commissioning.

See Link: Relevant Link: Environmental Guidelines Revision

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What Investors Think

Investors commends the 24hrs turn around time for Enterprise incorporation; they agree that this has streamlined the business entry process. However, they look forward to full automation of the process.

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