Foreign-Owned Company Registration in Nigeria

Foreign-owned company registration in Nigeria may involve more than obtaining a Certificate of Incorporation from the Corporate Affairs Commission.

The required steps depend on the proposed ownership structure, business activities, use of expatriate personnel and any regulatory approvals that apply to the company’s sector.

Foreign investors and their professional advisers should therefore distinguish between:

Incorporation with the Corporate Affairs Commission;
Registration with the Nigerian Investment Promotion Commission;
A Business Permit issued under the authority of the Federal Ministry of Interior;
Expatriate Quota approval, where foreign personnel will be employed; and
Licences or permits required for regulated business activities.

These are separate processes with different purposes.

Important clarification: The ₦100 million threshold discussed in this guide relates to the capital requirement stated by the Federal Ministry of Interior for a Business Permit. It should not be described as the universal CAC minimum share capital for every company that has a foreign shareholder.

What is a foreign-owned company in Nigeria?

A foreign-owned Nigerian company is a company incorporated in Nigeria in which one or more shares are held by a foreign individual, foreign company or other foreign investor.

It is helpful to distinguish this from a foreign company.

A foreign company is an entity incorporated outside Nigeria. A foreign-owned Nigerian company is incorporated in Nigeria but has foreign participation in its ownership.

For example, an overseas parent company may establish a separate Nigerian subsidiary and become a shareholder in that subsidiary.

A Nigerian–foreign joint venture, by comparison, has a combination of Nigerian and foreign participation.

Must a foreign company incorporate in Nigeria?

Subject to the exemptions provided under the Companies and Allied Matters Act 2020, a foreign company incorporated outside Nigeria that intends to carry on business in Nigeria must take the steps necessary to become incorporated as a separate entity in Nigeria.

Section 78 of CAMA also provides that, until the foreign company is incorporated in Nigeria, it must not carry on business in Nigeria or exercise the powers of a registered company, except for activities preliminary to incorporation.

CAMA provides limited categories under which a foreign company may apply for exemption. A foreign investor should not assume that an exemption applies without examining the statutory conditions and obtaining appropriate professional advice.

Can a foreign investor own 100% of a Nigerian company?

The Nigerian Investment Promotion Commission states that foreign nationals may own up to 100% equity in enterprises in Nigeria, except businesses falling within the statutory negative list and subject to applicable sector-specific restrictions or approvals.

A foreign-owned company may therefore be structured as:

A wholly foreign-owned Nigerian subsidiary;
A Nigerian–foreign joint venture;
A Nigerian company owned by one foreign individual;
A Nigerian company owned by several foreign investors; or
A Nigerian company whose shareholder is an overseas corporate entity.

The appropriate structure will depend on the investment arrangement, proposed operations and any sector-specific rules.

CAC incorporation is the foundation of the Nigerian entity

The Corporate Affairs Commission is responsible for incorporating the Nigerian company.

Before commencing the CAC company registration application, the promoters should determine and document the following:

Proposed company name;
Nature of the proposed business;
Registered office address in Nigeria;
Proposed issued share capital;
Number and classes of shares;
Identity of each shareholder;
Shareholding allocation;
Proposed directors;
Persons with Significant Control;
Whether a foreign company will be a shareholder;
Whether the company expects to apply for a Business Permit;
Whether expatriate personnel will be employed; and
Whether the proposed activity requires a sector licence or approval.

These matters should be settled before submission because the information recorded at incorporation forms part of the company’s official CAC records.

The ₦100 million Business Permit capital threshold

The ₦100 million requirement is frequently misunderstood.

It is important to distinguish between:

The number of shares issued by the company;
The nominal value of each share;
The total value of the company’s issued share capital;
Paid-up capital; and
Evidence that investment funds have been brought into Nigeria.

“100 million shares” is not automatically the same as “₦100 million share capital.”

For example:

100 million shares with a nominal value of ₦1 each have a total nominal value of ₦100 million.
10 million shares with a nominal value of ₦10 each also have a total nominal value of ₦100 million.

The Federal Ministry of Interior handbook sets a ₦100 million capital threshold for Business Permit applications. Its general rules describe a minimum paid-up capital of ₦100 million, while its specific Business Permit requirements state that the issued or paid-up share capital must not be less than ₦100 million for each company.

This requirement should therefore be discussed in the context of a Business Permit, not presented as a general CAC rule applying identically to every company with foreign ownership.

A company operating in a regulated sector may also be subject to a separate and potentially higher capital requirement imposed by the relevant regulator.

No.

The share capital recorded in the company’s CAC documents is a corporate record. Evidence that investment funds have been imported, provided or paid into the company is a separate documentary matter.

For a Business Permit application, the Ministry’s handbook lists documents including a Certificate of Capital Importation, evidence of capital importation or another funding source, a bank reference letter and a bank statement showing an inflow that supports the company’s feasibility study.

A company should therefore avoid treating its CAC share-capital figure as automatic evidence that the corresponding investment funds have been brought into Nigeria.

What is a Nigerian Business Permit?

The Federal Ministry of Interior handbook describes a Business Permit as a certificate issued under the authority of the Minister of Interior to a wholly foreign-owned company or joint-venture company with foreign participation intending to do business in Nigeria.

The Business Permit is separate from the CAC Certificate of Incorporation.

CAC incorporation establishes the Nigerian company. The Business Permit concerns the qualifying foreign-participation company’s authority under the Ministry’s framework to operate in Nigeria.

According to the Ministry’s handbook, the prescribed Business Permit documents include:

An application letter on the company’s letterhead;
CAC Certificate of Incorporation;
Memorandum and Articles of Association;
Feasibility report, business plan or company profile, where applicable;
Relevant CAC incorporation record or electronic status report;
Joint-venture agreement, where applicable;
Current tax clearance documentation, where applicable;
Licence, permit or certificate from a relevant government authority for regulated activities;
Evidence of operating premises;
Certificate of Capital Importation;
Evidence relating to imported equipment or machinery, where applicable;
Evidence of work or contracts for specified activities, where applicable;
Evidence of capital importation or another source of funding;
Identification documents for directors;
Contact details for authorised representatives; and
Bank reference and supporting bank information.

The particular documents applicable to an applicant will depend on the company’s ownership, activities and circumstances.

NIPC registration for companies with foreign participation

CAC incorporation and NIPC business registration are separate processes.

Section 20 of the NIPC Act requires an enterprise in which foreign participation is permitted to apply to the Nigerian Investment Promotion Commission for registration before commencing business.

The Business Facilitation Act 2022 added that where a Nigerian enterprise acquires foreign participation after it has commenced business, it must register with NIPC within three months of acquiring that foreign participation.

In practical terms:

CAC incorporates and maintains the legal entity;
NIPC registers the qualifying enterprise with foreign participation; and
The Federal Ministry of Interior administers Business Permit and Expatriate Quota processes.

One registration does not automatically replace the others.

Business Permit and Expatriate Quota are different

A Business Permit and an Expatriate Quota serve different purposes.

The Business Permit relates to a wholly foreign-owned or joint-venture company with foreign participation.

An Expatriate Quota relates to a company or organisation engaging expatriate personnel in approved positions.

The Federal Ministry of Interior describes the establishment grant of Expatriate Quota as a facility enabling an organisation to engage expatriate personnel whose skills and competencies are in short supply or unavailable locally.

Foreign shareholding does not, by itself, constitute approval to employ an expatriate in Nigeria. The company’s ownership and its employment of foreign personnel are separate issues.

Where foreign personnel will be deployed, the company should examine the applicable Expatriate Quota and immigration requirements with appropriately qualified advisers.

Persons with Significant Control and beneficial ownership

Nigeria’s Persons with Significant Control Regulations require relevant companies and limited liability partnerships to provide information on their beneficial owners.

The Regulations define a Person with Significant Control as a person who satisfies one or more of the following conditions:

Directly or indirectly holds at least 5% of the issued shares;
Directly or indirectly exercises at least 5% of the voting rights;
Directly or indirectly has the right to appoint or remove a majority of the directors;
Directly or indirectly exercises significant influence or control; or
Exercises significant influence or control over a trust or firm that would satisfy the relevant conditions if it were an individual.

Where a foreign company is a subscriber or shareholder in a Nigerian company, the prescribed particulars of the natural person who ultimately owns or controls the foreign company must be provided in accordance with the Regulations.

The immediate corporate shareholder may therefore be only one part of the ownership information required for the CAC filing.

Sector-specific licences and approvals

CAC incorporation does not, by itself, authorise a company to conduct every type of regulated activity.

The NIPC Act recognises that an enterprise may still need to obtain any licence, lease, permit or other approval required for its establishment or operation.

The Federal Ministry of Interior handbook also requires relevant licences, permits or certificates for businesses engaged in regulated activities. It gives examples including oil exploration and services, healthcare services, fishing, mining and engineering services.

A regulated business should confirm the requirements of the responsible authority before finalising its business objects, capital structure and operational plan.

Foreign-owned company registration checklist

Before starting the CAC incorporation process, prepare:

Proposed company names;
A clear description of the proposed business;
Nigerian registered-office address;
Proposed issued share capital;
Number and class of shares;
Share allocation for each shareholder;
Identification documents for individual shareholders;
Incorporation documents for a foreign corporate shareholder;
Proposed directors’ information and identification documents;
Details of the ultimate beneficial owners;
Information concerning each Person with Significant Control;
Proposed commencement date;
Whether a Business Permit will be required;
Whether expatriate employees will be engaged;
Whether NIPC registration will apply; and
Whether the proposed business requires a sector-specific approval.

The supporting documents required for a particular application should be confirmed against the current requirements of the relevant government authority.

Where Fadenbles Multiconcepts Limited comes in

Foreign-company market entry may involve corporate, investment, immigration, tax and sector-specific considerations.

Fadenbles Multiconcepts Limited focuses on the CAC incorporation and corporate-documentation stage.

Fadenbles supports clients and professional advisers with:

CAC company registration in Nigeria;
CAC registration support for companies with foreign participation;
Incorporation of companies with high issued share capital;
post-incorporation services, including increases in issued share capital;
CAC application monitoring and query follow-up;
CAC status report services and electronic status-report support;
Corporate-record and document requests; and
Relevant post-incorporation CAC filings.

Where legal opinions, tax advice, immigration applications, Business Permit services or sector-specific regulatory advice are required, the appropriate qualified professionals or responsible government authorities should be consulted.

Fadenbles can work directly with an investor or alongside the investor’s corporate lawyer, accountant, immigration consultant or market-entry adviser.

Frequently asked questions

Can a foreigner own 100% of a company in Nigeria?

The NIPC states that foreign nationals may own up to 100% equity in enterprises outside the statutory negative list, subject to any applicable sector-specific restrictions or approvals.

The ₦100 million threshold covered in this guide is the capital requirement stated by the Federal Ministry of Interior for a Business Permit. It should not be presented as the universal CAC minimum share capital for every company with foreign ownership.

Is CAC incorporation the same as NIPC registration?

No. CAC incorporation establishes the Nigerian company. NIPC business registration is a separate process for an enterprise with foreign participation.

Is a Business Permit the same as an Expatriate Quota?

No. A Business Permit concerns the qualifying foreign-participation company, while an Expatriate Quota concerns the engagement of expatriate personnel in approved positions.

Not necessarily. The total value depends on the number of shares and the nominal value attached to each share.

Who is a Person with Significant Control?

A PSC is a natural person who satisfies one or more of the ownership, voting, board-appointment or significant-control conditions in the PSC Regulations 2022.

Planning to register a foreign-owned company in Nigeria?

Before submitting the CAC application, ensure that the proposed ownership, issued share capital, directors, beneficial owners and business activities have been properly documented.

Fadenbles Multiconcepts Limited can provide a preliminary CAC incorporation checklist and review the proposed registration information for the incorporation stage.

Send “NIGERIA ENTRY” through the official Fadenbles Multiconcepts Limited LinkedIn Company Page or contact Fadenbles Multiconcepts Limited through the company’s official website.

This article provides general information. It does not constitute legal, tax, immigration, investment or sector-specific regulatory advice.

Official sources consulted

Companies and Allied Matters Act 2020 — Corporate Affairs Commission.
Persons with Significant Control Regulations 2022 — Corporate Affairs Commission.
Handbook on Expatriate Quota Administration and Business Permit — Federal Ministry of Interior.
Nigerian Investment Promotion Commission Act.
Business Facilitation (Miscellaneous Provisions) Act 2022.
NIPC Guide to Getting Started.

How to Register a Foreign-Owned Company in Nigeria: CAC, Business Permit, ₦100 Million Capital Threshold and NIPC